Regardless of the outcome of the proposed sale of Kaua’i Electric, an existing contract mandates that Kaua’i Power Partners provide 26.4 megawatts of power to KE by the middle of 2002. KE has the county permits to proceed with its
Regardless of the outcome of the proposed sale of Kaua’i Electric, an existing
contract mandates that Kaua’i Power Partners provide 26.4 megawatts of power to
KE by the middle of 2002.
KE has the county permits to proceed with its
Lihu’e Energy Service Center project along Ma’alo Road (the road to Wailua
Falls) in Kapaia, where the KPP power plant will be built. That’s pending a
deadline tomorrow for appeal of a Fifth Circuit Court ruling upholding the
legality of those permits.
John Rapacz, a Maui attorney retained by
Citizens for Clean Air, a group of Kauaians including Kaua’i High School
teacher Patrick Cockett and others who filed suit challenging the permits, said
the group hadn’t decided if it would appeal Judge George Masuoka’s ruling that
the Kaua’i County Planning Commission properly approved the various
permits.
On the same day that Amfac Sugar Kaua’i officially announced it
would discontinue agricultural operations on the island, Kaua’i Power Partners
and the Contractors Association of Kaua’i hosted a gathering at the Kaua’i
Marriott Resort and Beach Club for potential power plant contractors.
The
fact that Amfac’s Lihu’e Plantation power plant provides over 10 percent of the
island’s electricity, and the questions about the power plant that are raised
Amfac’s decision to get out of sugar and agriculture on the island, have made
KPP consider supplying KE power earlier than the mid-2002, contract-mandated
timeframe, said John Burns, KPP project director.
“With Lihu’e Plantation
shutting down, we’re looking at whether that might be moved up a little bit to
try to help support KE,” Burns said.
Construction of the $30 million KPP
project is expected to begin early next year, he said.
While no
Kaua’i-based contractor is large enough to be the general contractor, KPP
intends to hire as many Kaua’i subcontractors as possible for concrete work,
grading, painting, and building non-power plant components of the project,
according to Burns.
Besides the power plant, KPP is to build a small
electric substation and a transmission line to link up with the existing KE
grid, Burns continued.
The state Public Utilities Commission last month
refused to approve the $270 million sale of KE to Kaua’i Island Utility
Cooperative. But KE’s mainland parent company, Citizens Communications, remains
committed to selling both KE and The Gas Company (Gasco), a propane and related
products business with locations in Lihu’e and statewide, said Brigid M. Smith,
an assistant vice president of Citizens.
The utilities commission ruled the
$270 million price was too high.
“It’s still under discussion about whether
another application will be filed, and if the co-op will be pursuing this
application,” Smith said. “We’ve made it clear that we are certainly not in any
type of a fire-sale mentality. We will take as long as we need to take to get
the buyer that’s right for these properties. We’re in no hurry. It’ll go as it
goes.”
Morgan Stanley Dean Witter was hired by Citizens as an advisor on
the sale of KE and Gasco.
Smith said prospective buyers that will be assets
to the state will be given higher priority, Burns noted.
Representatives of
the co-op and Citizens met earlier this month in Washington, D.C. to determine
their next steps.
In the meantime, the Kaua’i County Council has approved
spending between $50,000 and $100,000 to hire an independent appraiser to
determine the value of KE. A committee working on the hiring includes Wally
Rezentes Sr., who is Mayor Maryanne Kusaka’s administrative assistant, county
clerk Peter Nakamura, and Glenn Sato, an energy specialist in the county Office
of Economic Development.
The committee held its first meeting last week,
Rezentes said.
Negotiations between Citizens and the co-op continue,
confirmed Dick Heitman, a co-op official.
Separate bills in Congress could
appropriate around $113.25 million in federal loans for the co-op this federal
fiscal year, which ends Sept. 30.
No conference committee action is
scheduled on either of those bills.
The money is considered “hardship”
funds, with a 5 percent interest rate Heitman said would make the deal less
expensive to Kaua’i residents who would become the owners of KE under the co-op
deal.
If a lower sale price could be negotiated between Citizens and the
co-op, a new sale application likely would be filed with the utilities
commission, Heitman said.
Staff writer Paul C. Curtis can be reached
at 245-3681 (ext. 224) and [
HREF=”mailto:pcurtis@pulitzer.net”>pcurtis@pulitzer.net]
