On June 24, the Public Utilities Commission approved a new rate schedule sought by Launiupoko Irrigation Company (LIC) for the delivery of water to its 400-plus agricultural and residential customers.
Instead of paying a flat rate of 76 cents per thousand gallons, ratepayers will be charged the following starting this month: $1.50 per thousand gallons up to 50 thousand gallons/month, $1.83 per thousand gallons from 50.1 to 150 thousand gallons/month, and $2.15 per thousand gallons over 150.1 thousand gallons/month.
The new tiered rates for non-bulk users (which include all ratepayers, except for a cacao farm) will remain in effect until the commission decides on LIC’s application for a general rate increase. That case is not expected to conclude for another year or so.
LIC has had to rely more heavily on groundwater to meet customer needs ever since the state Commission on Water Resource Management set a new interim in stream flow standard for Kaua’ula Stream in March 2018 that requires more water to remain in the stream. Kauaʻula once provided LIC with 90 percent of its water.
LIC argued to the PUC in June 2020 that it needed a rate increase to cover its growing pumping costs and to develop new wells. The company sought to “increase its test year revenues by $605,368.37, or approximately 125.59%,” a May 2022 PUC order recounts.
Unpersuaded that LIC needed all that money to better serve its customers, the PUC decided in June 2021 to authorize a temporary increase of about 15 percent over the test year revenues, or just over $73,000.
The company then asked the utilities commission to reconsider and provided it with more information to support the proposed rate increase. On May 23, the PUC granted, temporarily, the rate increase that LIC had initially sought, but made it clear that rate would apply only to LIC’s existing ratepayers. (Kuleana landowners served by LIC’s system have an agreement with the company that they would receive their water free of charge.)
Under a condition in the PUC’s May order, LIC had to propose tariffs consistent with the PUC’s May order by June 6, as well as a policy to encourage water conservation and prioritize agricultural uses over landscaping and residential swimming pools. LIC complied, proposing a flat rate or a tiered rate structure for non-bulk users.
In its June 24 order approving the tiered rate structure, the commission echoed sentiments expressed by the Consumer Advocate and intervenors in the case, the non-profit organization Na Aikane O Maui and J. Keʻeaumoku Kapu.
“The Commission believes that the Proposed Tariff’s tiered rate will promote conservation of a critically scarce resource and should help prioritize its utilization for legitimate agricultural uses,” the order stated.
The PUC also took notice of the Water Commission’s unanimous vote on June 14 to designate the Lahaina region, including Launiupoko’s service area, as a surface and ground water management area.
“This designation and the current drought in West Maui raises significant questions and concerns for the Commission about Launiupoko’s long-term ability to access water, even with increased pumping,” the PUC order continued.
In addition to requiring LIC to report relevant developments regarding the Water Commission’s Lahaina designation, the PUC stated that it intends to further explore rate designs that promote conservation and agricultural uses in the general rate proceeding.
That general rate proceeding cannot begin until LIC responds to all outstanding information requests. The commission had expected that would be by March 31, but LIC failed to deliver. The intervenors still await information on the fuel LIC plans to use in the off-grid diesel generators that will be used to pump the wells, as well as how that fuel is to be stored.
“The use of these generators may be in violation of Environmental Protection Agency rules regarding bulk fuel storage as well as increase fire risks to the surrounding areas,” state the intervenors’ attorneys Lance Collins, Bianca Isaki, Ryan Hurley, and Christina Lizzi in a June 16 letter to the commission.
To prevent further delay of the general rate proceedings, the commission directed LIC to answer all outstanding information requests by July 27. Evidentiary hearings should begin 44 weeks after that, according to the schedule agreed upon by the parties.
Lahaina Now a Designated Water Management Area
“At every site visit staff has recorded multiple properties in Launiupoko irrigating lawns during midday hours,” Commission on Water Resource Management staff commented in a June 14 report.
