The Public Utilities Commission wants to know why some customers of the Launiupoko Water Company are consuming frankly outrageous amounts of potable water. And so, on October 17, it sent formal requests for information to LWC, laying out in detail the mismatch between what LWC had anticipated its customers would be using when LWC first sought to be recognized as a publicly regulated utility back in 2003, and what the actual consumption rate has been in recent years.<\/p>\n\n\n\n
The information requests are part of the proceedings initiated late last December, when the water company brought to the PUC an application to approve an increase in rates charged to its customers. In June, the PUC determined that the company should file an amended application in light of the fact that the company\u2019s initial justification for the increase anticipated using some of the additional revenues to pay off outstanding debt that the PUC did not sanction in advance.<\/p>\n\n\n\n
That amended application has yet to be filed. <\/p>\n\n\n\n
But the PUC is evidently concerned that the difficulties that Launiupoko Irrigation Company has had providing non-potable water to its customer base \u2013 a base that is largely shared with LWC \u2013 have led to soaring draw-downs of potable water among LWC\u2019s customers.<\/p>\n\n\n\n
The first set of questions in the October 17 filing deals with the topic, \u201cLWC\u2019s historical water demand and its goals for water conservation.\u201d This seeks to explore the difference between what LWC was predicting customers would use in 2003 and what actual use is today. <\/p>\n\n\n\n
In 2003, the PUC notes as background, the company expected customers would use about 1,200 gallons of potable water per day. And this, the company added, \u201cwould be the same whether customers built on a 2-acre, 5-acre, or 15-acre parcel.\u201d<\/p>\n\n\n\n
The PUC asks: \u201cLWC reasoned that because LIC [the irrigation utility] would provide non-potable water for landscaping, that dual LWC\/LIC customers would rely on inexpensive non-potable water for irrigation. LWC further explained that it expected \u2018the same number of people will live on a lot, regardless of its size\u2019 and that \u2018[a] typical single family home is estimated to average between 500-600 gallons per day without irrigation use.\u2019 Further, LWC stated that \u2018[a]ny swimming pools are assumed to be included in the 1,200 gallons per lot per day.\u2019\u201d<\/p>\n\n\n\n
Three years later, when LWC sought a rate increase, the average use was just 614 gpd \u2013 a fact that was explained by Glenn Tremble, an officer of the company, as resulting from customers \u201cminimizing their use of potable water and \u2026 using non-potable water for such things as yard irrigation.\u201d Tremble later on said he had re-evaluated customer usage and had found it to be even lower: 496 gallons per day.\u201d An expert retained by LWC testified that the company\u2019s rates had been set high \u201cto discourage users who use water excessively and indiscriminately, and to encourage conservation.<\/p>\n\n\n\n
In a filing last spring, when the water company was urging the PUC to approve this recent rate request, it said that it was going to be sending notices to its customers to reduce their use of potable water for irrigation purposes \u201cto ensure the continued availability of water for domestic use and fire suppression and control.\u201d<\/p>\n\n\n\n
By this time, potable water consumption of the average rate-payer had increased from 705 gallons per day, in 2017, to 1,991 gpd.<\/p>\n\n\n\n
The PUC notes that the company\u2019s use of water was now subject to regulation under the state Commission on Water Resource Management, which in 2022 had found the Lahaina aquifer sector to be a designated ground and surface water management area. Given this, the PUC \u201cseeks more information about LWC\u2019s approach to water conservation and management to assist with the commission\u2019s future adjudication of LWC\u2019s amended application.\u201d Specifically, it wants the company to \u201cdiscuss any factors that LWC believes may have led to increased average customer potable water demand\u201d in the period from 2007 to 2017, when usage ramped up from 496 gpd to 705 gpd, and also to describe factors that \u201cmay have led to such high increases in LWC customer water demand from 2017 to present.\u201d<\/p>\n\n\n\n
Referring to a parcel-by-parcel chart showing the water consumption of individual rate-payers submitted by the utility to the Water Commission as part of the utility\u2019s application for use permits, the PUC asks to what extent the figures shown in that chart \u201creflect any increased demand for LWC potable water due to\u201d the irrigation company\u2019s \u201coperational challenges.\u201d (Those \u201coperational challenges\u201d as well as the high consumption rates have been described in recent editions of Environment Hawai\u02bbi.<\/em>)<\/p>\n\n\n\n What might \u201creasonable consumption levels\u201d be? the commission asks. Also, \u201cplease include an explanation of reasonable consumer potable water consumption levels based on both the presumption that LIC may return to full operational capacity and on the presumption that LIC does not return to pumping ground water.\u201d<\/p>\n\n\n\n Five of the LWC\u2019s customers \u201creport consumption levels exceeding 10,000 gpd,\u201d the PUC notes, \u201cwith the top water user reporting 19,067 gpd.\u201d<\/p>\n\n\n\n \u201cPlease analyze the water usage of these top five LWC customers, and please explain, to the best of LWC\u2019s knowledge, the following: \u2026<\/p>\n\n\n\n \u201ci. What factors contribute to the consumer\u2019s high rate of potable water consumption? Please include any discussions of pools, landscaping, agriculture uses, or any other features that distinguish these parcels from more modest water users.<\/p>\n\n\n\n \u201cii. If the consumer engages in agriculture activity, please elaborate on the type of agriculture\u2026<\/p>\n\n\n\n \u201ciii. Does the consumer operate a transient vacation rental, short-term rental home, and\/or bed and breakfast on the parcel\u2026?