Economics of East Maui Water
Owning the East Maui irrigation ditch system has not allowed Mahi Pono to get more water than they would have if the State owned the ditch system, because the State Land Board and the Courts have been the ones who have set the amount of water Mahi Pono can divert. So why do they put up with the headache of maintaining it and wrestling with the various agencies?
According to this document[1] average daily usage by Mahi Pono crops in 2025 was 34.25 MGD, which is 12, 500 million gallons for the year.
Rates for agricultural water in Maui are:
| Source of water | Rate (per 1000 gallons) | Document |
| MDWS | $2.27 | https://www.hawaiidws.org/wp-content/uploads/2025/07/Water-Rates-Brochure-Effective-07-01-2025 |
| State DAB | $0.50 | https://dab.hawaii.gov/wp-content/uploads/2023/06/2019-water-pricing-report-rev2.pdf |
| State Leased Lands in East Maui | $0.26 (the pro-rated cost to Mahi Pono for the water they receive) | This analysis |
If Mahi Pono paid market rates, they would pay at least $6.3M dollars per year if all of their irrigation water came from the State. If they purchased water from the County, they could pay as much as $28M.
How much is it costing EMI and Mahi Pono to maintain their ditch system? According to testimony they gave to the CWRM on May 19, 2026, the annual budget for EMI is $2.5 – $3.2M. They also pay the State of Hawai’i $283,000[2] for the Revocable Permit, for a total of about $3M per year. So, Mahi Pono is saving at least $3.3M annually with their ditch system and the bargain rate they have been getting from the state for 150 years.
The above figure for water usage by Mahi Pono is what they apply to the crops and some of that can be pumped from wells, in fact they do just that in times of drought. What does ground water cost compared to using stream water?
The energy to pump water is about 1.1 KWH for every 1000 gallons raised by 100 feet. Most well water in Maui is basal water, at about sea level. Mahi Pono fields vary in elevation from about 200’ to 800’ above sea level. Taking the average of 500’ elevation for their fields, for how much water has to be raised, we get 5.5 KWH for every 1000 gallons pumped to field-level. At current Maui electrical prices that is about $2.20, which is just about the same cost as buying irrigation water from the County, and is considerably more than using diverted stream water from East Maui. Of course, buying irrigation water from the County or the State is mostly an academic exercise as neither of them have water available in the quantities Mahi Pono requires.
Basically, Mahi Pono is highly motivated to transport as much stream water as they can from East Maui to their fields as it is by far the cheapest option they have. This will likely be an important factor in negotiations between the County and Mahi Pono over the EMI ditch system.
Trust Doctrine
How does all of this mesh with the Trust Doctrine, which underpins all public policy regarding water (and other resources)? The Trust Doctrine is silent on the economics of water in Hawai’i, but the courts have weighed-in on this in some of their rulings regarding the legal tensions that exist between private water companies and the Trust Doctrine.
The courts have played the biggest role in clarifying both the Trust Doctrine and historical Hawaiian law around water rights. In general, starting with McBryde (McBRYDE SUGAR COMPANY, LIMITED v. Robinson, 504 P.2d 1330 (1973)), the courts have frowned on private water companies because conveying water from one location to another is not recognized as a protected use of stream water under Hawai’i law. This is particularly true when the water being diverted and transported adversely affects others with appurtenant rights, which is exactly the situation in East Maui. However the State has been reluctant to shut down private water companies because doing so would violate other Constitutional rights.
Conclusions
The State has chosen to give Mahi Pono, and its predecessor, Alexander & Baldwin, a very friendly deal on water. But in doing so the State effectively subsidized both businesses for years, although it was far more egregious in the A&B era when the volume of water was five times greater. The errors in apportionment of State-owned East Maui stream water are being remedied, albeit slowly, by litigation and changes in CWRM policies, but it is unclear what will happen with the business end of the EMI system. Putting it under control of Maui County would be most consistent with the Trust Doctrine and State law, but it is likely that the County will need to subsidize Mahi Pono as the State is doing now, in order to close a deal.
[1] EMI Report Q4 2025, available here.
[2] This fee is an “all you can eat” fee – it does not scale by how much water is diverted and transported from streams in East Maui. There are limits on the amount of water that they can take, but that is unrelated to the fee.