If HECO gets its rate increase, a typical household would see its electric bill increase to $117.85 from $111.05

Oahu electricity bills might be going up again: Hawaiian Electric Co. is seeking a 7 percent net increase in power rates.

HECO submitted the request yesterday to the state Public Utilities Commission, which will review the proposal, as will the state's Division of Consumer Advocacy.

Rising rates Year Rate approved of increase 2007 7% (pending) 2005 3.3% 1996 1.3% 1995 1.6% 1994 6.5% 1992 23.7%* 1990 9.9%** * Result of purchase power agreement with AES ** Result of purchase power agreement with Kalealoa Partners Source: HECO Quotable "There's never a good time to file for a rate increase. ... We also know having reliable service is critical for our customers at home and at work. We have to keep investing in the reliability of our system by upgrading it." -- HECO spokeswoman Lynne Unemori

Customers would not feel the impact of the rate increases until at least next fall, the utility said.

The net rate increase -- totaling $99.6 million -- largely would be used to pay for capital projects and operating and maintenance costs for the Oahu electric system, according to Hawaiian Electric.

"There's never a good time to file for a rate increase," HECO spokeswoman Lynne Unemori said. "It's something that's always difficult for our customers, and our decision to ask for one wasn't easy. But we also know having reliable service is critical for our customers at home and at work. We have to keep investing in the reliability of our system by upgrading it."

The costs of maintenance are going up, she added.

If approved, the 7 percent increase would be on top of a 3.3 percent interim rate increase worth $41 million already granted by the utilities commission.

HECO, which serves about 292,000 customers, filed a notice of intent to raise the rates with the commission on Sept. 22, well before the Oct. 15 Hawaii earthquakes and resulting power failures. In its November 2004 application, it sought a 7.3 percent increase, worth additional annual revenue of $74.2 million.

"The earthquake is not a factor in this request," Unemori said, noting that the 7 percent increase was based on costs from a typical year.

Maui Electric Co., a sister company of HECO that serves about 64,000 customers on Maui, Molokai and Lanai, also filed a notice of intent to raise rates in September, but is not expected to specify the amount until the new year. Hawaii Electric Light Co., which serves the Big Island, is awaiting a PUC decision on the 9.2 percent rate increase request it filed in May.

Because HECO also wants to implement a new tiered electric rate structure -- which rewards residential customers who practice energy conservation with lower rates -- those customers would see smaller monthly increases.

Pending approval, Oahu residents would see their bills increase between 3 and 6 percent for a typical household.

A home using 600 kilowatt-hours a month would see its monthly electric bill increase by $6.80, to $117.85 from $111.05.

If the household uses only 350 kilowatt-hours, its monthly bill would increase by only $2.31, to $70.19 from $67.88, because of lower rates. But a household using more than 1,200 kilowatt-hours a month would see its monthly bill increase to $232.43 from $214.85 because of higher rates.

The major capital projects HECO has invested in this year and next are:

» A new systems operation dispatch center and energy management system that monitors and manages the entire Oahu electric system. This system, to be combined with a new outage management system to be completed in 2007, would help HECO pinpoint and troubleshoot outages faster.
» Facilities for distributed generating units, which provide additional power at times of high demand and low generation reserves.
» New substations and related lines to support growth and improve service.
» The replacement and upgrade of underground lines serving part of Waikiki.
» Boiler upgrades and other replacement projects to increase the reliability of existing generating units.
» Investments in overhead and underground cables, as well as transformers, poles, meters, communication equipment and other facilities.

HECO said it faces higher costs from frequent inspections of utility lines and poles, increased vegetation management and more frequent servicing of generators.

Catherine Awakuni, executive director of the state Division of Consumer Advocacy, declined to comment until her agency completes a thorough review of the application and holds an evidentiary hearing, expected in the fourth quarter of 2007.

The PUC is expected to hold a public hearing on the proposed increase early next year.

The commission may grant an interim increase within 10 to 11 months following HECO's application. However, that increase is not guaranteed. The timing and amount of any final increase is up to the PUC's discretion.