NOTICE OF PUBLIC HEARING
APPLICATION OF LANAI WATER COMPANY, INC.
FOR REVIEW AND APPROVAL OF RATE INCREASES;
REVISED RATE SCHEDULES; AND CHANGES TO ITS TARIFF
Docket No. 2019-0386
The PUBLIC UTILITIES COMMISSION of the STATE OF HAWAII (“Commission”), pursuant to Hawaii
Revised Statutes (“HRS”) §§ 269-12 and 269-16, HEREBY GIVES NOTICE that it will hold a public
hearing relating to the Application of LANAI WATER COMPANY, INC. (“LWC”), filed on December 30,
2019, for review and approval of rate increases, revisions of rate schedules, and changes to its tariff.
The public hearing will be held as follows:
Monday, March 16, 2020, at 4:30 p.m.
ILWU Local Hall
840 Ilima Avenue
Lana’i City, Hawaii 96763
LWC is a public utility authorized to provide potable water distribution service to the following areas
on the island of Lanai: Lanai City, Koele, Kaumalapau, Manele-Hulopoe, and Lanai Airport. LWC is also
authorized to provide non-potable (aka brackish) water distribution service to the Manele-Hulopoe area
on the island of Lanai. In addition, LWC “currently provides potable water distribution services to Miki
Basin and Palawai Basin, Kaupili Road and Upper Kaumalapau Highway, and Upper Manele on the
island of Lanai.” As of the date of the Application, LWC provides potable water distribution service to
approximately 1,500 residential, commercial, and other customers within its authorized potable water
service area, as well as non-potable water distribution service to approximately 50 customers within its
authorized non-potable service area.
LWC requests commission approval of an overall net revenue increase of $1,717,970 for its potable
water distribution service and an increase of $206,372 for its non-potable water distribution service,
based on a 2020 calendar test year. For LWC’s potable water distribution service, this proposal
represents an increase of approximately 364% over the pro forma revenue amount of $471,460 at
present rates for the 2020 test year. For LWC’s non-potable water distribution service, this proposal
represents an increase of approximately 66% over the pro forma revenue amount of $313,207 at
present rates for the 2020 test year.
In addition to its proposed rate increase, LWC seeks approval to modify the existing rate designs
for its potable and non-potable water distribution services based on its cost of service and rate design
studies. Specifically, LWC proposes amending its “LWC Water Tariff No. 1 (Potable)” by creating two
classes of potable water distribution services, “Non-Agricultural” and “Agricultural,” each with its
separate monthly flat rate service charge and monthly volumetric water charge. For its “LWC Water
Tariff No. 2 (Non-Potable),” LWC proposes to change the criteria for determining customer classification
for it volumetric charges from gallons of water used to meter size, in addition to adding a monthly flat
rate service charge.
If approved, LWC proposes a 4-step phase-in of its proposed rate increases for both its potable
and non-potable water distribution services to mitigate or reduce any potential “rate shock” to its
customers.
LWC’s present and proposed charges for its potable and non-potable water distribution services, as
set forth in Exhibits LWC-P 12 and LWC-B12 to its Application, are as follows:
PRESENT CHARGES:
LWC WATER TARIFF NO. 1 (POTABLE)
User Charge (2 month billing cycle) Rates (per 1,000 gallons)
First 25,000 gallons $1.10
Over 25,000 gallons $1.62
Service Charge (meter reading) (charge per meter per two month billing cycle)
Meter Size Rate
5/8 inch $5.00
3/4 inch $5.00
1 inch $10.00
1 1/2 inch $10.00
2 inch $25.00
3 inch $50.00
4 inch $75.00
6 inch $150.00
8 inch $250.00
10 inch $250.00
Hydrant $80.00
Tap in Charge per connection
Single Family Unit $600.00
Multi-Family Unit $475.00
Commercial
5/8 inch meter $600.00
3/4 inch meter $475.00
1 inch meter $5,400.00
1 1/2 inch meter $8,900.00
2 inch meter $17,800.00
3 inch meter $57,000.00
4 inch meter $89,100.00
6 inch meter $178,200.00
8 inch meter $285,100.00
Agriculture
5/8 inch meter $700.00
3/4 inch meter $1,000.00
1 inch meter $1,700.00
