Should Maui hotels pay more for water? This board member thinks so

As part of an ongoing discussion about the cost of Maui’s tourism industry, a council member wonders if resorts are paying their fair share for one of the island’s most valuable resources: the water.

Maui County Council Vice Chairman Keani Rawlins-Fernandez asked officials at a Thursday Water Supply Board meeting to consider raising water prices for some of the users Maui’s most glaring – the resorts.

When it comes to paying for the volume of water used, agricultural customers have long paid the lowest rates. But owners and general users – ranging from family shops to schools to luxury hotels – are billed at the same rate.

There is, however, an exception for owners who use a lot of water. They may end up paying the county’s highest prices per gallon if they use more than 35,000 gallons per month, a policy intended to ‘further encourage conservation’, according to a recent water tariff study.

There is no separate category like this for businesses – including hotels – that use a lot of water.

“It didn’t seem fair that families, who need the essential amount of water to survive, were paying the same rate as hotels, which generate huge profits from our water,” Rawlins-Fernandez said.

The councilwoman proposed that water officials create an autonomous class for hotels to encourage them to conserve water and address “perceived inequity” in Maui’s water system. In fiscal 2020, which ended in June, resorts, many of which are located in Kihei and Wailea, made up the majority of Maui’s top 20 customers. county documents.

Hotels are among Maui's biggest users of water.
A screenshot of a list of Department of Water Supply services biggest clients in fiscal year 2020.

The Grand Wailea topped the list, using over 172 million gallons that year. In a statement, the hotel said it is “deeply committed to preserving Maui’s precious natural resources” and has invested $1 million in water conservation programs.

That’s nearly 500,000 gallons a day — the amount needed to supply 1,428 single-family homes, Rawlins-Fernandez told the water board.

Asking hotels to pay higher water bills is not uncommon on Maui. While researching water rates, the council member came across a private water company serving Kapalua that has a separate category for hotels and motels. These properties are billed $11.60 for every 1,000 gallonsnearly double the county’s highest rate of $5.85 per 1,000 gallons.

“It’s almost double what we charge…and they still operate the hotels on that side,” Rawlins-Fernandez said. “I think it’s us giving them a really huge discount at the expense of our community.”

His proposal was only the first step in what could become a multi-year price adjustment process. Before taking effect, the council member said it would have to be reviewed by water officials and voted on by the county council, as well as scrutinized by experts trained to set the prices that the governments charge for water.

Like many local governments, Maui County for years hired a private consultant to perform the complex data analysis needed to determine what customers should pay to cover the costs of running the water system. Currently, three main factors go into customer bills: the type of property, the amount of water consumed, and the size of a property’s water meter, which is the device connecting the property to the water pipe that allows the county to meter usage.

All customers pay a flat monthly fee ranging from $19.80 to $1,251 depending on the size of their water meter. They also pay for the amount of water they use – between $2.05 and $5.85 for every 1,000 gallons for single-family homeowners and general customers. However, owners who use more than 35,000 gallons per month pay $6.55 per 1,000 gallons.

Maui County Water Rates
A screenshot of Maui County water rates from its recent study on water tariffs.

In a study published last year, the Maui County-hired consultant wrote that higher rates are meant to encourage homeowners to conserve water and discourage “discretionary” outdoor water use. Charging higher amounts for general customers, the consultant wrote, could inadvertently penalize larger operations – large companies, for example, are likely to use more water than smaller ones.

Jeffrey Pearson, the director of Maui’s water supply department, said at Thursday’s meeting that he was “not going to show reservations” about Rawlins-Fernandez’s proposal, telling him he thought “It’s great that you have ideas and different ways to generate revenue and hopefully reduce usage.

Meanwhile, the manager said, the Maui Water Department is trying to find ways to help communities like Kihei and Wailea use more recycled water.

Last year, the debate over water restrictions in Maui made national headlines while only backcountry residents were ordered to conserve water – or face $500 fines. Some Upcountry residents have accused the county of favoring resort communities like Wailea, while county officials have argued they could not have changed the situation due to how Maui’s water system was originally built: The section of the system that serves the Upcountry, which is more vulnerable to drought, is completely separated from those that serve the resort areas.

“I think important conversations about water have been going on for a long time,” Nalani Kaninau, vice president of the Water Supply Council, said at the meeting. “It’s not to punish egregious users, but I think they should pay for the privilege of using and abusing our precious resource.”

Read the board member’s presentation below.

Coverage of Maui County by Civil Beat is funded in part by a grant from the Nuestro Futuro Foundation.