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Kauai Island Utility Cooperative has asked the state Public Utilities Commission for a 9.42% rate increase that would boost the monthly bill for the average residential customer using 500 kilowatt-hours a month by roughly $19.
The rate request filed Wednesday is subject to approval by the PUC and any increase is not expected to affect power bills until the second half of 2023 at the earliest.
“There’s never a good time to increase rates,” KIUC President and CEO David Bissell said in a statement. “However, since our last base rate increase in 2010, growth in electricity sales has lagged far behind inflation, so an adjustment is necessary.”
The request marks only the second time in KIUC’s 20-year history it has asked the state agency for a revenue increase.
While KIUC has experienced a 5% increase in electricity sales over the past 12 years, inflation has cumulatively increased by 37% during this period, as measured by the Consumer Price Index.
“The gap in sales growth versus inflation is no longer sustainable,” Bissell said.
He noted that necessary investment in utility infrastructure, operational cost increases and significant costs associated with developing a habitat conservation plan for endangered species will reduce annual margins to a level that would no longer comply with lender covenants.
“We’ve worked hard to keep our cost increases at or below the level of inflation,” Bissell said. “Our cost control efforts included restructuring debt, reducing employee head count and reducing the amount of diesel used and replacing it with fixed-price renewable generation.”
