HILO — The public soon will have a chance to weigh in on two scenarios posed by Hawaii Electric Light Co. that could raise typical residential electric rates by $9.31 a month in one case or possibly provide savings in another.
HELCO is asking the state Public Utilities Commission for a two-pronged rate hike; 12.5 percent if a proposed purchase of the Hamakua Energy Partners generating plant goes through, and 6.5 percent if it doesn’t. HELCO submitted an application with the PUC in February to purchase Hamakua Energy, an independent power producer, for $86.2 million.
The PUC has scheduled public hearings on the rate proposal at 5:30 p.m. Dec. 13 at Hilo High School and 5:30 p.m. Dec. 14 at the West Hawaii Civic Center.
Although the 12.5 percent rate hike looks like an increase, the typical residential customer’s bill would actually go down under that scenario, HELCO President Jay Ignacio said Tuesday.
That’s because the current lease payments HELCO makes to the privately held company are surcharges elsewhere in the bill that would be removed if the utility owned the plant. HELCO now pays Hamakua Energy for power and it would no longer have to if it owned the facility.
The Division of Consumer Advocacy will have a representative at the meetings to hear testimony and later will read written comments that are submitted to the PUC, Acting Executive Director Dean Nishina said Tuesday.
The office, part of the state Department of Commerce and Consumer Affairs, looks out for the public’s interest in utilities filings. That includes analyzing documents filed by utilities, asking questions and making recommendations, Nishina said. An example is an 85-page list of questions the division filed Nov. 15 seeking more details on the need for a rate increase.
“We try to make sure we do a very thorough analysis,” Nishina said. “We never just come in and say yes or no.”
The public can mail written comments to the PUC at 465 South King St., Room 103, Honolulu, HI 96813, or send them by email to puc.comments@hawaii.gov. Written statements should reference Docket No. 2015-0170, and include the author ’s name and the entity or organization that the author represents.
The utility hasn’t raised rates on the Big Island since 2010.
In fact, because of lower power charges and other adjustments, electric rates have actually dropped, Ignacio said in an open letter published in the Sept. 18 newspapers. 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 September this year, paid a bill of $161.85. If the 6.5 percent hike is approved, a typical residential bill for 500 kilowatt hours on Hawaii Island would increase by $9.31 a month to $171.16.
Approved hikes would not go into effect until next summer at the earliest, he said.
Ignacio said the company reviews its expected expenses and income and then determines what its rate needs to be so income matches need. Public input is part of the process.
“Any time we do a rate review … there is a lot of attention and interest,” Ignacio told the Tribune-Herald in September.
The Big Island has the highest residential electric rates of the four major islands. Last year, Hawaii Island’s residential rate was 33.2 cents per kilowatt-hour, compared to 27.2 cents on Oahu, 30.9 cents on Maui and 32.7 cents on Kauai, which has an electric co-op instead of being part of the publicly owned Hawaiian Electric Industries companies.
HELCO announced Dec. 23 it had signed an agreement to purchase the 60-megawatt Hamakua Energy Partners generating plant. The purchase is “expected to result in lower costs for customers and will support continued integration of renewable energy from variable sources such as solar and wind,” according to a HELCO press release issued at the time.
The plant is currently owned by the Boston-based private equity firm ArcLight Capital Partners LLC.