honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Saturday, July 20, 2002

County objects to utility deal

By Jan TenBruggencate
Advertiser Kaua'i Bureau

LIHU'E, Kaua'i — The county yesterday said it objects to an agreement by the state consumer advocate and the Navy to allow the Kaua'i Electric sale to proceed without a full set of hearings before the Public Utilities Commission.

The other parties filed a stipulation agreement Thursday, after Kaua'i Electric and purchaser Kaua'i Island Utility Co-op agreed to several concessions. The terms include a $3 million payment from Citizens Communications, owner of Kaua'i Electric, to power customers a year after the sale and rebates of 25 percent of net revenues to consumers by the co-op starting in 2004.

However, Kaua'i County also has expressed interest in buying the electric company.

Bill Milks, a special counsel to Kaua'i County, said in an 82-page preliminary position paper filed yesterday with the Public Utilities Commission that several key issues remain unsettled. He said that Citizens Communications has not justified the purchase price of $215 million — $25 million higher than an appraisal for $190 million derived by a county consultant — and that the sale price amounts to a windfall.

Milks also argued that the utility's rates are so high that some major power customers may find it necessary to generate their own power, undercutting the electric company's customer base. The stipulation between the other parties provides some relief for customers in the form of rebates, but does nothing about rates that are too high to begin with, he said.

"County's extensive analyses leave county unconvinced that the revised transaction offers Kaua'i's consumers concrete benefits outweighing identified risks and uncertainties," Milks wrote.

Citizens, KIUC, the Navy and the state consumer advocate's office have urged the commission to approve the sale by Sept. 17, so the new owner can get federal financing locked in before the Sept. 30 end of the federal fiscal year.

Reach Jan TenBruggencate at jant@honoluluadvertiser.com or (808)245-3074.