Hawaii PUC holds public hearing on Young Brothers' request for up to 27% general rate increase, 25% temporary relief

The Hawaii Public Utilities Commission held a public hearing on docket number 2020-4255 to collect testimony on Young Brothers LLC’s application for a general rate increase, a proposed Water Carrier Inflationary Cost Index (WICCI), and a request for temporary rate relief.

Young Brothers asked the commission for a revenue increase of $26,368,923 — a 27.06% increase over revenues at present rates for the 2025 test year — based on a requested rate of return on rate base of 10.92%. The company also filed a motion for temporary relief seeking a single-step increase of up to 25%, and it proposed an annual automatic adjustment mechanism (WICCI) tied to the U.S. Gross Domestic Product Price Index (nonfood, nonenergy) capped at 5% per year.

Chris Nakagawa, Vice President of External and Legal Affairs for Young Brothers, told the commission that the company is “facing financial distress” and that its current rates, set on an emergency basis in August 2020, have not kept pace with rising operating costs. “We’re losing money on our current rates and cannot continue to offer you the frequent, reliable services you rely on without adequate rate relief,” Nakagawa said. He told the commission the temporary rate increase is intended to address an immediate financial crisis and that any approved general increase would replace, not stack on top of, the temporary increase.

To illustrate the impact of the requested increase, Nakagawa provided an example: the current one-way cost to ship a medium-sized personal automobile from Honolulu to Maui is about $334; under the company’s requested increase, that cost would be about $434.

Michelangelo, Executive Director of the Division of Consumer Advocacy at the Department of Commerce and Consumer Affairs (the Consumer Advocate), said the Consumer Advocate will “independently review the reasonableness of Young Brothers’ requested general rate increases, WICCI, and temporary rate increase.” He described the office’s process of discovery and analysis and said the Consumer Advocate will submit its recommendations to the commission later in the proceeding.

Dozens of written testimonies and more than a dozen organizational statements were entered into the record before and during the hearing. Supporters emphasized Young Brothers’ role in maintaining inter-island supply chains and the potential impacts on nonprofits and businesses if service faltered. David Washburn of Hawaii Food Bank told the commission that Young Brothers “has been a critical partner in our efforts to build food security,” noting the carrier’s role in transporting fresh produce to neighbor islands. Katie Chen, president and CEO of Goodwill Hawaii, said Goodwill “could not run our operations efficiently without the services of Young Brothers.” Neli James, cofounder of Mana Up, said the company’s financial stability is important to small producers statewide.

Melissa Pavlicek, testifying for the Hawaii Harbors Users Group via WebEx, said Young Brothers is “a vital part of our state’s supply chain” and urged the commission to consider community impacts when evaluating reasonable rate adjustments.

Not all public comments supported immediate rate relief. An individual caller, Sean Riley, said he opposed passing “double-digit increases” directly to consumers and urged the company and regulators to consider efficiencies and other supports before raising rates. Riley emphasized concerns about rising household costs in Hawaii should the increase be approved.

The commission’s chair, Leo Asuncion, reminded testifiers that the hearing’s scope was limited to the matters raised in Young Brothers’ application and motion for temporary relief, and that the hearing was for taking testimony rather than deciding the requests. The Consumer Advocate and Young Brothers both remained available for questions during a post-hearing question-and-answer period.

Next steps described at the hearing included the Consumer Advocate conducting discovery, both parties filing evidence, and the commission ultimately issuing a written decision on Young Brothers’ motion for temporary relief and application for a general rate increase, including the WICCI proposal. The commission’s public record remains open to written comments referencing docket number 2020-4255; the Consumer Advocate provided contact information for submissions.

No formal vote or decision was taken at the hearing.