POSTED: 27 November 2005 - 12:30pm HST

Push for KIUC Sunshine Policy

Some 2005 board members watch as Governor Lingle signs bill related to KIUC keeping unclaimed refunds

To The Forum in the Garden Island News
by Carol Bain on 27 November 2005

In the late 1980's, our state defined Chapter 92 of Hawaii Revised Statutes that allowed residents to access government meetings and records. The laws commonly known as “sunshine” though not perfect actually do work pretty well as a guideline to open governance if they are read and applied fairly. The section dealing with open records works well to protect private records as much as it provides access to public documents. These laws can be a guide to non-government entities, including some large cooperatives and non-profit agencies.

A proposed change in the bylaws is recommended: “KIUC (Kauai Island Utility Cooperative) shall use Chapter 92F Uniform Information Practices Act (modified) as guideline, and shall adopt all applicable open records policies in compliance with this Act prior to the March 2006 annual election.” In other words, let the KIUC members like you and me vote on whether our electric cooperative should follow open records laws.

Had our electric utility been fully compliant with sunshine and open records laws, perhaps the public would have been better informed (and perhaps a curious reporter would still have his job).

KIUC members have been at the past few board meetings to educate and encourage compliance with open records laws. I believe some board members are open to the policy changes, and I am hoping they will be open to bylaw updates as well.
The next regular board meeting is Tuesday, November 29 at 1:30 p.m. at their Kukui Grove offices 4463 Pahee Street. If you can you can attend, please consider coming to let KIUC know how important open records are to good governance. The agenda has the topic listed at item #9, but be aware there are strict rules for public input which are not as flexible as local government procedures.

Carol Bain: KIUC member
PO Box 2320, Lihue, HI 96766

Agenda link:



KENRON: KIUC Scandal coverage by Garden Island

2 November 2005 - 10:00am

services provided by a real cooperative utility in Jamestown NY

For once it looked like our local daily rag, The Garden Island News (TGI) , had earned the name newspaper with its pointed series covering the goings on at Kauai Island Utility Cooperative (KIUC). The series, written by Andy Gross, woke people up and drew their attention to several important issues regarding the operation of the KIUC. Apparently the series offended some people in power. Those people made some phone calls.

The unsigned editorial "In Our View" in Monday's TGI was titled "Time to Move Forward". It was a full retreat for the paper. It essentially disassociated itself with the investigative reporting. The editorial apologized for its actions that led to a falling out and breakdown in communication between TGI and KIUC. It certainly looks like somebody got called onto the carpet at the TGI.

Last night I had a conversation with a friend who told me that Andy Gross has resigned from the paper over the lack of support embodied in the editorial. I have not gotten this confirmed from a second source, but if it is true it is a shame for the paper and a loss for the people of Kauai. Most likely the editor of TGI will have to stick to KIUC press releases and fluff pieces in the future.

I lived in a community on the mainland that had a true non-profit utility cooperative. It was Jamestown, New York. Their cooperative was called the Board of Public Utilities (BPU) and provided electricity, water, waste water treatment, solid waste disposal and steam (for heating) to the city of Jamestown. They used coal from nearby Pennsylvania and had high tech scrubbers on their stacks and evaporative coolers on their turbines. Fairly efficient and clean. They provided electricity so cheap that some people were still heating with electric baseboard radiators when I left in 2000. The suburbs of Jamestown were served by a private utility company, named Niagra-Mowhark, at price three times higher than the BPU.

Cooperatives can work, but the KIUC was formed as a golden parachute for the previous owners, Kauai Electric, and was a vehicle to create a debt burden that was foisted on the people of Kauai. The investigative reporting on the KIUC was a welcome moment in which I was proud to be a TGI subscriber.

If the TGI cannot stand up to institutions like the KIUC and be an independent voice, then I will withdraw my daily advertising from the paper.




KENRON: Kauai Island Utility Cooperative

28 October 2005 - 8:00pm

Happy Halloween!

by Ray Chuan on 28 October 2005

A friend was depressed, as I was, about the KIUC situation; and was further depressed after reading a copy of a letter I had sent to the Garden Island. I thought, perhaps unrealistically, to assuage her melancholy with some background story about the creation of KIUC. This turned out to be much longer
than I intended, so I thought I might as well share this with all of you on my e-mail circuit.

