Rise in fuel cost is behind spike in bills
Hawaiian Electric Co. customers on Oahu will have to dig a little deeper into their wallets this month to pay for a $4 increase on their June bills compared with May.
The bill for a typical household using 500 kilowatt-hours on Oahu is $129.34 this month, $4.49 higher than what customers paid in May. The price per kilowatt-hour on Oahu was 23.8 cents, up from 22.9 cents in May.
Darren Pai, HECO spokesman, said bills on Oahu, Hawaii island and Lanai are higher because of increased fuel costs.
“While typical residential bills are still between 25 to 30 percent lower than just two years ago, rising fuel prices are having some impact on our customers this year,” Pai said.
The price of benchmark West Texas Intermediate crude oil has gone from below $30 a barrel in January to about $50 a barrel in June.
Pai said bills are higher on Maui due to the combination of higher fuel costs and more use of wind energy. Pai said the wind energy is priced higher than the current cost of oil-based generation.
Wind makes up 22 percent of the energy mix in Maui County.
Fuel costs on Molokai are slightly lower, resulting in a small decrease in bills.
Hawaii has the highest electricity rates in the nation, due in part to the state’s use of imported oil for most of its power. Hawaii’s price of electricity is more than double the national average, according to the latest figures from the U.S. Energy Information Administration. Hawaii’s residents paid an average of 27.35 cents a kilowatt-hour in March, while the national average was 12.58 cents in the same month, the most recent price available.
In 2015 oil made up roughly 71.1 percent of the energy mix of HECO. Oil made up roughly 62.5 percent of the energy mix at Hawaiian Electric Light Co. on the Big Island and 73 percent of the energy mix at Maui Electric Co. HECO imports oil mainly from Southeast Asia and the Middle East. Other states use energy resources such as natural gas, hydroelectric power, coal or nuclear power.
“Modernizing our electric systems, adding more renewable energy and transitioning with cleaner, cheaper fuels like LNG (liquefied natural gas) can help provide our customers with lower and more stable bills,” Pai said.
The residential rate for HELCO customers on Hawaii island was 27 cents a kilowatt-hour, little changed from May. The average bill this month for a household using 500 kWh on the Big Island is $146.74, up from $146.66.
Maui customers paid 26.7 cents per kilowatt-hour, up from 24.6 cents in May. The average bill for a household using 500 kWh is $143.47, up from $132.89 last month.
The Kauai Island Utility Cooperative increased its rate to 31.9 cents a kilowatt-hour in June from 30.9 cents a kilowatt-hour in May. The average bill for a household using 500 kWh of electricity, including a $10.58 customer base charge, is $170.08, up from $165.08.
Maui Electric Co. customers on Molokai using 400 kWh of electricity are paying an average of $118.95 with effective rates of 27.6 cents a kilowatt-hour, down from May, when the typical bill was $120.31. Customers on Lanai using 400 kWh of electricity are paying 30.6 cents a kilowatt-hour. Lanai residents are paying $136.22 in June compared with $132.03 in May.
The typical customer bill on Lanai and Molokai is measured with electrical use at 400 kWh due to lower energy use, HECO said.
Monthly bills include the cost for kilowatt-hours used plus other charges.
2 responses to “Rise in fuel cost is behind spike in bills”
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“…Pai said the wind energy is priced higher than the current cost of oil-based generation…” And that is why most European countries have begun to move away from “green” renewable energy. The dirty little secret about clean energy efforts is the high costs. Higher than conventional methods. Let us not forget, LNG is being pushed away by the same environmentalists who demand MORE solar, wind, and wave energy systems. LNG is cheap and abundant and actually has average prices trending down. But too many here in power preventing a swift move toward its use. Finally, fuel oil of any type is brought to Hawaii in volume by the cheapest method possible. Shipped in bulk, by large foreign flag tankers (NOT American ships), owned by foreign companies, using foreign crews, brought from foreign countries. The liquid cargoes of oil are pumped ashore by the ship’s crew, that involve NO UNIONIZED LABOR (which typically raise costs of shipping, eh?). In fact, the process to transfer cargo from ship to shore involves about 3-4 people on ship (foreign labor) and same ashore. Thus it is the perfect model for the anti-Jones Act people, right? The ultimate low cost method of ocean transportation. BUT SOMEHOW WE STILL HAVE THE HIGHEST COST OF ENERGY IN THE UNITED STATES?!?! How is that? Don’t believe the myth of the GUARANTEED lower costs after repealing the Jones Act and automatically seeing lower retail prices for goods at the store. Based on the model we see with energy prices in Hawaii…cost of living may actually go up!?
“Pai said the wind energy is priced higher than the current cost of oil-based generation.” – is this also the case on Oahu? If so, why have wind energy when it is also not desirable due to environmental considerations and possible noise problems?