County may appeal if PUC okays KE sale

The county administration is contemplating an appeal of a state Public Utilities Commission decision should the PUC approve the sale of Kauai Electric to Kaua’i Island Utility Co-op.

The administration may negotiate a lower sale price and place further conditions on rate levels by appealing the PUC decision.

Such an appeal would likely require the extension of the contract of special counsel William Milks, and would depend on availability of funds, said Beth Tokioka, county public information officer.

The County Council would need to approve an administration request to extend funding for Milks’ services.

A county appeal would cause the co-op to rearrange financing of the sale, and would likely end a promise by KE parent company Citizens Communications to provide $3 million to rate-payers if the deal closes by the end of October.

Wallace Rezentes, Sr., administrative assistant to Mayor Maryanne Kusaka, said the administration would support the sale immediately if a predetermined lower price was agreed to, and if that lower price would lead to lower rates.

An administration appeal would likely prevent KIUC from securing a low-interest U.S. Department of Agriculture Rural Utilities Service loan now available for much of the $215 million purchase price. There is a deadline of Sept. 30 for securing funds in the current round of federal funding.

According to KIUC calculations, the deal could still be done without the RUS loans, but would result in an additional $10 million in interest payments through 2010 because of KIUC having to secure sale financing through higher-interest loans through a nonprofit, cooperative financing entity.

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