LIHU‘E — Considering there are some 24,000 members of Kaua‘i Island Utility Cooperative, Wednesday evening’s turnout for the third informational meeting regarding proposed rate increases was remarkably small.
Roughly 15 people attended, almost half of whom were KIUC board members, including Stu Burley and Peter Yukimura.
Nonetheless, a few concerned residents wanted to know why their local co-op was proposing to hike their electric rate 10.5 percent.
Randall Hee, president and CEO of KIUC, and David Bissell, chief financial officer of KIUC, said the extra cost incurred was mostly needed due to lower visitor arrivals and occupancy rates.
“The greatest factor for lower sales is our visitor counts,” Hee said.
When an attendee asked why residents would be paying for the downturn in occupancy rates, Hee replied, “The basis for our utility is that our utility needs to be here in order to supply its customers power. It doesn’t matter if, for a short period of time, there are lower sales and fewer tourists on the island, essentially, we still need to cover our bases.”
Another reason for the rise in rates is also attributed to the increase in renewable energy use and efficiency.
One member asked why it happened to be that as people “got smarter about reducing their energy usage,” it ended up “backfiring” as added cost in the long run.
“If you install all the energy efficiencies that you can in your house,” one would ultimately end up with more than a 10 percent savings, Hee said.
“Reducing the amount of energy you use, reduces our income and does force us to raise our rates a little bit .. but, remember savings is still greater,” he added.
In an effort to communicate with its members, KIUC arranged three successive meetings which residents were invited to attend and gain an opportunity to directly converse with decision-makers.
“Our objective was to progressively share information and to address any member concerns that we could,” Hee said Friday during a phone interview. “In that respect, I think we’re always open to better ways of communicating.”
Despite newspaper and radio announcements, as well as several e-mail blasts, Hee said they “did the best we could to bring the information” to as many people as possible.
Wednesday’s meeting ended an hour before it was expected to finish, as residents were not there to voice their concerns or ask questions about the extra $16 a month an average household might be paying.
The meeting discussion kept referring to the decline in fuel price, being some 30 percent below 2008 levels. Yet, the price per gallon of gas and barrel of oil are noticeably on the rise again, as the average gallon of gas now costs about $2.97 on Kaua‘i and a barrel of oil roughly $68. This is opposed to paying $2.46 at the pump in the beginning of the year and $2.53 at the beginning of last month.
“What’s going on here, is we believe petroleum prices are being driven heavily by speculation and there isn’t an underlying demand for it right now and investors are putting their money into it,” Bissell said.
Oil has gone up, but “our prices haven’t,” he added.
The combination of declining visitor rates, a jump in energy efficiency and what KIUC considers a plunge in fuel prices, have caused the cooperation’s sales to drop 3 percent in 2008 compared to the prior year, according to Wednesday’s presentation. In addition, during the first quarter of 2009, sales have already depreciated by 9 percent in comparison to last year.
In essence, Bissell said he hopes that with the rate increase and simplified customer bills, “we will have slightly less exposure to petroleum price fluctuation, which should be a benefit to members and they (bills) should be a lot more transparent.”
Another KIUC board member meeting will be held June 23 to consider approval of the rate application and, if approved, is predicted to be filed by July 1 with the Public Utility Commission.
PUC will then schedule a public hearing after receipt of application.
Though KIUC would prefer to implement the rate increase as soon as possible, it may take up to 11 months before members will be required to pay, Bissell said.
For more information visit www.kiuc.coop.com or call 246-4389.
