PUC holds public hearing on Punalu'u Water & Sanitation request for $639,505 temporary rate increase

The Public Utilities Commission held a virtual public hearing on docket PUC-20250167 to take testimony on Punalu'u Water & Sanitation LLC’s (PWS) application for approval of a temporary rate increase and related tariff changes.

PWS asked the Commission to approve temporary rate revenues of $639,505 — an increase the company characterized as necessary to cover operating shortfalls and immediate repairs. PWS said the requested revenue would represent roughly a 2,795 percent increase over pro forma revenue at current rates and that about $167,500 of the request would be used to repair four broken fire hydrants. PWS said it had sustained cumulative losses from 2020–2024 and relied on a $750,000 long-term loan and a $65,000 short-term loan to continue operations.

The hearing was limited to taking testimony on the temporary rate application. The Division of Consumer Advocacy (DCA) told the Commission it would independently review PWS’s filing and conduct discovery on the company’s financial and operational claims before making a recommendation.

Why it matters

PWS’s request touches on public-safety and basic-services concerns for residents in the company’s service territory in Kaʻū and nearby subdivisions served by the utility. Speakers at the hearing described recent equipment failures, an instance in which customers were asked to conserve because of a failed pump, and out-of-service fire hydrants. Several owners and occupants of multiunit properties told the Commission the system’s condition risks health, safety and property values.

What PWS told the Commission

Shane Yonemori, counsel for Punalu'u Water & Sanitation LLC, introduced Charles “Chuck” Loy, CPA, who presented the company’s case. Loy said the system has run at a revenue deficit for years, that the current residential rates were set in 1977 and have not been adjusted to reflect inflation, and that operating deficits and aging equipment had left the utility “at a critical juncture.” Loy summarized the filing (PWS exhibit PWS-T-100) and said PWS is seeking a temporary revenue increase of $639,505 and tariff changes, including raising the deposit requirement from $25 to $50 (no interest), increasing reconnection charges, and removing a monthly irrigation charge from the water schedule. Loy said, “PWS can’t go on like this,” and that the temporary increase was intended to “keep services running and reliable” while the utility and regulators work on a longer-term solution.

Loy told the Commission PWS had warned that its operator had said the system might be shut down after Feb. 28, 2025, and that PWS secured an extension contingent on shoring up finances. He said the company would refund or credit customers if temporary collections exceeded what was needed, and that the filing did not include a rate of return, depreciation expense, or income taxes.

Consumer Advocate

Michael Angelo, who identified himself as the executive director of the Division of Consumer Advocacy in the Department of Commerce and Consumer Affairs, said the DCA is "extremely concerned over the size of this increase" and would review the reasonableness of PWS’s requested revenues through discovery and analysis. Angelo said the DCA advocates for safe, reliable, cost-effective service and urged customers to file testimony; he said the division would evaluate whether any interim increase should be limited to what is necessary for service continuation and that PWS should propose a plan to address safety and reliability issues.

Public testimony — main themes

Public testimony was divided. Several long-term residents and local businesses urged approval of near-term funding for repairs and operations on public-safety grounds; many condo owners and homeowner-association representatives opposed the magnitude of the requested increase and questioned PWS management, past expenditures and transparency.

Opposition and concern

- Jeff Silva, president of the Colony 1 AOAO and a Colony 1 owner since 2013, said Colony 1 (76 condominiums) depends on PWS for water, sewer and fire suppression but opposed the application "as written," saying PWS had not provided adequate documentation to justify passing on large expenses and that notification to customers during a recent pumping failure was delayed. Silva said an operator and management team should be better prepared for emergencies.

- Tamara Ghosh, a ColonyOne owner and AOAO board member, said the PUC’s prior transfer order (she referenced Order No. 36473 in her remarks) required the owner to remedy derelict conditions and that increases should not be used to cover developer or owner shortfalls. Ghosh urged that any revenues be overseen and that customers not be asked to underwrite prior ownership or unrelated development expenses.

- Donna Barnett, a ColonyOne owner, called the requested jump from roughly $30 per month per condo to hundreds of dollars "far out of line" and questioned documentation backing PWS’s claims, saying many customers view PWS as mismanaged.

- Shannon Cruz, representing 28 Vacation International timeshare units at ColonyOne, said she opposed the increase as presented and called for a cooperative, long-term solution.

- Elsa Dedmon (identified herself as a property owner and resident of Punaluʻu/Black Sand Beach) called the proposed 2,795 percent increase unacceptable and said the owner/operator had not demonstrated trustworthy financial or managerial practices.

Support for short-term relief

- Candace Kaalva (said she formerly managed properties in Punaluʻu) and several residents of Kalana Estates and Kaulana Estates told the Commission they supported a rate increase to keep water flowing, fix hydrants and avoid shutdowns. Candace Kaalva recounted participating in pump and hydrant repairs and said, "This is a dire need."

- Ron Ebert, a long-time local resident and volunteer fire captain, urged approval for public-safety reasons, describing a recent structure fire in the area and noting the remoteness of the community and the need for functional hydrants. "We have to have water," he told the Commission.

Other concerns raised

- Attorney David Kimofrankel, representing Iyewe Hanao O'Kaina and the Center for Biological Diversity, highlighted data discrepancies he said exist between groundwater pumped and wastewater reported as treated and urged a thorough investigation of stewardship and operations. He argued that any interim increase should come with conditions requiring a financial and engineering plan for long-term wastewater treatment improvements and that interim rates should not be used to pay for loans that were not commission-approved.

Procedural notes and next steps

The Commission reminded attendees that the proceeding is limited to the temporary rate request and related tariff changes in PUC docket 20250167. Written testimony previously submitted to the docket was circulated to commissioners. The hearing notice cited in the record was published in the Hawaii Tribune-Herald and West Hawaii Today. The Commission noted a motion-to-intervene deadline of March 31, 2025, and said it will issue a written decision after the DCA and PUC review the filing, discovery responses and any motions or interventions.

No vote or formal Commission action was taken at the hearing; the session was a public forum for testimony that will be considered as part of the docketed proceeding.

Ending

The Commission and the DCA will continue review and discovery. Members of the public were urged to submit written testimony to the docket and to the DCA; the Commission closed the public hearing after receiving testimony from PWS, the Consumer Advocate and multiple customers, owners and residents.