Governor's renewable energy plan advances

A House committee approves portions opposed by HECO

A key part of Gov. Linda Lingle's energy package setting up a policy to shift the state from oil toward renewable energy is moving in the Legislature, including portions opposed by Hawaiian Electric Co.

One critical portion of House Bill 2308 would empower the Public Utilities Commission to remove the power company's fuel adjustment clause, which automatically passes the cost of oil increases onto consumers.

In a speech yesterday morning, Lingle pushed hard for removing that automatic adjustment. She said the existing law doesn't force power companies such as Hawaiian Electric to conserve or move to renewable energy, because they just pay the increased cost for oil and send consumers the bill.

"It doesn't matter how much electricity you use. You can't conserve your way out of this charge, you can't efficiency out of this charge ... it is an automatic pass through," Lingle said in a speech to the National Federation of Independent Businesses.

"The electric company doesn't have to have any efficiencies. They don't have to get better at what they do," Lingle said.

The House Committee on Energy and Environmental Protection, however, voted to approve the measure and pass it on to the House Consumer Protection and Higher Education committees.

Robbie Alm, HECO senior vice president, public affairs, told the committee at a public hearing that HECO makes no profit on the fuel oil adjustment, although 65 percent of the company's increased costs cover the rise in fuel costs.

HECO, Alm said, is already working on alternative energy projects such as wind farms, geothermal and garbage to energy plants, so saying the fuel oil adjustment stops the company from supporting renewable energy "is simply not true."

But Ted Liu, director of the state Business, Economic Development and Tourism Department, said the existing plan "allows the energy utilities to avoid all financial risks ... by passing these costs through to their customers."

Alm argued that if HECO didn't pay for the extra cost of oil with the fuel oil surcharge on a routine basis, it might be forced to buy fuel oil on the market and wind up paying even higher costs.