A special counsel’s decision not to attend a July 11 meeting in Honolulu where the U.S. Department of Navy and the state’s consumer advocate preliminary approved the $215 million sale of Kauai Electric has created a rift between him and the Kaua’i County Council.
At a council meeting held at the historic County Building Thursday, councilmembers grilled and criticized William Milks for missing the July 11 meeting. Milks was hired by the county at a cost of $40,000 to analyze the proposed sale.
The council claimed his absence left the county without proper representation on the proposed sale before the state Public Utilities Commission.
The council still hasn’t taken a clear stand on whether to support or oppose the sale. They have scheduled a workshop this week to study the matter.
The PUC must approve the sale between the Kauai Island Utility Cooperative and the Citizens Communications Corp. of Stanford, Conn., before it becomes official.
The stipulation agreement reached by only two of three intervenors in the proposed sale – the Navy and the state Consumer Advocate, and not Kaua’i County – could leave the county with electrical rates or sale conditions it doesn’t want, Kouchi and other councilmembers indicated.
Such a sale approved by the PUC could leave island electrical consumers with adverse ramifications for generations to come, the legislators indicated.
The stipulation agreement, signed by the state on July 17 and by the Navy July 18, noted the lower purchase price – down from $270 million two years ago – and lower interest rates put KIUC in a better financial position to operate Kauai Electric.
At the Thursday council meeting, Milks said he didn’t attend the July 11 meeting because previous meetings held by intervenors didn’t point to any action for the July 11 meeting.
Milks also said he was on Kaua’i to join Mayor Maryanne Kusaka in a televised taping of a program to educate the public about the proposed sale.
At Thursday’s council meeting, Kouchi voiced his frustration over Milks’ absence from the July 11 meeting.
Kouchi said Milks had cautioned the council that “sometimes technical sessions” (conducted by the intervenors) sometimes turns back into negotiations.”
Councilman Daryl Kaneshiro noted that it appeared that Milks had suspicions the preliminary sale agreement could be reached July 11.
Kaneshiro quoted Milks as saying that he felt people attending the July 10 meeting on technical matters would have a “good idea at the conclusion as to where everyone is coming from. “
Councilman Gary Hooser also asked why Milks didn’t attend the meeting.
At the crux of his frustration and anger, Kouchi said was that “while we referenced the 1 p.m. council meeting and 2 p.m. meeting on the charter amendment (on July 11) , the reason you had to be on Kaua’i Thursday morning was to film the mayor’s chat.”
Council Chairman Ron Kouchi later apologized for scolding Milks, saying he “misfired” and that the criticism should have been pointed at the administration for requesting Milks’ presence on Kaua’i on July 11.
The stipulation agreement supporting the sale could encourage the PUC to approve the sale, or it may send mixed signals to the body, confusing the purchase question more, the county attorney said.
In a preliminary position statement, the county administration states it opposes the sale, citing questions about projected revenues and concerns about major electrical users leaving the system if alternative sources of electricity become cost effective. The council has yet to take a position.
The PUC is anticipated to make a preliminary decision on the proposed sale July 30, followed by a final decision scheduled to be released on Sept. 17.
The charter amendment, which could be placed on the November election ballot if approved by the council, would empower the council to create an electrical power authority.
The entity would run Kauai Electric should the KIUC sale bid before the PUC fail and the county decides to negotiate to buy the utility.
Kouchi said he felt it was “a very poor judgment call (for Milks) to come back and film what I call a political propaganda piece with the mayor when we needed you to be in front of the proceedings that were going to be filed with the PUC.”
Kouchi said he hired Milks for his expertise. “I thought that is why I hired you,” Kouchi said. “I didn’t hire you to be a mouthpiece to be on the mayor’s program.”
Milks said he didn’t know whether the talk show was of a political nature, adding that “when the mayor of this county asked me to appear on the television show, I am going to do everything I can do to accommodate her, period.”
Milks said he didn’t attend the July 11 meeting because he didn’t feel what was discussed July 10 would lead to the stipulation agreement.
“I would have liked to have sat down Wednesday, ten minutes after the nonsense of going through what we have been going through the last three months, and start negotiating. But it was a very, very structured meeting. Questions were written out, questions were read into a recorder…In my opinion, it was not a very productive day,” Milks said.
