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Some businesses support Young Brothers rate hike

Company has asked for decision by Monday

Several Maui County businesses are throwing their support behind Young Brothers’ request to raise its rates 47 percent, though at least one called for an independent audit of the struggling interisland shipper.

Grocery store owners, local vendors, a car dealership and Pulama Lana’i voiced support for Young Brothers’ request in letters to the state Public Utilities Commission this week. On Friday, the PUC held a daylong evidentiary hearing to consider Young Brothers’ request; the company has asked for a decision by Monday or says it might be forced to furlough employees or discontinue services.

“Our focus today is on finding a solution,” Young Brothers President Jay Ana said in a statement Friday evening. “We at this point are entirely focused on a solution, whether it’s through emergency relief or continuing dialogue with state and local agencies.”

Young Brothers’ request for a rate hike, which would amount to $27 million and just help the company break even, has been strongly criticized by the state agency that represents customers. Dean Nishina, executive director of the Division of Consumer Advocacy, called the request “unreasonable,” “highly objectionable and outrageous” and “ill-timed” in a July 23 letter to the PUC, pointing out that customers were also facing economic challenges during the pandemic that would make it difficult to afford increasing rates.

However, in letters to the PUC this week, many businesses felt that a rate increase was preferable to losing the service altogether.

Kurt Matsumoto, chief operating officer of Pulama Lana’i, said the loss of delivery services to Lanai would be “far more pernicious than a just and reasonable rate increase.” Nevertheless, Matsumoto said that if the new rates were approved, he would like to see an independent audit of Young Brothers that would “provide insight into the financial health and operational efficiency” of the company and help develop action plans going forward.

He also called for a commitment from Young Brothers “to provide, at minimum, barge delivery twice a week to Lanai.”

Under the company’s current scaled-back schedule, a barge makes a once-weekly trip from Honolulu to Lanai.

Meanwhile, a group of 12 Maui County businesses that included Pine Isle Market and Maui Ice and Soda Works also backed the temporary increase, saying that without the once-weekly barge to Lanai, they would have to fly in products, which would cost much more.

“While this temporary rate increase will have a trickle-down effect and increase operating costs for our businesses in the short term, not having Young Brothers bringing in vital supplies will be even more costly to our community in the long term,” the businesses said.

Even fellow shipping company Matson extended its support for Young Brothers, which helps Matson move cargo to and from Neighbor Island ports, especially Molokai and Lanai, where Matson barges are too big to enter the harbor.

“Ensuring the survival of our state’s only water carrier is vital to our economy and to Matson,” Senior Vice President Vic Angoco said.

Because the hearing concluded after hours and the PUC’s offices were closed, it was unclear what the commission planned to do by Monday.

If the rates are not approved by then, Young Brothers said it will face a cash shortfall in the ensuing weeks and will be unable to pay its bills or continue funding operations.

“While we are a utility, we are not immune to the impacts of the pandemic and we are not able to operate if we don’t have cash to manage or pay for our obligations,” Ana said.

* Colleen Uechi can be reached at cuechi@mauinews.com.

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