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The Honolulu Advertiser
Posted on: Saturday, August 27, 2005

Seawater rate hike protested

By Kevin Dayton
Advertiser Big Island Bureau

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HILO, Hawai'i — The Natural Energy Laboratory of Hawai'i Authority is increasing the rates it charges for the deep seawater it supplies to its tenants, a change that drew objections from many of the tenants yesterday.

Ron Baird, chief executive officer of the authority, has said the rate hike will help to cover increased costs at the 870-acre ocean science and technology park at Keahole Point in Kona, and are part of a larger effort to make the park self-sufficient.

Gerald Cysewski, president of a tenants' groups called the Keahole Point Association, said most of the aquaculture companies in the park are already struggling, and the rate increase will hurt.

The aquaculture firms often have to weather lean years after they first begin operations until the products they grow are mature enough to harvest and sell, he said.

Cysewski, who is also president and chief executive officer of Cyanotech, said the tenants believe the rate increase approved by the authority board of directors yesterday will raise considerably more money than the park needs to cover its higher operating costs. His organization represents 16 of NELHA's 20 tenants.

"We realize that there needs to be a rate increase based on increased energy costs, but there's certainly some disagreement as to what that should be," Cysewski said.

For aquaculture companies, the rates would be increased to 14.4 cents per thousand gallons from 11.74 cents per thousand gallons of deep seawater, he said.

He said the price hike approved yesterday follows 20 percent water rate increases that were imposed in each of the last two years.

For the bottled water companies that have been investing heavily in new facilities in NELHA, the rate will increase to 60 cents per thousand gallons from about 12 cents per thousand gallons, said Hiroshi Usami, general manager of bottler Koyo USA Corp.

Usami said it is unfair for the authority to charge bottled-water companies so much more than the aquaculture firms, but said Koyo has little choice but to pay the increase.

The park also charges the bottlers lease rent and a royalty charge.

Koyo now ships about 3 million bottles of water a month from NELHA to serve a growing market in Japan. The desalinated deep ocean water sells for $3 to $4 a bottle, and is marketed as a dietary supplement.

Baird could not be reached for comment after the board of directors' vote.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.