Whistleblower says utility commission risks “a mass departure of critical staff.”

State regulators are investigating complaints made against a high-level official of the Hawaiʻi Public Utilities Commission, the head of the state’s main consumer protection agency told lawmakers on Tuesday.

The investigation follows an anonymous complaint sent to Sen. Jarrett Keohokalole, chair of the Senate Commerce and Consumer Protection Committee, concerning the PUC’s new chief of policy and research, Randy Baldemor.

The letter describes Baldemor as an unqualified, ill-tempered bully who has created a “toxic work environment” at the PUC, weaponizing the “State’s Law of Aloha Spirit” to mute complaints and providing feedback to staff “in the form of put-downs and endless amounts of time boasting about himself.”

Sen. Jarrett Keohokalole added a public utilities whistleblower complaint to the agenda for a briefing on performance-based utility regulation on Tuesday. “I felt personally that it would be derelict not to address it,” he said. (Cory Lum/Civil Beat/2022)

Based on the allegations, Nadine Ando, director of the Hawaiʻi Department of Commerce and Consumer Affairs, said, “We believe it would be appropriate” for the consumer agency to launch an investigation. Although the utilities commission operates independently, it is attached to the agency for administrative purposes.

Ando’s statement came Tuesday during an informational briefing before the Senate committee, which was scheduled to focus on the process of setting electric rates. The PUC has given Hawaiian Electric Co. the green light to pursue a likely rate increase under a process critics say is inconsistent with the current law. HECO asserts the potential rate increase is consistent with Hawaiʻi’s performance-based regulation statute.

Most of Tuesday’s meeting amounted to a deep dive into the complexities of performance-based regulation, which requires rates to be set on utilities meeting performance metrics in areas like adding renewable energy resources, rather than simply charging customers to cover utility operating costs.

An anonymous complaint sent to state officials alleges a senior Public Utilities Commission official is unqualified to lead the agency. The commission is located in the state Territorial Office Building. (David Croxford/Civil Beat/2023)

Discussion of the whistleblower complaint came and went in minutes. Keohokalole said he had added a presentation on the consumer protection agency’s whistleblower complaint process to the meeting’s agenda after receiving the complaint last week. He also included the letter in meeting materials.

“I felt personally that it would be derelict not to address it,” he said.

The letter notes that Baldemor was hired despite a lack of regulatory experience and a work history that includes a high-profile ethics charge while he held a top job with the Hawaiʻi Tourism Authority. The policy and research chief must deal with extremely complicated subjects explored in thousands of documents submitted in PUC proceedings, including the performance-based regulation lawmakers discussed on Tuesday, the letter says. It asserts Baldemor simply doesn’t have that background.

“If no action is taken,” the letter says, “the Commission risks a mass departure of critical staff enduring continuous verbal and emotional abuse by Randy Baldemor.”

Through a PUC spokesman, Baldemor declined to comment. The PUC also declined to comment about specific allegations but said it would cooperate with the investigation.

“The Hawaii Public Utilities Commission takes any complaints seriously and will fully cooperate with any investigation relating to a complaint,” the agency said in a statement. “The Commission is considerate of issues or complaints relating to its employees. However, any such complaints must be allowed due process as permitted by law.”

The PUC is in charge of regulating not only the state’s power utilities, but also water, sewer and transportation companies, including Young Brothers, Hawaiʻi’s interisland cargo shipping firm.

The anonymous complaint says the commission’s “ability to carry out this work is currently being undermined by a toxic and ineffective work environment caused by the new Chief of Policy and Research, Randy Baldemor.”

Accused Of Soliciting Upgrades From Contractor

A former partner with the law firm Goodsill, Anderson, Quinn and Stifel, Baldemor has held several high-level state government jobs, including serving as deputy director at the Department of Human Resources Development, deputy director of the Department of Taxation and deputy chief information officer for the Office of Information Management and Technology.

He also pulled down more than $200,000 a year in compensation as chief operating officer of the Hawaiʻi Tourism Authority, records show.

Baldemor left the authority in 2018 after the State Ethics Commission found he had likely violated a variety of state ethics laws by soliciting, accepting and failing to report free travel upgrades from airlines and a hotel while traveling on state business. Among those providing upgrades was Japan Air Lines, a contractor for the tourism agency at the time, the Ethics Commission said.

The commission allowed Baldemor to resolve the matter by paying $6,000.

“Randy had zero experience in public utility regulation.” PUC complaint letter

An overarching issue in the complaint involves Baldemor’s qualifications for a job involving complex fields such as electric utility regulation.

The whistleblower’s letter notes that the job description for the policy and research chief required “Five (5) years progressively responsible experience involving the development, implementation, and administration of program policies, electricity, telecommunications, gas, private water and wastewater, motor and water carrier transportation regulation, research, analysis, and investigation activities, and program administration.”

Although it notes that Baldemor previously worked for Roberts Hawaii, a regulated bus company, it says that experience does not adequately equip him for his current job.

“Randy had zero experience in public utility regulation,” the complaint says. “He has zero experience working in electric, gas, water, wastewater, and/or telecommunications industries. He has zero experience with Young Brothers. He has also clearly demonstrated he has zero knowledge of utility regulation and no understanding of utility systems and technologies.”

The letter adds that at least four experienced candidates within the PUC or the consumer protection agency applied for the job.

“To many PUC staff, it is not clear what Randy’s role is or what he does on a day-to- day basis,” the letter adds. “He is not capable of performing the duties of the Chief of Policy and Research due to his complete lack of regulatory and industry experience and apparent disinterest in learning about utilities.”

The bottom line is that tension has pervaded staff, the complaint says.

“Staff complain that team meetings he convenes end up having nothing to do with the PUC’s work, nothing to do with professional development, and often go hours over the scheduled time,” it says. “He degrades and bullies his staff during meetings. These meetings are a waste of state resources and ratepayer money.”

A complaint letter singled out PUC chair Leo Asuncion Jr., alleging at a PUC holiday party he mentioned that he had attended barbecues with Hawaiian Electric Co. executives. Asuncion denied that allegation on Tuesday. (Kevin Fujii/Civil Beat/2024)

The letter also singled out the PUC’s chair, Leo Asuncion Jr., for creating “an environment where staff feel unable to share feedback, as he has been unreceptive to previous concerns and remains closed off to input.”

Although the letter was put into the record for the Senate hearing, formal presentations on the complaint to the legislators amounted to a brief description by Ando on the consumer protection agency’s process for dealing with such complaints. She said that identities of employees who come forward to participate in the investigation will be kept confidential.

However, she noted that the administration’s task related to the letter is complicated because the complaint is anonymous and the complaints it contains are generally broad and don’t include details of employment law violations.

Keohokalole did take the opportunity to question Asuncion about some allegations in the letter. In one instance, it says Asuncion said at a PUC holiday party that he and Baldemor had attended barbecues with Hawaiian Electric Co. executives.

“In fairness,” Keohokalole said, “I want to provide you opportunity to be asked and answer whether during your tenure as PUC chair you have ever attended functions hosted by executives or employees of Hawaiian Electric.”

“I have not,” Asuncion said.

“As chair, have you ever been to the home of an employee or executive of a regulated utility?” the senator asked.

“I have not,” Asuncion said.

“Have HECO executives or executives of any other entity that’s regulated by your commission ever paid for food, drinks or hosted events that you attended while you were chair,” Keohokalole asked.

“No,” the PUC chair said.