Kauai co-op makes deal
to buy isle’s utility firm
for $215 million

The mayor, however, wants
to review the details with parent
Citizens before giving her blessing

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By Anthony Sommer
tsommer@starbulletin.com

LIHUE >> The 32-month game of brinkmanship among a cooperative wanting to buy Kauai Electric Co., the mayor's office and the Kauai County Council took another turn yesterday.

Kauai Electric announced a deal had been struck between parent Citizens Communications Co. and the Kauai Island Utility Cooperative, under which the cooperative would buy the electric company for $215 million.

The price tag was not a surprise. It had been rumored for months.

Two weeks ago, Mayor Maryanne Kusaka's office released an appraisal conducted by consultant R.W. Beck placing the value of KE at $190 million.

Kusaka said she would support the cooperative's efforts to buy KE, but only if it followed her recommendations. When she made the statement, Kusa- ka was aware of reports placing the price the cooperative and Stamford, Conn.-based Citizens already had agreed on at $25 million above her appraisal.

For more than two years, Kusaka has been positioning the county to buy Kauai Electric if the deal between Citizens and the cooperative falls through.

But asked yesterday if that means the mayor will now oppose the purchase, her administrative assistant Wally Rezentes Sr. said Kusaka wants to see the details of the deal before making a decision.

Gregg Gardiner, chairman of the cooperatives board of directors, said the details will not be made public until the proposal is filed with the state Public Utilities Commission in one to two weeks.

Meanwhile, the Kauai County Council late last year made it clear it will not give Kusaka any more money for consultants and attorneys to work on county acquisition of KE until there is a showing that Kauai residents want the county to buy the utility.

Not a single councilman disagreed when Council Chairman Ron Kouchi said he was cutting off the mayor's cash flow.

Last May, the council engineered this year's budget so Kusaka would have to come to them with a separate request for each expense related to Kauai Electric.

Under a cooperative, Kauai electric customers would own the electric company rather than Kauai County.

Two years ago, the PUC rejected the cooperative's original proposal to pay $270 million for Kauai Electric.

The PUC said the cooperative was paying too much.