Raising Cane
By Rob Perez
Sunday, June 3, 2001
At first glance, the idea seems inequitable. Offer big discounts to major customers considering leaving the fold and expect the small customers -- already paying among the highest prices in the country -- to help foot the bill. Big Island power
plan draws sparksIn a nutshell, that's what Hawaii Electric Light Co., the Big Island's power provider, wants to do. It plans to ask state regulators this summer for permission to offer discounts to large commercial customers contemplating developing their own power-generation systems and leaving HELCO's network.
Small businesses and residential customers eventually would be expected to pay higher rates to help offset the cost of the discounts. Consumer advocates bristle at such policies.
"It seems so blatantly unfair," said Linda Sherry of Consumer Action, a San Francisco-based advocacy group that analyzes energy matters and other consumer issues.
But if HELCO starts losing major users, the remaining customers would shoulder more of the financial burden in paying for the system's costs, the utility says. And for the small customers, that burden likely would be greater than what they would otherwise pay to shoulder the discount program, the utility says. The discount, the size and scope of which have yet to be determined, would only be offered if a major customer had a viable alternative to getting power from HELCO.
The utility, however, has yet to lose a major commercial customer, though some have looked into developing their own power systems.
Since March 2000, HELCO has had the authority to offer 10 percent discounts to customers with viable alternatives. But no customer is on the program.
Lynne Unemori, a utility spokeswoman, said HELCO wants the flexibility to offer something other than the 10 percent discount so it can have another option for persuading major customers not to leave the network.
With the technology for alternative power systems improving, more big customers are expected to consider those alternatives, especially with Big Island rates so high, analysts say.
A lot is at stake if a major customer leaves.
Commercial users make up roughly 16 percent of HELCO's customer base, but account for close to 60 percent of sales, the utility says.
Some of the large resorts individually consume as much power as thousands of homes combined, according to Carl Freedman, a Maui-based energy consultant.
But Freedman, who has helped clients evaluate whether to generate their own power, said more than economics comes into play. Issues related to noise, fumes and other matters sometimes are enough to override any economic advantages, Freedman said.
He also questioned whether a defection of big users would hurt the remaining customers. "That clearly has not been demonstrated in Hawaii by any analysis I've seen," he said.
Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: rperez@starbulletin.com.