1 1/2 inch meter $3,500.00
2 inch meter $5,700.00
LWC WATER TARIFF NO. 2 (NON-POTABLE)
User Charge (2 month billing cycle)
Single Family (SF)
Tier 1 <1,000 per day per lot $3.57
Tier 2 >1,000 & <2,500 per day per lot $4.64
Tier 3 >2,500 per day per lot $5.72
Multi-Family (MF) (AOAO)
Tier 1 <1,000 per day per unit $3.57
Tier 2 >1,000 & <2,500 per day per uni $4.64
Tier 3 >2,500 per day per unit $5.72
Home Owners’ Association (HOA)
Tier 1 <1,000 per day per acre $3.57
Tier 2 >1,000 & <2,500 per day per acre $4.64
Tier 3 >2,500 per day per acre $5.72
All Other
Tier 1 <1,000 per day per acre $3.57
Tier 2 >1,000 & <2,500 per day per acre $4.64
Tier 3 >2,500 per day per acre $5.72
Service Charge (meter reading) charge per meter per two month billing cycle)
Meter Size (inches in decimal format) Rate (every two months)
0.625 $5.00
0.750 $5.00
1.000 $10.00
1.500 $10.00
2.000 $25.00
3.000 $50.00
4.000 $75.00
6.000 $150.00
8.000 $250.00
10.000 $250.00
PROPOSED CHARGES:
LWC WATER TARIFF NO. 1 (POTABLE)
NON-AGRICULTURAL MONTHLY FLAT RATE SERVICE CHARGE
Meter Size Step 1 Step 2 Step 3 Step 4
(effective upon (effective 6 (effective 6 (effective 6
approval) months after months after months after
the effective the effective the effective
date of Step 1) date of Step 2) date of Step 3)
5/8" $3.46 $4.85 $6.91 $9.85
1" $7.55 $11.28 $16.78 $24.63
1.5" $10.75 $19.16 $31.55 $49.25
2" $21.12 $33.72 $52.28 $78.80
3" $40.96 $64.28 $98.65 $147.75
4" $64.64 $104.30 $162.76 $246.26
6" $129.28 $208.60 $325.51 $492.51
8" $211.19 $337.17 $522.81 $788.02
Hydrants/ $54.01 $74.48 $104.65 $147.75
Standpipes
NON-AGRICULTURAL MONTHLY WATER CHARGE
In addition to the Monthly Flat Rate Service Charge as noted above, there shall be a
Monthly Water Usage Charge based on each 1,000 gallons of metered domestic water.
Usage Level in Step 1 Step 2 Step 3 Step 4
Gallons (effective upon (effective 6 (effective 6 (effective 6
approval) months after months after months after
the effective the effective the effective
date of Step 1) date of Step 2) date of Step 3)
0 to 5,000 $1.22 $1.39 $1.65 $2.02
5,001 to 12,500 $1.41 $1.87 $2.55 $3.51
12,501 to 50,000 $2.32 $3.34 $4.85 $7.00
50,001 to 400,000 $2.58 $3.98 $6.05 $9.00
Over 400,000 $2.71 $4.30 $6.65 $10.00
AGRICULTURAL MONTHLY FLAT RATE WATER CHARGE
Meter Size Step 1 Step 2 Step 3 Step 4
(effective (effective 6 (effective 6 (effective 6
upon months after months after months after
approval) the effective the effective the effective
date of Step 1) date of Step 2) date of Step 3)
5/8″ $3.46 $4.85 $6.91 $9.85
1″ $7.55 $11.28 $16.78 $24.63
1.5″ $10.75 $19.16 $31.55 $49.25
2″ $21.12 $33.72 $52.28 $78.80
3″ $40.96 $64.28 $98.65 $147.75
4″ $64.64 $104.30 $162.76 $246.26

AGRICULTURAL MONTHLY WATER CHARGE
In addition to the Monthly Flat Rate Service Charge as noted above, there shall be a Monthly Water
Usage Charge based on each 1,000 gallons of metered domestic water.
Usage Level in Step 1 Step 2 Step 3 Step 4
Gallons (effective (effective 6 (effective 6 (effective 6
upon months after the months after the months after the
approval) effective date of effective date of the effective
Step 1) Step 2) date of Step 3)
0 to 200,000 $1.10 $1.10 $1.10 $1.10
200,001 to $2.58 $3.98 $6.05 $9.00
400,000
Over 400,000 $2.71 $4.30 $6.65 $10.00
LWC WATER TARIFF NO. 2 (NON-POTABLE)
MONTHLY FLAT RATE METER SERVICE CHARGE
Customer Classification Step 1 Step 2 Step 3 Step 4
(effective (effective 6 (effective 6 (effective 6
upon months after months after months after
approval) the effective the effective the effective
date of date of date of)
Step 1) Step 2) Step 3)
Residential – 5/8″ Meter $6.86 $11.22 $15.58 $19.93
Multi Group I – 1″ Meter $16.21 $27.42 $38.63 $49.83
Multi Group II – 1.5″ Meter $28.66 $52.32 $75.98 $99.65
Multi Group III – 2″ Meter $49.24 $85.98 $122.72 $159.44
Multi Group IV – 3″ Meter $93.49 $161.98 $230.47 $298.95
Multi Group V – 4″ Meter $152.69 $267.88 $383.07 $498.25
MONTHLY WATER CHARGE
In addition to the Monthly Flat Rate Meter Service Charge as noted above, there shall also be a
Monthly Water Usage Charge based on each 1,000 gallons of metered domestic water usage.
