State commission delays decision on rate increase for private utility company on Big Island

After hearing more than two hours of online testimony on Thursday evening, the Public Utilities Commission decided to seek more written testimony before deciding whether to approve temporary rate increases requested by the privately-owned Punalu‘u Water and Sanitation utility.

The seven-member commission said it will continue to accept written testimony until March 31.

After the commission reviews all the testimony and consults with the state Department of Commerce and Consumer Affairs’ Division of Consumer Advocacy, it will issue a written decision about the rate increases.

It is unknown at this time when that decision will be made. However, commissioners said they are aware of the urgency of the situation and are committed to addressing the issue.

The sanitation company, which services about 100 households in Punalu‘u for Colony I and Kalana Golf Estates, said its annual revenue collected through these user rates is currently $25,006. With the proposed rate increases, it would result in approximately $617,415 in annual revenue, according to documents filed with the Public Utilities Commission.

Chuck Loy, certified public accountant for Punalu‘u Water and Sanitation, told the commission Thursday that the system is at a critical juncture because it is outdated and struggling to keep up with maintenance.

The sanitation company hasn’t issued a rate increase in almost 50 years. When Eva Liu bought the system in 2019, Loy said she agreed to no rate hikes for three years.

That same year, Liu purchased more than 400 acres of the former Sea Mountain resort area east of Hawai‘i Belt Road under the limited liability company called Black Sand Beach with a plan to develop the area with residential and short-stay units along with amenities.

But Loy said: “PWS has reached the end of the line. They’ve racked up losses of $1.1 million. Without additional support from customers, water and sewer operations could grind to a halt.”

Loy said the sanitation system isn’t looking to profit from the temporary increase, it’s about surviving and keeping services running and reliable.

“If the temporary increase brings in more than what is needed, it will refund customers or give credit to utility bills,” Loy said.

Michel Angelo, a consumer advocate for the Department of Commerce and Consumer Affairs, said his office is aware of the ongoing concerns regarding the service quality of the sanitation system.

“The size of the increase is extremely concerning to our office,” Angelo said. “We’re working to ensure the rate is focused only on what is needed.”

One testifier and current customer to the system said she realizes the current rates are not enough to sustain the system, and supports the increase to ensure she has water and sewer services.

“There needs to be a meeting of the minds,” the testifier said.

Donna Barnett, a property owner at Colony I, opposed the rate increase saying that while she does “understand a partial rate increase is justified,” the proposed hike is too exorbitant, hiking her bill from $30 to $500 a month.

“This is Ka‘ū, not Monty Carlo,” Barnett said.

Tamara Goesch, a Colony I resident for about 30 years, opposed the increase saying the burden of oversight for the system lies with Liu.

“Don’t punish the customer,” Goesch said.

Wayne Kawachi spoke in support of the increase saying he believes Liu has done her best to maintain the system, adding the money collected will keep the system going.

“It’s a necessity to have water,” Kawachi said. “I think there are ways to monitor the money that goes to PWS and make sure things are spent well.”

Kawachi also believes the consumer advocates can help with ensuring money collected is spent where it needs to be to keep the system running.

According to Loy, a big chunk of the money collected through the new rates would go toward repairing four fire hydrants.

Ron Ebert said he is the longest customer of Punalu‘u Water and Sanitation. Based on the public safety aspect with nonoperational fire hydrants in the rural community, Ebert strongly urged the commission to approve the proposal.

“We can study this thing to death,” he said. “I’d recommend you look at Lahaina and see what happened there.”

Additional testimony can be submitted online at puc@hawaii.gov or by mailing it to the Hawai‘i Public Utilities Commission at 465 South King Street. #103 Honolulu, HI 96813.