Molokai Properties rescinds notice to quit operations

WAILUKU - Mayor Charmaine Tavares expressed outrage Wednesday over what she called Molokai Properties Ltd.'s "cavalier attitude" toward the people of Molokai in its actions on its utility systems.

Tavares was reacting to a Molokai Properties letter sent Monday to the state Public Utilities Commission advising that the company will continue to operate its three utilities "and hereby revoke and rescind all prior notices of intent to terminate operations."

"It appears that Molokai Properties may have created an artificial emergency in order to receive an emergency rate increase from the PUC," Tavares said.

"All the while, the company's customers have been made to live with the anxiety the company caused when it announced that it would abandon their customers and leave over a thousand people without water and sewer services."

The Molokai Properties letter to the PUC, signed by company Chief Executive Peter Nicholas, said that interim water rate increases approved by the PUC last month will allow the utilities to continue to operate through March 1, even factoring in reduced consumption by customers cutting back because of the massive rate hikes. The rates amounted to a 121 percent increase on one system and a 40 percent hike on the other.

But Nicholas' letter said only that the utilities "will remain operational for the period of the temporary rate increase," and does not indicate what MPL will do after the six-month interim rate hikes expire. The PUC had ordered MPL to prepare a rate request if it has not found another operator for the utilities.

MPL in April notified the state that it would shut down its two water utilities and a wastewater operation servicing residents and businesses in Kualapuu, Maunaloa and Kaluakoi. At the time, the company claimed that it was suffering continuing losses and MPL would no longer subsidize the utility operations.

In response, Gov. Linda Lingle and the state Department of Health ordered Maui County to take over the Molokai utilities. Tavares protested that county rate payers should not be held responsible for mismanagement of a private company.

In a statement Wednesday, the mayor noted that the county incurred considerable costs to defend itself against the state's orders and to prepare for an emergency if MPL had followed through on its shutdown threat.

She said the county will continue to pursue a declaratory order in 2nd Circuit Court holding Molokai Properties responsible for maintaining the utility services for developments on its lands. The suit is based on documents signed by Molokai Properties, Molokai Ranch and other predecessor landowners involved in developing the ranch lands.

"The company has taken a cavalier attitude and has toyed with the people of Molokai's emotions," Tavares said. "Their pattern of irresponsible behavior gives us no reassurance. The apprehension and insecurity they caused for the impacted families, businesses and employees, is inexcusable."

* Edwin Tanji can be reached at citydesk@mauinews.com.