Capital Program Planning for Hawaii Water Utilities

by | Oct 21, 2026

Hawaiʻi · Water & Wastewater Utilities

On an island, there is no pipeline from somewhere else. Your water capital plan has to hold.

Hawaiʻi's drinking water sits in a handful of island aquifers with no imported backup — and the last five years have shown how fast that supply can be threatened. Red Hill took a quarter of Oʻahu's sources offline, Lahaina rebuilt a poisoned system from scratch, and roughly 88,000 cesspools have to be retired by 2050. For a utility CFO, every one of those forces reshuffles the project list. Invizion helps Hawaiʻi utilities re-sequence a capital portfolio in a click — and defend every decision.

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The bottom line: Hawaiʻi's drinking water sits in island aquifers with no imported backup — and Red Hill, Lahaina, and an 88,000-cesspool mandate have all proved how fast that supply can be threatened. The utilities that win the decade will be the ones whose capital plans can absorb that volatility and stay defensible.
~93K1
People on the Navy's Oʻahu water system exposed when jet fuel from Red Hill reached a drinking-water well in 2021.
$1.2B2
Sought by the Honolulu Board of Water Supply from the Navy to protect and restore Oʻahu's aquifer after Red Hill.
~88K3
Cesspools statewide that Act 125 requires be converted or connected to sewer by 2050 — the largest such mandate in the U.S.
~$194M4
Bipartisan Infrastructure Law water dollars flowing to Hawaiʻi since 2022.

The Hawaiʻi Landscape

Four forces are moving your project list at once

None of these is theoretical, and none of them waits for your next budget cycle. On an island system with no imported supply and construction costs among the highest in the nation, the capital plan you approved last year may already be the wrong plan.

Contamination — Red Hill

A single fuel leak took a quarter of Oʻahu's supply offline

The Navy's Red Hill Bulk Fuel Storage Facility held up to 250 million gallons of fuel in 20 tanks sited about 100 feet above the aquifer that supplies Oʻahu.5 In November 2021 fuel reached the Red Hill drinking-water well, and roughly 93,000 people on the Navy water system were exposed to contaminated tap water.1

To protect its own wells, the Honolulu Board of Water Supply shut down the Hālawa Shaft and the ʻAiea and Hālawa wells — about a quarter of Oʻahu's water sources — and is seeking roughly $1.2 billion from the Navy to monitor, treat, and replace lost capacity.2 The Navy finished removing fuel from the tanks in 2024, but the aquifer response is a decades-long capital commitment.6

Supply — Island Aquifers & Drought

No backup supply, and a recharge that depends on rain

Oʻahu's municipal drinking water comes almost entirely from groundwater, and the state's water agency reports groundwater supplies roughly half of Hawaiʻi's total water needs.78 Those aquifers refill only from rainfall — there is no interstate pipeline or imported river to draw on.

Recurring drought across the islands stresses recharge in the same years demand and contamination pressures rise.9 Protecting and diversifying source capacity — new wells, treatment, and interties — is now a capital question, not just a resource one.

Wastewater — Cesspools

The nation's largest cesspool-conversion mandate

Hawaiʻi has roughly 87,900 cesspools discharging about 53 million gallons of untreated wastewater into the ground each day — over the aquifers and near the reefs.3 Act 125, passed in 2017, requires all of them be converted to septic or connected to sewer by 2050.

The Department of Health's original estimate was about $1.75 billion at roughly $20,000 per conversion; individual conversions now often run $50,000 or more, and the burden falls heaviest on Hawaiʻi Island (~49,300 cesspools) and Kauaʻi (~13,700).3 For county sewer utilities, absorbing even part of that load reshapes the collection-and-treatment capital plan for a generation.

