"We know there's never a good time for a rate change, and we have made significant efforts to keep those costs down in our Kapalua service area." Geoff Fulks, general manager of Hawaiʻi Water Service, said that to the state Public Utilities Commission at a public hearing at Maui Preparatory Academy on February 2, 2026. Hawaiʻi Water was asking to raise Kapalua's rates for the first time since 2009. Eight months later, that request has turned into a settlement that is waiting on a final decision. Most of the money in it doesn't stay with the utility. It goes upstream to the company that owns the water.
Kapalua's water price is set two steps away from the tap, by a seller that neither homeowners nor their utility control. A buyer comparing Kapalua with Kāʻanapali or Wailea will see that in HOA budgets and owner bills before they see it anywhere else.
Three Parties Stand Between Honokōhau Stream and a Kapalua Faucet
Hawaiʻi Water Service bought Kapalua Water Company from Maui Land & Pineapple in May 2021 and took over Kapalua's potable and nonpotable systems. Maui Land & Pineapple still owns the wells that supply the resort and the nonpotable ditch irrigation system. So Hawaiʻi Water has to buy the water it delivers, at rates Maui Land & Pineapple sets.
The chain looks like this:
- Maui Land & Pineapple owns the source: wells plus the Honokōhau ditch system.
- Hawaiʻi Water Service buys that water wholesale and delivers water and wastewater service to about 1,500 customers in Kapalua. The company describes that service base as 11 developments and one hotel.
- The Public Utilities Commission decides what Hawaiʻi Water may charge. It doesn't regulate what Hawaiʻi Water pays upstream.
Between 2024 and 2025, the wholesale price Hawaiʻi Water pays Maui Land & Pineapple went from $2.99 to $4.06 per 1,000 gallons for potable water and from $0.46 to $1.69 per 1,000 gallons for nonpotable water. The nonpotable price nearly quadrupled, and nonpotable is the bigger stream by far. Hawaiʻi Water projected 450 million gallons of nonpotable use for 2025, compared with 180 million gallons of potable. Nonpotable water is the irrigation side of the system. In a resort built around landscaping, that cost tends to show up in association budgets as well as on individual bills.
The Bill Math From the Original Request
The application put the cost of the upstream water in plain view. Hawaiʻi Water said average residential use is 15,000 gallons a month. At that level, a customer currently pays $66.41 for water and $66.41 for wastewater. Under the original proposal, the water bill would have been a $38.83 base charge, a $2.81 power charge and a $92.69 watershed charge, for $134.33 in total. Wastewater would have gone to $108.72.
The watershed line, meaning the water bought from Maui Land & Pineapple, made up more than two-thirds of that proposed water bill. The utility's own base charge would actually have dropped.
Those figures describe the November 2025 application, not the deal that came later.
What the August Settlement Changed
Hawaiʻi Water and the state Division of Consumer Advocacy reached a full settlement in mid-to-late August 2026. A proposed decision and order adopting it would approve a combined increase of $1,935,117, about 51.43% over present rates, for a 2026 test year.
| PUC Docket 2025-0220 | Original application, Nov. 2025 | Settlement, Aug. 2026 |
|---|---|---|
| Water revenue increase | $1,597,773, about 68% | $1,465,876, about 62.5% |
| Wastewater revenue increase | $622,882, about 44% | $469,241, about 33.1% |
| Combined | about $2.22 million, 59% | $1,935,117, about 51.43% |
| Watershed Purchase Rider | Requested | Withdrawn |
As of October 4, 2026, the Commission's case page still lists the docket as open, and no final order has been found. The roughly 51% figure is a proposal, not a rate anyone is paying yet. No settled monthly bill example for a typical household has been published either.
Why the Withdrawn Rider Matters More Than the Percentage
The smaller headline number gets the attention. The bigger structural change is the dropped rider.
Hawaiʻi Water had asked for a Watershed Purchase Rider, a separate line that would pass whatever Maui Land & Pineapple charged straight through to customers as the price moved. The company argued that it doesn't control or set that cost and that the cost can change between rate cases. The Consumer Advocate opposed the rider. Its view was that the rider would shift substantial cost risk onto customers and weaken the utility's incentive to control procurement costs.
