NOTICE OF PUBLIC HEARING

IN THE MATTER OF THE APPLICATION OF LAIE WATER COMPANY, INC. FOR APPROVAL OF A RATE INCREASE PURSUANT TO HAWAII REVISED
STATUTES § 269-16; AND REVISED RATE SCHEDULES

DOCKET NO. 2006-0502

The PUBLIC UTILITIES COMMISSION of the STATE OF HAWAII (“Commission”), pursuant to Hawaii Revised Statutes (“HRS”) § 269-16, HEREBY GIVES NOTICE that it will hold a public hearing on Thursday, March 8, 2007, at 6:00 p.m. at Laie Elementary School Cafeteria, 55-109 Kulanui Street, Laie, Oahu, regarding the application of LAIE WATER COMPANY, INC. (“Applicant”), Docket No. 2006-0502, filed December 29, 2006, for approval of general rate increases and revised rate schedules governing its water utility services in the Laie area, on the Island of Oahu.
Applicant seeks Commission approval of a general rate increase of approximately $1,522,089, which amounts to an approximate 198.0% increase over pro forma revenues at present rates, and is based on an estimated total revenue requirement of $2,290,723 for the 2007 calendar test year. In particular, Applicant seeks to implement: an additional intermediary rate block for residential customers; a new rate structure with four rate blocks for commercial customers; an increase in fixed monthly and usage charges for both residential and commercial customers; and an Automatic Power Cost Adjustment Clause, which will allow Applicant to increase or decrease its water service rates based on any corresponding increase or decrease in Applicant’s cost for electricity. Applicant’s present and proposed rates for its residential and commercial classes of service are shown below:

Residential Service Present Rate Proposed Rate
Per month or per Per month or per
1,000 gallons 1,000 gallons

Monthly Charge Per Customer $2.50 $5.84
Usage Charge – 0 to 13,000 gallons per month $1.67 $2.79
Usage Charge – 13,001 to 30,000 gallons per $2.00 $3.36
month
Usage Charge – Over 30,000 gallons per month $2.00 $5.01

Commercial Service
Monthly Charge Per Customer $2.50 $5.84
Usage Charge – 0 to 13,000 gallons per month $1.67 $2.79
Usage Charge –13,001 to 30,000 gallons per $2.00 $3.36
month
Usage Charge – 30,001 to 400,000 gallons per $2.00 $5.01
month
Usage Charge – Over 400,000 gallons per month $2.00 $8.28

Applicant states that: (1) it has incurred cumulative losses between January 1, 2005 and September 30, 2006; (2) it will have spent approximately $5.9 million on needed projects and improvements that are used and useful to its utility operations since December 31, 2000, the end of the last test year used in Applicant’s prior approved rate case, until December 31, 2007, the end of Applicant’s current test year in this docket; and (3) the instant rate case was designed to allow Applicant the opportunity to recover costs and earn a fair and reasonable return on its utility assets. In addition, in recognition that the proposed rate increases could result in “rate shock” to certain classes of customers, Applicant proposes a three-step phase-in of the proposed rate increases.
The Commission will investigate whether the proposals in the Application, including revisions to its rate schedules, are just and reasonable. The total revenue requirement for the 2007 calendar test year will not exceed the $1,522,089 amount over revenues at present rates that Applicant requests. However, the increase in rates and charges to be finally approved by the Commission, if any, may be higher or lower than Applicant’s proposed rates and charges noted above.
All interested persons are urged to attend the public hearing to state their views, orally, in writing, or both. Written statements may be submitted prior to or at the public hearing. Statements may be mailed to the Public Utilities Commission, 465 South King Street, Room 103, Honolulu, Hawaii, 96813. Statements may also be sent by electronic mail to the Commission’s e-mail address at Hawaii.PUC@hawaii.gov.
Motions to Intervene or Participate in this proceeding shall comply with Subchapter 4, Rules of Practice and Procedure Before the Public Utilities Commission, Hawaii Administrative Rules, Title 6, Chapter 61. A motion to intervene or participate in this proceeding shall be filed with the Commission by March 19, 2007.
Copies of the application and supporting documents are available for public inspection during regular business hours at the following locations:

PUBLIC UTILITIES COMMISSION DEPARTMENT OF COMMERCE
465 South King Street, #103 AND CONSUMER AFFAIRS
Honolulu, HI 96813 DIVISION OF CONSUMER ADVOCACY
Phone: (808) 586-2020 335 Merchant Street, #326
Honolulu, HI 96813
Phone: (808) 586-2800
LAIE WATER COMPANY, INC.
55-510 Kamehameha Highway
Laie, Hawaii 96762
Phone: (808) 293-7017

Special accommodations for persons with disabilities can be made if requested reasonably in advance by contacting the Commission’s Honolulu office.

_________________________
Carlito P. Caliboso
Chairman (SB05527541 2/15, 2/22, 3/1, 3/6/07)