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The Utility Dog and Pony Show
PUC a disgrace to Molokai residents, needs to stop “kowtowing to Mr. Gotbucks.”
Editorial By Robert Brokate
The Public Utility Commission (PUC) meeting in Maunaloa last Tuesday has once again highlighted the woeful inadequacies of our government’s civil servants. One was left in a quandary as to what is driving the PUC train, but whatever the driver may be it has drastically veered from the tracks.
The justification and purpose of a PUC is to protect the public’s interests (thus the name Public Utility Commission) against the abuses and wrongdoings of the utilities because by nature the utilities are monopolies and are prone to abuse and wrongdoing (recall the Enron energy debacle).
However, it appears that the Hawai’i PUC sees their function as not protecting the interests of the miscreant public. The Hawai’i PUC apparently interprets their function to be lackeys for billionaire Quek Leng Chang, who is the owner of Molokai Ranch’s parent company GuocoLeisure, to protect the interests of the Ranch against the ungrateful, malcontent public.
The Hawai’i PUC is in effect saying, “Yes, Mr. Billionaire, we (the Hawai’i PUC) will gladly exempt you from all of the nasty, tiresome nonsense of following the law and will do all of your dirty work for you. And any time you should step into something unpleasant, we will joyfully lick your boots clean.”
What the Hawai’i PUC is doing is going to open the floodgates for utilities throughout Hawai’i; any utility that wants a rate increase will just have to submit an unsubstantiated, unaudited, unverified income statement depicting a loss and the Hawai’i PUC will be compelled to fall all over themselves providing a “temporary rate increase.” The Hawai'i PUC is establishing the precedent with their current actions.
The Ranch has remedies available. They can sell the utilities. They can file for a rate increase as the law allows. Or they can file for bankruptcy and the court can take the assets and determine the proper course of action. It is not the Hawai’i PUC’s function to work for the Ranch when the PUC’s wages are paid by the public. The Hawai’i PUC should only explain the options available to the Ranch and explain that the Ranch cannot cease operations of their utilities without a court order releasing them of their public responsibility.
Should the Ranch follow through on their threat to cease operations without a court release, Maunaloa Highway would be bumper to bumper with tort lawyers eager to have former utility customers sign on to their class action law suits against the Chang, Ranch CEO Peter Nicholas, and probably the PUC.
So, Hawai’i PUC, quit kowtowing to Mr. Gotbucks; get off your knees and show a little self respect. You are embarrassing all of us. In the same breath, KUDOS to the County, Mayor Travares, et al, for their appropriate response and providing a ray of hope that our government is not totally dysfunctional.
Editorial about the PUC
Submitted by George Barbour on Sun, 2008-07-27 20:39.
Mr. Brokate, thank you for your thoughtful response to my earlier comments. I agree that there are important and basic issues in this struggle with the closing of the water and sewer services. Certainly the courts and the PUC are the appropriate venues to address those issues. I happen to believe that the County also has a fundamental responsibility to protect the health and safety of its citizens especially in a crisis. That responsibility is best carried out by prudent disaster planning. On July 2, 2008 the WMA sent a letter to the Mayor and Councilmember Mateo asking the following questions:
1. Who will direct the county's emergency effort
2. What efforts will the county undertake to involve citizens from the affected communities?
3 How will the county organize the distribution of potable water?
4. Where will temporary sanitary facilities be located?
5. Will additional fire suppression equipment be temporarly be stationed in the area?
6. Where will the command center for the emergency effort be located?
7. When will the stockpiling of the necessary equipment and supplies begin?
I agree that these questions are not lofty issues of policy but with the potential crisis but a month away, wouldn't you think some visible effort on the part of Maui County would be evident? The mayor mentioned in her July 10 meeting that she had dispatched the fire chief to look at the situation. None of the other questions have yet to be answered.
I believe that we deserve more specific action on the part of the county. To wait till that last moment would be cruel and cause needless additional harm to the citizens of Molokai
What a mess !
Submitted by mainlander on Fri, 2008-07-25 06:11.
Is it worth staying on that Island ? I wonder how many people have left already because of this fiasco. What if that Peter guy from who knows where asks you for permission to build only 50 lots (on his companies property), would you take that deal to get your jobs back and have water again ? How about if he opens the Kaluakoi Hotel to ? Would you first ask for EIS ? I think not. Deal with it and enjoy your sunsets....
PUC Editorial
Submitted by George Barbour on Thu, 2008-07-24 21:54.
Mr Brokate doesn't go far enough in his editorial. Finding fault with the PUC and bashing the Ranch are are all well and good. But where are the solutions that the 3,300 men, woman and children of Maunaloa, Kaluakoi, Kualapu'u, part of Kalae and the Industrial park desperatly need to ensure that after August 31 there will be water and sewer services to their homes and palces of business and employment? Mayor Tavares and Councilmember Mateo are glad to spend $ 100,000.00 defending the County but what are they spending to ensure that these vital services continue? When Maunaloa and Kualapu'u schools close down where are the children and teachers going to go? So far, not a peep from the school administration. The County suggests in a news article that we can shower at county facilities and that water trucks may be rolled out. Is this the best that our County can offer the citizens of Molokai? Are you sure you want to give the mayor KUDOS for this kind of performance? On the other hand, Mr Brokate may not live in the service area losing its water and sewer and therefore has nothing to worry about unless he has children going to the only charter school on Molokai, or he likes to shop at Kualapu'u market, or eat at the Cookhouse or take friends to Coffees of Hawaii for a mocha mamma. Just a few of the other places that will have to cease operations. This crisis hurts all of Molokai and our citizens deserve constructive action from our county not just a free shower and a few bottles of water.
