PUC denies KIUC’s rate-hike request

LIHU‘E — The state Public Utilities Commission on Thursday denied Kaua‘i Island Utility Cooperative’s request to raise its rates by roughly 10.45 percent, a PUC press release states.

The commission approved a net increase of 1.98 percent, which is the same amount the PUC approved in its April 29 interim decision.

As stated in the decision and order, “the commission denied recovery from KIUC’s customers, through electric, rates, incentive employee compensation and salary increases for managerial and other non-bargaining unit employees, finding that such expenses were unreasonable for ratemaking purposes in the current down economy,” the PUC release states. “Nonetheless, KIUC has informed the commission that it intends to continue paying these disallowed expenses, which will still be borne by its owner-members (who are also KIUC’s customers).”

KIUC issued the following two-paragraph news release Friday in response to the PUC decision Thursday.

“In a Decision and Order issued yesterday, the Public Utilities Commission (PUC) approved as final the interim rates currently in affect for Kaua‘i Island Utility Cooperative (KIUC) ratepayers. KIUC began charging the new interim rates on May 26 of this year,” the KIUC release states. “After PUC’s review of the details of KIUC’s rate increase request, the PUC issued the final decision, which required no further adjustments to the interim rates currently being charged.”

KIUC, as part of its application filed in June 2009, initially requested an increase in revenues over present rates of $12.99 million (roughly 10.45 percent), according to the PUC release. The approved 1.98 percent increase in revenues over present rates amounts to $3.06 million, based on a Regulatory TIER of 2.27 and a total test year revenue requirement of $157.42 million.