State gives green light
to sale of Gasco

It will become a subsidiary
of Citizens Utilities, parent company
of Kauai Electric

By Russ Lynch
Star-Bulletin

The state Public Utilities Commission has approved the $100 million sale of Gasco Inc. to Citizens Utilities Co., parent company of Kauai Electric Co.

Gasco, founded in 1904, is owned by BHP Hawaii Inc., the local unit of an Australian oil and minerals giant. BHP put its Oahu household and commercial gas supply utility up for sale in July 1996, in a realignment of its worldwide assets.

Gasco, which will be renamed The Gas Co., has about 70,000 customers and more than 300 employees.

The state Consumer Advocate's office had raised concerns about Citizens' pending energy monopoly on Kauai, where it will own both the electric and gas utilities. In response, Citizens said it will ensure competition between gas and electricity by setting its Kauai gas prices the same as those on Maui, where there is competition.

Gasco has 5,000 customers on Kauai using bottled propane and about 500 using synthetic natural gas shipped from Oahu. While the bottled gas business in not subject to PUC regulation, the electric utility is.

Citizens first announced its intention to buy Gasco in January. Both companies said the change of ownership at Gasco will not affect gas rates.

Stamford, Conn.-based Citizens said it will honor existing union contracts at the 323-employee Gasco and named Jim R. Yates, vice president of gas services at BHP Hawaii, to be vice president and general manager of The Gas Co.

Citizens said it is reviewing the details of the PUC approval and a date has not yet been set for concluding the purchase.

Founded in 1904 as Honolulu Gas Co., Gasco later developed into Pacific Resources Inc. Broken Hill Proprietary Inc. bought PRI in 1989 and later changed its name to BHP Hawaii.

Citizens Utilities, a diversified telecommunications and utilities company, was founded in 1935. The company, which had revenues of $1.3 billion last year, made its first entry into Hawaii in 1969 when it bought Kauai Electric from McBryde Sugar Co.