Kauai business group to
buy Kauai Electric

The $215-million deal is expected
to close within a year

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Star-Bulletin staff

A group of Kauai businesspeople has reached a definitive agreement to buy Kauai Electric from Citizens Communications Co. for $215 million, following the state's rejection of a previous purchase attempt two years ago.

The deal with Kauai Island Utility Cooperative is expected to close within a year, pending regulatory approval from the state Public Utilities Commission, according to a statement from Kauai Electric, which provides electricity to 31,000 customers on the Garden Isle.

Connecticut-based Citizens has owned Kauai Electric since 1969 and put it up for sale in October 1999, so it could focus on its telecommunications business.

In April 2000, Citizens and the cooperative took a proposed $270 million deal to the Public Utilities Commission, which rejected it. Critics, including the state consumer advocate, said the group was paying too much and was carrying so much debt that any increase in costs would lead to rate increases.

Kauai Mayor Maryanne Kusaka has appraised Kauai Electric's value at $190 million, according to a statement issued from Kusaka's office last week.

Kauai Electric has among the highest rates of electricity of any company in the United States, which it attributes to the sparse population of the Garden Isle.