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
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.
