A new state audit out Wednesday finds that Hawaii’s Public Utilities Commission generally lacks the proper tools and guidance for its staff to keep up with its heavy caseload.

Further, the PUC still has trouble with long-term planning as its “policy and big-picture matters” often get pushed aside so the group’s limited staff can work instead to resolve the hundreds of electricity-, gas-, telecommunications- and sewage-related cases that land there each year, the state auditor’s office found.

In many ways, it’s the same problem the auditor’s office found when it last examined the PUC 14 years ago.

The three-member commission “needs to step back from the grind of its day-to-day operations and plan strategically to address its critical issues,” state Auditor Les Kondo said in a statement Wednesday. “Without a clear vision and specific goals and action plans to achieve them, the PUC will trudge through its heavy workload, while staff continue to leave and the workload increases.”

HEI HECO Waiau power lines gear. 14 april 2016.
Workers gather at the Waiau power plant operated by Honolulu Electric Co., which is regulated by the state’s Public Utilities Commission. Cory Lum/Civil Beat

Kondo himself served as a PUC commissioner from 2007 to 2011. In 2017, the commission regulated nearly 1,800 entities across the state.

According to the audit, PUC staff and managers find the system used to process the commission’s hundreds of annual cases on utility rates, capital improvements, financing and other issues, as well as other internal agency operations, “unreliable,” “slow,” “difficult to use” and “obsolete.”

The PUC spent $2.8 million from 2005 to August 2017 on the Document Management System, provided by the Ohio-based tech firm Dayhuff Group.  The contract expires in 2019.

The audit says the PUC “has no firm plans to fix or replace this problematic system,” although PUC Chairman Randy Iwase said officials are aware of the problem and looking at what to do once the Dayhuff contract expires.

Despite what the audit described as “near-universal disdain” at the PUC for the Dayhuff system, Iwase said Wednesday that he could not confirm whether the PUC would replace it until that assessment is done. The commission plans to eventually issue a “request for information” to see how much its future document-management needs would cost.

The audit also found rampant turnover at the PUC, where 45 of 56 employees at the time the report was done had been working at the commission for five years or less. The commission, it said, is failing to retain institutional knowledge on work that can be significant and complicated.

More, the commission lacks a clear, documented procedure for this mostly new staff to handle and process all the cases that come in, including their testimonies, briefs, decisions and other elements, the audit found.

The report recommends that the commission better articulate and keep track of its long-term objective, including its role in the state’s goal of relying entirely on renewable energy by 2045. It also calls on the PUC to establish policies on how it handles its dockets, and to fix its information-technology woes as soon as possible.

“We agree that there’s always need to improve strategic planning, and we will do so,” Iwase said Wednesday. The audit’s recommendations to improve that, as well as its information technology, are “not unreasonable” and “we intend to take those … very seriously,” he said.

Randy Iwase chairs the Hawaii Public Utilities Commission. Cory Lum/Civil Beat

Iwase added, however, that the commission only had 34 staff members when he joined in 2015, including clerical employees, and that his top priority has been to boost the commission’s total staff.  It now has 58 staff members, including a doubling of its attorneys from five to 10, he said.

For the first time in three years, the PUC is reviewing proposed rate changes for Hawaiian Electric Co., Maui Electric and Hawaiian Electric Light Co. on the Big Island, plus rate changes for the inter-island cargo carrier Young Brothers and various water rate changes, Iwase said.

In recent years the PUC also had to focus much of its attention on the proposed $4.3 billion merger of Florida-based NextEra Energy and Hawaiian Electric — a move the commission ultimately rejected.

“In the midst of all of this, we’re going to do it,” Iwase said of the audit’s recommendations. “It’s just when you ask me why did it take us this long, it’s not that we didn’t care and we didn’t do it. We were just blasted with all of these cases.”

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Here’s the full audit:

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