Bill allowing $113 million loan for KE sale passes

WASHINGTON, D.C. – The U.S. Senate approved an amendment in its Rural

Development Appropriations bill Thursday making a $113 million loan available

towards the purchase of the Kaua’i Electric Company.

The bill, which was

introduced by U.S. Sen. Daniel Inouye , designates two possible recipients of

the loan. One recipient named is the Kaua’i Island Utility Co-op, which is

currently negotiating the buyout with KE’s owner, Citizens Communications, and

the second is the County of Kaua’i.

The County of Kaua’i?

Two weeks ago

the county, along with the Navy and the state Consumer Advocate, announced

their opposition to the sale, saying that the $270 million price tag was too

high. The sale’s approval is now pending before the Public Utilities


County officials would not say whether the county is going to

try to buy KE if the sale is shot down by the PUC.

“We need to look into

all options,” said Beth Tokioka, public information officer for the


Last month, the county administrative assistant Wallace Rezentes,

Sr. and Council chair Ron Kouchi traveled to Washington, D.C.

“We went

there to make sure those funds would be protected if the deal didn’t go through

and offer an alternative if need be,” Rezentes said.

He added that the

funds could be used by the County of Kaua’i as well as any other non-profit

organization that would qualify for the loan.

Inouye said he was concerned

that Kaua’i residents’ electric rates are among the higest in the country, due

to the island’s dependency on refined oil and the cost of repairing the isle’s

electricity system that was devastated by Hurricane ‘Iniki in 1992.


power customers now pay more than 20-cents per kilowatt-hour, which is twice

the rate of Honolulu power customers, he said.

“My primary concern is that

Kaua’i residents receive stable and reliable service, without fear of further

rate increases, and that Kaua’i Electric’s personnel remain employed,” Inouye


“At this point, I felt it important that the loan amount for Kaua’i

be maintained as an option that may be executed at the appropriate time,”

Inouye said.. The House passed its version of the bill earlier this month. The

Senate and House bills will face a joint House-Senate Conference to resolve the

differences between the measures. A conference version of the bill will be sent

to the Senate and House for final approval before it is transmitted to the

White House.


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