STAND. COM. REP. NO. 1843

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  GOV. MSG. NO. 193
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred Governor's Message No. 193, submitting for study and
consideration the nomination of:

PUBLIC UTILITIES COMMISSION

     G.M. No. 193       GREGORY G.Y. PAI, Ph.D., for a term to
                        expire June 30, 2000, 

begs leave to report as follows:

     The Chair of the Public Utilities Commission (PUC) presented
testimony in support of the nomination.  Written testimony in
support of the nomination was received from the following persons
and entities who were not present at the hearing:  a commissioner,
the administrative director, and five employees of the PUC, the
Hawaii Korean Chamber of Commerce, the Korean American Bar
Association Hawaii, the Hawaii Han-in Sports Association, the
Honolulu Korean Jaycees, the Korean American Women's Club, the
Korean American Coalition Hawaii Chapter, and three individuals.
Two individuals presented testimony opposing the nomination. 

     Upon review of the resume and other background information
submitted by the nominee, your Committee finds that Gregory G.Y.
Pai has, among other credentials, a Ph.D. in economics from the
Massachusetts Institute of Technology and a Master's degree in
Architecture from Harvard University.  The nominee worked as an
economist with the Bureau of Economic Analysis and the United
States Department of Commerce, and served for six years as
Vice-President and Chief Economist with First Hawaiian Bank.

 
a                                                     GM193      
                                   STAND. COM. REP. NO. 1843
                                   Page 2


     In 1989, Dr. Pai was appointed Special Assistant to the
Governor for Economic Affairs and was subsequently named Director
of the Office of State Planning.  The nominee held an interim
commissioner position on the PUC from 1996 to 1997, prior to being
appointed Special Assistant to the Governor for Policy.  Dr. Pai
is currently an interim commissioner on the PUC.
     
     Dr. Pai is active in community affairs, having served as
President of the Korean Chamber of Commerce of Hawaii, the
American Statistical Association, Hawaii Chapter, and First Night
Honolulu.  Additionally, the nominee has served on the boards of
numerous organizations, including Hawaii Public Radio, the
Honolulu Symphony Orchestra, the Health and Community Services
Council of Hawaii, and the Girl Scout Council of the Pacific.    

     Testimony received by your Committee in support of the
nominee indicated that Dr. Pai's expertise in economic analysis
and planning has been invaluable to the PUC in its decisionmaking
since a significant number of utility filings involve complex
economic issues.  Further, the nominee's diverse experiences in
the public and private sectors allow him a broad and balanced
perspective on the issues facing the PUC.  Supporters of the
nominee also noted that Dr. Pai's qualities include knowledge of
the regulatory process, dedication, independence, leadership,  and
a commitment to public service.

     Testimony received by your Committee in opposition to the
nominee indicated that Dr. Pai is unqualified to serve on the PUC
due to his lack of business and telecommunications experience.
Other testimony indicated that the nominee displayed a lack of
openness to public input during meetings of the Barbers Point
Redevelopment Commission, on which the nominee served as one of
its Chairs.  Concerns were also raised regarding the nominee's
position against the mandatory undergrounding of high voltage
electric transmission lines.       

     Your Committee members diligently questioned the nominee
regarding his qualifications, his position on the role of the PUC,
and his views on substantive public utility issues.  Dr. Pai
responded that his professional and educational background, as
well as his prior and current experience as an interim PUC
commissioner qualified him for a regular appointment to the PUC.
Dr. Pai also indicated that he favors greater openness in PUC
matters and the adoption of a more proactive stance by the PUC.  

     The nominee also indicated that he did not support the
mandatory undergrounding of electric transmission lines and
favored the current law under which, the PUC, applying certain
criteria, has the discretion to determine whether transmission

 
a                                                     GM193      
                                   STAND. COM. REP. NO. 1843
                                   Page 3


lines should be placed overhead or underground.  The nominee noted
that in two recent dockets, the PUC, applying the current law,
approved in both cases the overhead placement of electric
transmission lines. 

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee, after full consideration of the
background, character, experience, and qualifications of the
nominee, has found the nominee to be qualified for the position
to which nominated and recommends that the Senate advise and
consent to the nomination.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
a                                                     GM193