Unnecessary utility poles are all over Hawaii because two companies that share most of them often disagree about their responsibilities. Now that problem has been resolved.
In a move that will eliminate 14,000 unsightly poles, Hawaiian Telcom agreed to let Hawaiian Electric Cos. have sole ownership of about 120,000 utility poles on Oahu, Hawaii island, Maui, Molokai and Lanai.
The agreement ends nearly a century of joint pole ownership between the electrical utility and its longtime partner that was once just a phone company.
Under the new arrangement, Hawaiian Telcom will lease pole space for its telephone, internet and TV transmission lines. In return, Hawaiian Electric will provide Hawaiian Telcom with a $48 million credit, though $26 million of that covers disputed past costs of jointly owning poles.
The two companies had been negotiating a settlement of long-running disputes over joint pole ownership for more than a year.
The state Public Utilities Commission recently approved the agreement that settles the disputes and delivers sole pole ownership to Hawaiian Electric.
John Komeiji, Hawaiian Telcom president and general manager, called the deal a win for both companies and the state.
“With this change, Hawaiian Telcom joins many other communications providers that lease space on poles, enabling us to channel more of our resources toward investment in fiber and expansion of next generation services statewide,” he said in a statement.
Alan Oshima, Hawaiian Electric president and CEO, said in a statement that owning the poles alone will allow his company to more efficiently deploy new equipment on poles for services that benefit customers.
“In the nearly 100 years since the first joint pole agreement, our businesses and maintenance practices have changed dramatically,” he said.
Sharing utility pole ownership historically was done to minimize the number of poles in communities and reduce expenses for companies that needed such infrastructure. On Oahu, joint pole ownership dated to 1922 with Hawaiian Electric, Mutual Telephone Co. and streetcar operator Honolulu Rapid Transit Co., according to Hawaiian Electric.
In more modern times, however, joint pole ownership was a source of discord for Hawaiian Electric and Hawaiian Telcom. Problems included how much Hawaiian Telcom should pay for new poles or even whether new poles were necessary.
As a result, sometimes two poles carried lines when only one was necessary. This occurred in cases where Hawaiian Telcom disagreed over the need for a new pole. Hawaiian Electric would install a new pole for its use and cut off the top of the adjacent old pole where its lines used to hang, while Hawaiian Telcom kept its equipment on the old pole.
The two companies figure 14,000 such “double poles” exist. The agreement calls for these old poles kept by Hawaiian Telcom to be removed within 10 years, with Hawaiian Telcom paying $650,000 a year for the work.
Hawaiian Electric will have higher pole expenses as a sole owner, but the company said extra revenue will more than cover the added expense, which means rate-paying customers won’t be negatively affected.
Under the agreement, Hawaiian Telcom will pay $5 million a year to rent space on utility poles through a fixed rate for 10 years. Some of this rent will be covered by the credit, and any new equipment added to poles would incur an extra fee.
Other companies that use utility poles, including Hawaii’s other major phone, internet and TV service provider Spectrum as well as mobile phone service providers, are expected to pay $4.4 million in annual pole use fees. New equipment from emerging technology is expected to enhance future revenue from pole use.
Hawaiian Electric said being the only owner of utility poles will make it easier to approve equipment additions while also making pole repair and replacement faster and safer.
Of the poles involved in the transaction, 51,000 are on Oahu, 46,000 are on Hawaii island and 24,000 are in Maui County.
Kauai has a customer-owned electrical utility, so Hawaiian Telcom will continue to have a mix of its own poles and jointly owned poles on that island.
There are also 50,000 utility poles around the state that Hawaiian Electric has long owned by itself.
The state and counties, which use utility poles for streetlights, also maintain joint ownership of some utility poles on Oahu and Hawaii island, though Hawaiian Electric said it is working to acquire the government interests in those poles.
BY THE NUMBERS
About 120,000
Number of utility poles co-owned by Hawaiian Electric Cos. and Hawaiian Telcom
About 51,000
On Oahu
About 46,000
On Hawaii island
About 24,000
In Maui County
About 14,000
Utility poles to be eliminated
