PUC hears that Punaluu Water & Sanitation is out of funds; consumer advocate urges receivership

The Public Utilities Commission held a status conference on docket 2025-0167 to review the financial and operational condition of Punaluu Water and Sanitation (PWS) and to consider next steps, including a request for a temporary rate increase and a consumer-advocate recommendation that the commission appoint a receiver.

PWS’s counsel, Will Yamamoto, told the commission that "the only thing the primary thing preventing PWS from continuing to operate is simply funding, not a lack of desire." Yamamoto said PWS has exhausted loans and owner contributions and faces unpaid liabilities that it hopes a temporary rate increase would cover.

The consumer advocate, Mike Angelo, recommended the commission appoint a receiver pursuant to HRS Section 269-14.5, saying the proposal is grounded in concerns about ‘‘the health and safety of the utility customers of PWS’’ and continued uncertainty about whether the land-development funding PWS expects will materialize.

Why it matters: PWS supplies water and wastewater service to its customers. Commissioners said they will take the filings and testimony under advisement and anticipate issuing a written decision on PWS’s request for a temporary rate increase; the outcome will determine whether the operator can be paid and whether immediate service interruptions can be avoided.

Details from PWS: Yamamoto said the current ownership committed $520,000 in aggregate when it assumed operations (covering roughly 2020–2022), and later obtained a $750,000 loan from an affiliated entity (described in filings as BSB). He said those funds and a subsequent short-term loan of $65,000 have been spent. Yamamoto reported PWS has spent about $1.3 million to operate the facility since the current ownership took control and that, as of the filing on April 30, 2025, it had "no more money." He said PWS currently has "approximately $103,000" in unpaid liabilities that it hopes a temporary rate increase would allow it to pay.

Ling Zhang, PWS’s accountant, provided a short-term spending breakdown for the $65,000 loan: about $7,300 per month was paid to the operator (Big Island Sanitation/Big Island Water and Sanitation) for January through April, and about $6,000 per month went to power bills to keep the facility running.

Operational and long-term options discussed: PWS said it has reached out to larger water companies—Hawaii Water Service Company (a subsidiary of California Water Service Group) and Hawaii American Water Company—but received either no response or feedback that the utility was too small for acquisition. PWS also discussed contacting nonprofit or community-based options, including RCAC and Nupu'u Water Incorporated (NWI). PWS said NWI would consider the matter at a board meeting scheduled for May 20, 2025. PWS said a transition to a nonprofit would require funds for a preliminary engineering report (PER), environmental review, and application fees; Yamamoto estimated a PER could cost roughly $40,000–$50,000.

The record also includes operational deficiencies and repair needs described by PWS staff. Norman Kwan and other PWS representatives said they have funded incremental improvements (backup electrical systems, pump and aerator replacements, clarifier repairs) but that substantial remaining work remains. PWS cited an itemized hydrant-related budget figure of about $160,500 that it had not fully priced out and said it lacks engineering to define all isolation valves and other facility-level work.

Easement and property questions: Yamamoto stated PWS operates under an easement granted by the landowner (described in filings and testimony as BSB). Commissioners asked whether the easement covers the treatment plant and other facilities, and Yamamoto said he had not reviewed the specific easement language but believes it covers the utility and the property under which it sits. Yamamoto also said he could follow up on whether the land is registered in land court or as regular property and which counsel represented PWS in the acquisition (he identified Kathy Garson as counsel for the transaction).

Consumer advocate recommendation and receivership logistics: Angelo said the consumer-advocate office is not opposed to a temporary rate increase, but it urged receivership because of concerns about maintenance, fire-protection infrastructure, and the unresolved land-development contingency that PWS regards as a potential funding source. Angelo said a receiver ‘‘would need’’ both legal/financial management and an operator, and that appointing a receiver will require vetting and community input; he estimated a process could take months and called for planning now rather than waiting for a crisis.

Commission response and next steps: Chair Leo Asuncion and Commissioner Naomi Kauai (chair and commissioner presiding) said the commission would take the record under advisement and expected to issue a written decision on the temporary rate increase request. The commission recognized that PWS reported it had no funds as of April 30, 2025, and noted that the current operator said it would continue service if it is paid on time. The PUC did not make a decision at the status conference; it left the request pending and sought further documentation in the docket.

Votes at a glance: No formal vote or final action was taken at the status conference. The PUC will issue a written decision on the temporary rate increase request in the docket.

Ending note: Commissioners asked PWS and intervenors to keep the commission apprised of developments on the land-use and financing fronts. The record indicates multiple paths remain under consideration—temporary rate relief, receivership, county or nonprofit acquisition, or a larger development-driven capital infusion—but no definitive long-term outcome was adopted at the conference.