HELCO seeking rate hike

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Hawaii Electric Light Company plans to request a 6.5 percent rate increase.

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Hawaii Electric Light Company plans to request a 6.5 percent rate increase.

The announcement comes just months after the failure of a proposed merger between NextEra Energy and Hawaiian Electric Industries, the parent company of HELCO.

“Every three years, Hawaii Electric Light is required to file a rate review with our regulators to give them the opportunity to see if our rates are reasonable,” HELCO President Jay Ignacio says in a letter to customers last published Sunday in the Tribune-Herald.

HELCO filed the rate review Monday afternoon.

Ignacio’s letter says it’s been six years since the last HELCO rate review. Renewable energy, such as solar power, lower fuel prices and cost-cutting, his letter says, mean “the typical residential electric bill would still be less than it was a year ago” — even after the rate increase.

According to Ignacio, a typical residential bill for 500 kilowatt hours on Hawaii Island was $189.62 in January 2015. By September of the same year, a typical bill was $172.43. A typical residential customer, as of this month, paid a bill of $161.85.

“If approved, a typical residential bill for 500 kilowatt hours on Hawaii Island would increase by $9.31 a month to $171.16,” says HELCO’s announcement. “The proposed rate change will be reviewed by regulators and would likely not take effect until the summer of 2017 at the earliest.”

HELCO previously proposed an increase in 2013 but withdrew that request. This time, the company is proposing “benchmarks” to measure key areas such as performance, reliability and communication.

The proposed merger of NextEra with HELCO created frustration among some members of the public.

“Not all members of the public, but there were certain parties that took a different view,” Ignacio said during an interview Monday.

Public input is part of the process.

“Any time we do a rate review … there is a lot of attention and interest,” Ignacio said.

Ignacio said the company reviews its expected expenses and income and then determines what its rate needs to be so income matches need.

Richard Yambao, an 808 Tobacco employee in Hilo, said he’s concerned about people who work part-time jobs and how they can pay all their bills when costs such as electricity keep going up. By the time a person pays for water, buys something at the store and pays rent, he said, there is “nothing, any more, to save money in your pockets.” That, he said, is why it’s better to not have a rate increase.

Newton Low, co-owner of Low International Foods, said he doesn’t think an increase is good, but hopes HELCO will fix things up, the right way, so everybody saves.

HELCO noted it invested $14 million trimming away albizia trees that, in the past, damaged power lines during storms. After recent tropical storms Darby and Madeline, by contrast, there were fewer outages and power was restored faster.

Low said, as a business owner, he gives the benefit of the doubt to HELCO because “you don’t know what the costs to put up lines and poles are, so it’s hard to judge.”

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The Public Utilities Commission must approve the rate increase in order for it to go into effect. HELCO increased its use of renewable energy from 35 percent in 2010 to 49 percent currently, with wind, hydroelectricity, solar and geothermal power to replace imported oil to generate power.

Email Jeff Hansel at jhansel@hawaiitribune-herald.com.

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