Electrical bills will be increasing on Oahu for the first time in more than six years.
The state Public Utilities Commission has approved revised tariffs that will go into effect for more than 304,000 customers on Feb. 16 and boost the typical bill by $2.60 a month for a household using 500 kilowatt-hours of energy, according to Hawaiian Electric Co.
The approved interim rate represents a 2.3 percent increase over the previous rate and is expected to generate an additional $36 million in annual revenue, HECO said today. The additional revenue will help pay for grid updates and “resilience efforts” aimed at reducing outages and their duration during storms.
The increase in the base rate is considerably lower than the initial 6.9 percent hike HECO sought in 2016, and lower than even the 2.5 percent increase the PUC approved in December.
A Nov. 15 settlement between HECO and the Consumer Advocate yielded an agreement on an interim rate increase of about 3.5 percent.
But a month later the PUC further reduced the increase to 2.5 percent in its authorization of a new interim rate, citing investigation into HECO’s base-line plant additions and HECO’s previous stated intention not to seek recovery of pension-related expenses.
HECO asked the PUC to reconsider the amount and in subsequent deliberations proposed to account for an estimated $6 million in pension expenses, half through undefined employee benefits and the other via savings realized through the new Tax Cuts and Jobs Act of 2017.
However, the PUC rejected using potential tax bill savings to cover the pension expenses, according to PUC Chairman Randy Iwase.
Iwase said the PUC intends to ensure that any savings from the tax bill are passed on to consumers.
A final decision on a new base-rate increase is still pending.