Kaua'i co-op gets loan approval
By Jan TenBruggencate
Advertiser Kaua'i Bureau
LIHU'E, Kaua'i — The co-operative buying Kaua'i Electric has received approval of a $215 million loan from the U.S. Department of Agriculture's Rural Utility Service.
Kaua'i Island Utility Co-op chairman Gregg Gardiner said the federal agency had been expected to make its final decision on the loan about Sept. 30, but gave an early loan approval this week.
The next step is the closing of the sale from Citizens Communications to the cooperative. The closing is scheduled for Oct. 31.
The expedited process leading to the sale of the utility to the local cooperative began with the state Public Utilities Commission's approval of the sale terms on Tuesday.
Both the state consumer advocate and the Navy, which were parties to the sale application before the commission, had recommended approval in midsummer. The county opposed the sale until about a week before the scheduled PUC decision, and then recommended approval with a series of conditions, which included an immediate electricity rate reduction. The PUC rejected most of the county's conditions for approval.
Mayor Maryanne Kusaka said lawyers have concluded that the county has very limited rights to appeal, and that the county has decided not to try to challenge the approval.
"I am hopeful that the risks and uncertainties that we've pointed out during this process don't materialize and that the financial projections they've made will be realized. And I'm hopeful that KIUC, its officers and managers will maintain all of their commitments, representations and promises, so that this project will move forward in the best interests of the ratepayers," Kusaka said.
Gardiner called for unity: "It's time for our community to come together."
Under the terms of the cooperative's rules, immediately after closing, all Kaua'i Electric customers will automatically become members of the co-op, although they have the option of dropping out.
Citizens Communications has agreed to distribute $3 million to the members a year after closing, a sum that will be distributed to member-customers according to a formula based on the previous year's power use.
The co-op had planned on holding an election to install a new board of directors within 120 days of the closing of the sale. The PUC asked that the election be held within 120 days of the commission's approval, which moves up the election date by about 45 days.
"We're going to do everything in our power to accommodate their request. I think we can do it," Gardiner said.
Reach Jan TenBruggencate at jant@honoluluadvertiser.com or (808) 245-3074.
