Posted on: Saturday, August 31, 2002

PUC sets deadline for sale of Kaua'i Electric to co-op

By Jan TenBruggencate
Advertiser Kaua'i Bureau

LIHU'E, Kaua'i — The long-delayed sale of Kaua'i Electric to a local cooperative appears to be nearing approval by the state Public Utilities Commission.

The PUC has given itself a Sept. 17 deadline to prepare a decision and order either approving or denying the sale, but the panel already has issued a preliminary indication that it is looking favorably on the deal.

The Kaua'i Island Utility Co-op is proposing to buy the utility from the mainland firm Citizens Communications for $215 million.

That is far less than the $270 million sale price the PUC rejected last year, but more than the $190 million that a county appraisal says the utility is worth.

KIUC officials say it's a fair price, and one that will immediately benefit ratepayers. Although rates would remain the same, the utility has agreed to make a $3 million payment to ratepayers after the sale goes through, which means an average of $45 per customer.

Furthermore, the co-op expects income to exceed costs, and is proposing to return 25 percent of the excess to ratepayers each year, said Gregg Gardiner, chairman of the KIUC's organizing board.

The state consumer advocate and the Navy have agreed to the sale, leaving Kaua'i County as the only party to the application that is still expressing reservations.

Mayor Maryanne Kusaka and her administration have concerns that the price is still too high. The County Council, which has deferred action at the last two meetings at which it was supposed to reach a position, has a special meeting scheduled Thursday on the Kaua'i Electric issue. There were some indications that the council and administration could split on the issue, with the administration opposing and the council favoring the sale, but no final decisions have been made.

The PUC has ordered the parties to submit their final position statements by Sept. 10.

Gardiner said that if the sale is approved, the deal could be completed as early as Oct. 30.