Recovery & Renewal — Lahaina and aging pipe

Rebuilding a poisoned system while the old one keeps breaking

After the August 2023 wildfire, Maui County issued an unsafe-water advisory for Lahaina that stood nearly a year until August 2024; crews tested about 26 miles of mains and more than 1,500 service laterals and cut and capped roughly 850 contaminated laterals before restoring service.10

Recovery capital stacks on top of ordinary renewal. Honolulu's Board of Water Supply alone runs nearly 2,100 miles of pipeline and around 94 active sources, and has recorded hundreds of main breaks in a single year.11 New obligations don't replace the backlog — they compete with it for the same dollars and the same crews.

Who Runs Hawaiʻi's Water

A county-run system — four semi-autonomous water boards, few private utilities

Hawaiʻi's water is delivered almost entirely by county water departments and boards, which set their own rates. Private, PUC-regulated utilities are a small share, and the federal military systems sit outside both. The pressures are shared; the accountability path differs.

County water utilities

Rates set by county water boards & councils · capital approved by governing boards

Honolulu Board of Water Supply ~1M served · ~2,100 mi of line · 94 sources11
Honolulu BWS (delivery & CIP) ~145 MGD · FY2025 CIP ~$310M12
Maui County Dept. of Water Supply Countywide; led Lahaina recovery10
Hawaiʻi County (Big Island) Dept. of Water Supply Largest cesspool-conversion burden
Dept. of Water, County of Kauaʻi Semi-autonomous county water board

County water boards in Hawaiʻi are semi-autonomous: they own their systems, set their own rates, and approve their own capital plans in public.

Private & federal systems

Private utilities regulated by the Hawaiʻi PUC; military systems federal

Hawaiʻi Water Service Company PUC-regulated private utility · neighbor-island systems
Navy / JBPHH (Red Hill) water system Federal · ~93,000 users affected in 20211
Numerous small private & HOA systems Where funding and compliance gaps hit hardest

With so few investor-owned utilities, most of Hawaiʻi's water capital is decided by county boards and the state — not a single statewide rate regulator.

Rate-Setting & Oversight

Every capital dollar has to be defensible

Whether you answer to a county water board or the Public Utilities Commission, the question is the same: why this project, why now, why at this cost? In Hawaiʻi, contamination, wildfire recovery, and the cesspool mandate have put that question front and center.

  • County water boards & councils set rates and approve capital for the four county water utilities — in public, in front of ratepayers — since Hawaiʻi has no statewide rate regulator for municipal water.
  • Hawaiʻi Public Utilities Commission (PUC) regulates rates and capital recovery for the state's small number of investor-owned water and sewer utilities.
  • Hawaiʻi Dept. of Health, Safe Drinking Water Branch holds Safe Drinking Water Act primacy and administers the Drinking Water State Revolving Fund — lead service line inventories, PFAS/emerging-contaminant monitoring, and the compliance capital that follows.13
  • Act 125 cesspool mandate (Dept. of Health, Wastewater Branch) requires all ~88,000 cesspools be upgraded or connected to sewer by 2050 — a compliance driver with no statewide precedent.3

Funding On The Table

The money is moving — can your plan absorb it?

Hawaiʻi utilities have more capital funding available than in a generation, including a large wildfire-recovery supplement. The constraint is no longer only dollars — it's readiness: which projects are shovel-ready, which qualify, and how the timing lines up with everything else on the list.

  • Drinking Water SRF — ~$112M in federal funds (SFY2026), including a $68.3M Hurricanes Helene/Milton and Hawaiʻi Wildfires supplement (with a Maui set-aside), $24.9M in general BIL supplemental, and $7.9M for emerging contaminants such as PFAS.13
  • ~$194M in Bipartisan Infrastructure Law water dollars has flowed to Hawaiʻi since 2022, including a $50.08M drinking-water, clean-water, and stormwater package announced in 2024.4
  • Honolulu BWS FY2025 CIP ~$310M blends operating funds, about $112M in SRF loans, and roughly $55M drawn against a WIFIA loan — a template for stacking sources on one program.12
  • Cesspool conversion assistance — Dept. of Health grant and loan programs, plus county pilots such as Kauaʻi's $20,000-per-household reimbursement, chip away at the 2050 mandate.3
  • USDA Rural Development water and waste-disposal loans and grants fund small and rural systems across Hawaiʻi and the Western Pacific.14

Where Invizion Fits

Turn a moving Hawaii picture into a defensible capital plan

Invizion is scenario-based capital portfolio optimization built for water utilities. When the supply picture shifts, a mandate lands, or a grant comes through, you don't re-plan by hand for weeks — you model it and decide with a record you can stand behind.

