East Hawaii News

PUC Grants Rate Increases to Hawaiian Electric Companies

June 2, 2014, 5:31 PM HST
* Updated June 3, 4:49 PM
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The state Public Utilities Commission on Friday approved two tariff filings that will raise the electrical rates for customers of Hawaiian Electric Co., including its Big Island and Maui subsidiaries.

The increase will be $3.92 a month for an average customer of Hawaii Electric Light Co. on the Big Island using 500 kilowatt hours per month.

The hike will be $4.90 for customers of HECO and Maui Electric Co. using 600 kWh per month, and $3.27 for customers on Molokai and Lanai using 400 kWh.

A PUC spokesman said the increases are due largely to increased capital expenditures by the utility and declines in sales over the past year.

They are based on annual “sales decoupling” tariff filings by the utilities. That mechanism is comprised of two parts, the Revenue Balancing Account tariff and the Rate Adjustment Mechanism tariff.

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The Revenue Balancing Account decouples or breaks the link between sales and total electric revenues granted by previous rate hikes.

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The tariff is designed to maintain the utilities’ incentives to increase energy efficiencies and allow customer-sited power generation such as photovoltaic, both of which would otherwise reduce the utilities’ revenues.

The Rate Adjustment Mechanics or RAM is a formula that compensates the HECO companies for changes in utility costs and infrastructure investments that occur between their requests for rate hikes, thereby reducing the frequency of such requests.

This was the fourth consecutive annual tariff filing or HECO, the third for HELCO and second in a row for MECO.

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The PUC is also currently reviewing possible changes to the RAM that could more appropriately track the companies’ performance measures and provide greater incentives for cost savings to customers. A decision in that proceeding is expected by the end of the year.

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