NOTICE OF PUBLIC HEARING

IN THE MATTER OF THE APPLICATION OF KUKIO UTILITY COMPANY, LLC FOR REVIEW AND APPROVAL OF RATE INCREASES
AND REVISED RATE SCHEDULES

DOCKET NO. 2007-0198

The PUBLIC UTILITIES COMMISSION of the STATE OF HAWAII (“Commission”), pursuant to Hawaii Revised Statutes §§ 269-12 and 269-16, HEREBY GIVES NOTICE that it will hold a public hearing on Thursday, October 11, 2007, 6:00 p.m. at Kealakehe Intermediate School Cafeteria, 74-5062 Onipa`a Street, Kailua-Kona, Hawaii relating to the Application of KUKIO UTILITY COMPANY, LLC (“Kukio”), filed on July 20, 2007, for approval to increase its water and wastewater (sewer) rates and revise its rate schedules.
Kukio is a public utility which provides water and sewer services, as authorized by the Commission, to residences, commercial establishments and others located in the North Kona area on the island of Hawaii.
Regarding its water operations, Kukio seeks Commission approval of a general rate increase of approximately $238,603, or an approximate 11.0% increase, from the pro forma revenue amount of $2,170,266 at present rates for the 2008 calendar test year.
For its sewer operations, Kukio seeks Commission approval of a general rate increase of approximately $65,888, or an approximate 7.6% increase, from the pro forma revenue amount of $863,122 at present rates for the 2008 calendar test year.
Among other requests stated in its Application, Kukio also seeks Commission approval to (1) establish a Power Cost Adjustment Factor (“PCAF”) for its water service, which will allow it to increase or decrease its water rates based on any corresponding increase or decrease in its cost for electricity, and (2) revise the existing PCAF formula pertaining to its sewer services.
Kukio’s present and proposed rates are as follows:

Monthly Water Meter Charges:

Present Rate Proposed Rate
(monthly (monthly Percent
Meter Size/ Service charge/meter) charge/meter) Increase
3/4” (commercial) $11.50 $12.80 11.3%
5/8” (residential) $11.50 $12.80 11.3%
1” (residential/commercial) $11.50 $12.80 11.3%
1 1/2” (commercial) $30.00 $33.30 11.0%
2” (commercial) $30.00 $33.30 11.0%

Monthly Water Consumption Charge – Rate/Gallons:

Block/Definition Present Rate Proposed Rate Percent
(gallons/month/meter) Rate/1000 gal. Rate/1000 gal. Increase
Block I (0 – 29,999) $4.75 $5.273 11.0%
Block II (30,000 – 74,999) $6.75 $7.493 11.0%
Block III (75,000 – above) $8.75 $9.713 11.0%
Monthly Bulk Interruptible Users $2.3069 Cost* + 20%
* Cost of production and delivery of water

Monthly Sewer Stand-By Charges

Present Rate Proposed Rate Percent
Type of Service (per month) (per month) Increase
Residential $50.00 per $60.00 per 20% dwelling unit dwelling unit
Commercial $50.00 per $60.00 per 20%
toilet toilet

Monthly Sewer Quantity Charge – Rate/Gallons*

Present Rate Proposed Rate Percent
Type of Service Rate/1000 gal. Rate/1000 gal. Increase**
Residential and Commercial $3.50 $4.201 20%

* Per thousand gallons of domestic water consumption.
**The actual average percent increase will be less (to approximately 7.6%) since the Application proposes a new base for the existing PCAF charge.

Kukio states that its requests for approval to increase its water and wastewater rates and revise its rate schedules are necessary to eliminate the current ongoing losses and to allow Kukio to recover all of its reasonably incurred expenses and earn a fair return on its prudently incurred costs for utility assets providing water and sewer services to its customers. In 2006, on a pro forma basis, Kukio incurred a net loss of approximately $1,100,000 for its combined water and sewer operations. From January 1, 2007 until May 31, 2007, Kukio had a net loss of approximately $261,000 for its combined water and sewer operations.
The Commission will investigate the justness and reasonableness of the proposed general increase in Kukio’s water and wastewater rates and charges, and its revisions to its rate schedules. Regarding its water operations, the total revenue requirements for the 2008 calendar test year will not exceed the $238,603 amount over revenues at present rates that Kukio requests. For its sewer operations, the total revenue requirements for the 2008 calendar test year will not exceed the $65,888 amount over revenues at present rates that Kukio requests. However, the increases in water and wastewater rates and charges to be finally approved by the Commission, if any, may be higher or lower than Kukio’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 or delivered to the Public Utilities Commission, 465 South King Street, #103, Honolulu, Hawaii 96813. Statements may also be sent by electronic mail to the Commission’s e-mail address at Hawaii.PUC@Hawaii.gov. All written statements should reference Docket No. 2007-0198 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 October 22, 2007.
Copies of the Application and supporting exhibits are available for public inspection during regular business hours at any of the following locations:

PUBLIC UTILITIES COMMISSION
465 S. King Street, #103
Honolulu, HI 96813
Phone: (808) 586-2020

PUBLIC UTILITIES COMMISSION
HAWAII DISTRICT OFFICE
688 Kinoole Street, #106A
Hilo, Hawaii 96720
Phone: (808) 974-4533

KUKIO UTILITY COMPANY, LLC
87 Mile Marker Queen Ka’ahumanu Highway
Kailua-Kona, Hawaii 96740
(808) 325-4151

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
DIVISION OF CONSUMER ADVOCACY
335 Merchant Street, #326
Honolulu, HI 96813
Phone: (808) 586-2800

Special needs to accommodate persons with disabilities can be made if requested reasonably in advance by contacting the Commission\u2019s Honolulu office.

Carlito P. Caliboso
Chairman (SB03512336 9/20, 9/27, 10/4, 10/9/07)