This, at a time when Kauaʻula Stream, a source of water for Launiupoko residents and farmers, has been flowing much less than expected in recent years and rainfall throughout the entire West Maui region has been decreasing for decades. What’s more, families with kuleana rights to that same water have complained they don’t have enough to meet their needs.
Higher rates for the delivery of water, which the Public Utilities Commission recently approved for customers served by the Launiupoko Irrigation Company’s system, may discourage such wasteful uses. But the Water Commission’s decision two weeks earlier to designate the Lahaina Aquifer Sector as a surface and groundwater management area is intended to put a hard stop to them.
Designation requires water users in the region to apply for permits for existing and/or new water uses. Based on the information they provide to justify their uses, the Water Commission will decide how much water, if any, each permittee is entitled to.
In the lead-up to staff’s recommendation to designate on June 14, the Maui Board of Water Supply and the Maui County Council voted in support of the proposal, and an “overwhelming majority” of those of the dozens of people who offered oral or written testimony at an April 26 public hearing in Lahaina supported designation, according to commission staff.
But shortly before the June meeting, the council was deluged with emailed testimony from those seeking to delay designation and asking that a working group be formed instead. Given the years it may take for the commission to process and approve water permits for new uses, designation could be tantamount to a moratorium on new housing, especially affordable housing, the email testimony argued.
The Maui Department of Water Supply submitted testimony opposing designation of the entire Lahaina Aquifer Sector, but supporting the designation of the Honokowai Aquifer System, which it argues is the only system within the sector where current and proposed groundwater withdrawals already exceed the sustainable yield.
While commission staff had determined that current and authorized uses in the Launiupoko system also exceeded the sustainable yield, the DWS argued that authorized planned uses and tunnel discharges had been miscalculated. The department argued that current and proposed groundwater uses represent only 57 percent of the sustainable yield.
County Conversation
At the commission meeting, Eva Blumenstein, planning program manager for the Maui DWS, explained that her agency would work closely with the county Planning Department to ensure that the new county Water Use and Development Plan (WUDP) guides future land uses.
The plan recommends developing basal groundwater wells to support planned population growth while “maintaining a buffer to sustainable yield.” The development of those wells would be “guided by available data and modeling results to optimize pumpage, mitigate salt water intrusion and preserve regional resources with adequate distribution to Launiupoko and Honolua aquifers,” according to a presentation she gave to the commission in May.
The plan also recommends supporting traditional ahupuaʻa management, capital improvement funding for recycled water projects, and funding for watershed management partnerships’ fencing and weed eradication efforts.
Testimony submitted to the Water Commission by a team of climate scientists with NOAA’s Pacific Regional Integrated Sciences and Assessments program noted, “When combined with future rainfall projections, we found that land use decisions could greatly influence and even mitigate the effects of climate change. In particular, a scenario in which urban development occurs jointly with watershed protection” — above the cloud zone, in particular — “results in increased groundwater recharge for source aquifer systems.”
Blumenstein argued that designating the Lahaina sector would undermine the years of work that went into the county’s WUDP.
The plan projects that the demand for potable and non-potable water in the Lahaina Aquifer Sector will grow from about 10 million gallons a day (mgd) at present to 29.6 mgd by 2035.
The plan anticipates meeting that increased demand with increased withdrawals from most of the aquifer systems — especially in Honolua and Launiupoko — augmented with recycled water and increased water conservation.
At the June meeting, commissioner Mike Buck asked Blumenstein what authority the county had over the actions of the private water purveyors in West Maui that control 75 percent of the water used.
She replied that the county doesn’t have jurisdiction but added that the WUDP would be a tool that could guide how future land use development occurs. She then suggested that short of designation, the Water Commission still has the authority to control private groundwater withdrawals via its approvals of new well construction permits. “You can review the pump capacity, location,” she said.
Commissioner Aurora Kagawa-Viviani asked what kind of monitoring the DWS does to assess whether public trust resources are being protected. “How does DWS address water shortages across non-public purveyors?” she asked.
“There’s definitely a gap in collaboration currently regarding a drought plan and contingency plan. That’s something this [designation] initiative really brought to the surface. … It’s something we should have done a long time ago,” Blumenstein replied.
