Kauai's electricity

While NextEra Energy's $4.3 billion bid to buy Hawaiian Electric Industries dominates the local energy debate, a group of Hawaii island residents is quietly investigating another possible future for their utility. They are turning for inspiration to Kauai, where pioneering folks banded together in a cooperative and bought their electric utility for $215 million in 2002 in a completely debt-financed deal.

"We had zero equity," recalled Dennis Esaki, who runs an engineering company and was a founding director of the nonprofit Kauai Island Utility Cooperative. "We didn't have any money. It was an amazing feat."

At first he ducked when people called about the idea of buying the electric company.

"I didn't take their phone calls," he said in an interview. "I figured they must think I got money that I don't have."

By the Numbers Kauai Island Utility Cooperative is a not-for-profit electrical co-op owned and controlled by the members it serves. >> $215 million: Cost of the utility when purchased in 2002 >> 33,000: Member-owners, who are its customers >> $80 million: Equity stake owned by members >> $30 million: Returned to members since 2002 >> 9: Elected board members Source: Kauai Island Utility Cooperative

But he decided to join the effort. The cooperative got rolling with $200,000 fronted by a Lihue businessman, Gregg Gardiner, and the support of the National Rural Utilities Cooperative Finance Corp. which put up $2 million and financed the acquisition.

Since its launch 12 years ago, the nonprofit Kauai Island Utility Cooperative has returned $30 million to its members, who are its customers, money that is left at the end of the year after expenses are met. And it has built up more than $80 million in equity, the members' ownership stake.

"Main thing is, we don't have off-island owners that the profits go out to, like an investor-owned utility," Esaki told a forum in Hilo last month. "All of the profits, called margins in this business, stay on the island."

The co-op is guided by a board elected by its 33,000 ratepayers, who each get one vote. It has aggressively pursued solar power and focused on rate stability.

Residential electricity cost 34.1 cents per kilowatt-hour on Kauai in January, compared with 35.9 cents on Hawaii island, 35.1 cents on Maui and 29.5 cents on Oahu, where there are economies of scale.

Kauai's residential electricity rates fell by 1.6 percent from 2008 to 2013 while Hawaiian Electric Co.'s rose by more than 21 percent, according to KIUC, which crunched data from the Public Utilities Commission.