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In Aloha State, HELCO Files Two Rate Scenarios

November 28, 2016 By Cheryl Kaften

On December 13 and 14, Aloha State ratepayers will have a chance to weigh in at public hearings on two scenarios proposed by Hawaii Electric Light (HELCO) that could raise typical residential electric rates by $9.31 a month in one case – or possibly provide savings in another, the Hawaii Tribune Herald reported on November 23.

HELCO is filing a two-pronged rate increase scenario with the Hawaii Public Utilities Commission (Docket No. 2016-0328): 12.5 percent, if a proposed purchase of the 60-megawatt (MW) Hamakua Energy Partners  (HEP) generating plant goes through – or  6.5 percent if it doesn’t.

HELCO submitted an application to the PUC in February to purchase Hamakua Energy, an independent power producer, for $86.2 million, from ArcLight Capital Partners. .

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 has said, according to the local news outlet. That’s because the current lease payments HELCO makes to privately held ArcLight are passed on to customers as surcharges that would be removed from their bills 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.

In fact, because of lower power charges and other adjustments, electric rates actually already have dropped since 2015, Ignacio said in an open letter published in the September 18 issue of the Tribune-Herald. A typical residential bill for 500 kilowatt-hours (kWh) on Hawaii Island was $189.62 in January 2015. By September of the same year, a typical bill was down to $172.43.

And as of September of this year, a typical residential customer paid a bill of $161.85.

Indeed, if the 6.5 percent hike were to be approved, a typical residential bill for 500 kWh on Hawaii Island would increase by $9.31 a month to $171.16.

Approved rate hikes would not go into effect until next summer at the earliest, he said.

At this time, 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/kWh, compared with 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.

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