ML&P: Kapalua water, wastewater companies are sold

Sale to Hawaii Water is pending closing conditions as well as PUC approval

Maui Land & Pineapple Co. announced Monday that it has agreed to sell Kapalua Water and Kapalua Waste Treatment Cos.' regulated utility assets to Hawaii Water Service, which operates facilities in Pukalani and Kaanapali.

The Kapalua companies serve about 1,000 connections in the Kapalua Resort for drinking and nonpotable water and wastewater systems for homes, hotels, condominiums, golf courses, restaurants and other resort amenities, ML&P and Hawaii Water Service said in news releases Monday.

As part of the agreement, Hawaii Water Service will serve future expansion areas of Kapalua as they are developed, ML&P said.

The sale is pending closing conditions and state Public Utilities Commission approval. Tim Esaki, ML&P chief financial officer, said in an email Monday that the process is expected to take at least a year to be completed.

Neither Esaki nor representatives of Hawaii Water Service disclosed the sales price.

The sale does not include the ML&P Honokohau ditch system, which is not part of the company's PUC regulated assets, Esaki said. The company has come under fire from Honokohau residents complaining about unreliable water supply and the wasting of water in Honokohau Stream.

On Nov. 20, the state Commission on Water Resource Management unanimously approved recommendations for ML&P to upgrade a damaged Honokohau Stream intake and other fixes meant to prevent wasting water.

ML&P announced in early December that it had embarked on a $300,000 to $400,000 Honokohau Stream ditch repair project. The ditch system was damaged by Hurricanes Lane and Olivia, which passed through the area in 2018, the company said.

The anticipated completion date of this two-phased project is March 31, ML&P said.

The water from the ditch flows to the county water treatment facility, Kapalua Water Co., and various residents and farmers for drinking, irrigation and fire suppression.

"The planned repairs are progressing well and even after the sale is consummated, MLP will retain the management of the ditch system, which the repairs are being done on," Esaki said.

The proposed sale was "a business decision," he said.

"For several years, it was MLP's strategic vision to sell its regulated water and wastewater assets," he said. "This transaction is consistent with that strategy."

The buyer, Hawaii Water Service, already has Maui operations, delivering drinking water to Kaanapali hotels and condominiums and running a sewage treatment facility in Pukalani that serves nearly 800 residential units as well as shopping centers and schools.

The company also provides water and runs a sewage treatment plant for the Waikoloa Resort and Village on Hawaii island. In addition, the company's news release Monday said it was under contract to acquire Kalaeloa Water Co., which provides potable water and wastewater service to the Kalaeloa community on Oahu.

Hawaii Water Service is a subsidiary of California Water Service Group, which includes wholly owned subsidiaries in California, Washington state, New Mexico and Hawaii. As a whole, it provides regulated and nonregulated utility services to approximately 2 million people in 100 communities.

"One thing that makes this such a good fit is that we share Kapalua's world class commitment to its visitors and residents," said California Water Service Group President and Chief Executive Officer Martin A. Kropelnicki. "Our purpose as a company is to improve the quality of life for those we serve, and I look forward to welcoming the Kapalua 'ohana to our company."

* Lee Imada can be reached at leeimada@mauinews.com.