191
HOUSE OF REPRESENTATIVES             H.R. NO.              
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     HOUSE  RESOLUTION

RECOGNIZING AND CONGRATULATING THE KAUAI ISLAND UTILITY CO-OP AND
   ITS CHAIR GREGG GARDINER, VICE CHAIR ROBBY RASK, SECRETARY
   MARK HUBBARD, TREASURER JAMES MAYFIELD, AND MEMBERS ON THE
   CELEBRATED AND HISTORIC OCCASION OF ITS ACQUISITION OF KAUAI
   ELECTRIC COMPANY. 


 1       WHEREAS, the unparalleled success of the United States
 2   (U.S.) economy and its free enterprise system is directly
 3   attributable to resourceful entrepreneurs, risk takers with
 4   bold vision and courage to overcome insurmountable odds to
 5   reach seemingly unattainable goals; and
 6   
 7       WHEREAS, these attributes of success have been epitomized
 8   by several Kauai entrepreneurs whose dreams, initiatives, and
 9   unceasing efforts resulted in the formation of KAUAI ISLAND
10   UTILITY CO-OP (KIUC) and its acquisition of Kauai Electric
11   Company; and
12   
13       WHEREAS, the leaders of KIUC sought and received the
14   assistance of several organizations and individuals on the U.S.
15   Mainland who willingly volunteered engineering, regulatory
16   financing, evaluation, and due diligence expertise, valued in
17   the millions of dollars, and that without such special help,
18   the buyout would not have been possible; and
19   
20       WHEREAS, the National Rural Electric Cooperative
21   Association (NRECA) sent its staff members to Kauai to help
22   evaluate the feasibility of operating a co-op on Kauai,
23   provided their economist to evaluate the acquisition proposal,
24   provided a grant to pay for some of the due diligence, and
25   lobbied in Washington for a $113.25 million low-interest loan,
26   which will increase KIUC's cash flow by about $4 million per
27   year; and
28   
29       WHEREAS, the National Rural Cooperative Finance Cooperation
30   (NRCFC), a lending institution for non-profit cooperative
31   utilities, through its Vice President, John Rodgers, also
32   provided on-island evaluation, assistance, and training of KIUC
33   board members; CFC agreed to provide 100 percent financing for
34   the acquisition, but to help KIUC with more favorable
35   financing, arranged for a Rural Utilities Services (RUS)
36   Hardship Loan, which will realize KIUC a savings of more than
37   $125 million over the 35-year loan period; and

 
Page 2                                                     191
                                  H.R. NO.              
                                                        
                                                        

 
 1       WHEREAS, Lower Valley Energy, in the true spirit of
 2   cooperation with other cooperatives, provided at no cost to
 3   KIUC, two of its professional engineers, Rick Knori and Steve
 4   Owens, who conducted on-island evaluations of all the
 5   transmission and distribution lines, power plants, and
 6   substations as part of the due diligence requirement:  These
 7   services, engineering reports, and study would have cost about
 8   $500,000, an amount that KIUC would have had difficulty
 9   producing; and
10   
11       WHEREAS, Cliff Humphrey, Legislative Representative for
12   NRECA, took personal ownership of this project and convinced
13   NRECA to allow him and its vast resources to be expended on
14   KIUC, worked tirelessly in Washington D.C., and personally led
15   a congressional senior staff group to Kauai, thus leading to
16   needed congressional assistance, including an appropriation for
17   the $113.25 million low-interest loan; and
18   
19       WHEREAS, Rich Larochelle, Senior Vice President of
20   Cooperative Relations for CFC, dedicated himself to this
21   project for four months, was instrumental in taking KIUC's
22   story to the Rural Utilities Service and obtaining favorable
23   financing, coordinated all the materials for the presentations
24   before the Public Utilities Commission and the Consumer
25   Advocate, and helped in the preparation of educational
26   materials for the employees and consumers of Kauai Electric;
27   and
28   
29       WHEREAS, upon the request of the Cooperative Financing
30   Corporation, Dutch Achenbach, Diesel Engineer, willingly
31   donated his expertise in completing the diesel portion of the
32   due diligence, which was particularly crucial since diesel
33   engineers were difficult to find and would have cost KIUC over
34   $100,000; and
35   
36       WHEREAS, as a result of this massive, well-coordinated
37   effort in a relatively short time period, the citizens of Kauai
38   will directly benefit as consumers and ratepayers of electrical
39   service and become owners of KAUAI ISLAND UTILITY CO-OP, and
40   able to look forward with confidence to stable and possibly
41   lower rates; and
42   
43       WHEREAS, no ratepayer/owner has been or will be required to
44   render payment beyond current electrical charges towards the
45   $270 million purchase price; now, therefore,

 
 
Page 3                                                     191
                                  H.R. NO.              
                                                        
                                                        

 
 1       BE IT RESOLVED by the House of Representatives of the
 2   Twentieth Legislature of the State of Hawaii, Regular Session
 3   of 2000, that this body recognizes and congratulates KAUAI
 4   ISLAND UTILITY CO-OP and its Chair Gregg Gardiner, Vice Chair
 5   Robby Rask, Secretary Mark Hubbard, Treasurer James Mayfield,
 6   and members on the celebrated and historic occasion of the
 7   acquisition of Kauai Electric Company; expresses its heartfelt
 8   appreciation to the National Rural Electric Cooperative
 9   Association, the National Rural Cooperative Finance
10   Corporation, and the Rural Utilities Service for their
11   significant achievement; and extends to them its warmest aloha
12   and sincere wishes for continued success in their future
13   endeavors.
14 
15 
16 
17                         OFFERED BY:  ____________________________