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Neighbor Islanders brace for higher prices after Young Brothers gets 46% rate increase

Published: Aug. 18, 2020 at 10:07 AM HST|Updated: Aug. 18, 2020 at 10:09 AM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - In a decision expected to drive up the already high cost of living on the Neighbor Islands, the Public Utilities Commission on Monday approved a jaw-dropping 46% rate increase for the state’s only regulated inter-island cargo shipping company.

The PUC, acknowledging the economic strain the pandemic has put on Young Brothers, approved the emergency rate increase to restore the company’s “pre-COVID” sailing schedule by Sept. 1.

The added routes will reduce delays of freight for customers, but also means much higher shipping costs for inter-island services.

“It’s really going to be a big problem here for our island because you know, we going to have to raise our prices,” said Derek Kurisu, executive vice president of KITA Superstore.

“But one of the things that we’re really glad about is that the barges coming to Hilo again.”

On July 7, the company filed a request with the PUC to help regain revenue lost, save jobs, and keep service going throughout the islands.

In a statement, the company said: “Young Brothers understands that our communities and customers are struggling right now as we all cope with the impacts of COVID-19. That’s why we cut costs and pursued every avenue of assistance before asking the Public Utilities Commission to approve a temporary, emergency rate increase totaling $27 million, which does not include profit of any kind.”

The conditions of the approval include:

  • A 12-month “stay-out” period for additional general rate increases.
  • Young Brothers is required to provide six months advance notice to the PUC and state if the company decides to discontinue regulated inter-island service in the future.
  • They must develop and implement a comprehensive customer service plan.
  • A financial management audit will now be conducted by a third party, selected by the PUC.

The significant increase comes after the company was unsuccessful in securing federal funding to cover revenue shortfalls.

“We recognize that this is a huge cost burden on Hawaii’s customers at this time, but really what is at stake here is the lifeline to the neighbor islands,” said Jay Griffin, PUC chair.

“We hope that this will provide the stability that Young Brothers has been asking for, but mostly the peace of mind for folks on the neighbor islands to continue the services that we know are so essential,” he added.

Kurisu also adds that KTA will do everything they can to avoid raising costs for customers.

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