Cooperative applies for ownership of Kauai Electric

LIHU’E (AP) — A cooperative has formally applied to own and operate Kauai

Electric Company.

The Kauai Island Utility Co-op and Citizens Utilities,

the current owner, have filed a joint application with the state Public

Utilities Commission.

The cooperative of Kauai Electric ratepayers is

paying $270 million dollars for the utility.

Attorney Alan Oshima, who

represents both parties, said the state consumer advocate has agreed to an

expedited process. Approval of the purchase is expected by fall.

Oshima

said he anticipates a challenging approval process, and expects many questions

from the consumer advocate.

This will be the first time a cooperative has

sought to acquire a public utility in Hawaii. But Oshima said it is a

well-developed method of utility ownership.

Dick Heitman, transition team

leader for the co-op, said the cooperative will provide local control of the

utility, provide tax benefits and remove the need to produce a profit for

stockholders.

He also said there is a commitment to lower Kauai Electric’s

rates, which are the highest in the nation for a utility its size.

But

co-op chairman Gregg Gardiner said it will be several years before rates can be

reduced.

Under existing state laws, the cooperative will be regulated by

the PUC, Oshima said. It would take action by the Legislature to make it exempt

from PUC control, he said.

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