Special Electricity

Whether the market is up or down, a staggering number of vacant parcels on Hawai’i Island change hands each year. Well-priced properties are snapped up quickly. Inventory is always high, so unless there’s something special about a property, competitive pricing is the fastest way to ensure a sale. Interesting thing about vacant land listings, we rarely know if they are being shown. Most agents just assume the parcel is available if it’s still listed in the Multiple Listing Service. The risk of having a buyer disappointed after having been presented a lot for their consideration is fairly slim.

The Hidden Cost of Power

Because pricing is so critical, buyers (and sellers hoping to be competitive) must remember to factor in the “hidden cost” of the Special Subdivision Power Provision (SSPP). While not unique to vacant land, it’s certainly a bigger issue when the charge to connect to power is part of the future cost to develop the property. This is especially important when considering a purchase in Puna or Ocean View. Take a typical Hawaiian Paradise Park (HPP) lot, for example. Several possibilities may exist regarding payment (if any) for power poles along the roadway. The power may be “regular” power which means no charge attaches.

The property, could, however belong to an SSPP. This means that HELCO has outlined an area in which a cost-share charge applies and has been established for each parcel along that SSPP. Unless an owner makes a conscious decision to participate, or a contracted agreement is made, the charge should not be assessed until a connection to permanent power is established. The charge for a typical HPP lot usually ranges from $2000-$3000. I have, however, known of charges in excess of $8000 in Hawaiian Acres. As owners connect along each line, the charge decreases.

Find Out if SSPP Applies to Your Property

Don’t forget that these charges can apply to residential sales as well. HELCO will allow owners to prorate the payments over several years, making the charge very affordable (normally around $30 per month in addition to use charges). Generally, SSPP charges under $2000 must be paid lump sum and for participants with appropriate balances, must be paid upon transfer. No matter where you buy on Hawai‘i Island, it’s a good idea to inquire if an SSPP exists. The best way to find out if SSPP applies is for your agent to inquire with HELCO Engineering. It’s important to check because, after all, you don’t want the cost of electricity to turn a simple purchase into a truly “shocking” experience!