Objections Raised Over Advancement of Water Monopoly Bill

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Yesterday’s  Hawaiʻi’s Senate voted to pass HB1536, a bill that would eliminate public oversight of private monopoly companies supplying irrigation water, reported the Sierra Club of Hawaiʻi in a recent press release.

The bill will now be assigned to a committee of Representatives and Senators for review during conference.

“This bill offends fundamental principles about water in Hawaiʻi,” Marti Townsend, Sierra Club of Hawaiʻi director, said after the Senate vote. “Water is a public trust for the people, not for monopoly profits.”

Eight organizations representing over 135,000 supporters throughout the Hawaiian Islands oppose the bill, citing the need for Public Utilities Commission oversight of monopoly water companies to protect local farmers and the public, the press release continued.

In its testimony to the Senate, the Consumer Advocate explained that “exempting all non-potable water facilities from commission review, especially when such services are also offered in conjunction with regulated water or wastewater services, could adversely expose customers to various rate issues, quality and access issues, as well as possible subsidization issues for the customers of the regulated operations.”

At least 11 water companies are currently regulated by the PUC for supplying irrigation water. More such water companies are anticipated as former plantations move into the business of purveying water.

“If the Legislature passes this bill, then private corporations will be allowed to make unlimited profit from selling water, which will create new incentive to divert water from public streams,” said Albert Perez, executive director for Maui Tomorrow Foundation. “H.B. 1536 would allow former plantations to maintain their monopoly over water and sell it to others without any regulation.”

Advocates for the bill contend the PUC lacks expertise in water issues and therefore should not be deciding irrigation rate cases.

“If there is genuine concern about the PUC’s expertise in an area, there are a lot better ways to address them than creating unregulated market in water,” said Townsend. “The Legislature can issue statutory guidance, require regulations, or even transfer oversight to another agency. But to exempt these monopolies from any and all oversight is simply outrageous.”

HB1536 was originally drafted to clarify that irrigation systems regulated by the Department of Agriculture are exempt from PUC oversight. The bill was amended in the House Consumer Protection and Commerce Committee under Rep. Angus McKelvey to expand that exemption to all irrigation systems.

Rep. McKelvey was replaced as chairman of the CPC Committee in a rare mid-session reorganization of the House leadership.

New CPC Committee Chairman, Rep. Roy M. Takumi, will now represent the House in negotiations with the Senate on HB1536.