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Awash in losses, water company seeks approval of land sale

Wailuku group wants PUC action on sale of 4,500 acres to Ting Ranch LLC

Wailuku Water Co. hopes the state Public Utilities Commission approves its proposed sale of about 4,500 acres in the next two to three months to survive mounting losses that threaten to close the company, its president said Tuesday.

In April, the company asked the commission to approve the $3.4 million land sale to Ting Ranch LLC, but it was forced to withdraw its filing because of statutory and procedural issues, President Avery Chumbley said.

The company refiled with the PUC last week and the parties involved have until June 18 to file objections or comments.

“We have lost money for the past eight years straight (and) last year was the worst by far,” Chumbley said. “I may be able to hang on for a short time. That is why this is critical.”

The commission has blocked Wailuku Water Co. since 2008 when it sought to provide nonpotable water through its ditch system and establish rates for delivering the water. The commission suspended the company’s docket and disallowed it from taking new customers, raising its rates or selling its assets while stream-flow standards in a contested case hearing were being worked out.

Chumbley has asked the commission to work as quickly as possible and that “if things go well,” a decision could be made in a few months. He said all parties responded positively or no had response at all in the April filing, with only the consumer advocate asking for more information.

“The Ting party remains very interested and anxious to proceed,” he said.

The proposed sale to the ranch, a Hawaii limited liability company managed by Duane Ting, only involves the land and would not include the Waikapu ditch or any other water delivery systems. The property would include 3,425 acres mauka of the King Kamehameha Golf Club and about 1,100 acres farther mauka.

The county’s proposed purchase of 8,764 acres of Wailuku Water’s land, including its water infrastructure, will have to be dealt with separately after the ranch sale, Chumbley said. Approval of the sale would help the company’s chances of selling to the county, a deal Chumbley said he believes would be easier to get approved.

While Mayor Alan Arakawa has proposed paying $9.5 million for the company’s water system, the two sides would still need to reach an agreement on the contract and a final price. The County Council would have to appropriate funds and hold public hearings.If the county goes through with the purchase, it also would operate the water distribution system on the land that Ting Ranch wants to buy.

Wailuku Water owns about 13,170 acres of West Maui watershed lands. Its system services more than 110 users and applicants for water, including the county’s 3 million gallons per day.

The commission’s suspension of action on the Wailuku Water docket has led to increasingly large operating losses, highlighted by last year’s $459,000 loss, according to the docket. The company lost 35 percent of revenues due to the closure of Hawaiian Commercial & Sugar Co., and additionally missed out on five to six months of revenue from the county after September’s storm damage in Iao Valley.

Chumbley said the land sale is needed to survive until the county possibly buys the water system. He said it would be “traumatic” if the company were forced to shut down and leave its customers without any kind of relief or resolution.

“I don’t see how the (state) water commission nor the PUC would order us to stay open and operate if we don’t have any funds to pay for those operations,” he said.

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

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