Molokai Ranch has confirmed it will continue providing water service to West Moloka'i beyond Aug. 31 following a temporary rate increase ordered by the state Public Utilities Commission on Aug. 14.

Peter Nicholas, chief executive of Moloka'i Properties Ltd. dba Molokai Ranch, said the company will go along with the order as a "stop-gap measure" but will not operate the utilities indefinitely.

Nicholas notified the state of its agreement in a letter to state Public Utilities Commission Chairman Carl Caliboso. Gov. Linda Lingle's office publicized the announcement yesterday.

"The temporary rate increases will allow Moloka'i Properties to continue to provide water service until another entity can take over the operation," Lingle said in a statement. "We recognize that this is a difficult situation for everyone involved, and we especially understand residents' concerns regarding increases in water rates. However, facing the potential shutdown of water and wastewater services, the Public Utilities Commission has taken appropriate action to ensure the health and safety of residents are not compromised by any disruption of water or wastewater service."

Lingle also emphasized that water and wastewater service is a basic responsibility of county government in the absence of a private provider, and she pledged to assist Maui County to ensure uninterrupted service.

"Mayor Tavares, council members, state legislators and Moloka'i residents have asked for my help, and we will continue to work with the county to ensure uninterrupted water and wastewater service to protect the health and safety of the island," Lingle said.

The ranch, a subsidiary of Singapore-based conglomerate GuocoLeisure Ltd., had threatened to cease service Aug. 31 after the shutdown of ranch and resort operations in March that resulted in the company laying off more than 120 employees. The company said it couldn't sustain losses of its utility subsidiaries Wai'ola O Molokai, Molokai Public Utilities and Mosco.

Molokai Ranch also told the PUC in March that it intended to transfer the responsibility for providing water within six months to a private or public entity, but was unsuccessful in negotiating for Maui County or any private entity to assume the service.

The PUC initially proposed to raise rates between 41 percent and 122 percent as a way for Molokai Ranch to break even on its service. After the ranch argued that the increase was insufficient to cover losses, the commission approved rate hikes between 90 percent and 178 percent that will go into effect Sept. 1 for at least six months, affecting roughly 1,200 customers.