PUC Holding Hearings on Rate Hike, Biodiesel Plan

A proposed electricity rate hike and a request for a biofuel surcharge will be the subjects of public hearings to be held by the state Public Utilities Commission on both sides of the Big Island early this week.

The Hilo meeting is scheduled for Monday at the Hilo High School cafeteria. A second meeting will be held Tuesday in Kailua-Kona at the Kealakehe High School cafeteria at 74-5000 Puohulihuli St.

Both start at 6 p.m.

Hawaii Electric Light Co. has asked the state Public Utilities Commission to approve a 4.2% increase in its rates.

If approved, the rate hike would add $8.32 to a typical 500 kilowatt-hour monthly electric bill.  According to HELCO, the increase would result in $19.8 million in additional revenue for the Big Island’s electrical utility.

HELCO said the rate increase is needed for a variety of renewable energy projects including forecasting systems for wind and computerized models to analyze integration of additional solar power systems into the grid.

The PUC will also take public testimony on a request by HELCO and its parent company, Hawaiian Electric Co., for the approval of a contract with Aina Koa Pono to provide 16 million gallons of biodiesel for HELCO’s generation plant at Keahole in Kona.

The PUC is also being asked to approve a surcharge to be paid by HECO’s customers to subsidize the higher cost of the biofuel.

This is the second such proposal by HECO and Aina Koa Pono. The first, which the PUC rejected last year as placing an unreasonable burden on ratepayers, would have added $1.55 to $1.86 per month to a typical residential electric bill, according to figures provided by AKP.

The latest proposal introduced several months ago would add from 84 cents to a dollar to the bills of typical customers on the Big Island and Oahu, the company said.

The price would be fixed and the surcharge would decline as the cost of petroleum-based diesel rises, company officials said.

Aina Koa Pono plans to use 12,000 leased acres of former Ka`u Sugar Co. property to provide biomass for a refinery to be built near the junction of Wood Valley and Meyer Camp roads near Pahala.

The company said it would initially process existing vegetation and local green waste and then replant the land with “non-invasive” crops to be converted into biofuel.

HELCO has already encountered public resistance to both proposals including from critics who note that Big Island electrical rates are already among the highest in the nation.