Kauai Electric sale LIHUE >> A group of Kauai business leaders has received "preliminary approval" from the Public Utilities Commission to purchase Kauai Electric Co.
gets preliminary OK
Island utility co-op expects
a final decision on its
purchase proposal by Sept. 17By Anthony Sommer
tsommer@starbulletin.comA final decision is expected Sept. 17.
"We are thrilled with the PUC's preliminary decision," said Kauai magazine publisher Gregg Gardiner, who heads the Kauai Island Utility Co-op.
Following an agreement between the state consumer advocate and the U.S. Navy to endorse the sale, Kauai Mayor Maryanne Kusaka is the only one opposed to the purchase.
Kusaka's office issued a statement saying she had "mixed emotions" about the decision.
"It's important to remember this is a preliminary approval and it's conditional -- it's not a final decision," she said.
The mayor said she was pleased the PUC promised in yesterday's order to review all issues raised by Kauai County before making a final decision.
The co-op has been urging the PUC to make a final decision before the end of the federal fiscal year on Sept. 30 to lock in current interest rates. The sale would be financed by the Rural Utilities Service, a federal agency.
The PUC re-emphasized its intent to make a decision by Sept. 17 and moved up several deadlines for document filings to make sure it can stay on schedule.
Two years ago, the PUC rejected an offer from the same group to buy Kauai Electric -- which has belonged to Citizens Communications Corp. of Stamford, Conn., since 1968 -- for $270 million.
Kauai County, the Navy (the Pacific Missile Range on Kauai is one of Kauai Electric's biggest customers) and the consumer advocate all were opposed. They argued the high sales price would create rate increases.
The current proposal calls for a $215 million price and requires some minor rate reductions in the first few years after the sale.
If the sale goes through, the business group would offer co-op membership to all Kauai Electric customers. Those who choose not to be members would pay the same rates but could not vote in co-op elections or be eligible for any rebates.
The Kauai County Council has been reluctant to back either the mayor or the business group for the past year and a half.
The council is scheduled to vote tonight whether to place a change to the County Charter creating a public power authority on the ballot this fall. The authority would have the power to buy Kauai Electric if the sale to the co-op falls through.
Meanwhile, many of Kauai's environmental activists, who normally oppose Kusaka on everything, have strongly supported the mayor in her opposition to the sale.