WAILUKU - The state Public Utilities Commission on Thursday ordered a temporary increase in rates for water services to Molokai Ranch communities in west Molokai and indicated Maui County is off the hook for assuming control of Molokai Properties Ltd.'s utilities.

If another entity is not found to take over Molokai Properties' operations in the next six months, the utilities must apply for general rate increases, according to a PUC order issued Thursday, The Maui News reported today.

The decision drew protests from Molokai residents who said west Molokai consumers will be facing massive new bills when many are jobless or had income cut from the Molokai Ranch shutdown. Mayor Charmaine Tavares vowed to provide assistance to the residents.

The PUC order provides for the temporary rate hikes to take effect Sept. 1 to keep Molokai Properties in the utilities business.

In a statement issued with its order for the temporary rate hikes, the PUC said it was "taking unprecedented steps to maintain essential water services to West Molokai customers" after the three utility companies informed the PUC in March that they would discontinue the service if no other entity took them over.

Molokai Properties had agreed to temporary rate increases during hearings before the PUC. However, company General Manager Daniel Orodenker declined to comment on the PUC decision Thursday evening, saying he first wants to carefully review the ruling.

The PUC order setting rates intended to keep the three MPL utilities operating was matched on Thursday by an order issued by Thomas Rack, a Department of Health hearings officer, upholding two prior Department of Health orders that the utilities must continue to operate.

The MPL utilities - Mosco, which provides wastewater treatment, and two water companies, Molokai Public Utilities and Waiola O Molokai Inc. - had claimed they could no longer operate because of losses suffered over the past two years. Based on data provided by the utilities, the PUC on June 16 opened a docket on increasing rates for the three companies and held hearings on Molokai to review the temporary rates.

Earlier this month, the PUC denied a request to intervene by representatives of the consumers in west Molokai who will be affected by the temporary rate increases, saying their interests are represented by the state consumer advocate and they showed no special expertise on the details of the case.

But the property owners affected by the rate setting could renew their efforts if the MPL utilities apply for permanent increases in six months.

In its review of the data, the PUC order accepted claims made by the two water companies in setting the temporary rates but rejected a rate hike sought for the wastewater service.

Under the order:

* Molokai Public Utilities rates will go from $3.18 per 1,000 gallons to $6.04 per 1,000 gallons.

* Waiola O Molokai Inc. rates will go from $1.85 per 1,000 gallons to $5.15 per 1,000 gallons.

* The company's request for an increase in Mosco's rates from $44 a month to $52.56 was denied, with the PUC finding that the wastewater service does not require temporary relief although there may be a need for long-term adjustments.

The price adjustments are projected to generate $555,397 a year for the two water utilities. MPL claims it lost $1.2 million in two years operating the facilities and could no longer afford to subsidize them.

"Under these dire circumstances, the commission has no choice but to approve the temporary rate increases as a stop-gap measure," said commission Chairman Carlito Caliboso. "We need to do what we can to require the utilities to keep operating, at least temporarily, for the sake of the health and welfare of the people of West Molokai."

Molokai Properties' decision to abandon its utilities came shortly after it shut down Molokai Ranch and related visitor operations, including the Maunaloa lodge and the Kaluakoi Golf Course, laying off 120 employees.

The shutdown was ordered within months of a critical Hawaii Supreme Court ruling that Molokai Properties needs to reapply for a permit to draw water from its Well 17 at Kualapuu - the source of the water it needs to provide customers at Maunaloa and Kaluakoi. MPL also had been stalled in its effort to win approval of a proposal to develop a luxury rural residential subdivision above Laau Point on the southwest corner of the island. The company withdrew an environmental impact statement on the project last year, when it appeared the EIS would be rejected by the state Land Use Commission.

A Molokai resident and community advocate, DeGray Vanderbilt, said the PUC action will hurt the residents in the economically depressed Maunaloa community.

"It's just whopping what they approved," Vanderbilt said. "They gave them everything they wanted. The families that are already lower income will now go from paying $50 a month for their utilities to $139, which is just staggering."

Vanderbilt said that's on top of Molokai paying some of the highest gas and electricity bills in the state.

"I think it's just unfair that the governor (Linda Lingle) and the PUC go together to support corporate interests on the backs of the poor," Vanderbilt said. "The PUC could have just ordered Molokai Properties to hold a fire sale of a few of its 20-acre lots on Kaluakoi to make it another year."

Tavares, who resisted an initial state order that the county take over the Molokai utilities, said Thursday night that the county will seek to assist Molokai residents facing sharply increased costs for their basic water service.

"To assist the people of Molokai, the County of Maui will be taking steps to provide temporary subsidies for those that qualify," she said.

At the same time, the county is seeking to comply with an order by the state Department of Health to prepare an emergency plan if MPL does shut down its utility services.

In its order, the PUC is requiring the three utilities to provide monthly financial reports, including copies of billing records, usage by each customer and documents to support the utilities' claimed operating expenses.

The utilities also are required to file reports biweekly on its efforts to find a new owner or new operator for the utilities.

"Within six months of the date of this order, MPU and Waiola shall file an application for a general rate increase with the commission if a third-party is not found to take over the utilities' systems," the PUC order said.

The commission maintains that it has the authority to order Molokai Properties to comply with its orders since it granted contractually binding certificates of public convenience and necessity, to allow the utilities to operate and support MPL developments. The certificates were issued to Molokai Public Utilities, Waiola O Molokai and Mosco in 1981, 1993 and 1982, respectively.

"I just hope with this quote, unquote temporary increase that someone will audit the books and find out what their true costs are, " said Stephanie Cobble, a Maunaloa-area resident. "The ranch got what they want. Basically, they've thrown us under the bus. If they can't get another buyer, then they will just come in and get another rate increase."

* Chris Hamilton can be reached at chamilton@mauinews.com.