UPDATED 2/6/2014 4 p.m.

Lawmakers are considering a simple yet dramatic change to how the state funds the agency in charge of regulating Hawaii’s electric monopoly, phone companies and dozens of other businesses.

Sen. David Ige has introduced a bill that would let the Public Utilities Commission keep up to $10 million in its special fund each year.

The commission currently retains just $1 million, with the excess money siphoned off into the general fund for unrelated purposes. The longstanding practice forces the PUC to ask the Legislature annually for all the extra cash it needs to operate, creating a cycle of budget uncertainty that complicates long-term planning.

“As we look at the energy transformation in the state of Hawaii and move toward self-sufficiency, the Public Utilities Commission has a critical role in assisting and accelerating the transformation of renewable energy,” Ige said. “This measure would allow for more resources to the Public Utilities Commission and assist their effort in this process.”

Updated Senate Bill 2924 had its first hearing Thursday before the Commerce and Consumer Protection Committee, chaired by Sen. Roz Baker. The committee passed it unamended.

If the bill goes on to become law, the legislation could help level the playing field between the cash-strapped PUC and Hawaiian Electric Co., which virtually everyone on Oahu, Maui and the Big Island depends on for power.

The commission is often outmatched when it goes head-to-head with HECO in rate cases that affect the cost of electricity in Hawaii, ever among the most expensive states.

“The utility has always had the upper hand in terms of resources when they’re at the table so they should at least have a good counterbalance on the other side,” Jeff Mikulina, who heads the non-profit Blue Planet Foundation, told Civil Beat this week.

“Otherwise the onus is on intervenors like us to try to bring those resources to the table.”

The special fund has been singled out for years as a critical kink in the commission’s ability to effectively regulate HECO and its neighbor-island subsidiaries.

The PUC ended the 2012 fiscal year with $19.3 million in revenue, of which 92 percent came from HECO. In 2011, the commission hauled in $17.2 million. And in 2010, it brought in $21.8 million. The 2012-13 special fund report, which would have the 2013 balance, is not available yet on the commission’s website.

Updated In testimony Thursday, PUC Chair Mina Morita shared a five-year look at the special fund:

Source: Hawaii Public Utilities Commission

PUC Special Fund, 2009 to 2014.

In her testimony, Morita said dedicating a higher or the full portion of the PUC Special Fund to support the commission’s and Consumer Advocate’s operations would be advantageous to the state. (The Division of Consumer Advocacy, headed by Jeff Ono, gets its operating money from the PUC special fund. The office represents the public’s interests in electric rate cases against HECO.)

“As the Commission has testified previously, the complexity and size of the Commission’s workload has drastically increased over the last few years as advancements in state policy and utility technology has required, and is causing, a critical review for regulatory reforms,” Morita said in her testimony. “Increasing the annual carryover amount in the PUC Special Fund would support the PUC and the Consumer Advocate fulfill their respective statutory duties during these challenging times.”

Ono said in his testimony that allowing the commission and Consumer Advocate to retain consultants and use greater levels of resources would help them more quickly analyze existing constraints and develop possible solutions for renewable energy integration. It would also help them develop sound analyses to evaluate the feasibility and desirability of importing liquefied natural gas to cut back on oil, he said.

The Legislature has historically given the PUC roughly half of whatever money was in the special fund, taking almost $50 million from it over the past four years to use for unrelated programs.

In 2013, the commission’s operating budget was $11.3 million, almost $250,000 more than it received in 2012 but far less than needed to meet public expectations.

Expanding the special fund carryover balance from $1 million to $10 million won’t completely alleviate the commission’s need to go back before the Legislature to ask for additional operating money given that its most recent operating budgets have exceed that amount. But it would give the PUC more stability since lawmakers couldn’t raid its budget during tough economic times.

“In the electricity sector, that area is evolving so quickly, you need to have resources to be able to hire consultants and pay competitive salaries so you can get sharp folks — attorneys, engineers, economists — people who can really make sure we’re heading in the right direction, achieving our clean energy goals while keeping rates affordable,” Mikulina said.

Morita did not respond to messages seeking comment on the bill.

SB 2924 heads next to the Ways and Means Committee, which Ige chairs, before crossing over to the House. Track its progress here.

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