LIHU’E – Kaua’i County, the state consumer advocate and the U.S. Department of Defense will file position statements today with the state Public Utilities Commission regarding the proposed sale of Kaua’i Electric to the Kaua’i Island Utility Co-op. The position
LIHU’E – Kaua’i County, the state consumer advocate and the U.S. Department of Defense will file position statements today with the state Public Utilities Commission regarding the proposed sale of Kaua’i Electric to the Kaua’i Island Utility Co-op.
The position statements-at least one reported to be in opposition to the buyout-are legal, technical documents basically stating whether the three parties granted intervenor status by the Public Utilities Commission (PUC) are for or against the proposed sale.
The Department of Defense (DOD) is typically granted intervenor status in these cases, specifically in this one because the Navy’s Pacific Missile Range Facility has a major national defense role and is one of the island’s top five users of electricity.
The Division of Consumer Advocacy (state consumer advocate), under the state Department of Commerce and Consumer Affairs, is by law an intervenor in utility sales cases, and the county requested and was granted intervenor status as the local governing body.
Alan Oshima, a Honolulu attorney representing Kaua’i Electric and the Kaua’i Island Utility Co-op (KIUC), said he has heard from certain sources that at least one of the parties is expected to file papers opposing the sale.
“That’s unfortunate,” he said.
But the filing of position statements is really the beginning of PUC scrutiny of the proposed sale, not the end, Oshima said.
“I don’t think the position statements are the end of the road. In fact, it is only the beginning,” he said.
Still, if one or more of the intervening parties recommends the PUC deny the sale, it would be a blow to buyer and seller, he noted.
“Oh, it’s definitely a setback, but not necessarily the end of the project. We’ll keep working with all the involved parties,” said Oshima, who is still confident the PUC will ultimately approve the sale.
Oshima acknowledged the sale of a for-profit electric utility to a nonprofit co-op is a first in the state and therefore not “a usual deal.” But he said that in other cases, intervenors which have expressed concern over a sale say in their position statements that they can support the sale if certain conditions are attached to it, or if certain other information not yet made available is brought to light.
It takes at least two of the three PUC commissioners’ votes to issue an order, either for or against the sale, he added.
Oshima and Denise Nip, PUC attorney, said another round of information requests-this time from the PUC to the would-be buyer and seller-will follow once the PUC has reviewed the three position statements due today.
The PUC is under the state Department of Budget and Finance.
“According to the schedule that was in the order, the position statements get filed (today), and then the commission reviews them. And after we’ve reviewed the position statements, if we feel that it’s necessary, we will issue our own (information requests) and start our own discovery process,” Nip said.
She said she didn’t know whether or not the PUC plans on holding any public hearings on the proposed sale.
The PUC chairman is Dennis Yamada, an attorney, Kaua’i native and former long-time state representative. The other commissioners are Rae Loui and Gregory Pai. Loui was formerly chair of the state Department of Land and Natural Resources’ Commission on Water Resource Management, and Pai is a former First Hawaiian Bank economist.
At various Kaua’i public meetings regarding the proposed sale, those opposed to it said the high purchase price ($270 million) and the business backgrounds of the initial KIUC board of directors are causes for concern.
The fact that the community has little say over board makeup, or in what the high purchase price will mean to the ratepayers who become co-op members, remain concerns, too.
Citizens Utilities Company (now Citizens Communications Company) sold three electric utilities on Kaua’i and in Arizona and Vermont for a total of $535 million. That means Cap Rock Energy Corp. got the Arizona and Vermont operations, which serve around 89,000 total customers, for nearly the same price ($265 million) KIUC would pay for Kauai Electric ($270 million). Kauai Electric has about 30,000 customers.
It was learned earlier that among those bidding for Kauai Electric was Hawaiian Electric Co., which did not make it to the second phase of bidding.
Fred Kobashikawa of Hawaiian Electric confirmed that the company submitted a bid. A price was not disclosed, though he said, “Our offer was significantly less than the asking price.” Business Editor Paul Curtis can be reached at 245-3681 or pcurtis@pulitzer.net
