Hoku Materials (HOKU) Files Complaint Against Idaho Power
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Hoku Materials, Inc., a wholly owned subsidiary of Hoku Corporation (NASDAQ: HOKU), that is constructing a polysilicon production facility in Pocatello, Idaho, announced the filing of a formal complaint with the Idaho Public Utilities Commission (the PUC), seeking to amend its electric service agreement with Idaho Power Company. On December 30, 2011, Hoku filed a complaint with the PUC asking that the commission stop Idaho Power from disconnecting Hoku's electrical service until the parties can resolve their dispute about the amounts that Idaho Power is charging Hoku. Today, Hoku answered Idaho Power's various allegations in response to Hoku's first complaint, and filed this additional complaint to amend the contract that was signed in 2009.
According to the complaint filed today, Hoku is alleging that Idaho Power is unfairly charging Hoku approximately $2 million each month for power not being consumed by Hoku's Idaho facility, while also demanding that Hoku pay a $5.8 million security deposit. To date, Hoku alleges that it has paid more than $11 million since April 2011 for power it did not consume, and has also paid a $4 million deposit to Idaho Power. Hoku was not connected to Idaho Power's grid until November 2011, and during its commissioning activities, Hoku only used the equivalent of less than $1,000 of power each day. Instead, Hoku alleges that it is being charged $65,000 per day. Hoku also claims to have paid more than $18 million to construct the high-voltage power lines and the substation to service its polysilicon production facility.
In Hoku's complaint, the company is asking the PUC for the following relief:
1. Elimination of the minimum payments that are due each month under the electric service agreement; 2. Monthly bills be limited to the power actually consumed by Hoku's facility; 3. Reduction of the deposit to only $4 million, eliminating the additional $1.8 million that is being requested by Idaho Power; 4. Continued electrical service; and 5. A refund of some, or all, of the amounts that were previously paid by Hoku to Idaho Power.
According to the complaint filed today, Hoku is alleging that Idaho Power is unfairly charging Hoku approximately $2 million each month for power not being consumed by Hoku's Idaho facility, while also demanding that Hoku pay a $5.8 million security deposit. To date, Hoku alleges that it has paid more than $11 million since April 2011 for power it did not consume, and has also paid a $4 million deposit to Idaho Power. Hoku was not connected to Idaho Power's grid until November 2011, and during its commissioning activities, Hoku only used the equivalent of less than $1,000 of power each day. Instead, Hoku alleges that it is being charged $65,000 per day. Hoku also claims to have paid more than $18 million to construct the high-voltage power lines and the substation to service its polysilicon production facility.
In Hoku's complaint, the company is asking the PUC for the following relief:
1. Elimination of the minimum payments that are due each month under the electric service agreement; 2. Monthly bills be limited to the power actually consumed by Hoku's facility; 3. Reduction of the deposit to only $4 million, eliminating the additional $1.8 million that is being requested by Idaho Power; 4. Continued electrical service; and 5. A refund of some, or all, of the amounts that were previously paid by Hoku to Idaho Power.
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