PUC approves big rate hike for Manele Water

Changes would increase rates 172 percent over next four years

Manele Water Resources has gotten approval to increase its rates by 172 percent, bumping monthly service charges for single-family homes from $56.74 to $156.11 over the next four years.

The state Public Utilities Commission approved Manele Water’s request last week, which was whittled down from the 211 percent increase the company originally proposed. The new rates will be phased in five steps, with increases taking place every 12 months, according to documents filed with the PUC.

Manele Water Resources provides wastewater collection and treatment services to residents and businesses on Lanai and recycled water to the Challenge at Manele Bay Golf Course for irrigation. As of June 30, 2019, the company was servicing 66 residential customers in 50 multifamily and 16 single-family dwellings, one hotel with 213 guest rooms and seven commercial/recreational customers in the Manele-Hulopoe area.

The company has not applied for an increase since its initial rates were approved and established in 2007, according to PUC documents. In September 2019, the company asked for a 211 percent increase that would raise its revenues for wastewater operations from $707,849 to $1,043,373.

That would’ve upped monthly service charges for single-family homes from $56.74 to $189.58. Multifamily users, who were paying about $42.21 a month per dwelling, would have paid more depending on meter size and number of dwellings — $135.42 for a single dwelling with a 5/8-inch meter on the low end and $262.50 for four dwellings with a 1-inch meter on the high end.

Joy Gannon, director of utilities for Pulama Lana’i, said in a public hearing in December that Manele Water Resources’ operating losses for 2019 were estimated at over $500,000, and the company was looking to recoup the costs. She said that the company’s current rates were based on 2006 operating costs and weren’t providing enough revenue to cover growing expenses like contracted services, electricity, labor, chemicals and regulatory requirements.

“We understand that no one looks forward to an increase in their rates,” Gannon said. “However, we do ask that you consider the costs to provide safe, reliable, cost-effective wastewater collection and treatment services.”

Pulama Lana’i’s parent company, Lanai Island Holdings, bought Manele Water Resources from Castle & Cooke in 2013 and as a condition was required to invest $10 million in the water and wastewater utilities, which it has done, Gannon said.

Both Manele Resources’ application and the public hearing took place prior to COVID-19. However, even after the pandemic hit, the company told the PUC in May that it “has not experienced any significant near-term financial impact as a result of the COVID-19 emergency due to its revenue source and unique customer base.”

Most of the company’s revenues come from the Four Seasons Resort Lanai, which is owned by Pulama Lana’i. The parent company planned to pay all water fees charged to the hotel, golf course and Hulopoe Beach Park, which it owns. The pandemic also did not significantly impact cash receipts from customers for sewer services, the company said.

However, Manele Water added that it would “experience both a medium-term and longer-term financial impact” if it couldn’t get a rate increase approved.

The final monthly flat rate service charges agreed upon by both the company and the Division of Consumer Advocacy — the agency that represents customer interests — are as follows and will take place every 12 months:

• Residential single-family, one dwelling, 5/8-inch meter, $76.61 (effective upon approval), $96.48, $116.35, $136.22, $156.11.

• Residential multifamily, one dwelling, 5/8-inch meter, $56.16, $70.11, $84.06, $98.01, $111.94; one dwelling, 1-inch meter, $62.45, $82.69, $102.93, $123.17, $143.40; three dwellings, 1-inch meter, $144.46, $162.29, $180.12, $197.95, $215.78.

• Hotel (per guest room), $128.57, $165.02, $201.47, $237.92, $274.38.

• Commercial (monthly service charge), 5/8-inch meter, $25.95, $39.90, $53.85, $67.80, $81.75; 1 1/2-inch meter, $75.24, $138.48, $201.72, $264.96, $328.20; 2-inch meter, $93.72, $175.44, $257.16, $338.88, $420.59.

• Commercial (monthly sewer treatment charge, per 1,000 gallons of water consumption), $10.38, $10.78, $11.18, $11.58, $12.

• R-1 reclaimed water sales (user charge per 1,000 gallons), $0.35, $0.45, $0.55, $0.65, $0.75.

While Consumer Advocate Dean Nishina supported the rates with adjustments, he recommended that Manele Water phase in the rate hikes and also consider talking to the county about lowering customer costs in the future, perhaps by dedicating Manele Water’s system to the county or sharing technical resources in operating both systems, thus sharing costs.

Manele Water agreed in settlement discussions to talk with the county once proceedings were over and to include a summary of those discussions in its next rate case application.

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


Today's breaking news and more in your inbox

I'm interested in (please check all that apply)