<\/p>\n\n\n\n \u201civ. Has LWC ever sent any notices to the consumer or engaged in any individualized discussions with the consumer about ways to reduce the consumer\u2019s water demand? Please provide or summarize if so.\u201d<\/p>\n\n\n\n The second set of questions deals with the way in which the water company is enforcing its own rules relating to water consumption, as set forth in the tariff rules that were approved by the PUC as part of the company\u2019s original application to operate as a publicly regulated utility.<\/p>\n\n\n\n Those rules include the conditions under which the company can take on new users; when it should impose special conservation measures in order to forestall water shortages; when it can refuse to grant service or discontinue service to protect against \u201cfraud, abuse, or unauthorized use of water;\u201d what to do when \u201cnegligent or wasteful use of water\u201d exists on any premises, and conditions where the company can refuse service to customers \u201cwhere the demands of the consumer will result in inadequate service to others.\u201d<\/p>\n\n\n\n The PUC asks the utility to explain how it is enforcing those rules and to provide a list of instances where water use has been restricted. Also, has the company received complaints about \u201cnegligent or wasteful use of water?\u201d Has it ever issued notice to customers for such waste? Has it ever discontinued service as a result of negligent or wasteful use of water? Does it regularly monitor for such waste? <\/p>\n\n\n\n A third set of questions deals with the utility\u2019s involvement \u2013 or lack of it \u2013 in the county\u2019s water planning process. <\/p>\n\n\n\n Did the utility participate in meetings or other opportunities to engage with preparation of the county\u2019s Water Use and Development Plan or its Water Shortage and Conservation Plan?<\/p>\n\n\n\n Did it notify its customers when the county has declared water shortages?<\/p>\n\n\n\n Does the utility \u201cregularly monitor drought conditions in Launiupoko as determined by the National Integrated Drought Information System or other authority?\u201d<\/p>\n\n\n\n Responses to the information requests are due by November 8.<\/p>\n\n\n\n Revised Financial Statements<\/strong><\/p>\n\n\n\n As Environment Hawai\u02bbi <\/em>has reported, the Public Utilities Commission has informed both Launiupoko Water Company and Launiupoko Irrigation Company that it would not approve the repayment of loans extended to the companies by majority owner Peter Martin in the calculation of rate increases they are seeking.<\/p>\n\n\n\n Yet in the semi-monthly financial reports that the irrigation company has had to submit to the PUC, there appear hold-backs, to the tune of around $50,000 a month, for repayment of those loans.<\/p>\n\n\n\n After Environment Hawai\u02bbi <\/em>reported on these hold-backs in our September edition, intervenors in the irrigation company rate case asked for clarification. <\/p>\n\n\n\n On September 26, attorneys for LIC filed a response, stating that the profit-loss statements were \u201cset up to comply with IRS rules\u201d that \u201crequire reporting of accrued debt until it is properly written off.\u201d<\/p>\n\n\n\n They noted that LIC had withdrawn its request for approval of the Martin loans in June, following the PUC\u2019s disallowance of Martin loans in the water company rate case.<\/p>\n\n\n\n The loans, the lawyers said, \u201cdo not impact the rate case numbers in this case since LIC has not included interest expense for the loans in LIC\u2019s revenue requirement. \u2026 Thus, [the intervenors\u2019] request that the PUC not consider interest is gratuitous.”<\/p>\n\n\n\n In any event, LIC \u201cis willing to revise the bi-monthly P&L reports submitted to the PUC to an Earnings Before Interest and Depreciation and Amortization (\u2018EBIDA\u2019) format,\u201d LIC explained. An attached spreadsheet showing profit and loss adjusted to excluded interest and depreciation shows positive income in some months, with a net overall positive income so far in 2024, due, the attorneys say, \u201cto cessation of pumping.\u201d <\/p>\n\n\n\n \u201c[A]ny additional cash from positive income has been used to pay down LIC\u2019s aging receivables and is insufficient for normalized operations requiring the pumping of groundwater. \u2026 [The exhibit] clearly indicates how the temporary rate increase money has been spent and that it is insufficient to cover energy costs and the operational costs required to pump groundwater.\u201d<\/p>\n\n\n\n The EBIDA spreadsheet shows that by excluding depreciation and shareholder interest (the Martin loans), Launiupoko Irrigation Company had a net profit of $111,996 for the nine months from January to September.<\/p>\n\n\n\n On October 4, Glenn Tremble, secretary\/treasurer of LIC, informed the PUC that the company \u201cis in negotiations with the parties in an attempt to settle the issues in this case. We \u2026 are hopeful that we can achieve a positive outcome in the near future.\u201d<\/p>\n\n\n\n Parties to the case include homeowners\u2019 associations and traditional and customary users of stream water affected by the irrigation company\u2019s diversions.<\/p>\n\n\n\n \u2014 Patricia Tummons<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" The Public Utilities Commission wants to know why some customers of the Launiupoko Water Company are consuming frankly outrageous amounts of potable water. And so, on October 17, it sent formal requests for information to LWC, laying out in detail … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":16209,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21,338,530,28],"tags":[7],"class_list":["post-16208","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agriculture","category-land-use","category-november-2024","category-water","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/16208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16208"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/16208\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/16209"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}