HILO — While Hawaii Electric Light Co. is requesting permission to raise its rates, it continues to put up impressive earnings.
HILO — While Hawaii Electric Light Co. is requesting permission to raise its rates, it continues to put up impressive earnings.
On Thursday, the power company submitted a request to the state Public Utilities Commission to raise its electricity rates by 4.2 percent in the coming year to better cover costs associated with system maintenance, upgrades and the addition of clean energy technology.
Earlier this month on Aug. 3, HELCO’s parent company, Hawaiian Electric Co., reported that in its second quarter, which ended on June 30, it had earned $29.4 million in income for the common stock of its electric utilities. That’s about 70 percent more profit than it earned in the same quarter of 2011, which saw a net income for common stock of $17 million. HELCO, the Big Island subsidiary of the statewide company, contributed $4.5 million in profit to last quarter’s total.
HELCO’s rates are the highest in the state, and that makes them among the highest in the nation, according to a review of 2010 data by the U.S. Energy Information Administration. That year, Hawaii’s electric rates were not only the highest in the country, they were 30 percent higher than the second-place state, Connecticut.
When asked why electricity is so expensive in Hawaii, utility representatives point to significant cost increases for the fossil fuels used to produce it, as well as Hawaii’s geography, which serves to isolate the islands’ individual electrical grids.
“The electrical systems on each island are independent; there are no neighboring utility companies from which to draw power in the event of a problem,” reads an explanation of costs on HELCO’s website. “Therefore, for system reliability we must have reserve generating capacity and multiple distribution routes. This increased infrastructure is supported by our electricity rates.”
HELCO also says it’s addressing the high costs of fossil fuels by building up its use of renewable energy resources, like solar, wind and geothermal. Adding that technology to the system is an expensive investment, and one which must be defrayed through increases to rates.
HELCO boasts that as a result of such upgrades, 40 percent of the energy now sold on Hawaii Island comes from renewable sources. And that has some wondering why energy continues to be so expensive.
On Friday, Marlene Hall of Lucy’s Taqueria in Hilo said that shortly after opening the restaurant earlier this year, she and her family got an unpleasant surprise when they opened their first power bill.
“We were actually in shock when we got it,” she said. “We had a huge electric bill.”
The restaurant features an air conditioning system that sucks electricity, she said, but in the end, the family feels like it gives their customers a great experience, and that’s a priority for them.
“High electric bills definitely make an impact on the business,” Hall said of the possibility of a rate increase next year, “but, we’ve just got to go on. It’s all we can do.”
Meanwhile, Hawaii County Mayor Billy Kenoi said Thursday that he will be taking a firm stand when it comes to renewable energy proposals on the Big Island — the projects have to do more than just reduce the island’s reliance on fossil fuels.
Kenoi said his administration will be asking the PUC’s permission to participate in a recently filed HELCO and Aina Koa Pono docket seeking approval of a power purchase agreement between the two companies. Aina Koa Pono wants to build a biodiesel production plant in Ka‘u and sell the fuel to HELCO for use in the Keahole Power Plant. To do so, it proposed adding a surcharge — $1 per 600 kilowatt hours — to every electric bill on the Big Island and Oahu.
“We’re not interested in more renewable energy,” Kenoi said. “We’re interested in cheaper renewable energy. Unless it has lower rates, we will not support it.”
West Hawaii Today reporter Erin Miller contributed to this report.