Hawaiian Electric Co. executives speaking at an informational briefing at the state Capitol on Tuesday got an earful from state legislators who complained the utility is not moving fast enough to reduce electric rates.
The briefing opened with representatives from HECO, the Kauai Island Utility Cooperative, the state Public Utilities Commission and the state Division of Consumer Advocacy giving their views on why rates in Hawaii are the highest of any state, and what can be done about it.
The ensuing question-and-answer session became heated at times, with Sen. Malama Solomon (D, Kaupulehu-Waimea-North Hilo) questioning HECO officials about their commitment to delivering power at the lowest cost possible.
Solomon relayed stories about some residents in her district having to cook over wood fires and using candles to light their homes at night because of the high cost of electricity.
"I’m entitled to be angry. There are families burning kiawe to cook dinner," Solomon said. "I have to go home and report to my constituents. They have no confidence in you."
The top official from HECO’s Hawaii island subsidiary responded that the utility is aligned with the customers’ interests in trying to bring electricity costs down. Jay Ignacio, president of Hawaii Electric Light Co. cited two new renewable energy initiatives in the pipeline that are expected to produce electricity more cheaply: an expansion of geothermal production and a new biomass plant that will burn locally grown eucalyptus wood.
HECO Executive Vice President Robbie Alm led off the utility’s presentation, citing the high cost of fuel oil as the main culprit behind Hawaii’s high electrical rates. He repeated HECO’s frequently stated comment that the utility passes the cost of fuel oil straight through to ratepayers and makes no profit on it. Alm said the company is moving forward with plans to replace fuel oil with cheaper liquified natural gas as an interim step while it continues to pursue greater use of renewable energy sources.
Rep. Denny Coffman (D, Keauhou-Honokohau), suggested to Alm that HECO might be forced to operate more efficiently if it had to pay for the fuel oil rather than pass the cost on to consumers.
"I don’t see a fire in the belly," Coffman said. "Why don’t you put some skin in the game?"
Alm responded that having to pay for the fuel would "bankrupt us." "Fuel purchases are 10 times our net income," Alm said.
Michael Champley, a PUC commissioner and former utility executive, said while Coffman’s suggestion was not practical, financial incentives could be created for HECO to be more efficient with its fuel use.
"This is something we ought to consider. We need a fresh perspective," Champley said.
