Kauai County expected
to try to block utility sale

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By Anthony Sommer
tsommer@starbulletin.com

LIHUE >> Kauai County was expected today to file to intervene in the Public Utilities Commission's consideration of the planned purchase of Kauai Electric Co. by the Kauai Island Utilities Cooperative.

The filing is without a formal vote from the County Council. Instead, council members each met privately with the mayor's chief aide who said they all have agreed to support the intervention.

The cooperative, formed by a group of Kauai businessmen, filed with the PUC last month the sales agreement with the current owner, Citizens Communications Inc., of Stamford, Conn. No schedule has yet been set by the regulatory agency.

Two years ago -- with opposition from Kauai County, the U.S. Defense Department and the state Consumer Advocate's Office -- the PUC rejected a similar deal for a sale price of $270 million. The new package proposed by the cooperative calls for a $215 million sales price.

The county's position on the sale this time around has not been determined, said Wally Rezentes Sr., administrative assistant to Mayor Maryanne Kusaka. Rezentes said the cooperative's original filing lacked some critical data.

The county is not expected to support the sale to the cooperative. The only question is how strongly it will oppose it. Rezentes has been maneuvering to place the county in a position to buy the utility if the deal with the cooperative falls through.

Rezentes said he has met privately with all seven county councilmen, who have agreed to provide funding for the intervention. But they have not agreed to give the mayor's office a blank check on deciding the county's position.

Rezentes said the private meetings were conducted because the six-day public notice requirement before the council could not be met in time for an open discussion of today's PUC filing.

Critics repeatedly have accused Rezentes and the council of sidestepping the state open meetings law by conducting closed-door executive sessions on the Kauai Electric sale in the past.

Over three years since the cooperative was formed, the council has been cool toward the idea of the county competing as a possible buyer. The current budget was structured in a way that requires the mayor's office to come back to the council for funds every time it wants to hire an attorney or consultant.