HECO bill up

Electricity costs will rise about 5 percent for Oahu customers

STORY SUMMARY »

Gas and milk are not the only things going up in price on Oahu.

You can now add electricity to the list.

For the second time in three years, Hawaiian Electric Co. has gotten interim approval from the state Public Utilities Commission for a rate increase. The 4.96 percent increase, which will provide the state's largest utility with nearly $70 million annually in additional revenue, became effective yesterday, affecting 293,000 customers islandwide.

POWER TO PEOPLE The state Public Utilities Commission let Hawaiian Electric Co. increase its rates by 4.96 percent while it considers granting an even larger permanent increase. When: Immediately Effect on typical* bill: Up $6.61 a month, to $143 from $139.39 Extra revenue for HECO: $70 million per year If final increase approved is lower: HECO would give refunds * 600 kilowatt-hours per month Source: HECO

A typical residential household using 600 kilowatt-hours a month will see its monthly electric bill increase by $6.61, to $143 from $136.39. The amount will vary by type of customer and actual electricity use.

The increase will help HECO pay for more than $250 million of investment in new capital projects completed in 2006 and 2007.

HECO, which initially sought an increase of 7.1 percent -- or $99.6 million -- when it filed the rate increase request in December, reached an agreement last month with the state Division of Consumer Advocacy and the U.S. Department of Defense on the 4.96 percent interim increase. However, HECO is still seeking a permanent increase of 5.3 percent, or $75.5 million. The PUC's final decision is pending.

The last HECO rate boost came in 2005 when the PUC approved an interim increase of 3.3 percent, or $41 million. A decision on that rate increase also is pending.

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FULL STORY »

Oahu electric customers are going to see their rates go up for the second time in three years.

The state Public Utilities Commission approved yesterday an interim 4.96 percent rate increase for Hawaiian Electric Co. that will affect 293,000 customers islandwide.

A typical residential household using 600 kilowatt-hours a month will see its monthly electric bill increase by $6.61 to $143 from $136.39. The rise, which became effective yesterday, will vary by type of customer and actual electricity usage.

HECO rate history A look at HECO's increases, in millions of dollars, 1983 to present: Date Amount pct. 1983 $22.6 4.2 1990-1991 $52 9.9 1992 $124 23.7 1994 $40.5 6.5 1995 $10 1.6 1995-96 $9 1.3 2005 $41 3.3 Source: Hawaiian Electric Co.

"We know any rate increase isn't easy for our customers," said Robbie Alm, HECO's senior vice president, public affairs. "But we have a responsibility to maintain the electric system, and the fact is those costs are going up."

The increase will provide HECO nearly $70 million annually in net revenue and help pay for more than $250 million of investment in new capital projects completed in 2006 and 2007.

HECO initially sought a 7.1 percent increase, worth $99.6 million in annual revenue, when it filed the rate increase request in December 2006. Last month it reached a settlement with the state Division of Consumer Advocacy and the U.S. Department of Defense in which it agreed to the 4.96 percent interim increase that the PUC approved yesterday.

However, HECO is still seeking a permanent increase of 5.3 percent, or $75.5 million, as well as a tiered rate structure that is designed to reward customers for energy conservation by applying lower electric rates to customers with lower kilowatt-hour usage.

The PUC's final decision could takes months or even more than a year. If a lower final increase ultimately is approved, the difference would be refunded to customers with interest.

Kaimuki resident Audrey Niau, who is retired and lives on a fixed income with her husband Solomon in an eight-person, three-generation household, said it's already hard enough to pay bills without having to absorb yet another increase in her monthly payments.

"It's difficult because of the fact that it's not only electric; it's gas, water, everything has been going up," she said. "We pay quite a bit of money out each month for all these different things. For people on fixed income, it's really, really difficult because you have to watch how you spend your money."

In Niau's case, the situation is complicated by the fact that her husband recently had a stroke, and there are doctor bills and medication for which to budget.

"It's getting kind of ridiculous," she said. "You hear these nightmare stories about older people eating dog food because they have to eat and have all these bills. I'm not eating dog food, but some people are very, very bad off because they have no way of getting more money because they're not working. You have to cut corners every which way you can think of."

The last HECO rate boost came in 2005, when the PUC approved an interim increase of 3.3 percent, or $41 million. HECO had been seeking 3.4 percent, or $42 million. A final decision in that case also is pending.

HECO said the $250,000 of investment in new capital projects include:

» A new System Operations Dispatch Center and Energy Management System, which monitors and manages the entire Oahu electric grid. Combined with a new Outage Management System, the improvements can help pinpoint and troubleshoot outages faster.

» Facilities for distributed generating units dispersed at substations and other company facilities around the island. The units provide needed additional power-generating capacity at times of high demand and low-generation reserves.

» New substations -- and related lines -- to support growth and improve service.

» Replacement and upgrade of underground lines serving part of Waikiki to improve reliability.

» Boiler and other equipment projects to increase reliability of existing generating units.

» Investments in overhead and underground cables, as well as transformers, poles, meters, communication equipment and other facilities to maintain reliable service and fulfill new service requests from customers.

HECO said the additional revenue also will help pay for higher maintenance costs, such as servicing of generators, which have been running harder and longer as power generation reserve margins have narrowed over time.

The company's neighbor island subsidiaries also recently filed for rate increases.

Hawaii Electric Light Co., which serves about 74,000 customers on the Big Island, received approval in April for an interim 7.58 percent rate increase. It is still awaiting final approval.

Maui Electric Co., which serves about 64,000 customers on Maui, Molokai and Lanai, is still awaiting interim approval on a 5.3 percent increase filed in February.