(BIVN) – Young Brothers’ emergency request to increase its inter-island shipping rates by 46 percent has been approved.
In an August 17 decision, the Hawaii Public Utilities Commission approved the shipping company’s emergency request, with several conditions over the next 12 months. The PUC says that as a result of the decision, Young Brothers will resume the full “pre-COVID” sailing schedule by Sept. 1, 2020, which will restore an additional sailing from the ports of Hilo and Kahului to Honolulu.
The PUC’s decision also included the following conditions:
- Instituting a 12-month “stay-out” period for additional general rate increases;
- Requiring Young Brothers to provide 6-months advance notice to the PUC and State if the Company decides to discontinue regulated interisland service in the future;
- Requiring Young Brothers to develop and implement a comprehensive customer service plan; and
- Requiring Young Brothers to undergo a financial and management audit by an independent party selected by the PUC.
The PUC provided this background in a news release:
On July 7, 2020, Young Brothers filed a motion requesting “an emergency or temporary rate increase to mitigate Young Brothers’ current liquidity crisis and assist the Company to continue its intrastate water carrier of property operations and services.” Young Brothers had previously requested emergency financial assistance in the form of CARES Act funding and funding from other State or County sources, as well as third-party financing, in an attempt to alleviate its liquidity crisis, but was unsuccessful in obtaining it. The Commission conducted an expedited
review of the emergency request, including an evidentiary hearing on Aug. 14, 2020, in which Young Brothers and the Consumer Advocate participated.
The PUC held a virtual evidentiary hearing for the request on Friday, August 14. The hearing was also posted to YouTube.
In a news release issued by Young Brothers on the day of the evidentiary hearing, the company said “it is not seeking a profit of any kind as part of this emergency request,” and indicated that if it did not receive relief by Monday, August 17, Young Brothers “will face a cash shortfall in the ensuing weeks – meaning it will be unable to pay its bills or continue funding operations.”
“We are not effectively generating the cash and the revenue necessary to operate our business,” said Jay Ana, President of Young Brothers, LLC. “While we are a utility, we are not immune to the impacts of the pandemic and we are not able to operate if we don’t have cash to manage or pay for our obligations.”