What would happen if, at the end of the contested case hearing, the Water Commission allows continued flows in the Waiahole Ditch?
The Waiahole Irrigation Company, in anticipation of this, has established a formal mechanism for distributing water to various users. It is outlined in a May 16, 1996, document, which was submitted to the Water Commission in July.
WIC, the document states, “has agreed to deliver water from the Waiahole ditch irrigation system (the ‘Ditch System’) to the undersigned parties (sometimes hereinafter referred to as ‘member’ or ‘members’).”
The “members” own, lease, sublease, or hold license to agricultural lands in leeward O`ahu. They include Del Monte Fresh Produce (Hawai`i), Inc., Larry Jefts (on behalf of Waikele Farms; Sugarland Farms; and Sugarland Distributors, Inc.), and Alec Sou (on behalf of Aloun Farm; Alec and Mike Sou, a general partnership, and Ewa Farms), and Garst Seed Company.
“The only cost-effective source of irrigation water which is available to the members,” the document states, “is from the Ditch System. Therefore, the members intend to form a cooperative [referred to later in the document as the ‘user’] to facilitate the delivery and allocation of water from the Ditch System.”
The agreement took effect April 1, 1996, but there are several conditions. Here are four of the most important:
First of all, the Water Commission must allocate water permits, issued in the names of the fee simple owners of the affected lands. Second, the terms of those permits must allow the cooperative “the flexibility to utilize water among the affected lands as it shall determine from time to time.” Third, the total allocation of water to the leeward parties “shall be sufficient to allow the Ditch System to achieve economic and operational viability in WIC’s discretion” — in other words, if the total amount of water allocated to the leeward side is not enough to allow WIC to make a profit, all bets are off.
The fourth condition makes the agreement contingent upon WIC “reaching a separate agreement with Castle & Cooke,” under terms of which Castle & Cooke is to become a member of the cooperative and agree to “take delivery of certain minimum amounts of water.”
The document also specifies the cost of the water. The base rate is 35 cents per thousand gallons of water delivered, plus state excise tax. That rate is good through March 31, 1997. On April 1, 1997, and on each April 1 thereafter through the end of the period covered by the agreement (March 31, 2012), the rate is to rise in accordance with the producer price index.
Members of the coop have agreed to use the water only on lands specified in the document, and “only for agricultural (and not golf course) purposes.” The water is not to be resold, except to lessees, sublessees, or licensees occupying the lands. Nor is there to be any profit on the resale of water, except for “out of pocket costs of delivery plus a reasonable charge for overhead and administrative expenses, which in any event shall not exceed five percent.”
However much water is allocated or used or available, the coop members will pay WIC annually “for the delivery of not less than 1,460 million gallons of water (i.e., 4 million gallons per day x 365 days)” at the agreed-upon rate, “whether or not such water is required by user or is actually taken by user.”
The agreement, however, anticipates substantial increases in the water demand over the next few years. For example, if at least 6.5 million gallons a day (on an annual basis) aren’t being taken by April 1, 2000, WIC can terminate the agreement. That minimum rises to 7.0 mgd by the year 2003.
The agreement does not cover several of the present major users of Waiahole water, including golf courses, a cemetery, Waiawa correctional facility, HSPA fields, and several ranches.
Volume 7, Number 3 September 1996
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