Public Hearing Set for Ranch’s Water Rate Increases

By Catherine Cluett

After months of delays, a general rate increase application has been successfully filed by Molokai Ranch’s water utility companies. The Public Utilities Commission (PUC) has set a public hearing on Molokai for September 3, 2009 at Mitchell Pauole Center at 5 p.m.

At the end of May last year, Molokai Ranch threatened to shut down their water utilities Molokai Public Utilities (MPU) and Wai`ola O Molokai (Wai`ola), citing financial hardship. In an unprecedented move, the PUC approved temporary rate increases that have been described as outrageous.

MPU and Wai`ola filed general rate applications with the PUC in March, requesting rate increases of as much as five times greater than what consumers were paying last summer. The utilities also requested their applications be accepted with unaudited financial statements in lieu of audited ones, which the PUC denied.

On June 29, 2009, MPU and Wai`ola submitted amended applications to the PUC, this time with audited financial statements.

MPU and Wai`ola are proposing the rate increase incrementally in a two-phase one year “test” period scheduled between July 1, 2009 through June 30, 2010.  Wai`ola is seeking a general rate hike of $8.97 for every 1000 gallons sold, almost five times greater than the rate of $1.85 per 1000 gallons, which is what consumers were paying a year ago. MPU applied for rates of $9.61 per 1000 gallons, three times greater than the last PUC approved general rate of $3.18.

In addition to water rate increases, MPU and Wai`ola requested in their amended applications to increase other fees such as service charges for meter reading, private fire protection charges, adjustable charges for power and fuel costs associated with water production, and reconnection fees.

For example, MPU is proposing doubling their private fire protection rates, while Wai`ola is requesting their customers pay nearly fives times as much as they are currently charged. MPU has proposed a standby charge (per installed meter) that is three times greater than what customers are paying now; Wai`ola has requested a service charge increase for meter reading of nearly five times greater than the current rate. Reconnection fees are also proposed to double for both utilities.

About 1,200 Molokai residents will be affected by the proposed increases. Wai`ola provides water to consumers in Maunaloa, Kualapu`u, Kipu, Manawainui and Molokai Industrial Park. MPU services residents at Ke Nani Kai, Paniolo Hale, Kaluakoi Villas and Papohaku Ranchlands. 

To view the full applications filed by MPU and Wai`ola, visit the PUC website at http://puc.hawaii.gov/RII/water/Dockets.

Molokai Ranch Water Rate Timeline:
May 30, 2008 Molokai Ranch threatens to terminate water utilities

Aug. 14, 2008 PUC approves temporary rate increase as high as 178%

Aug. 29, 2008 County of Maui files suit against Molokai Ranch and its water utilities

Oct. 29, 2008 Ranch requested and is granted an additional 6 months to file a general rate increase application

March 2, 2009 MPU and Wai`ola file for general rate increase, requesting to submit unaudited financial statements in lieu of audited financial statements

April 2, 2009 PUC denies the utilities’ requests to submit unaudited financial statements. PUC requires them to file amended applications

June 29, 2009 MPU and Wai`ola submit amended applications with audited financial statements

Sept. 3, 2009 Molokai hearing will be held

Water Rate Table:
Molokai Public Utilities
Last permanent rate: $3.18
Current temporary rate: $6.04
Phase I proposed rate: $7.9996
Phase II proposed: $9.60961

Wai`ola O Molokai
Last permanent rate: $1.85
Current temporary rate: $5.15
Phase I proposed rate: $6.6549
Phase II proposed rate: $8.9675