Had he had any inkling that an agreement was pending, he would have been at the July 11 meeting, Milks said.
“And if I thought if it was fruitful, I guess I could have made substitute arrangements, but I didn’t…I regret (it),” Milks said.
Kaua’i residents Glenn Mickens, Robert Lebendiger and Andy Parx said the council was coming down too hard on Milks for missing the meeting.
Mickens, who opposes the proposed utility sale, said Milks has provided excellent service to the county and that he should not be blamed for missing one meeting.
Addressing Kouchi, Lebendiger questioned why Kouchi was hammering away at Milks decision not to attend the meeting.
“Yeah, Mr. Milks made a big mistake, you are right about that. Why you are driving it so harshly makes me a little suspect.”
Kouchi acknowledged all the work that Milks has done, but said that Milks presence at the meeting was critical.
“If you are upset that I have conveyed my disappointment in such a strong fashion, I am sorry,” Kouchi said.
Parx said Milks gave a good explanation on why he wasn’t at the meeting, and that the Navy and the state’s consumer advocate could have reached the agreement without a county representative at any time.
Cheryl Kikuta, utilities administrator with the state Department of Commerce and Consumer Affairs, said the Navy and the state’s consumer advocate didn’t go into the July 11 meeting intending to reach the stipulation agreement without the county’s participation.
On July 10, all intervenors discussed many topics, including the “quantification of the benefit” of the proposed sale for Kaua’i residents, Kikuta said. That aspect became the main theme for the July 11 meeting, she added.
She said Milks informed the intervenors that he wouldn’t be able to get to the meeting. Wallace Rezentes Sr., the administrative assistant to Kusaka, was to attend, Kikuta said.
Rezentes said he could attend the meeting, but only if it could start earlier on July 11, because he had a meeting on Kaua’i to get back to on that day, Kikuta said.
It was agreed the meeting was to start at 7:30 a.m., Kikuta said. “We purposely scheduled the meeting at 7:30 a.m. to accommodate the county’s presence,” Kikuta said.
But before the morning meeting could be held, Rezentes said he had to head back to Kaua’i early and couldn’t attend the meeting, Kikuta said.
The purpose of the July 11 meeting was not to talk about the settlement, but the “overall perceived benefit of the sale, which was an important matter,” Kikuta said.
“During discussions, it became evident to our office that there was a possibility of getting some concessions from the applicants that would address our specific concerns,” Kikuta said.
Continued discussion evolved into a decision to reach a tentative sale agreement, she said. The intervenors then began working on a draft agreement to “memorialize what the parties understood to be the tentative settlement,” Kikuta said.
Attempts were made to contact Milks on July 11, July 12 and July 15, she said.
Through its attorney, the state’s consumer advocate made “a concerted effort” to contact Milks and to inform him of the tentative agreement and to relay it back to the county for review,” Kikuta said.
Milks told the council because he didn’t think anything substantial would come from the July 10 meeting, he didn’t attend the July11 meeting and went to Maui over the weekend.
Milks was reached by the state’s consumer advocate office on July 15. Kikuta said the county had a chance to review the agreement before it was sent to the PUC.
The Navy and the state will not renege on the stipulation agreement, which the county can “join in” if it wants to, or it can take its own stand on the issue, she said.
Councilman Randal Valenciano said he wanted to know why the communication broke down among the intervenors.
Milk said he was perceived form the “outset” as being an adversary, “clearly by the KIUC, probably by Citizens, maybe by the consumer advocate.”
Councilman Jimmy Tokioka and Kouchi also were surprised Milks signed off on the county’s preliminary statement opposing the sale, indicating support for that stand by the council when the lawmakers had yet to take an official stand.
In representing the county, Milks said Kusaka’s stand is unambiguous, but that it was a different matter with the council.
“From the council, there are seven individuals, and I don’t know, as I sit here today, what the sentiment of each one of the seven councilmen is regarding this proposal,” Milks said.
Staff Writer Lester Chang can be reached at mailto:firstname.lastname@example.org or 245-3681 (ext. 225).