PUC failure to take appropriate action
In response to Mr. Barbour, I would like to start with a little housekeeping; I do live in Maunaloa, I own a house here (not one of the expensive houses; my house is small and old but it serves me well). My children are grown and do not live with; I live independently. I still give KUDOS to the County and the Mayor because they are forcing the bigger issues that are at play and disparage the PUC for their submission to the monied harriers.
I would like to regress for a moment now and if you will bear with me I will try to explain why I believe the PUC is falling extremely short of the mark and why the County is taking the correct track. The way I interpret the issues currently being surfaced are as follows (I may be wrong, I have been wrong many times in my life, so you are more than welcome to disagree with my synopsis of the situation … in fact I hope you do as I enjoy the mental exercise.)
Issues:
1) Are the water and wastewater systems which are owned by the Ranch and/or their subsidiaries Public Utilities?
2) Do the Ranch and/or their subsidiaries have the legal right to place the public at risk by unilaterally ceasing operation of their water and wastewater operations?
3) Does the PUC have the legal authority and moral obligation to seek a court ordered injunction preventing the Ranch and their subsidiaries from suspending water and wastewater operation until all of the issues is resolved in a court of law?
4) Can a private purveyor of water unilaterally cease operations and place the burden on the public sector without any consequence to the private purveyor?
5) Does the state have the legal right to exercise their right of imminent domain and seize all of the assets related to the utilities for the good of the public?
All of these issues and the many related sub-issues need to be resolved in court. Perhaps Mr. Barbour, you are a legal expert and can expound upon issues and predict how a court will decide the issues. I, however, cannot. With my own very limited brain capacity the best I can do is to play “what if” scenarios to try to understand the possible outcomes. Again, if you will be so kind as to indulge me, I will try to demonstrate what mean.
Issue:
Are the water and wastewater systems owned by the Ranch and/or their subsidiaries Public Utilities? They certainly appear to be so, they are utilities and they do provide water and wastewater service to the public, but “what if” through the application of sophisticated legal loopholes they are not subject to the oversight of the PUC, and thus have the ability to cease operation on their whim. Now, just hypothetically speaking, suppose an unscrupulous developer happened across this tidbit of information (I know that the concept of an “unscrupulous developer” is so alien, so farfetched, as to make the idea incomprehensible … but just maybe, somewhere on this crazy planet we call home there may exist a developer that is less the honest and honorable) and this unscrupulous developer hatches a money making get-rich-quick scheme. And what if the scheme goes something like this, he purchases a choice parcel of undeveloped real estate and he wants to develop the choice piece of property. Everything looks good but there is no water, so he decides to start a private water company. He builds a desalination plant to turn sea water into fresh water, he gets a Public Water Supply permit from the state and he is off to the races. He develops the property, sells the homes at a fair price which includes a handsome profit and then when all the homes are sold and the formidable profits are in the bank, he decides that the water business is not his cup of tea, so he shuts down the water operations. If he is not a public utility and there is no consequent to his shuttering the utilities, then the only losers are the homeowners that cannot sell their homes because who would buy a home without water and wastewater available. So now this unscrupulous developer, through another shell corporation, buys all these waterless homes for pennies on the dollar, cranks up the desalination plant and then proceeds to resell the homes at a substantial gain and repeats the process until he becomes a billionaire and decides to quit working so hard and retire to New Zealand or Singapore or some such place. Who is going to stop him? Who has the authority over the water monopoly? These are the issues the County and the Mayor want to take to court in an effort to gain resolution to the principals involved.
“What if” in the foregoing hypothetical situation, the unscrupulous developer was just to walk away from the heavily leveraged capital assets of the desalination plant and dump it on the closest publicly operated utility and burden the tax payers with repayment of debt while the unscrupulous developer jets away to New Zealand or Singapore or some other third world destination with all of the proceeds from the development. Who has the legal right and authority to prevent such abuse and wrongdoing from occurring? Again, issues that County wants resolved in court.
“What if” the only way the Ranch and or their subsidiaries can cease operations is to declare bankruptcy? Not an ideal ending but at least there would be some consequence to the Ranch. The Ranch and/or their subsidiaries would have to present financial documentation to the court proving they were insolvent, which is something the Ranch does not want to do.
I could continue on in ad nauseam, but I hope you understand why I believe the County is pursuing a laudable course of action and why the PUC is rather disgusting in their capitulation to the Ranch. These issues, and others, need to be resolved in court so the public can understand where they stand in the future and if need be, get politicians into office that will pass the laws that are required to prevent any future abuses by unscrupulous developers and quasi utilities. Obviously no one desires to be the test case but someone has to make a stand and draw the proverbial line in the sand and to me it appears that Moloka’i is the chosen one.
The unpleasant repercussion to which you allude may come to pass; I most certainly hope they do not. But Mr. Barbour, you and I are but pawns in this game and as such we have no control as to the outcome. I would say that if New Orleans can survive Katrina then Moloka’i can surely survive the Ranch. I do believe all of the unpleasantness could be avoided the PUC, as an agency of public oversight, would seek an injunction against the Ranch to prevent suspension on water and wastewater operations until all of these issues can be resolved in court. It is hard to imagine any court not granting the injunction because if the cessation of water and wastewater service is not classified under irreparable harm then I guess I do not understand what irreparable harm really is.
To the “mainlander” I would say, “Go burn another dooby and do some more mainlining there on the mainland, but just stay in your La-la land.” Your shallow insight must come from your mirror.