Kauai’s largest company re-emerges on the Top 250, with higher revenues and new owners
After a three-year hiatus, the Garden Isle’s sole electric company (and the island’s largest business) is back on the Top 250 list, only this time it’s got a new name, Kauai Island Utility Cooperative, and new owners, the citizens of Kauai. When it was formed in 2002, the new company (KIUC) became the first and only cooperative utility company in the state. And doing so wasn’t an easy process. When the co-op finally purchased the utility from Connecticut-based Citizens Com-munications Co. for $215 million in November 2002, it was on the heels of more than three years of opposition from then-Mayor Maryanne Kusaka and several local community groups.
Since the purchase, things have moved quickly for the co-op. KIUC has seen membership rise, from 31,000 members to more than 33,000. Revenues have also risen. In 2001, the last time Kauai Electric appeared on the Top 250 list, at No. 74, it posted gross annual revenues of $95.1 million, while this year, it comes in at No. 61, with $118.9 million in revenues – a 25 percent increase over 2001.
But the most dramatic increases the co-op has seen since taking over, have been in crude oil prices. Three years ago, when the co-op signed the deal, oil was trading in the neighborhood of $13 per barrel. In late June of this year, oil prices reached a record high of over $60 a barrel. That’s a whopping 370 percent increase, and KIUC executives fear prices are showing no signs of slowing.
“Oh, [oil prices are] going to continue to go up,” says H.A. “Dutch” Achenbach, president and chief executive officer of KIUC. “Why would it change? Do you see any fewer cars on the street? Do you see anybody turning down their ACs or walking to the store? I don’t. So there’s a really good chance that it’ll continue to rise steadily. It’s certainly done nothing but increase over the past year and unfortunately, we’ve gotta pass that fuel cost along to our members.”
Initially, when KIUC purchased the company, its intention was to gradually lower rates for its members. But three years have passed, and members are now paying slightly more per kilowatt-hour than they did pre-co-op. In 2002, at $.24 per kilowatt-hour, Kauai Electric customers were already paying the highest electric rate of any regulated electric company in the nation. At the time of this writing, KIUC rates had risen to $.27 per kilowatt-hour.
If oil prices continue to rise, there’s a good chance rates will also. It’s not something Achenbach wants or likes, but he says there is one silver lining to the escalating energy costs: “Kauai is very, very conservative in terms of electrical consumption. However, our usage is slowly rising and people are using more than they used to. So we’re really hoping that, with the high prices per kilowatt-hour, people will start getting back into the conservation mode. Because, ultimately, conservation is a real win-win for everyone. It’s good for the company, it’s good for the members and it’s good for the community.”