Sorry to sound so depressing. A fairly large group fought Greg for two years, through two rounds with the PUC during which the story kept changing. One of the realities here is that the RUS is an old federal bureaucracy that’s been around for four or five decades, starting as the Rural Electrification Administration for spreading electricity into the farm areas in the US. As time went on all the farms had electricity so the agency was changed to its present name, with the mission of providing phone service, then internet to rural and undeserved areas in the country. It is funded by a sort of public service fee tacked onto every utility bill in the country. If you look at you phone bill you will find it among the obscure sounding items near the end of the itemization of fees and charges. Having an inexhaustible supply of money the task of the RUS is to spend or loan money. The more they can spend the better is their performance. So with the slightest excuse any group of smart operators can get the loan from RUS. And The ultimate scam artist on this island - Greg Gardiner - discovered it and off he went.

At that time Citizens Utility (the investor owned utility from Connecticut) was trying to get out of the electric utility business and into the internet business.

Most electric coops are formed to distribute electricity to under served areas; very few are generating coops. So this was a great opportunity for the RUS to show good performance. Citizens was happy to get rid of Kauai Electric and the use the money for getting into the internet.

Greg was very clever to start out with an outrageously high purchase price so that he could get the local government and interested citizens to raise hell; then he backed down to the final price. In the PUC process all interested entities could raised questions and either Citizens or KIUC had to respond. One of the questions asked was how much profit Citizens would end up with. In the response document were listed all the expenses connected with selling the company. One of these was Transaction Expenses, which include finders’ fees. This item was listed at around five million dollars which was spread among the “founders” of KIUC.

So there you have how KIUC was created. And that is not the only one in this state. One of the alleged under-served groups in this state is the Hawaiians who a group of smart and educated Hawaiians claim were not able to connect to the Internet (when in fact almost all the Hawaiian Homes already have telephone phone service which meant they had, if they wanted, internet connection. But these Smart Hawaiians claimed the Hawaiians could get better and higher speed connection if the communities could be connected with a fiber-optic cable. Guess what – these Smart Hawaiians formed Sandwich Isles Communications and got half a billion dollars loan from the RUS to connect all the Hawaiian Homelands with fiber-optic cable. When the commercial phone companies were asked why they did not protect this project their answer was simple. “We already serve these communities with phone service and internet if anyone wanted it; so why should we care if the RUS comes into the market?” The project started at Anahola about four or five years ago, eventually connecting the other islands where there are Hawaiian Homes.. Of course, you know that after the land was given back by Washington there were to be about 20,000 Hawaiian homes built, starting around 1925. To date, less than a thousand homes have been built; and many of the older Hawaiians who applied for the land have died. But Sandwich Isles Communications of course has the target, and the money, to connect up all 20,000 homes, no matter if so many homes are ever built or if anyone would want to get the internet service from Sandwich Isles. Anahola, where the system started, does not have any service from Sandwich Isles, even though SI has an office headed by former Planning Director Dee Crowell in Lihue, with no business to attend to, of course, because anyone in Anahola who wanted internet connection already had it.

I mentioned this lucrative project to a friend at the San Francisco Office of the Wall Street Journal who had done a front page story back around 1998 about the
“Garbage Island”, based on the thousands of junk cars strewn along the highways all around Kauai. In a matter of a few weeks these junks were gone and shipped to Honolulu for scrap iron – becoming one of the major triumphs of Mayor Kusaka.

The WSJ was very interested in this scam and was making preparations to send someone over when they discovered that U.S. News was already on the story.

the ostentatious Enron Center back in the good old days

Unfortunately, or fortunately for Sandwich Isles, the US. News story came out about the time the Enron story broke, and drew no attention whatever. And the world never learned about this great enterprise created and still “operated” by a few Smart Hawaiians. Incidentally, one of these is also one of the New trustees of
Kamehameha Schools.

Maybe the only way to deal with the smart folks at KIUC would be to get the WSJ to do a story on it, especially since both Sandwich Isles and KIUC are creations of that generous lending agency Rural Utility Service. Of course, the story shouldn’t come out at least until after the Harriet Meir and Rove/Libby/Judy Miller stories have gone away from public attention.

Sorry I have to go to such length to explain how it is practically impossible to deal with the KIUC situation. It is too bad we can’t buy electricity from some other place or even one of the other Hawaiian islands. If somehow we can get the long-suffering folks on this island classified as being under-served (like the Native Americans on reservations, Native Hawaiians and Native Alaskans) we too can get millions from the RUS and form us an electricity distribution cooperatives, piggy-backing on the unused fiber-optic cables from Sandwich Isles to bring the juice from Oahu.

On that dreamy note I bid you goodnight!

Editors Note:Here are some links to more Ray Chaun:

Chuan Politics7
Chuan Politics6
Chuan Politics5
Chuan Politics4
Chuan Politics3
Chuan Politics2
Chuan Politics1


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