comscore Hawaiian Electric suspends rate increase due to COVID-19 pandemic | Honolulu Star-Advertiser
Hawaii News

Hawaiian Electric suspends rate increase due to COVID-19 pandemic

  • STAR-ADVERTISER FILE
                                Hawaiian Electric said any increase at this time would be a hardship for financially distressed customers due to the pandemic.

    STAR-ADVERTISER FILE

    Hawaiian Electric said any increase at this time would be a hardship for financially distressed customers due to the pandemic.

Hawaiian Electric announced Thursday that it will no longer seek an increase in its rates on Oahu, due to the hardship to customers presented by the coronavirus pandemic.

In August the company had initially requested a 4.1% rate increase on Oahu to generate an additional $77.5 million to help pay for operating and capital costs, including upgrades to the grid and the integration of more renewable energy.

In a settlement agreement between the company and the state Division of Consumer Advocacy, Hawaiian Electric revised its pending request to zero, saying any increase at this time would be a hardship for financially distressed customers due to the pandemic.

The agreement has been filed with the state Public Utilities Commission and is subject to regulatory approval.

“We know it’s a tough time for everyone,” said Jim Kelly, vice president of corporate relations. “Any kind of increase is tough on our economy, even before the pandemic, so we really put it to ourselves to make some significant changes in how we’re organized, how we would tighten our belts and keep all our commitments on the renewable energy front while holding our rate cases to zero.”

If the 4.1% rate increase on Oahu had been approved, a typical residential customer using 500 kilowatt-­hours a month would have seen an increase of $8.67 a month some time in the middle of this year. Hawaiian Electric said the last rate review — filed in 2016 — resulted in a decrease to customer rates overall, largely due to the pass-through of savings from federal tax law changes.

Instead, Hawaiian Electric says it has embarked on a comprehensive, three-year cost reduction program that shares resources across the five isles it serves, reduces overlaps and uses technology to work more efficiently.

It has committed to reducing costs by at least $25 million a year by the end of 2022.

Additionally, Hawaiian Electric in April reported a significant reduction in electricity use and demand across the isles when stay-at-home orders went into effect and tourism activities ceased.

Nevertheless, the company says it also is still committed to achieving the state’s clean energy goal of 100% renewables by 2045, as well as modernizing the grid and providing reliable electricity to its customers on Oahu, in Maui County and on Hawaii island.

Due to the pandemic, Hawaiian Electric in April also announced it would suspend service disconnections for the nonpayment of customer bills through the end of June.

With falling oil prices and no change to base rates, customers should generally see lower bills this summer, according to Kelly, which could aid the state with economic recovery.

Since 2013, Hawaiian Electric says it has spent more than $1 billion replacing and upgrading equipment to improve the efficiency and resilience of the Oahu power grid. That included the replacement of 7,100 poles and 5,800 transformers, upgrading steel transmission towers and clearing trees from around power lines.

That work will continue, even without the rate increase, Hawaiian Electric said, with most improvements aimed at accelerating the switch from fossil fuel generation to renewable energy resources.

“The decision to hold the line on rates doesn’t change the commitment to achieve our renewable energy goals and to build on our strong customer satisfaction levels,” said Scott Seu, president and CEO of Hawaiian Electric, in a statement. “We’ll live within our means and make it work. This is the right thing to do as communities reopen and business activities pick up.”

Click here to see our full coverage of the coronavirus outbreak. Submit your coronavirus news tip.

Comments (3)

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines.

Having trouble with comments? Learn more here.

Scroll Up