By NANCY COOK LAUER
County Councilman J Yoshimoto wants Hawaii Electric Light Co. to more aggressively renegotiate its power purchase agreements to lower rates to electric customers by delinking costs of alternative energy from the price of fossil fuel.
Yoshimoto, chairman of the council’s Committee on Agriculture, Water and Energy Sustainability, has sponsored a resolution to that effect that’s scheduled to be heard at 4:30 p.m. Wednesday in the Hilo council chambers. The public can testify in person in Hilo, or by videoconference from the West Hawaii Civic Center or the Waimea or Pahoa council offices.
While the nonbinding resolution doesn’t carry the weight of law, Yoshimoto said he hopes public support will motivate the electric company and the various power producers to consider the public’s benefit and help bring electric rates down.
Big Island residents paid a starting rate of 40.1 cents per kilowatt hour, compared to the Hawaii average of 36.25 cents and the national average of 11.43 cents in January, according to the U.S. Energy Information Administration. That’s by far the highest in the nation, with no other state reaching even half that.
A typical residential customer’s monthly electric bill, using the average 500 to 600 kilowatts, runs $204 to $250. That’s significantly above the typical $80 to $129 monthly the largest percentage of customers reported in a nationwide survey the Mountain View, Calif.-based business research and consulting firm Frost & Sullivan conducted last summer.
“We understand that companies need to make money,” Yoshimoto said Thursday. “But we encourage alternative energy providers to be more reasonable with their costs in light of how difficult the economy is and how much electricity costs in Hawaii.”
Yoshimoto points to HELCO’s application last year to purchase an additional 8 megawatts of power from Puna Geothermal Venture, bringing the total to 38 megawatts. HELCO estimated the expansion would reduce a typical residential customer’s bill by $1.67 in 2015.
When approving the deal, the Public Utilities Commission expressed its own disappointment that HELCO and PGV weren’t able to negotiate a bigger reduction.
“As a consequence, the vast majority of the annual energy procured from the existing facility would still occur at pricing that is linked to fossil fuels and thus provides no price advantage or stability benefits to HELCO’s customers. The 8 MW expansion was the opportunity to renegotiate the underlying contract terms for the existing facility, but HELCO and PGV failed to produce a better economic result for customers,” The PUC said in its Dec. 30 decision.
HELCO President Jay Ignacio said the company’s negotiations with suppliers are confidential, but he said HELCO shares the same goal.
A recent state law requires the PUC to reduce or remove linkages between the price of fossil fuel and the electric rates for nonfossil fuel generated electricity to enable utility customers to share in the savings from alternative fuels. But power purchase agreements inked before the law went into effect are grandfathered in.
Ignacio said his company doesn’t want to wait until the various contracts expire. HELCO is seeking to renegotiate contracts, he said, adding that a resolution from the County Council, while nonbinding, could help send a message.
“We certainly want to enter into negotiations as soon as possible,” Ignacio said. “We’ve invited the independent power producers to come to the table.”
Email Nancy Cook Lauer at firstname.lastname@example.org.