1

Model the “what-if” before it's forced on you

A new mandate, a failed main, a grant with a deadline — build the scenario and see the impact on the whole portfolio, side by side with today's plan.

2

Re-sequence 500 projects in a click

When priorities move, Invizion re-orders the portfolio automatically — accelerating, stretching, or deferring projects against the constraints you set, not weeks of spreadsheet surgery.

3

Give regulators or your board a defensible record

Every prioritization and trade-off is captured. When you're asked “why this project, why now,” the answer is documented — not reconstructed after the fact.

Hawaiʻi Water, In Brief

Questions Hawaiʻi utility leaders are asking

Short, sourced answers — the same facts we'll dig into on a call, in the context of your system.

How did Red Hill affect Oʻahu's public water supply?
In November 2021, fuel from the Navy's Red Hill facility — up to 250 million gallons stored about 100 feet above the aquifer — reached a drinking-water well, exposing roughly 93,000 people on the Navy system. To protect its own wells, the Honolulu Board of Water Supply shut down the Hālawa Shaft and the ʻAiea and Hālawa wells, about a quarter of Oʻahu's sources, and is seeking roughly $1.2 billion from the Navy for monitoring, treatment, and replacement supply.12
How much of Hawaiʻi's drinking water comes from groundwater?
Almost all of it on Oʻahu: the Board of Water Supply's municipal system draws essentially all of its drinking water from underground aquifers, and the state's water agency reports groundwater supplies roughly half of Hawaiʻi's total water use. Those aquifers refill only from rainfall, so there is no imported backup when a source is lost or contaminated.78
What is the cesspool mandate and what will it cost?
Act 125 (2017) requires all of Hawaiʻi's roughly 87,900 cesspools — which discharge about 53 million gallons of untreated wastewater a day — be converted to septic or connected to sewer by 2050. The Department of Health's early estimate was about $1.75 billion at roughly $20,000 per conversion, but individual conversions now often exceed $50,000, and Hawaiʻi Island alone has about 49,300 cesspools.3
What happened to Lahaina's water system after the 2023 fire?
Maui County issued an unsafe-water advisory for Lahaina after the August 2023 wildfire that stood until August 2024. Crews tested about 26 miles of mains and more than 1,500 service laterals and cut and capped roughly 850 contaminated laterals before service could be restored — a full rebuild running in parallel with the rest of the county's capital program.10
What funding is available to Hawaiʻi water utilities right now?
Hawaiʻi's Drinking Water SRF carried about $112 million in federal funds in SFY2026, including a $68.3 million Helene/Milton/Hawaiʻi-Wildfires supplement and $24.9 million in BIL general supplemental. Since 2022 the Bipartisan Infrastructure Law has sent roughly $194 million into Hawaiʻi water infrastructure, and USDA Rural Development funds smaller and rural systems.13414
How does Invizion help Hawaii water utilities plan capital?
Invizion is scenario-based capital portfolio optimization for water utilities. It lets you model how a lost source, a wildfire-recovery mandate, a cesspool-conversion obligation, or a funding award reshuffles your whole project list, re-sequence the portfolio automatically against the constraints you set, and keep a defensible record of every decision for your county board, the PUC, or ratepayers. The best next step is a short first meeting to look at it against your own program.

