HILO — The state Public Utilities Commission has scheduled public hearings next week to determine whether a 3.4 percent rate increase for Hawaii Electric Light Co. is “fair and reasonable.”
The proposed rate hike stems from a required three-year review of rates to ensure that revenues for the utility are keeping up with costs, Jim Kelly, vice president for corporate relations for the parent company, Hawaiian Electric, said Wednesday.
Among the costs that have increased for the Big Island utility is proactive vegetation management, he said. Keeping tree limbs, particularly those of albizia trees, off electric lines reduces outages and in the long run will save costs to repair them, he said.
“Every three years, the PUC looks at our expenses and our costs and determines whether what we are charging is a fair reflection of our costs,” Kelly said.
Part of the increase would also be used to fund grid modernization efforts, repairs to facilities damaged by the Kilauea eruption and increasing operation at power plants due to the loss of Puna Geothermal Venture, repairing and repowering the Waiau hydro plant, enhancing cybersecurity and equipment upgrades or repairs.
HELCO estimates the rate hike will generate $13.4 million in additional revenue. It would cost a typical residential customer using 500 kilowatt-hours of electricity another $8.21 per month. If approved, it’s expected to go into effect late this year.
The hearings are scheduled for 5 p.m. April 11 at the West Hawaii Civic Center and the same time April 12 at Aupuni Center in Hilo.
Written statements may also be mailed to: Public Utilities Commission, 465 South King St., Room No. 103 Honolulu, HI 96813 or email to firstname.lastname@example.org. All written statements should reference Docket No. 2018-0368.
HELCO serves 86,000 customers maintaining more than 3,600 miles of overhead electric lines, 68,000 poles and 67 substations. The utility operates two hydroelectric and five thermal generating stations while also integrating energy from five independent power producers and more than 12,000 private rooftop solar systems.
Another rate hike is likely to follow in short order, after the PUC last week approved an $86.3 million statewide electric grid modernization plan that will incorporate more renewable energy and improve reliability of the system.
The modernization plan will include more private rooftop solar, along with battery storage, smart meters and other advanced technologies.
Public hearings on the grid modernization plan were conducted in 2017, prior to its submittal to the PUC, Kelly said.
Members of the public who submitted input to the PUC file on the grid modernization plan (Docket No. 2018-0165) primarily offered detailed suggestions on procurement processes, public involvement and whether technology will be open-source and transparent.
“Life of the Land hopes that the new process is more than a name change, that the utility wants to be a conductor of a smooth-running orchestra, rather than being a conductor and simultaneously being several players competing against and drowning out other players,” Henry Curtis, vice president for consumer issues for the nonprofit that focuses on land and energy issues, said in comments to the commission.
“One of the keys is to make sure that all entities are aware of what data and what assumptions will be relied upon. It is important to identify these early, and to have a robust discussion around them,” Curtis said. “Even if all parties do not agree, having the dialogue is important.”
Will Rolston, former Hawaii County energy coordinator and now director of Energy Island, has also been accepted as an intervenor in the case. Rolston said it’s too early for detailed comments on the plan, but he believes transparency is important. The utility hires many consultants for the studies, which are renewed every five years, he said. It’s the utility’s responsibility to keep the rate-payer informed, he said.
“They’re getting lots of consultants coming in that the rate-payers are paying for,” Rolston said. “It’s important for the rate-payer who’s actually carrying the cost to know who the consultant is and how much it cost.”
The cost of the first phase of the four-year plan for a typical residential customer on Oahu would be 24 cents a month; Maui, 34 cents; Molokai and Lanai, 27 cents; and Hawaii Island, 55 cents, according to a PUC press release.
“We know the size of the electric bill is a concern for our customers, so we’re always looking for efficiencies and productivity improvements so we can provide service in the most cost-effective way,” said Kristen Okinaka, HELCO’s senior communications consultant. “The proposed increase will help pay for operating costs, including customer service enhancements, system upgrades and grid modernization to increase reliability and resilience, and to integrate higher levels of renewable energy.”
This article has been corrected to reflect that there are 68,000 poles on the Big Island.