Keeping Water on Tap

New law ensures continued water utilities

By Catherine Cluett

Many Molokai residents and lawmakers have wondered in the past year what would happen if Molokai Ranch terminated its water utility services. House Bill 1061, signed into law by Governor Linda Lingle last week, helps to banish some of the nightmare scenarios. By authorizing the Public Utilities Commission (PUC) to appoint a temporary entity to take over operation of water utilities in an emergency situation, the bill ensures uninterrupted service for the utility’s customers.

“We wanted to ensure that if consumer’s welfare was in jeopardy, we would be able to act in haste,” said Catherine Awakuni, Director of the Division of Consumer Advocacy, who submitted testimony in favor of the bill. “We don’t want people to be without water service.”

She added that the bill allows immediate take-over of utilities, rather than waiting for the state procurement process to be completed before continued service can take place.

In the spring of 2008, Molokai Ranch threatened to shut down water utility services to approximate 1200 Molokai residents, leaving the state and county in a panic to come up with an emergency water plan for the island. The PUC approved a temporary water rate increase for the utilities in July, which is still in effect almost a year later. The Ranch’s utilities are in the process of filing for a permanent rate increase, but have offered no guarantee of continuing to operate and maintain their water and sewer systems.

Passing the bill was primarily motivated by Molokai Ranch’s previous threat, according to PUC Chairman Carl Caliboso. But, he added, utility commissions in other states already have similar authority.

“This is not something you want to have to use,” he said. But before the bill passed, the PUC had the authority only to work with the existing utility and try to force them to continue utility services, according to Caliboso.

House Bill 1061 gives the PUC the power to appoint a “receiver” to temporarily take over the utility in the case that “a regulated water or sewer utility either fails to provide adequate and reasonable service to its customers or creates a serious and imminent threat to the health and welfare of its customers,” according to the bill.

A “receiver,” explained Caliboso, can be a qualified individual, company, or consultant contracted by the PUC. The receiver could also be another utility currently operating elsewhere in the state, according to Caliboso.

“I think [this bill] provides the Commission with greater amounts of authority which would assist in the very situation that we saw with the Molokai utilities,” said Awakuni.

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