Go Deeper

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About the Author

GB

Guy Barlow

President, Invizion

Guy Barlow leads Invizion, a capital lifecycle management platform for water and wastewater utilities. He has spent two decades at the intersection of utility capital programs, funding, and analytics, helping utilities make faster, more defensible capital decisions.

Start The Conversation

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Book a 20-minute first meeting. We'll talk through the forces reshaping your capital program and show how Invizion helps you keep the plan current and defensible — no slides, no pressure.

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This briefing was last reviewed September 2026.

Sources

  1. U.S. EPA, "About the Fuel Releases at the Red Hill Bulk Fuel Storage Facility" — ~93,000 Navy water-system users impacted; May 2021 ~19,000-gallon JP-5 release; November 2021 contamination of the Red Hill well, 2022–2024. epa.gov
  2. Honolulu Star-Advertiser (via Yahoo News), "Honolulu water agency sues US Navy over Red Hill fuel spill damage" — ~$1.2B sought; Hālawa Shaft and ʻAiea/Hālawa wells shut down, ~25% of Oʻahu's supply, 2024. yahoo.com
  3. Honolulu Civil Beat, "Cesspools: Too Environmentally Harmful To Keep, Too Expensive To Get Rid Of" — ~87,900 cesspools, ~53M gal/day discharge, Act 125 2050 deadline, ~$1.75B / $20K–$50K+ per conversion, island breakdown, Kauaʻi $20K reimbursement, 2024. civilbeat.org
  4. U.S. EPA, "Biden-Harris Administration announces over $50 Million for Hawaii drinking water, wastewater, and stormwater infrastructure" — $50.08M package; ~$193.9M BIL water funding to Hawaiʻi since 2022, Feb. 2024. epa.gov
  5. U.S. EPA, "About the Red Hill Bulk Fuel Storage Facility" — up to 250M gallons in 20 tanks, ~100 feet above the aquifer; DoD decision to defuel and close, March 2022. epa.gov
  6. USNI News, "JTF-Red Hill Turns Over Remaining Fuel Depot Closure Tasks to the Navy" — defueling completed and closure tasks transferred, March 2024. news.usni.org
  7. Honolulu Board of Water Supply, "Data & Statistics / Water Resources" — Oʻahu's municipal drinking water is provided by groundwater sources dependent on rainfall recharge, 2026. boardofwatersupply.com
  8. Hawaiʻi DLNR, Commission on Water Resource Management — groundwater supplies about half of Hawaiʻi's water. dlnr.hawaii.gov
  9. NOAA / NIDIS drought.gov, "Hawaiʻi and U.S. Affiliated Pacific Islands" quarterly drought status update, 2024. drought.gov
  10. Maui Now, "Maui County lifts unsafe water advisory for Lahaina ahead of one-year mark" — advisory Aug. 2023–Aug. 2024; ~26 mi mains and 1,500+ laterals tested, ~850 contaminated laterals cut and capped, Aug. 2024. mauinow.com
  11. Honolulu Board of Water Supply, audited financial statements — ~94 active potable sources, 171 reservoirs, nearly 2,100 miles of pipeline, ~1M customers, 287 main breaks (~14 per 100 miles). boardofwatersupply.com
  12. Honolulu Board of Water Supply, FY2024–2025 Budget — ~145 MGD delivered; FY2025 CIP $310.3M funded from operating funds, ~$111.8M SRF loans, and ~$54.7M WIFIA. boardofwatersupply.com
  13. Hawaiʻi Dept. of Health, Safe Drinking Water Branch, DWSRF Intended Use Plan (SFY2026/FFY2025) — ~$111.9M total federal funds incl. $68.282M Helene/Milton/Hawaiʻi-Wildfires supplement, $24.898M general BIL supplemental, $7.857M emerging contaminants. health.hawaii.gov
  14. USDA Rural Development, "Revolving Funds for Financing Water and Wastewater Projects in Hawaii and Western Pacific" — water and waste-disposal loans and grants for small and rural systems, 2025. rd.usda.gov