Hawaiian Electric Proposes Multi-Year Rate Hikes Across State

Hawaiian Electric Seeks Approval for Statewide Rate Hikes

The Hawaiian Electric Company has announced a proposal to raise its base electricity rates across the state over the next several years, aiming to effect the most significant increase on Hawaii Island. According to company estimates, residential customers on Hawaii Island could pay about $15 more monthly by 2028.

Details of the Proposed Increases

The proposed changes are set to roll out in two phases. During a recent hearing in Hilo, Jon Itomura, Chair of the Hawaii Public Utilities Commission (PUC), outlined the plan:

• The first phase would boost consolidated annual revenues by approximately $125 million, effective January 1, 2027.
• The second phase would add another $45 million in revenue, taking effect January 1, 2028.

In total, Hawaiian Electric is seeking an estimated $170 million in additional revenue, equating to a companywide 5.3% increase.

Impacts by Island for Residential Customers

The impact of these hikes varies by island:

• Hawaii Island: Base rates for typical residential customers would rise by $12 per month in 2027 and an additional $3 in 2028, totaling $15 more monthly by 2028.
• Maui: Customers would see a $14 increase over the same period.
• Oahu, Molokai, Lanai: Residents would pay $11 more monthly by 2028.

Jim Kelly, Hawaiian Electric's vice president of government and community relations and corporate communications, explained that different rate increases are due to each island's unique generation mix, customer base, and geographic considerations. "The rate on Hawaii Island reflects the higher costs of operating a system spread across an island that's roughly the size of Connecticut and is almost six times larger than Maui," he noted in an email statement.

Performance-Based Regulation and Rate Review Process

Tyler Oya, manager of the Regulatory Rate Proceedings Division at Hawaiian Electric, addressed concerns about the timing and necessity of the increases. He explained that HECO last initiated a broad base rate change five years ago due to Hawaii's performance-based regulation (PBR) policy. Under this system, the company operates on a fixed income for five-year periods, with base rates up for review at those intervals. "We live on a fixed income for five-year periods. The process we are here for tonight is to reset the starting point for our base rates, our fixed income, for the next five-year period. This is a significant incentive for the companies to be as efficient as possible spending their money," Oya said.

Oya also acknowledged the difficulty for consumers: "We know that times are tough, and any rate increase is difficult to bear. We believe that it is respectfully necessary to allow the companies to remain sound and continue to provide service to our customers in a rapidly changing world."

Consumer Advocacy and Ongoing Review

Michael Angelo, executive director of the Division of Consumer Advocacy at the Department of Commerce and Consumer Affairs, noted that while base rates have held steady for five years, actual charges to consumers have sometimes increased due to regulatory mechanisms. Angelo emphasized that his division would independently assess the proposal's reasonableness before any approval is granted.

Next Steps for the Proposal

No members of the public testified at the recent Hilo hearing. The PUC and the consumer advocate have committed to continued evaluation of Hawaiian Electric's proposal before issuing a written decision. The full proposal is available for public review and commentary online.

For more information or to submit comments, visit the proposal page at tinyurl.com/fjxjpdrn.

Source: westhawaiitoday.com.