Cooperative Wildfire Cost Recovery: KIUC's Hawaii Filing

Kauai Island Utility Cooperative (KIUC) is working through a question other co-ops may also face: how a member-owned utility pays for wildfire work once a regulator has approved the plan. On July 17, 2026, KIUC asked the Hawaii Public Utilities Commission to set up a Wildfire Cost Recovery Mechanism, a surcharge on members’ bills. For anyone tracking cooperative wildfire cost recovery, the filing is useful because it lays out, line by line, which hardening work is already done and which is still ahead.

It also needs careful reading. Plan approval, money already spent, and money KIUC is asking to recover are three different things, and only one of the requests has been decided.

What KIUC Asked the Hawaii PUC For

The Commission approved KIUC’s 2025-2027 Wildfire Mitigation Plan on May 21, 2026, in Decision and Order No. 42567. KIUC’s application in Docket No. 2026-0161 followed and asked for three dated approvals:

Request	Date KIUC asked for
Deferred accounting to set up a regulatory asset for wildfire costs incurred from January 1, 2026 and not already recovered in rates	Order by October 1, 2026
Approval of the Wildfire Cost Recovery Mechanism and its tariff language	Decision by December 31, 2026
The initial 2027 surcharge, billed April 1 through December 31, 2027	Decision by March 15, 2027

KIUC’s release put its wildfire costs at more than $18 million at filing, expected to reach $55 million by the end of 2027. The initial surcharge would recover an estimated $9,403,367, which the application translates to $0.025732 per kWh, or about $12.87 a month for a residential member using 500 kWh. That covers projected 2027 costs of carrying out the approved 2025-2027 plan and meeting compliance requirements, plus half of 2026 costs, with the other half of 2026 pushed to a 2028 surcharge. New measures from KIUC’s upcoming 2027-2028 plan are excluded from the 2027 surcharge. KIUC also chose not to seek recovery of more than $1.2 million in 2025 wildfire O&M that its rates had not covered.

The proposed mechanism includes an annual reconciliation. KIUC would compare surcharge revenue collected against what actual costs and sales required, and apply the difference as a credit or charge from April 1 to December 31 of the following year.

Where the Docket Stands

A check of the Commission’s docket list on November 10, 2026 shows one request decided and the cost recovery mechanism still open:

• Deferred accounting: granted. Order No. 42878, dated September 17, 2026, is titled as granting KIUC’s request to establish deferred accounting treatment for wildfire-related costs.
• The surcharge mechanism: pending. The Division of Consumer Advocacy filed its statement of position on the cost recovery mechanism (Request 2) on October 28. The Commission had granted the Division two motions for more time, in Orders No. 42880 and 42952. The Commission sent KIUC information requests on November 4. No order on the mechanism or the 2027 surcharge appears in the listing.

Deferred accounting preserves costs for later recovery consideration. It is not approval of the surcharge, and the $12.87 figure remains an estimate inside a pending request.

The Hardening Work Behind the Numbers

Exhibit 2 of the application describes each project KIUC wants to recover. Two lines matter most for anyone buying overhead distribution equipment.

Poles. KIUC’s island-wide pole test and drone inspections, completed by the end of 2025, led it to anticipate about 1,200 reject poles and identified about 2,200 priority repair work orders. KIUC reports replacing 245 poles in 2024 and 528 in 2025, with the remaining reject poles planned for replacement by the end of 2026. It says the repair-order totals could change, “likely up but not down,” as it keeps reviewing inspection data. In higher-risk areas it is replacing wood poles with composite poles, and may use steel transmission poles where engineering analysis calls for them.

Fuses and arresters. KIUC plans an island-wide replacement of approximately 7,500 fuses and approximately 5,600 arresters with fire-safe units. Based on a preliminary analysis, the fuse count includes replacing all Kearney-type fuse links and primary overhead transformer links to coordinate with E-speed fuses. The application names S&C Electric Company’s SMU-20 fuse units and Fault Tamer fuse limiters. It estimates $1,610,000 for this work in 2026 and $5,466,000 in 2027, with the 2026 figure assuming work starts in the fourth quarter of 2026 and the 2027 figure offset by potential federal grant funds of up to about $2.4 million.

One sentence in that exhibit is worth noting for buyers: KIUC states that “the ordering lead-time for the fuses and arresters has experienced supply chain and procurement delays,” citing a response it filed in its plan docket. It plans to start replacements as soon as materials arrive.

What Other Co-ops and Munis Can Take From It

KIUC’s situation is specific. It is the member-owned utility for Kauai, and the Hawaii PUC directed it to file a wildfire plan following the 2023 Maui wildfires. Still, the filing shows a structure other utilities can borrow when they plan their own programs:

• Separate the three numbers in your own board materials. Approved plan scope, costs incurred, and costs you are asking to recover can move on different timelines. KIUC’s filing keeps them apart, and its deferred accounting order was granted while the surcharge request stayed pending.
• Order long-lead protection hardware early. If a fire-safe fuse and arrester program is in your plan, KIUC’s own filing says ordering lead time was a constraint. Check delivery dates before you commit to a crew schedule. Our pole and conductor supply outlook covers the related line-hardware picture.
• Treat inspection data as the driver of the pole budget. KIUC’s pole numbers came out of an island-wide test and drone inspection program. The condition-based pole asset management explainer covers how utilities build that data.
• Plan for reconciliation. KIUC proposes to true up its forecast-based surcharge each year against actual costs and sales. If you set a charge on projections, a similar annual reconciliation is worth building in from the start.

For a different state’s approach to wildfire plans and pole inspections, see our Texas wildfire mitigation plan explainer.

Related Reading

• Texas Wildfire Mitigation Plans and the New Pole Rule
• The Co-op Grid Hardening Playbook: Six Resilience Moves
• Grid Resilience Formula Grants: How Munis and Co-ops Get In

Request dates, surcharge figures, project counts and cost estimates are from KIUC’s application and Exhibit 2 in Hawaii PUC Docket No. 2026-0161, filed July 17, 2026. The $18 million and $55 million figures are from KIUC’s July 17, 2026 news release. Plan approval is from the Hawaii PUC’s Wildfire Mitigation Plans page. Docket status reflects the Commission’s filing list as checked November 10, 2026; order and filing descriptions are from their docket titles.

Wildfire plan and cost recovery dockets move on regulatory calendars that are easy to miss. The Feeder is our free weekly digest of the regulatory and supply signals that change what utility buyers spec.