Kaua’i utilitydealmakers meet in San Francisco

LIHU’E – Representatives of Kaua’i Electric, Kaua’i Island Utility Co-op and KE

parent company Citizens Communications Co. met in San Francisco last weekend to

discuss the proposed sale of KE to the co-op.

The deal, for $270 million,

needs state Public Utilities Commission approval to be finalized. The proposal

has drawn criticism from Kaua’i residents and government leaders, including

Mayor Maryanne Kusaka and the County Council, as well as state and federal

officials, united in their concern over the high price and other

details.

Dick Heitman, in charge of a transition team still hoping to move

KE from an investor-owned, profit-making venture into a non-profit,

member-owned utility, said last week the agenda for the meeting would not be

determined until meeting time.

Those on record opposing the sale – among

them Kaua’i County, state Division of Consumer Advocacy in the Department of

Commerce and Consumer Affairs, and U.S. Department of Defense (for the Navy’s

Pacific Missile Range Facility at Barking Sands) – continue to state their

major concern is the price.

So, it would be logical to think that price

may have been one item on the meeting agenda, even though the parties have a

signed sales agreement at $270 million. And, at that price, the co-op can make

the transaction work, Heitman said.

Not everyone agrees. Kusaka this week

will ask the council to agree to spend between $50,000 and $100,000 to hire an

independent appraiser to determine the value of KE. The money for an appraisal

exists in the county attorney’s budget, Kusaka said in a letter to the

council.

Heitman, who managed an electric cooperative on the mainland and

remains a firm believer in co-ops, has changed his mind about leaving the

island. He said he’ll continue devoting his time to making the transition and

sale successful.

While he has been involved in purchases and mergers of

electric cooperatives on the mainland, this is his first experience with a

co-op formed from scratch for the sole purpose of buying a for-profit electric

company.

The process has proven new and challenging and has exposed him to

lots of different entities and viewpoints, he said.

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