HECO Raises Utility Rates Again
Just about everyone is going to see their next electricity bill rise and, according to the companies with Hawaiian Electric, a drop in electricity sales over the past year is part of the reason why.
On Oahu, the typical power bill is going up by $4.89. A typical monthly bill is $210, which reflects the use of 600 kilowatt hours of energy a month.
Residents will see an increase of $3.92 a month (500kWh/mo.) on the Big Island, $4.90 (600kWh/mo.) on Maui, and $3.27 (400 kWh/mo.) for users on Molokai and Lanai.
The island of Kauai is powered by a different utility – the Kauai Island Utility Cooperative.
This increase comes shortly after the utility company was ordered to lower costs and connect their grids faster to alternative sources of energy like photovoltaic solar.
We know that any increase is electric bills is difficult for our customers. That is why we are working so hard to add more renewable energy and reduce the expensive fuel costs reflected in electric bills (more than 70% of an electric bill goes to pay for fuel-related costs).
A major part of the increase is to adjust Hawaiian Electric's total revenues back to the level approved by the PUC in the last rate case (2011 in the case of Oahu). This is to ensure the previously approved costs that are incurred by Hawaiian Electric to meet its obligation to serve all customers (including customers with solar who still remain connected to and use the grid when their solar systems are not producing power) are still covered.
In years where actual revenues are higher than what was approved in the last rate case, this adjustment would be a decrease. In 2014, actual revenues are lower than those approved in the previous rate case.
The next time you read your electric bill, look for the line that says Rate Adjustment Mechanism (RAM). That's where you will find how much more a month you will be paying.
This is not your typical rate increase that usually pays for the rising cost of fuel, about 70 percent of your bill. Instead, this increase is to cover the other 30 percent of your bill.
The hike will help pay for the system that delivers the power to you – the plants, the power lines and all the other infrastructure that not only needs to be maintained, but upgraded in order to take in energy from renewable energy sources like photovoltaic. The PV and solar companies rely on the utility companies to deliver their source of energy.
"They are going to be able to maintain and upgrade the utility grid to accept more renewable energy, more distributed energy, more other types of energy at a lower cost for everybody," said Chris Debone of the Hawaii Energy Connection (Kumu Kit).
The theory, as Debone explained, is to translate those hikes from short-term pain into long-term gain. "Only time will tell," he said.
In April, the state Public Utilities Commission ordered the Hawaiian Electric companies to lower utility costs and connect faster to alternative energy sources like PV.
The companies said they are already moving to do just that and this latest hike will pay for more than $200 million in capital projects placed in service last year and for 2014.
But, Debone said, he still believes the utility needs to modernize faster to keep up with the demand for renewables and to meet the state's combined goal of 70 percent energy efficient and reliant on renewable energy by the year 2030.
"The long-term future of how much more we can put in (the grid) — we're already having technical challenges now," said Debone. "How can we continue on to be able to get to our goals when we are already slowing down?"
KHON2 got mixed reviews from people when told they would be paying more for their electricity.
"The cost of living, energy is going up higher, all the equipment and everything," lamented Glenn Companion.
"There is a reason (for the hike)," said Heather Tesoro. "It's for the future, to be more sustainable, which I agree."
While the increase is effective immediately, the bills are just going out in the mail, so the first hike will be pro-rated.