Kaua'i utility co-op to purchase power plant

By Jan TenBruggencate
Advertiser Kaua'i Bureau

LIHU'E, Kaua'i — The Kaua'i Island Utility Co-op has agreed to buy its biggest power supplier's generating plant for $40.2 million.

The Kaua'i Power Partners plant, situated outside Lihu'e, generates 26.4 megawatts and supplies 40 percent of the island's electricity. The plant burns naphtha or diesel fuel. Kaua'i Power Partners is an affiliate of Dominion Resources, a Mainland gas and electric holding company.

The utility said that it will save more than $3 million in the first year by owning the plant rather than buying its power. Compared with the 25-year life of the purchase-power contract, owning will save the utility almost $40 million, the cooperative said.

"We feel certain we have made the best decision for our members," said Alton Miyamoto, the utility's president.

One reason for the savings is that as a cooperative, the utility can get much lower rates for a loan than an investor-owned utility, KIUC said in a fact sheet attached to its announcement.

The Kaua'i Power Partners plant is a year old. It was placed into service in September 2002 and has an estimated 35-year useful life. KIUC said it is buying only the assets, not the company, and is not liable for legal claims against the plant or its owners before the purchase.

The sale is subject to approval by the state Public Utilities Commission.