14. Commitments and Contingencies

Long-Term Fixed Supplier Commitments

The Company has entered into agreements with various entities under long-term fixed contractual commitments primarily for technology related services. Annual fixed fee commitments for agreements in effect at December 31, 2014, amounted to the following (dollars in thousands):

Years ended, December 31:
2015	$	21,080
2016		19,005
2017		4,722

	$	44,807

Under the long-term agreements, the Company incurred fees amounting to $9.3 million, $12.8 million and $12.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

In August 2014, the Company joined several other telecommunication companies to form a consortium to build and operate a trans-Pacific submarine cable system. The total system cost is $245 million and is primarily composed of a supply contract with the lead contractor. The Company will invest $25 million over the multi-year construction period for a fractional ownership in the system. The fixed fee component of the investment is included in the above fixed fee commitments. The Company will recognize its fractional share of the cost. In addition, the Company will construct a cable landing station in Hawaii and provide cable landing services in exchange for additional system capacity. The value of this capacity is estimated at $5.0 million. The system is expected to be completed in December 2016.

In July 2014, the Company entered into a power purchase agreement to acquire all of the power generated from solar photovoltaic systems that are to be installed by a third party on selected company properties. The agreement provides for all power generated to be purchased at a fixed price over a 25 year term. Based on planned solar installations and expected power generated, the Company estimates it will purchase power amounting to $0.7 million in 2015. Power purchased in future years will be dependent on the level of photovoltaic units installed by the third party and the power generated.

Other Installment Contracts

The Company has various other fixed installment contacts generally in conjunction with acquisition of assets. These agreements generally have a component representing interest at fixed rates in addition to principal. As of December 31, 2014, the commitments were as follows (dollars in thousands):

Years ended, December 31:
2015	$	3,176
2016		1,601
2017		1,099
2018		932
2019		938
Thereafter		9,872

		17,618
Less amount representing interest		5,334

Present value		12,284
Current reflected in other current liabilities		2,787

Noncurrent reflected in other liabilities	$	9,497

Tropical Storm Iselle

On August 8, 2014, Tropical Storm Iselle made landfall in the State of Hawaii with the most significant damage occurring on the east side of the island of Hawaii. The damage to the Company's outside plant is estimated to amount to $2.8 million as of December 31, 2014. The Company is insured but there are limitations based on proximity of poles and lines to other Company property and based on deductibles determined by insured location as well as by event. As of December 31, 2014, the Company has not recognized a recovery in the consolidated financial statements. The expense attributed to the storm recognized in the consolidated statements of income after cost capitalization amounted to $1.1 million for the year ended December 31, 2014.

Puna Lava Flow

A lava flow from Kilauea volcano is impacting the Puna district on the island of Hawaii. The Company has been monitoring the progress of the lava flow and has plans to reduce disruption to its services in the area. These plans are subject to change depending on the direction and advancement of the lava flow which has been unpredictable. Through December 31, 2014, the Company has incurred capital costs of $0.5 million related primarily to additional service lines along new roadways created to redirect traffic and utility services in the Puna district.

Collective Bargaining Agreement

The Company has a collective bargaining agreement with the International Brotherhood of Electrical Workers Local 1357 ("IBEW") that expires on December 31, 2017. The agreement covers approximately half of the Company's workforce.

Third Party Claims

In the normal course of conducting its business, the Company is involved in various disputes with third parties, including vendors and customers. The outcome of such disputes is generally uncertain and subject to commercial negotiations. The Company periodically assesses its liabilities in connection with these matters and records reserves for those matters where it is probable that a loss has been incurred and the loss can be reasonably estimated. Based on management's most recent assessment, the Company believes that the risk of loss in excess of liabilities recorded is not material for all outstanding claims and disputes and the ultimate outcome of such matters will not have a material adverse effect on the Company's results of operations, cash flows or financial position.

Litigation

The Company is involved in litigation arising in the normal course of business. The outcome of litigation is not expected to have a material adverse impact on the Company's consolidated financial statements.