Blow of rate increase can be softened
Hawaii Electric Light Co. is seeking approval for a 10 percent boost in charges.
GOVERNMENT predictions that oil prices will remain well above $50 a barrel through the next two decades point to rising electricity bills even without an increase in rates utility companies charge customers. That's why Hawaii Electric Light Co. aims to expand power generation
through renewable sources rather than by fossil fuels.
Nonetheless, the company's request to the Public Utilities Commission to boost rates by about 10 percent won't be easy for Big Island residents and businesses to swallow. They already pay the third-highest rate in the state, about 24 cents per kilowatt hour. Molokai and Lanai have the dubious distinction of paying more, about 26 cents and 25 cents respectively.
However, HELCO's proposal will allow residents to control their costs through a tiered structure that will charge lower rates for those who use less electricity. The utility also will increase subsidies for solar water heaters and is considering incentives for photovoltaic electricity generation.
Still, the price of oil, which rose to $61.30 a barrel earlier this week, is the chief reason customers see their bills soaring.
HELCO, a subsidiary of Hawaiian Electric, is allowed to pass on an adjusted cost of fuel above a base fuel charge. The "energy cost adjustment" sometimes totals more than 25 percent of a bill and, coupled with the base charge, can make up more than 50 percent of a customer's monthly costs.
Along with the rest of the state, home construction on the Big Island has been growing, but the company says it likely won't build another fossil-fuel plant. Instead, it hopes to generate more power from wind, geothermal, biomass and other renewable resources. This may prove prudent in the long run in light of the U.S. Department of Energy's recent recalculation that oil prices could average $54 a barrel, at best a conservative projection as global demand increases.
The silver lining is that the rising cost of fossil fuels will drive a greater shift toward conservation, fuel efficiency and alternative energy.
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