Mike Champley needs a long weekend to think about things.

He spent the last 18 months working on one of the biggest dockets in the state Public Utilities Commission’s history as one of three governor-appointed members tasked with deciding whether to approve the $4.3 billion buyout of Hawaiian Electric Industries by Florida-based NextEra Energy.

But with a decision expected any day, Gov. David Ige made the surprise move Wednesday of replacing Champley with an interim appointee, Tom Gorak, the commission’s chief counsel.

There wasn’t much question about Gorak’s qualifications or familiarity with the NextEra case, but the timing, motivation and legality has raised eyebrows.

Champley’s term ended Thursday, but he and others had counted on the governor to at least hold him over until a decision was reached in the NextEra case.

Hawaii Public Utilities Commissioner Michael Champley listens to the discussion during the Maui Energy Conference, March 17. His term ends June 30, and Gov. David Ige has to decide what to do about it.
Hawaii Public Utilities Commissioner Mike Champley is considering his options after Gov. David Ige replaced him this week. Nathan Eagle/Civil Beat

That didn’t happen, and Ige didn’t exactly explain why during a press conference announcing Gorak’s appointment.

The governor said Gorak was aligned more closely with his personal philosophy. Ige said he didn’t know where Gorak, Champley or the other two commissioners — Chairman Randy Iwase and Lorraine Akiba — stood on the NextEra merger that the governor has long opposed.

Energy industry analysts have said Gorak may be more skeptical of approving the NextEra merger.

Ige criticized the commission for not acting faster on the NextEra case. He said Wednesday that he had expected a decision before Champley’s term was set to end, but insisted that his appointment of Gorak was unrelated to the merger.

Iwase has said he’s hopeful a decision on the NextEra case can be reached next week, and expects Gorak to hit the ground running as he shifts from chief counsel to his role as commissioner Friday.

Governor David Ige announces his appointment to the Public Utility Commission, Thomas Gorak. 29 june 2016
Gov. David Ige announces his appointment of Thomas Gorak to the Public Utilities Commission at a Wednesday press conference. Cory Lum/Civil Beat

“I’m considering my options,” Champley said Thursday night when reached by phone at his home on Maui.

He did not elaborate on what those might be, but it could come down to a court deciding what “qualified” means in the statute authorizing the governor to make PUC appointments.

While Champley’s term has ended, he has not resigned. This may keep options open for him, particularly in addressing the question of whether the governor had the right to make the interim appointment.

The law says the commissioner “shall hold office until the member’s successor is appointed and qualified.” The question was over what “qualified” means — being confirmed by the Senate, or meeting the job description spelled out in the law.

Former Hawaii Public Utilities Commission Chair Mina Morita has said it means being confirmed by the Senate. But Attorney General Doug Chin told Ige in an letter dated Monday that it means “the governor’s review of the qualifications of the individual as well as the taking of the oath of office by the appointee.”

Hawaii Attorney General Doug Chin wrote that the governor had the legal authority to make the interim appointment to the commission.
Hawaii Attorney General Doug Chin wrote that the governor had the legal authority to make the interim appointment to the commission. Nathan Eagle/Civil Beat

Chin advised the governor that he had the constitutional authority to make the interim appointment.

Others have also questioned the legality of the appointment, including Sen. Roz Baker. In a separate written opinion Thursday, Chin essentially told her what he told the governor.

Chin said in his opinion to Ige that the appointment could face a legal challenge because there is no definitive Hawaii case confirming precisely when a vacancy exists on the commission in the event the commissioner does not resign at the end of the term.

Iwase said that, based on the attorney general’s opinion, Gorak was sworn in Friday morning.

“We operate on the basis that Mr. Gorak … is a fully empowered commissioner,” Iwase said.

While he wouldn’t elaborate Thursday on what might come next, Champley did express his frustrations with how the PUC is being run.

“It’s important to have an independent commission that can make decisions, and as part of that process, it’s important that each individual commissioner be able to be independent,” he said.

Champley said all three commissioners need to have access to the commission’s staff, including  legal and technical advisers who can analyze the evidence in a way that helps the commissioners make “sound, independent decisions.”

Soon after Ige appointed Iwase to serve as chair in January 2015, Iwase set about beefing up the staff and changing how the commission was managed.

He tightened the reins on Akiba and Champley by restricting their ability to utilize staff resources and consultants without the chair’s approval.

Iwase also instituted what he calls the “American flag” process in arriving at decisions. The commission had long been criticized for taking too long to act on various dockets.

The process starts with the first draft of an opinion, which is on a white piece of paper. That gets circulated and marked up with amendments written in red. Then the three commissioners look at the changes that have been made and put their agreements down in blue.

Public Utilities Commission Chair Randy Iwase implemented new management policies after he took over in January 2015.
Public Utilities Commission Chair Randy Iwase implemented new management policies after he took over in January 2015. Cory Lum//Civil Beat

Commissioners vote up or down on the amendments and then the overall opinion. They also have to respond within three days to a draft decision that’s been circulated, according to an internal memo from Iwase announcing the changes last year.

While Iwase said this has helped ensure a more efficient use of resources — and indeed, decisions did come out last year on dockets that had sat for months or longer — others familiar with the process said the reality is the three commissioners never end up sitting down together in the same room to hash things out as they used to and Champley and Akiba have been hamstrung by not having direct access to staff.

“This is a means to get the commissioners to do what they’re paid to do, and that is make a decision in a timely manner,” Iwase said last September in describing the changes. “We just cannot afford to have situations where decisions sit for no reason whatsoever. It’s an embarrassment.”

Iwase has said he’s putting to use his years of experience as a former state lawmaker and head of the Labor and Industrial Relations Appeals Board to get things moving.

The process does more closely resemble the top-down approach that House and Senate committee chairs use to run their committees, as opposed to a quasi-judicial process where the three members are on relatively equal footing.

Anita Hofschneider contributed to this report.

Read Chin’s letter to Baker below.

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