By COLIN M. STEWART
Tribune-Herald Staff Writer
Hawaii Electric Light Co. has requested a 4.2 percent rate increase.
The request, which was submitted to the state Public Utilities Commission on Thursday, would generate about $19.8 million in additional revenue, but would not go into effect until 2013, at the earliest, according to a HELCO press release.
If the entire request is approved, the typical residential home using 500 kilowatt hours in electricity would see a bill totaling $217.42 increase by $8.32, the release said.
In a phone interview Thursday afternoon, HELCO President Jay Ignacio acknowledged that the request would likely not be well received by Big Island customers.
“Filing for a rate increase is never popular,” he said. “We delayed the filing, looking for ways to minimize the request. We pared it down to the things we deemed necessary.”
He added that this was the first rate increase requested by the power company since 2009, when it asked for a 6 percent increase and was granted a 1.3 percent increase by the PUC following an evidentiary hearing.
On the company’s arrival at an increase of 4.2 percent, Ignacio denied any attempt by HELCO to overstate its needs.
“We really looked at how we could manage this request. We really got it down to what we need. This is realistic,” he said. “Some people may think ‘Oh, they really need only 1 percent.” But we did not do that. This is what we believe is a reasonable request.”
The increase is necessary to fund grid maintenance and system upgrades, he said.
“We need to increase tree trimming, pole and line maintenance and rebuild parts of our transmission system to better serve our customers,” Ignacio said. “
Additionally, HELCO’s request includes funding for renewable energy projects and clean energy integration programs, including:
l $180,000 for two programs that would use computerized models and tools to analyze integration of more distributed, customer-sited solar power on the grid, and enhanced sensors and tools to help system operators manage more variable clean energy on the grid
l and $130,000 for advanced wind forecasting systems.
“Nearly 60 percent of our customers’ electric bills go to pay the cost of fuel and purchased power. So it makes sense for HELCO to aggressively pursue renewable energy technologies that are not dependent upon oil and that will reduce the cost of electric service in the long run,” the press release quotes Ignacio as saying.
“As existing renewable contracts expire, or perhaps sooner if developers will agree, we will renegotiate these contracts to remove the link to oil as well, providing more stable and lower prices than customers face today.”
Currently, more than 40 percent of the Big Island’s electricity comes from renewable resources, he added.
“We understand the difficulties high oil prices and a struggling economy have placed upon our customers but we need to make these investments so this burden of oil dependence does not continue to plague our community in the future,” he said.
The requested rate increase may only be approved after public input and the PUC and the state Division of Consumer Advocacy have conducted an extensive review. The PUC is expected to hold a public hearing later this year with an evidentiary hearing next year.
Email Colin M. Stewart at firstname.lastname@example.org.