Customer Classification Step 1 Step 2 Step 3 Step 4
(effective (effective 6 (effective 6 (effective 6
upon months after months after months after
approval) the effective the effective the effective
date of date of date of
Step 1) Step 2) Step 3)
Residential
0 to 50,000 $4.51 $4.34 $4.17 $4.00
50,001 to 100,000 $5.01 $5.34 $5.67 $6.00
100,001 to 300,000 $5.51 $6.34 $7.17 $8.00
Over 300,000 $6.01 $7.34 $8.67 $10.01
Multi Group I
0 to 50,000 $3.99 $4.00 $4.00 $4.00
50,001 to 100,000 $4.49 $5.00 $5.50 $6.00
100,001 to 300,000 $4.99 $6.00 $7.00 $8.00
Over 300,000 $5.50 $7.00 $8.50 $10.01
Multi Group II
0 to 50,000 $3.68 $3.78 $3.89 $4.00
50,001 to 100,000 $4.18 $4.78 $5.39 $6.00
100,001 to 300,000 $4.68 $5.78 $6.89 $8.00
Over 300,000 $5.18 $6.79 $8.40 $10.01
Multi Group III
0 to 50,000 $4.55 $4.36 $4.18 $4.00
50,001 to 100,000 $5.05 $5.36 $5.68 $6.00
100,001 to 300,000 $5.55 $6.36 $7.18 $8.00
Over 300,00 $6.05 $7.37 $8.69 $10.01
Multi Group IV
0 to 50,000 $4.04 $4.02 $4.01 $4.00
50,001 to 100,000 $4.54 $5.02 $5.51 $6.00
100,001 to 300,000 $5.04 $6.02 $7.01 $8.00
Over 300,000 $5.54 $7.03 $8.52 $10.01
Multi Group V
0 to 50,000 $3.74 $3.82 $3.91 $4.00
50,001 to 100,000 $4.24 $4.82 $5.41 $6.00
100,001 to 300,000 $4.74 $5.82 $6.91 $8.00
Over 300,000 $5.24 $6.83 $8.42 $10.01
The Commission will investigate whether the proposals in LWC’s Application, including revisions
to its rates/charges and rate design, are just and reasonable. The total revenue requirement for the
2020 calendar test year will not exceed the $1,717,970 amount over revenues at present rates for
potable water distribution services or the $206,372 amount over revenues at present rates for nonpotable
water distribution services that LWC requests. However, the increase in rates and charges
to be finally approved by the Commission, if any, may be higher or lower than LWC’s proposed rates
and charges noted herein.
At the public hearing, the Commission will receive in-person testimony from the general public
regarding LWC’s Application and proposed general rate increase and revised rate schedules and tariff
changes, pursuant to HRS §§ 269-12(c) and 269-16(f). All interested persons are invited to attend
the public hearing to state their views on LWC’s Application verbally, in writing, or both. So that all
in attendance will have the opportunity to speak at the public hearing, the Commission may impose
time limits for each person’s testimony. Special accommodations for persons with disabilities can be
made if requested reasonably in advance by contacting the Commission’s Honolulu Office.
In addition, written statements may be mailed to the Commission at 465 South King Street, Room
103, Honolulu, Hawaii, 96813, or sent by electronic mail to puc.comments@hawaii.gov. Written
statements should reference Docket No. 2019-0386 and include the author’s name and the entity or
organization that the author represents, if any.
A copy of LWC’s Application is available for public review through the Commission’s electronic
Document Management System, accessible at http://dms.puc.hawaii.gov/dms/, Docket Quick Link
2019-0386. In addition, copies of LWC’s Application are also available for review by contacting the
Commission’s Maui office, (808) 984-8182, or the Department of Commerce and Consumer Affairs,
Division of Consumer Advocacy, (808) 586-2800.
Any motions to intervene or participate in this proceeding must comply with the applicable
provisions of the Commission’s Rules of Practice and Procedure Before the Public Utilities
Commission, Hawaii Administrative Rules, Title 16, Chapter 601. A motion to intervene or participate
in this proceeding shall be filed with the Commission’s Honolulu Office by March 26, 2020.
______________________________
James P. Griffin
Chair
SA1266592 2/21, 2/28, 3/6, 3/14/20