NOTICE OF PUBLIC HEARING

APPLICATION OF PUHI SEWER & WATER CO., INC.
FOR APPROVAL OF RATE INCREASES
AND REVISED RATE SCHEDULES

DOCKET NO. 2006-0423

The PUBLIC UTILITIES COMMISSION of the STATE OF HAWAII (\u201DCommission\u201D), pursuant to Hawaii Revised Statutes §§ 269-16 and 269-12, HEREBY GIVES NOTICE that it will hold a public hearing on Thursday, December 21, 2006, 5:00 p.m. at the Lihue Neighborhood Center (Old Side), 3353 Eono Street, Lihue, Kauai, HI, relating to the Application of PUHI SEWER & WATER CO., INC. (\u201DPuhi Sewer\u201D), filed on October 23, 2006, for approval to increase its wastewater rates and revise its rate schedules.
Puhi Sewer is a public utility that provides wastewater collection and treatment services to its residential, commercial, and industrial customers located in the Lihue/Puhi area on the island of Kauai. In addition, Puhi Sewer provides effluent to the Puakea Golf Course. Puhi Sewer seeks Commission approval of a general rate increase of $287,270, or 28.1 percent (28.1%), over revenues at present rates. The requested increase is based on an estimated total revenue requirement of $1,369,422 for the 2007 calendar test year, and an overall rate of return of 9.5%.
In Puhi Sewer\u2019s previous general rate case, Docket No. 03-0383, the Commission approved in 2004 a three-step phase-in of Puhi Sewer\u2019s rate increase, with the latest and final phase-in taking effect on September 1, 2006. Puhi Sewer states that: (1) since the time of its last rate case proceeding (Docket No. 03-0383), its operating expenses have been greater and have increased more quickly than projected at the time of that rate case proceeding, and at a greater pace than its operating revenues; and (2) its wastewater rates presently do not and will not in the foreseeable future produce sufficient revenues to earn a fair rate of return.
Puhi Sewer\u2019s present and proposed rates are as follows:

Present Proposed
Charge Charge % Increase

Residential (Single-Family and $46.00 $58.90 28.0%
Multi-Family/Condominiums)
(monthly service charge
per customer)

Industrial Minimum service Minimum service 28.1%
(monthly service charge charge of $286.00, charge of $366.30,
per customer) plus a sewer plus a sewer
consumption treatment charge
charge of $6.88 of $8.81 per every
per every 1,000 1,000 gallons of
gallons of metered metered domestic
domestic water water consumption.
consumption.

Commercial Minimum service Minimum service 28.1%
(monthly service charge charge of $275.00, charge of $352.20,
per customer) plus a sewer plus a sewer
consumption treatment charge
charge of $3.98 of $5.10 per every
per every 1,000 1,000 gallons of
gallons of metered metered domestic
domestic water water consumption.
consumption.

Golf Course Irrigation $0.50 per every No increase 0%
(effluent charge) 1,000 gallons of proposed.
metered effluent
delivered to the
Puakea Golf Course.

As part of its Application, Puhi Sewer also requests the Commission\u2019s approval to: (1) establish an Automatic Power Cost Adjustment Clause that will enable it to pass through increases in its electric charges above the base cost of electric charges established in this proceeding; and (2) increase its connection deposit/hook-up charge from $100.00 to $150.00.
The Commission will investigate the justness and reasonableness of the proposed general increase in Puhi Sewer\u2019s wastewater rates and charges, and its revisions to its rate schedules. The total revenue requirement for the 2007 calendar test year will not exceed the $287,270 amount over revenues at present rates that Puhi Sewer requests. However, the increases in rates and charges to be finally approved by the Commission, if any, may be higher or lower than Puhi Sewer\u2019s proposed rates and charges noted above.
All interested persons are invited 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\u2019s e-mail address at Hawaii.PUC@hawaii.gov. All written statements should reference Docket No. 2006-0423 and include the following information: (1) name of the person submitting the written statement; (2) organization the person submitting the written statement represents (if any); and (3) address of the person submitting the written statement.
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 January 2, 2007.
Copies of Puhi Sewer\u2019s Application and supporting documents are available for public inspection during regular business hours at the following locations:

PUBLIC UTILITIES COMMISSION PUBLIC UTILITIES COMMISSION
465 South King Street, Room 103 KAUAI DISTRICT OFFICE
Honolulu, HI 96813 3060 Eiwa Street, Room 302-C
Ph: (808) 586-2020 or Lihue, Kauai, HI 96766
toll-free from the island of Kauai, Ph: (808) 274-3232
at 274-3141, ext. 62020

DEPARTMENT OF COMMERCE PUHI SEWER & WATER CO., INC.
AND CONSUMER ADVOCACY 3-1850 Kaumualii Highway
DIV. OF CONSUMER ADVOCACY Lihue, Kauai, HI 96766
335 Merchant Street, Room 326 Ph: (808) 245-3678
Honolulu, HI 96813
Ph: (808) 586-2800

Special accommodations for persons with disabilities can be made if requested reasonably in advance by contacting the Commission\u2019s Honolulu Office.

_____________________________
Carlito P. Caliboso
Chairman (SB05525810 11/28, 12/5, 12/12, 12/19/06)