With the threat of designation looming, “the private purveyors listen now. This is where we need to go. This is an opportunity to get to do this,” she said.
She asked the commission for six months to develop strategies, on a local level, to balance reasonable water needs. A working group could include the state Department of Health, the Water Commission, the county Planning Department, the Department of Hawaiian Home Lands, the Maui DWS and Department of Environmental Management, as well as the private water purveyors, she said. They could consider how to resolve conflicts, balance the water budget, employ “aggressive conservation,” and distribute the burden of funding watershed protection, she added.
Commissioners Neil Hannahs lauded Blumenstein’s commitment to collaboration but seemed concerned about the possibility that it may fall short.
“We’re all human. Even humans with the best intentions can mess stuff up. Is there anything in designation that really precludes the collaboration you seek? You used the term we’re ‘undermining’ you. … We can still collaborate, can’t we?”
Blumenstein reiterated her agency’s concern that once designation occurs, the county’s pending applications for well pump installations in Launiupoko will be treated as new uses and their approval will be stalled until the water use permit approval process for all existing uses is complete.
“We can look at that and give that some consideration,” Hannahs said.
Blumenstein did not seem comforted. “I do see [designation] as a delay to affordable housing construction. We don’t have existing uses. … The department’s capacity to serve planned growth and affordable housing, we don’t have existing wells. We don’t have the time,” she said.
Hannahs replied that if the commission does not designate the Lahaina sector, people who see designation as a way to address resource issues are still going to pursue that end in whatever venues allow. “That could impede the normal process of development, planning, and permitting, couldn’t it?” he asked.
Blumenstein admitted that without designation, there was still a risk someone could seek a contested case hearing on a well permit.
Like Hannahs, commission chair Suzanne Case worried that collaboration may not be enough. “I’m sincerely trying to understand how you get this overall balancing without it being sort of a wild west of private purveyors doing whatever they want. … We have existing uses. We want to make sure they have water,” she said.
“Collaboration is key,” Blumenstein replied, adding that perhaps the county could enter into a memorandum of agreement with the private purveyors or conditions could be included in land use approvals.
“None of those [county planning] bodies have the focus that the Water Commission has to ensure everybody gets a reasonable and beneficial use of water. … There’s no tool to make sure people collaborate,” Case said.
Discussion
After hours of public testimony, commissioner Buck announced that he was “leaning toward designation.”
Commissioner Kagawa-Viviani felt the same. She noted that she was struck by the volume of last-minute opposition testimony that often repeated the same fear-mongering statements.
“As a trained scientist I was quite concerned about how data was being misconstrued. [It] undermined the credibility of the opposition,” she said.
One of the most repeated claims was that designation would stop the development of much-needed affordable housing. To this, she said, “the housing crisis has far more to do with global markets than water permits.”
Once designation occurs and permits are issued, permittees are required to report their usage, which helps the Water Commission track impacts to the resource.
She said that with the Red Hill fuel contamination crisis on Oʻahu, the Water Commission at least has access to current use data because most of the island has been designated.
“Right now, we don’t have that in undesignated areas. Say if there’s a shortage, we don’t even have the data to do informed planning. West Maui is a more challenging area. I’m interested in giving our staff the ability to ask for that and get it. Designation allows for that,” she said.
Commissioner Meyer, who lives on Maui, seemed to prefer collaboration over designation. He said collaboration is a powerful tool that gets people to make compromises and mutual agreements more often than any other process.
“It’s especially important when you’re talking about citizens living in the same community,” he said.
He said he saw the working group as a safe alternative and that designation would be a burden on commission staff.
Commissioner Wayne Katayama also said he felt a delay of six months would allow for some trust building.
In the end, however, when it was clear a motion to designate would pass, Katayama and Meyer voted with the rest of the commission.
(For more background, see “Water Commission Learns of Threats to West Maui Ground, Surface Sources,” from our February 2022 issue.)
— Teresa Dawson
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