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Group seeks PUC
By Anthony Sommer
approval to purchase
Kauai Electric
Star-BulletinLIHUE -- Kauai Island Utilities Co-op has formally requested state Public Utilities Commission approval of its $270 million purchase of Kauai Electric from Citizens Utilities Co.
The cooperative, formed by a group of Kauai businessmen headed by Gregg Gardiner, is hoping to close the sale by the end of this year. Stamford, Conn.-based Citizens has owned Kauai Electric since 1969 but is selling off all its gas and electric companies to finance telecommunications acquisitions.
At a news conference yesterday, Gardiner repeatedly cautioned Kauai residents, who will be both the customers and the owners of the utility if the sale is approved, not to expect any rate reductions.
Kauai Electric has the highest electric rates in the United States.
In the long term, Gardiner said, electric rates will be lower than they would be if the company was owned by stockholders because there will be no dividends or taxes to pay.
The cooperative also will be eligible for full federal compensation for damages in the event of another hurricane. One of the reasons that Kauai's electric rates are so high is that the PUC decided the full cost of repairs of utility property damaged in 1992's Hurricane Iniki should be borne by Kauai Electric customers.
Gardiner also announced the self-appointed board of directors will remain in place until 2002 when the first election will take place. Starting that year, one-third of the board seats will be up for election every two years.
If approved, the Kauai Island Utilities Co-op would be the first utility cooperative in Hawaii history. Only two other states do not have any electric cooperatives.
