Driven up by Russia’s invasion into Ukraine, oil prices will push electric bills higher in the coming months, Hawaiian Electric confirmed.
The rise in gas prices and electric bills come as the U.S. and other nations impose economic sanctions on Russia for its actions in Ukraine, including the refusal to buy Russian oil. Hawaiian Electric is forecasting that residential bills for customers on Hawai‘i Island and in Maui County to increase about 20% over the next several months and O‘ahu customers will see about a 10% uptick on their bills.
“The increases we’re anticipating are more abrupt than we’ve seen before and, on top of the inflation we’ve all experienced in recent months, I know they will impact the budgets of many households,” said Joe Viola, senior vice president of customer, legal and regulatory affairs. “We hope that by letting customers know what’s coming this helps households and businesses plan budgets and reduce energy use.”
There are options available to help customers manage their energy bills. Links to resources are available at hawaiianelectric.com. Hawai‘i Energy is an expert resource that offers rebates and practical energy-saving tips at hawaiienergy.com. Some actions to take now:
Reduce the use of anything that generates heat – water heater, oven, clothes dryer, stove. Consider a heat pump water heater, now available with a $500 rebate from Hawai‘i Energy – it could cut your bill by up to 40%.
Turn off air conditioning or set it at 78 degrees. Even turning it off for an hour helps.
Use smart plugs or unplug electronics when not in use, including computers, printers, cable boxes, game devices, chargers.
Consider rooftop solar. In addition to tax incentives, Hawaiian Electric is offering cash incentives through its Battery Bonus program to customers who install battery storage.
Shared solar will soon be available for customers who can’t put panels on their own roof but want to share in the savings and contribute to Hawai‘i’s clean energy transformation.
When gas prices are high, electric vehicles can help reduce your household’s overall energy spending, especially if you take advantage of special rates that provide incentives to charge at certain times of the day with lower rates.
Power Partnerships are a way residential and commercial customers can get financial rewards for signing up with independent companies called “grid-service aggregators” under contract with the utility. These companies recruit customers with solar, batteries, electric vehicles and other load flexibility devices to combine or “aggregate” their services to support the grid. Customers are rewarded, generally with credits that reduce their monthly bills.
“We hope this is the peak and that by summer we could see some relief,” Viola said. “There’s a lot of uncertainty and if the international situation remains in turmoil, the price could surge higher.”
The formula for rates is regulated by the Public Utilities Commission and include fuel costs that fluctuate with world markets. Hawaiian Electric makes no profit on the fuel used to generate electricity. Under a fuel-cost risk-sharing regulatory mechanism, the company’s shareholders are required to pay some of the cost when oil prices rise too high, resulting in a slightly lower rate for customers.
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Recognizing the instability of the world energy market, Hawaiian Electric has reduced the use of imported oil by 25% since 2008, in partnership with many others in Hawai‘i, and is working to bring more than 20 new, fixed-price renewable projects online in the next several years.
By the end of the decade, Hawaiian Electric expects the level of renewable resources on its grids to reach at least 70%, better insulating customers from the kind of oil price spikes caused by international events like the Russian invasion of Ukraine.
“Just as we did through the pandemic, we will work with you if you’re having trouble paying your bill. Our goal is to keep everyone connected and by working together we know we can get through this latest challenge,” Viola said.
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More information on the impact of oil prices on bills, as well as links to resources, is available at hawaiianelectric.com.
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