West End Water Rates to Rise Again

PUC approves temporary hikes.

It was nearly a year ago that two Molokai Properties Limited (MPL) subsidiary companies, Wai`ola O Molokai and Molokai Public Utilities (MPU), applied with the Public Utility Commission (PUC) for water rate increases, some over 500 percent higher than rates just a few years ago.

While PUC has yet to make a final decision on the matter, it issued an interim decision approving the rate increases two weeks ago. The new rates will go into effect when the PUC approves revised tariffs that the utilities must submit. As of last Friday, the PUC was still awaiting their filing, but the rate hikes are imminent.

“That’s not the final decision,” said PUC Chairman Carl Caliboso. “The interim just says they’re probably entitled to [raise rates].” The final decision, he said, will state definitely whether the utilities are entitled to the increase.

Caliboso was unable to say when a final decision would be issued.

To minimize a so-called rate shock for customers, MPU and Wai`ola proposed a two stage phase-in of the new rates. Phase I is expected to begin in the coming weeks; Phase II will begin six months after Phase I.

In Phase I, MPU customers will pay $8.00 per 1,000 gallons per month and $9.61 in Phase II, according to its application with the PUC filed in June 2009.

Wai`ola customers will pay $6.65 per 1,000 gallons per month in Phase I and $8.97 in Phase II, according to its application.

Meanwhile, the average family serviced by Maui County Water Supply pays less than $2.00 per 1,000 gallons, according to their website.

About 1200 Molokai residents will be affected by the 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.

Long Journey
In June 2008, MPL threatened to cut water utility services its customers after claiming that its subsidiary utility companies did not have the financial resources to continue service.

The announcement caused panic among island residents and lawmakers at the state and county levels. Maui County filed a lawsuit against MPL, pointing to the binding agreements the utility companies had signed with the County to provide residents with water services.
   
MPL agreed to continue service but at a much higher cost.

In August 2008, in an unprecedented move, the PUC recommended the temporary rates increases that are still in effect. In June 2009, Wai`ola and MPU applied to the PUC for permanent rate increases.

By this time next year, a family in Kualapu`u or Maunaloa using the residential standard of 600 gallons a day could see their monthly bill for water usage skyrocket from $33 they paid in August 2008 to $192.

Ratepayers’ Future
The rates approved by the interim decision will apply until the PUC makes its final decision. If that calls for rates lower than the new rates, the difference will be refunded to customers. 

Many on Molokai are disappointed with the PUC decision.

“It’s a disaster for the people on the island,” said Molokai resident Tim Brunnert. He founded the advocacy group Stand For Water last summer to fight the proposed rate raises.

“The main reason was to get the government to fight for us, and they obviously didn’t do that,” Brunnert said.

The Division of Consumer Advocacy signed off on the raises. “The concern is that without sufficient revenues… the utility company may say that ‘We can’t operate, we don’t have enough money,’” said Consumer Advocacy Executive Director Dean Nishina.

“Our office tries to make sure customers have a utility… we don’t want them to go out of business,” he added.

The PUC had set a deadline to make a final decision on rate increases by the end of 2009, but the process was sidetracked when interveners – third parties appointed by the PUC to provide research and information — were approved for the case.

A closed hearing was held May 19-20 and PUC’s interim decision was issued May 28.