County of Hawai’i Department of Water Supply Water Master Plan and Rate Study Update

The County of Hawai’i Department of Water Supply (DWS) retained Harris to update its Master Plan—the first since 2006—in conjunction with an update to the water rates and facilities charges.

The update of the Master Plan focused on areas modeled in the 2006 effort and accounted for approximately 96% of the DWS service area, including 23 separate water systems serving approximately 44,000 customers. The objective included preparing a 5-year and 20-year Capital Improvement Plan supported by a 5-year rate recommendation as well as updated facilities charges.

Harris assisted with several elements of the Master Plan update, including:

• Desktop condition assessment
• Population and demand analysis
• Hydraulic model calibration
• Hydraulic analysis
• Development of a cost estimating tool
• Recommendations for capital projects
• A needs assessment

While the initial rate update resulted in a 5-year rate proposal, COVID-19 caused a shift. Harris worked with the DWS Board to determine a one-year rate proposal and explore the possible impacts of the economic downturn on the DWS service area. 

The rate study effort included three revenue requirement scenarios reflecting various levels of water usage that could occur under COVID-19 conditions. The rate model projected rate adjustments, debt service coverage, and the level of reserves under each scenario. 

Based on these analyses, Harris and the DWS recommended a 13% rate increase, which the Board approved. During a public hearing in October 2021, facilities charges were also updated to reflect growth assumptions developed in the Master Plan. Harris submitted a draft and final report to DWS, including an update of the rate model. 

Core Elements

Harris’s update of the Master Plan provided DWS with a 20-year CIP needed to continue to fulfill its mission to its customers. Our efforts on the rate study work included the development of revenue requirements, cost of service and rate design analyses along with six Board presentations. Harris also developed a monthly financial and usage model to provide a closer look at water usage, patters of account receivables, and project-ending reserve balances.

Beyond the Blueprints

Throughout the project, Harris paid careful attention to aligning key assumptions and goals of the master planning and rate update efforts. The Harris team leveraged past ratemaking experience to address the Board’s rate concerns and conducted timely research to address water industry issues related to COVID-19’s economic impacts.