HECO clients, expect $17 refund

Oahu electric customers, who found out earlier this week that their utility rates were going up 4.96 percent, might get back a small amount of that money.

In an unrelated ruling, Hawaiian Electric Co. said yesterday that the state Public Utilities Commission has issued a "proposed" final decision stemming from a 2005 rate case that could result in an estimated refund to Oahu's 293,000 customers of $15 million. That would represent a one-time reimbursement of about $17 for a residential household using 600 kilowatt-hours a month.

HECO said the refund will be given because the PUC reduced the interim increase that had been in place since September 2005. The PUC reduced that increase of 3.3 percent, or $41 million, to 2.7 percent, or $34 million, because of a change in the way the commission accounts for HECO's prepaid pensions.

The refund will show up as a credit in customers' bills after the PUC issues its final order in the case, which could happen any time after Nov. 5 following a 10-day comment period.

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Oahu electric customers, for a change, will be getting a little payback.

Hawaiian Electric Co., the state's largest utility, said yesterday that the Hawaii Public Utilities Commission has issued a "proposed" final decision stemming from a 2005 rate case that could result in an estimated refund to Oahu customers of $15 million, or a one-time reimbursement of about $17 for a residential household using 600 kilowatt-hours a month.

The refund will show up as a credit in customers' bills after the PUC issues its final order in the case, which could happen any time after Nov. 5 when a 10-day comment period ends. The amount of the refund will vary by type of customer and actual electric use.

The PUC decision is unrelated to the interim ruling issued by the PUC earlier this week from a 2007 rate case that allowed HECO to raise electric rates 4.96 percent for Oahu's 293,000 customers. That rate increase, which went into effect Monday, will boost customers' monthly electric bills by $6.61 -- to $143 from $136.39 -- for a household using 600 kilowatt-hours a month. HECO will generate nearly $70 million annually in additional revenue from that increase.

In this most recent decision, HECO said customers will be getting a refund because the PUC reduced the interim increase that had been in place since September 2005. The PUC reduced that interim increase of 3.3 percent, or $41 million, to 2.7 percent, or $34 million, because the commission changed the way it accounts for HECO's prepaid pensions. HECO initially had sought a 3.4 percent increase that would have generated $42 million in revenue.

HECO spokeswoman Lynne Unemori said even though the PUC lowered the rate increase due to the accounting change, it upheld the portion of the increase that HECO sought for operating and maintaining its electric system.

"It's solely due to a technical rate-making accounting change," Unemori said. "So the difference is what would result in a refund."

The reason the PUC's final decision is "proposed" is because two of the current PUC commissioners were not yet on board when the evidentiary hearing was held for this rate case. State law requires a proposed final decision first be issued when this situation arises. Though HECO has 10 days to file exceptions and present arguments to the PUC on the amended increase, Unemori said that HECO has already accounted for the refund in its financials.

HECO said the 2005 rate increase was primarily to pay for capital projects to improve electric service reliability, including:

» Major underground cable replacements, including upgrading the underground cables in the critical downtown network, which serves key centers of government and business.

» A new 46-kilovolt subtransmission line from Waialua to Kuilima, placed in service in 1999.

» HECO's underground 138-kilovolt transmission lines connecting the Archer, Kewalo and Kamoku substations, completed in 2002 and 2003. These projects are part of a southern transmission corridor that HECO has been working on since the early 1990s to provide an alternate route to deliver power to customers.

» The cost of undergrounding lower-voltage distribution lines along Kamehameha Highway in Pearl City in 1998.

» A new, modern and more efficient underground fuel pipeline, running in the State Energy Corridor from Campbell Industrial Park to HECO's Waiau Power Plant, completed in 2004.

HECO said the interim rate increase that the PUC granted this week for the 2007 rate case will go toward recovering costs of subsequent investments in capital projects, and higher operating and maintenance costs incurred since the time of the 2005 rate filing. A final decision on that increase is still pending.