LIHUE >> After 33 years of providing electricity, Kauai Electric Co. ceased to exist Thursday night and reopened its doors yesterday morning as the Kauai Island Utility Co-op. Kauai co-op wins battle
to take over electrical plant
By Anthony Sommer
tsommer@starbulletin.comThe $215 million sale of the electric company by Citizens Communications Corp. of Stamford, Conn., to the co-op officially closed early yesterday morning.
It is the first utility cooperative ever formed in Hawaii, although 930 exist in other parts of the nation. Its owners are its customers, everyone on the island who buys electricity.
The electric company will be managed and operated by the same employees who worked for Kauai Electric.
The cooperative inherits the highest electric rate of any regulated electric company in the United States, about 24 cents per kilowatt hour, roughly three times the national average.
The transfer of the electric company's ownership came after 40 months of often bitter dispute between the founders of the cooperative, primarily Kauai business leaders, and an unusual alliance between Mayor Maryanne Kusaka and the island's environmental community.
The original sale for $285 million was rejected by the Hawaii Public Utilities Commission two years ago on the grounds the price was too high and would result in higher rates.
On Sept. 17, the PUC approved a new sales agreement with a price tag of $215 million. The approval requires minor rate reductions.
The purchase is being financed by a loan from the Rural Utility Service, a federal agency, which is loaning the money at an interest rate of 4.13 percent, according to co-op Chairman Gregg Gardiner.
Early next year, the 16-member board that formed the cooperative will give way to a nine-member board elected by the members in February. Each customer will have one vote, whether they are a single-family residence or a large company.
Kauai Electric was formed in the 1960s by merging several power plants owned by sugar plantations. The new company was then sold to Citizens.
County of Kauai
