Survey draws comments from various sides of proposed sale of Kauai Electric

Prior to publication The Garden Island provided the results of our telephone survey to various individuals who have a role in the proposed sale of Kauai Electric to the Kaua’i Island Utitlity Co-op. We asked for comments to accompany the release of the poll.

We received remarks from Gregg Gardiner, who is leading the co-op’s effort, from Mayor Maryanne Kusaka who is proposing the County of Kaua’i create a utility authority to run Kaua’i’s electric company and Walter Lewis, a critique of the sale.

Gregg Gardiner, Kaua’i Island Utitlity Co-op board chairman: We appreciate The Garden Island’s candid admission that their poll is not scientifically valid, and we hope the public will keep that admission in mind when it views these results. Although The Garden Island had good intentions, this poll was not professionally done and is therefore completely unreliable

Even if the survey had been professionally done, with so few completed interviews, the results on any question can be off by as much as 14 points as noted by SMS Research. For example, we think it is highly dubious that 72% of the people have no opinion or are uncertain about the proposed sale, but that is what this poll claims.

The Garden Island survey failed to follow professional, scientific procedures on such things as how the calls were made, how the questions were asked, and properly verifying who was answering the questions to assure a valid sampling of opinion.

While we give credit to The Garden Island for attempting to conduct a poll, it is unfortunate that they did not turn to the professionals for an accurate poll. We also note that KIUC has in the past conducted a professional poll by SMS Research in Honolulu, and those results were given to The Garden Island in June 2000.

Finally, KIUC offered The Garden Island financial help to fund a poll by a professional firm, independent and without input from KIUC.

KIUC has been blessed with overwhelming support in our Island community including over 5,000 people who signed petitions; over 500 letters, 60 e-mails and a dozen faxes to the Kaua’i Council last week; over 400 supporters at the PUC Public hearing in May; and the support of virtually every organization on Kaua’i including: the Chamber of Commerce, the Hotel Association (Kaua’i chapter), the Kapa’a Business Association, the Lihue Business Council, the Po’ipu Beach Association, the Kaua’i Business Council, the United Way, the Kaua’i Food Bank, the International Brotherhood of Electrical Workers, plus hundreds more. This kind of overwhelming support should lead the reader to be suspect of the results reported by this unscientific poll.

We appreciate the opportunity The Garden Island has given us to comment on their poll.

Mayor Maryanne Kusaka: I am surprised to learn that, of the respondents that had made up their minds on the issue, twice as many oppose the sale as support it. However, it doesn’t surprise me that such a large number of our residents feel uninformed. Despite KIUC’s claims of overwhelming community support, most people in our community simply don’t understand it well enough to render an opinion. I think the Public Utilities Commission would be well-served to consider this information as a barometer of how public opinion exists today, and to acknowledge that an enormous amount of work is ahead of us in having this transaction gain widespread public acceptance. To maintain its IRS tax exempt status, 85 percent of KIUC’s revenues would need to come from members. These figures throw some doubt as to whether that 85 percent can be achieved.

Walter Lewis: The Garden Island should be congratulated for the difficult undertaking of a poll about a complex business transaction The poll’s results showing that those who had an opinion were opposed to KIUC by a two to one margin was informative, but it was a major disappointment that about 70 percent of the respondents did not express an opinion. KIUC is the chief culprit responsible for this position. It chose to deprive the ratepayers of an opportunity to vote on whether they approved the transaction, and it felt no obligation to provide the public with adequate information about the deal. The average person without some assistance simply does not obtain the necessary information to make a sound evaluation. Mainly this is because few people will read the legalistic filings and other sources are perceived as partisan.

For those who have studied the filings and the issues the basic realities are that the deal as now structured does not provide rate reductions, it commits ratepayers to an excessive price financed by loans that will have to be repaid and that the obligations made were entered into without adequately evaluating the risks and failing to give the consumers a voice. All of these points are crucial indictments of KIUC.

KIUC’s sales theme has all along been to pressure us saying this is our last chance to catch a train that is leaving the station. They say that the financing for the deal is great; that the deal is beneficial for Kaua’i; and that if the deal does not occur we will lose the opportunity for self governance of our utility and KE will raise rates. Being right on one out of four is not enough. The financing is very good but you don’t buy something you don’t need to own because of attractive borrowing potentials. The deal offers no significant current benefits and the future benefits are questionable.

KIUC vastly overplays the consequences of the failure of the PUC to approve the transaction. The threat that rates will increase if the deal is not approved is baseless. KE cannot justify a rate increase – in fact a significant rate reduction could likely be obtained by ratepayers – and there is no other purchaser in sight. If the transaction is not approved by far the most likely potential is for a more favorable deal to be made that reduces the risks the current deal presents.


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