Hawaii PUC opens evidentiary hearing on Young Brothers rate request as parties spar over cost of capital, business plan and service changes

The Hawaii Public Utilities Commission on Oct. 15 opened an evidentiary hearing on Young Brothers LLC’s application for a general rate increase and related tariff changes, hearing arguments and witness testimony on the company’s business plan, revenue forecasts, cost-of-capital estimates and a proposed annual interim inflation adjustment mechanism.

Commission Chair Leo Sanchin presided over the hearing in Honolulu. The proceeding addresses Young Brothers’ request for a general rate increase and other tariff changes in docket number 20250255 and follows earlier temporary rate relief ordered in June 2025. During opening statements, counsel for the company and the Consumer Advocate framed the central disputes: the magnitude of Young Brothers’ requested revenue increase, the appropriate rate of return (cost of capital), and whether elements of the company’s business plan and proposed automatic adjustment mechanism should be approved as filed.

Why it matters: Young Brothers provides inter-island water-carrier services that the parties described as a “lifeline between the islands.” The commission’s decision will affect shipping costs for island businesses, agricultural shippers and residents, and could shape Young Brothers’ access to capital for equipment and systems investments that the company says are needed to maintain service reliability.

Opening positions and key issues

David Nakashima, appearing for Young Brothers, asked the commission to view the case in the broader context of maintaining inter-island lifelines. “This rate case is about saving the lifeline between the islands,” Nakashima said in his opening statement, and he told the commission that the record supports a requested overall revenue increase of at least 25.75% plus approval of an annual interim rate adjustment mechanism the company and stakeholders have referred to as “WICCI” (also discussed in testimony as “wiki” or “WICI”). Nakashima said the company has filed a business plan and is relying on that plan and the interim mechanism to stabilize operations and unlock capital markets.

Mickey Knox, attorney for the Consumer Advocate, agreed that Young Brothers is an essential service but sharply criticized the company’s recent business decisions and some elements of its rate request. Knox said the Consumer Advocate views some of the company’s proposed operating expense levels and its chosen proxy group for a high return on equity as…