Hawaiʻi Water's rebuttal stated the tradeoff plainly. Whether or not the rider is approved, customers pay for the purchased water. The only question is whether the charge tracks the cost as it changes or waits until the next general rate case. In the settlement, the company withdrew the rider, and the purchased-water costs moved into base volumetric water rates.
For a buyer, that means the price per gallon reflects today's wholesale cost. If the upstream price moves again, Kapalua bills won't follow it month by month. The change waits for the next rate filing, and the last gap between filings ran from 2009 to 2025.
The Upstream Seller May Change. The Billing Path Probably Won't.
There's a second clock running. On May 18, 2026, Maui County and Maui Land & Pineapple signed a nonbinding memorandum of understanding covering the Honokōhau Ditch System, a watershed lease, wells, proposed well sites, a reservoir site and the Kahana Pump Station, among other assets. The FY2027 county budget includes $30 million as preliminary funding, which Maui Now reported is not an agreed purchase price.
At a July 29 County Council committee briefing, officials said they expect to order preliminary title reports and hire an appraiser this fall. They then plan to make an offer and bring an acquisition resolution to the Council by winter. The MOU runs through May 18, 2027. The committee took no vote.
The detail that matters most for Kapalua came out at the same briefing. The transfer wouldn't need PUC approval because Maui Land & Pineapple is the wholesale source, not the retail distributor. County staff also said Hawaiʻi Water would likely keep serving Kapalua customers even if the county buys the sources underneath. A county purchase would change who sets the wholesale price. It wouldn't change the utility, the PUC rate structure or the lag built into base rates. Nobody has published what a county-owned source would charge.
What the Golf Courses Showed Everyone
The same system that sets the bill also sets how much water there is. Hawaiʻi Water's nonpotable conservation tiers went to Tier 3, a 60% cut, through early 2026. They eased to Tier 2 on April 7 and Tier 1 on April 22, then lifted completely on August 28, 2026. The utility warned that higher tiers can come back if stream flows drop below the state's Interim Instream Flow Standards.
Kapalua's fairways made the 2025 shortage visible. Kapalua Golf said a long stretch of Tier 4 restrictions, meaning zero irrigation, damaged both courses. The courses closed on September 2, 2025. The Plantation Course reopened on November 10, 2025, and the Bay Course stayed closed until further notice. As of this fall, the course website still says the Plantation Course is open and the Bay Course is closed. The PGA Tour has confirmed it is ending its Maui event, which was played at the Plantation Course from 1999 through 2025. The Sentry moves to Torrey Pines in San Diego for January 25 to 30, 2027.
TY Management, which owns both courses, and Maui Land & Pineapple sued each other in 2025. No ruling or settlement in those civil cases has been verified. At the state water commission, a related matter was deferred for more briefing on April 21, 2026. For now, the golf story is unresolved. It's also the clearest evidence of how tightly Kapalua's landscape depends on one ditch.
Questions Worth Putting to a Kapalua Association
These are due-diligence questions, not legal or financial advice. They tie the facts above to an actual purchase:
- How does the association budget for nonpotable irrigation water, and did the 2025 jump in wholesale prices show up in recent dues or reserves?
- Has the budget accounted for the pending PUC decision in Docket 2025-0220?
- Which conservation tier applies today, and how did the community handle Tier 3 and Tier 4 periods in landscaping and common areas?
- Which costs show up on the owner's own Hawaiʻi Water bill, and which are paid through dues?
Our Kapalua neighborhood page and buyer's guide cover the broader purchase process. Our earlier overview of Kapalua's golf and resort communities describes the developments these questions apply to.
Quick Answers
Is the Kapalua water rate increase final? No. As of October 4, 2026, the docket is open. The settlement of about 51.43% is a proposed decision awaiting Commission action.
Would a county purchase of the ditch lower Kapalua bills? No one has published that. County staff said Hawaiʻi Water would likely remain the retail provider, so any change would come through wholesale pricing and a future rate case.
Is the Bay Course reopening? No reopening date has been announced. Kapalua Golf lists it as closed until further notice.
If you're weighing a Kapalua purchase and want help reading an association budget against the water chain described here, Maui & Co. Real Estate can go through the numbers with you. Schedule a private consultation and bring the HOA documents.
