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Proposed rate increases for wastewater service explained

Officials: Upgrades have been made to Pukalani system

About 40 people attended Wednesday night’s wastewater workshop at the Mayor Hannibal Tavares Community Center Multipurpose Room in Pukalani. The Maui News / CHRIS SUGIDONO photo

PUKALANI — Proposed rate increases for the Pukalani wastewater system are expected to become public and be sent to the Hawaii Public Utility Commission this week, according to the company that manages the system.

Hawaii Water Service Co. Inc. is seeking an increase in rates to meet revenue requirements and to cover roughly $3.6 million worth of capital investments.

Company officials held a workshop Wednesday night to go over the general rate case process and their improvements with Pukalani customers, but they declined to provide details of their requested increases.

“People want to know what the rate increases are and the bottom line is we’re not in a position to talk about that until we file our rate case,” General Manager Mike Mares said at the meeting attended by about 40 people at the Mayor Hannibal Tavares Community Center Multipurpose Room. “But that’s going to happen soon. I get the anxiety about that, so we’re going to get that information out as soon as possible. Then we can start talking about it.”

The water company has been managing the Upcountry wastewater system since 2008, when it installed a $9.6 million wastewater treatment plant. Mares said that the new plant was sorely needed and was required by the state Department of Health due to the condition of the previous system.

Mike Mares, general manager of Hawaii Water Service Co. Inc., speaks to Pukalani residents during a wastewater workshop Wednesday night at the Mayor Hannibal Tavares Community Center Multipurpose Room. The Maui News / CHRIS SUGIDONO photo

The system serves nearly 900 customers, Mares said.

“We took over a system that was in bad repair and out of compliance,” he said. “It was an old-style system with bad corrosion, and it was getting letters from DOH. There were a lot of issues with it.”

Owners of the previous system contributed $2.8 million to the new plant, so Hawaii Water Service sought the remaining $6.8 million during its rate case in 2011. The PUC approved half the money, and the company is now seeking the rest.

“The PUC didn’t allow it last time because of the impact on customers, so we’re trying to get it in this time,” Mares said.

Hawaii Water Service reached an agreement with the state consumer advocate to approve additional annual revenues of about $300,000 in 2014, an increase of $200,000 in 2015 and a bump of $200,000 in 2016, according to financial documents. The new rates for 2016 took effect in February.

“The rates are changing. They’re going to be going up, but we’re looking at a much slower phase-in,” Mares said. “Our proposal is probably going to go beyond three years this time. I think we’re looking at five years, but don’t hold me to that.”

Recent capital improvements are two emergency generators and a water quality data monitoring system totaling nearly $200,000. The projects were required by the Department of Health, including the computerized system that provides information on effluent water quality at all times.

“We work hard to keep our costs down and subsequently our customers’ bills, while fulfilling our responsibility of keeping their wastewater system reliable,” Mares said. “Spills and things like that are very expensive and those spikes are direct paths to your (bills), so we want to avoid all of those.”

While Mares would not provide the proposed increases to residents’ bills, he said that the company has been working closely with the community through public meetings and is “trying to be as transparent as possible.”

Earlier this year, the company came under fire by Kaanapali hotels and condominium owners for proposed water rate increases.

The increases were approved in September, with the PUC deeming them “reasonable” and the company’s rate of return “fair.”

“I feel like that communication wasn’t delivered as well in the last rate case, and people went into a little bit of ‘rate shock,’ “ Mares said. “It’s not a fun thing to have rate increases, so we’re trying to get that out in front of them. This is good, to have these conversations and get people talking about it. Whether they agree or disagree, at least they have a format for them to talk about it, vent if they need to and maybe have a better understanding.”

Mares reiterated that the PUC ultimately decides whether to grant rate increases, and he welcomed customers to attend the public hearing. He added that customers can call the company if they would like to take a tour of the wastewater facility.

“I feel pretty strongly about our rate case, and we testified and did our due diligence, but it is up to the PUC for the outcome,” he said.

Hawaii Water Service serves about 4,300 connections in Pukalani and Kaanapali on Maui and in Waikoloa, the north Kona Coast and the Kohala Coast on the Big Island. It is a wholly owned subsidiary of California Water Service Group.

For more information, call (808) 893-2046 or visit www.hawaiiwaterservice.com.

* Chris Sugidono can be reached at csugidono@mauinews.com.