Electricity bills soar on Oahu

HECO raises its rates 3.3 percent while a rising fuel surcharge has upped bills 16 percent

It has been 10 years since Hawaiian Electric Co. increased its rates, but some customers say the utility could not have picked a worse time.

RATE INCREASE Hawaiian Electric's 3.3 percent rate increase means the average bill for a residential customer will be about $137.40 a month, up from $131.53. Source: Hawaiian Electric Co.

Starting today, Oahu residents will see a 3.3 percent rate increase tacked onto their electric bills. Coupled with a rising fuel surcharge, which increased the average residential electric bill by 16 percent this month from a year ago, some expect their electric bills to soar during the coming months and have already started scaling back on electricity use.

"I'm covering it but obviously it's hitting the pocketbook," Kaimuki resident Michael Abe said, adding that high gas prices have also burdened his household budget. "I know we're much more conscientious of the electricity we use."

The state Public Utilities Commission approved the 3.3 percent interim rate increase yesterday, giving Hawaiian Electric the potential to make an additional $41 million in revenues annually. It is unclear when the commission will make the increase permanent, as expected.

Hawaiian Electric executives say the increase is overdue and needed to cover several capital improvement projects since 1995.

"We held off for 10 years, especially when the economy was struggling," said Lynne Unemori, director of corporate communications. "But, as you know, 10 years is a long time. We weren't able to hold off any longer."

The average residential customer, who uses about 707 kilowatt-hours a month, will pay $5.87 more a month under the increase. The average bill will increase to $137.40 a month from $131.53.

HECO filed for the increase in November, originally asking for a 7.3 percent jump in rates, which would have netted it an additional $74.2 million a year. But last week, officials revised the percentage after a series of negotiations with the state.

The revised proposed increase was 3.4 percent -- .1 percent higher than what was approved by the commission. The last increase HECO requested, in 1995, was for 1.3 percent.

Included in the original 7.3 percent increase, officials said, was 1.9 percent to cover the costs of energy efficiency rebates and incentives. That increase was separated from the revised request and is still before the commission.

Unemori said the monthly fuel surcharge fluctuates but has risen because of soaring oil prices.

Paul Brewbaker, Bank of Hawaii's chief economist, said the rising costs of electricity -- added to other soaring prices for oil, housing and food -- could mean a slight drop in growth for the state. "It's not the kiss of death," he said, "but it is a dead-weight burden."

The rising price for electricity could spur some consumers to make more long-term adjustments, such as buying a solar water heater. But most, Brewbaker said, will tighten their household budgets for now and hope the situation will improve.

Abe, chairman of the Kaimuki Neighborhood Board, said he will cut down on his air conditioner use. He already uses solar power to heat his home's water, and is not optimistic prices will fall with time.

"When we see the increase in costs at the grocery store, somebody has to tell residents it's because fuel costs are up, energy costs are up," Abe said. "The long run does not look good."

Anthony Paresa, a member of the Hawaii Kai Neighborhood Board, said he expects to hear more and more from residents about rising electricity costs.

Like Abe, he has also cut down on electricity use and is working to get his $160 bill down.

"Nobody likes to pay more," Paresa said, "but if you want the lights to stay on, you have to" do business with Hawaiian Electric.