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Costs Recovered Twice in Hawaii?
Publication year - 1997
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1997.tb08236.x
Subject(s) - commission , presumption , business , certificate , finance , capital (architecture) , operations management , engineering , law , computer science , algorithm , political science , archaeology , history
A rebuttable presumption that lot owners contributed to the construction of a utility system arises only if certain factors reveal intent by a developer to recover its capital construction costs twice. This column discusses the case of Puhi Sewer and Water company, which was incorporated as a subsidiary of a developer to operate a sewage facility for an extensive development project on Kauai. The sewer facility was then transferred to Puhi. Puhi applied for a certificate of public convenience and necessity and for approval of the proposed rates, rules and regulations. Puhi sought to include the $10 million cost of construction in its rate base. The public utility commission denied the proposed rate because of a presumption that the cost of the facilities was passed on as part of the cost of lots in the development. Puhi appealed. The appellate court said that factors that give rise to the presumptions were not present in this case. The court remanded the case to the commission to determine whether the cost of building the facility was included in the purchase price of the lots.