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The Honolulu Advertiser
Posted on: Thursday, January 15, 2009

370 claim losses from December blackout

By Rick Daysog
Advertiser Staff Writer

Hawaiian Electric Co. has received about 370 claims from individuals and businesses who suffered losses from last month's islandwide blackout — but don't expect the local utility to mail out reimbursement checks anytime soon.

HECO still hasn't made any payments to the 1,400 customers who filed claims for losses such as spoiled food, damaged computers and broken appliances after an October 2006 blackout.

HECO said payment for claims from the 2006 outage hinged on the findings of the state Public Utilities Commission, which ruled last month that the blackout was unavoidable and that company officials acted in the public's interest during the outage.

"For this (last month's) outage, we would like to make sure that a thorough review is completed before making a decision on claims," said company spokeswoman Lynne Unemori.

During a briefing held by state lawmakers yesterday, PUC Chairman Carlito Caliboso said the regulatory agency opened a formal investigation into the Dec. 26 blackout, which HECO said was caused by lightning.

The power failure left most of the company's 294,000 customers in the dark for more than 12 hours, disrupted traffic and forced hundreds of retailers to close early on one of busiest shopping days of the year.

Caliboso said he hopes the PUC's investigation will be done quicker than the agency's review of the previous blackout. He said HECO officials agreed to provide the PUC and state Consumer Advocate Catherine Awakuni with a report in 2 1/2 months.

In response to a question from state Sen. Mike Gabbard, D-19th (Waikele-Kapolei), HECO Executive Vice President Robbie Alm said all claims will be reviewed on an individual basis.

That would be the case even if the PUC rules that the company acted in the best interest, as the state agency did in the 2006 outage, Alm said.

During yesterday's hearing, HECO officials and state lawmakers heard testimony from local restaurants and food businesses who said the power failure placed a heavy financial toll on them.

HUGE LOSSES CITED

Chris Colgate, vice chairman of the 600-member Hawaii Restaurant Association, said the blackout couldn't have come at a worst time for Waikiki's eateries.

He estimated that it cost local restaurants about 67 percent of their sales that day. Colgate added that restaurants lost anywhere between 25 percent and 75 percent of their food inventory because refrigerators didn't work and food spoiled.

Lauren Zirbel, a representative of the Hawaii Food Industry Association, said members of her organization "lost millions of dollars" in destroyed perishable merchandise and lost sales hours as a result of the blackout.

She said that one member, ABC Stores, lost $50,000 because it had to throw away unsold perishables, such as dairy products, fruits, vegetables, sandwiches and ice cream.

"Based on past experience, we know that there will be no reimbursements coming," Zirbel said.

"(And) we also know that the only thing our members can do is to fend for themselves by purchasing insurance for such losses, maintaining whatever backup generators they can afford, and passing the cost on to customers."

Colgate, who also is the O'ahu region manager for Duke's Waikiki and Hula Grill Waikiki restaurants, said he's worried about the blackout's impact on the visitor industry. Many tourists went to bed on Dec. 26 without dinner and went hungry the next morning because a lot of restaurants didn't have power restored yet, he said.

Colgate added that he hopes something can be done to restore power much more quickly to business centers like Waikiki during future blackouts.

"The image of Waikiki was definitely affected," he said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.