KIUC doing well in its first months, council told

Council members question raised rates

The $215 million sale of the Kauai Electric and the transition of operation from Citizens Commutations Company to the Kaua’i Island Utility Co-operative has been accomplished without a hitch, KIUC’s chairman told a council committee Thursday.

At a meeting of the committee of the whole held at the historic County Building, council chairman Kaipo Asing asked KIUC officials to provide a presentation to update the public on the current state of Kaua’i’s electric utility, which is now owned by a community utility cooperative.

Prior to the completion of the sale in November, the purchase the public was divided, pro and con, over the sale, and the topic was the source of public discussion for months.

In describing the successful transfer of the utility, KIUC board chairman Gregg Gardiner said, “forty months of planning in anticipation of the closing paid off.”

“We had our experts and we went without a hitch,” Gardiner said. “We started day one with zero dollars in the bank and we quickly started building revenues.”

He said electricity sales are up.

“Through January, our sales forecast are better than expected, and our cost are less than expected,” he said. “That is a great way to do it.”

And KIUC could have paid back a $3 million “working capital loan” earlier, but held back because the leaders of KIUC wanted to make sure there were no problems, Gardiner said.

In spite of the glowing report, some audience members criticized the council for allowing Gardiner, an incumbent who is running for one of nine seats on the KIUC board in an election that is be settled Feb. 15 , to make the presentation.

Gardiner also almost wasn’t allowed to discuss the current KIUC election and to provide updates about the co-op.

Council vice chairman Jimmy Tokioka said he is not opposed to Gardiner’s candidacy, but said the meeting didn’t seem to be the appropriate place for Gardiner to discuss the election, since the matter was not mentioned on the council committee agenda.

His objection was shot down by council chair Kaipo Asing, who said he wanted to know about all matters related to KIUC.

“The rationale for my thinking, information I am looking for is an entire picture of what has happened, what is happening,” Asing said.

Gardiner reported:

• The commitment by KIUC employees has been “extraordinary.”

  “I am very pleased and very excited about how the employees have embraced the whole cooperative plan, and I can see only bright spots ahead,” Gardiner said.

• KIUC has a sister relationship with an electrical co-op on America Samoa. In emergencies, the two cooperatives can help each other out. KIUC and the America Samoa cooperative have both secured loans from the Rural Utilities Service of the U.S. Department of Agriculture.
• KIUC is working with experts on renewable energy projects that would suit Kaua’i’s’ needs.

  Gardiner said the first elected KIUC board will be looking at them and will work with the state Public Utilities Commission to see “what works and what doesn’t work.”

• The election of the KIUC board is under way and ballots were mailed out to KIUC members beginning on Jan. 31 and must be received by the KIUC by Feb. 15.

The ballots can be mailed to KIUC or brought directly to KIUC’s office at the Kukui Grove Village West.

Councilmen Joe Munechika and Mel Rapozo said some constituents have voiced concerns that the voting process might be compromised because the envelopes in which ballots were mailed back to KIUC had the names of KIUC members on them.

Rapozo said he knew of two people who threw away their ballots because they “felt it wasn’t a secret ballot.”

Gardiner said that the filled out ballot is put in an envelope without the name of the voter.

That envelope, in turn, is put in a second envelope that has the name of the voting utility member and is sent to KIUC, he said.

When the ballots are counted, one person at KIUC opens the second envelope with the name on it and hands it to another person, who throws that envelope away, he told the council.

Another person gets that envelope, along with several hundred other envelopes, and they “open the envelope (with the ballot)” and the ballot is counted,” Gardiner said.

This procedure protects the identity of the voter, he said, emphasizing “there is no way persons opening up the envelope containing your ballot know how you voted.”

Councilwoman JoAnn Yukimura, interim KIUC board member, cautioned that the ballots will not get to KIUC in time if they are sent by mail and are “post-marked” Feb. 15.

The election count will be done by the same contractors who have been hired for state and county elections, Gardiner said.

Gardiner said all 31 board candidates were of high caliber.

“As I sit here today, I can tell you no matter how you slice or dice that group, you are going to get nine good candidates, and KIUC is going to be in good hands moving forward,” Gardiner said.

Yukimura congratulated Gardiner and others involved in bringing along KIUC, but she said electrical consumers were told their bills would be reduced immediately once KIUC took over the utility.

But recent bills have shown the opposite, Yukimura said.

Gardiner said rates have not gone up, but what has gone up is the energy fuel charge, a situation tied to higher oil prices.

“The volatility of oil affects us, electrical bills and gas prices,” he said, adding that “if oil prices go down, you will see lower bills.”

Asing said KIUC customers also were told they would be eligible for rebates, and it seems the public is still waiting.

Gardiner said distribution of the first “giveback”-$3 million from Citizens-will occur in April, followed by $2.6 million from KIUC next year.

The amount of the giveback from Citizens will be “typically” based on what the energy consumer used last year, he said.

Gardiner said once KIUC has built more equity into the system, RUS will allow KIUC to give “a greater portion back.”

Speaking before the council, local resident Andy Parx said it was not proper for the council to have allowed Gardiner to make his presentation a week before the election.

The presentation will be shown on Ho’ike Television, giving Gardiner an advantage over other KIUC board candidates, Parx said. Other people also have done advertisements for Gardiner, he said.

Mickens sought answers from Gardiner on these questions:

• Why was it not necessary for KIUC members to sign off on election ballots? During an election year, people sign off before they are allowed to vote, Mickens said, and people voting in the KIUC election should have been required to do likewise.
• If big electrical users go to co-generation, how will KIUC keep electrical rates down?

  Gardiner, however, was not asked by the council to respond. Before the meeting closed, Asing said the attacks made against Gardiner by some audience members were not justified and he indicated he would squelch similar attacks at future meetings.

Staff writer Lester Chang can be reached at 245-3681 (ext. 225) and lchang@pulitzer.net