In addition to increasing pain at the pump as gas prices rise, Big Islanders could see electric bills increase substantially in the coming months following an outright ban on the U.S. import of Russian oil, natural gas and coal amid Russia’s invasion of Ukraine.
“As the U.S. and other nations stand with the people of Ukraine and impose powerful economic sanctions on Russia, including the refusal to buy Russian oil, Hawaii will see higher prices at the gas pump and in electric bills,” Hawaiian Electric Co. Senior Communications Consultant Kristen Okinaka said Tuesday. “Over the next several months, we could be seeing a bill increase of up to 20% on Hawaii Island.”
Though the company has executed renewable energy contracts with independent power producers that are no longer tied to the price of oil, some are still connected to the cost of imported fuels. Okinaka said that means electric bills will go up as the cost of imported oil rises. On Tuesday, oil prices surged, with the cost of a barrel of brent crude topping $132, up from $128 Monday.
“We hope this surge won’t last and that bills could start to come down in June, but it all depends on the international situation. There’s a lot of uncertainty. If the international situation remains in turmoil, the price could surge higher,” Okinaka said. “Hawaiian Electric makes no profit on the fuel used to generate electricity.”
That’s because the cost of fuel is passed on directly to the customer via a “fuel adjustment clause” that doesn’t trigger a formal rate case with the Public Utilities Commission. The cost can increase as it did in February or decrease as occurred in January depending on the price of oil.
According to the company’s most recent Energy Cost Recovery Filing on Feb. 24 — the same day Russia began its invasion of Ukraine — already rising fuel costs were expected to increase February’s electric bill for a home on Hawaii Island using 500 kilowatt-hours by 6.37% or $13.20 to over $220.
A 20% increase to that bill would set a family back over $260.
“We urge customers to plan and prepare now by doing a thorough inventory of their appliances and devices and how they use them,” Okinaka said. “Some simple ways to use less energy include taking shorter showers, hanging laundry, baking less often, turning off the air conditioner or setting it at 78 degrees, and unplugging electronics when not in use.”
She advised residents to check out Hawaii Energy, which offers rebates and practical energy-saving tips, at hawaiienergy.com, as well as hawaiianelectric.com.
“We also encourage customers to contact us if they’re struggling to pay their electric bill. We offer payment plans and payment assistance resources,” she said. “Just as we did through the pandemic, we’ll work with customers who are having trouble paying their bill. Our goal is to keep everyone connected. By working together, we know we can get through this.”
Help is available by calling (808) 969-6999 or visiting the Online Customer Service Center on the company’s website.
Hawaii County Mayor Mitch Roth also urged residents to be “mindful of their fuel and energy consumption, as Russian oil imports are now banned due to rising tensions in Europe.”
“Although we stand in solidarity with Ukraine and the decision of the United States government to place strict sanctions on Russia in defense of democracy, we must also remember that we are an isolated island chain that the decision will heavily impact. After speaking with the Governor and other team members, we have been informed that the sanctions shouldn’t have an immediate drastic impact on our cost of living; however, we are beginning to feel it,” he said in a prepared statement.
In an effort to keep fuel, food, energy and other associated costs down, Roth asked residents to help by using as little fuel as possible. The county is already assessing its own mileage logs in an effort to reduce driving and utilizing carpooling whenever possible as it continues a transition to an electric fleet. Residents are encouraged to use the free Hele-On bus service.
“By being mindful, we can stretch our on-island supply as the global market adjusts to the economic impacts the sanctions are sure to cause. We are confident that solutions will be found to address this issue and appreciate the cooperation and commitment from the community in the meantime. Every effort, big or small, is valued and necessary to our economic vitality moving forward,” Roth said in the statement.
On Tuesday, the national average price of gasoline in the U.S. hit another record-high at $4.17, according to AAA, breaking Monday’s record of $4.10. Diesel on Tuesday was $4.75 per gallon and expected to top the record of $4.84 set in ‘08 in the coming days.
Hawaii also set a new record-high statewide average price for a gallon of gas on Tuesday at $4.71. Diesel was running $4.99 per gallon, still under the July ‘08 record of $5.41 per gallon.
Hilo was averaging $4.75 per gallon, just 1 cent below the record high $4.76 set in April 2012.
In Kailua-Kona, the price for a gallon of regular unleaded on Tuesday ranged from $4.89 at Lex Brodie’s to $4.94 at the 76 station at the intersection of Kuakini Highway and Hualalai Road up to over $5 on Queen Kaahumanu Highway, according to GasBuddy.com, which provides real-time price data for areas not tracked by AAA. Meanwhile, a gallon of regular unleaded fuel was $4.89 at Costco, which requires membership.
Up Waimea way, gasoline prices topped $5, with Ohana Fuels costing $5.10 per 3.78 liters of fuel.
“I look at it, and, you know what, gotta do what you gotta do,” said Maggie, 69, who asked her only her first name be used as she fueled up Tuesday afternoon at the Ohana Fuels station along Queen Kaahumanu Highway in Kailua-Kona. “There’s only me and my husband right now, so we do we what we gotta do to get places, but I’ve got my children all over the island.”
As fuel prices have increased, so have calls for suspension of the various fuel taxes assessed on each gallon purchased to help alleviate the pain Americans are feeling at the pump.
Governors in Michigan, Wisconsin, Minnesota, Colorado, New Mexico and Pennsylvania have penned to the leaders of the U.S House and Senate asking them to pass the Gas Prices Relief Act, which could suspend the federal fuel tax until 2023.
Hawaii Island’s gasoline price includes some 57 cents of taxes per gallon with 23 cents going to the county, 16 cents to the state and 18 cents to the federal government. The state and county taxes are the same on diesel; however, the federal government assesses a 24-cent per gallon tax on that fuel.
In response to a follow-up question to Roth regarding a temporary suspension of the county’s tax, spokesman Cyrus Johnasen said Tuesday the county has floated the idea, but is not pursuing it at this time.
“We have had the conversation internally and don’t believe that we are at a place that would warrant dropping our current tax. That said, we will continue to assess the ongoing situation and will inform our community if any changes occur,” he said.
Gov. David Ige said suspension of the state fuel tax, which funds road and bridge maintenance across the state, is not being considered.
“While difficult, our experience are minor in comparison to what the people of Ukraine are enduring,” Ige said. “At this time, there is no energy supply concern; however, there is price concern due to high global market prices and most of the state’s crude oil is sourced internationally.”
Hawaii’s sole refinery, Par Pacific Holdings, announced last week that it would no longer source oil from Russia and would turn to North and South America to make up for what it had been purchasing from Russia. In 2021, EIA data showed the state received most of its crude oil from Libya. Rising energy prices worldwide contribute to higher prices for goods and services throughout the economy, he said.
“The federal government, in coordination with other oil production nations, released crude from the strategic oil reserves which helped to provide a short-term buffer for global markets. This was helpful because Hawaii is subject to global market prices. The long-term solution to protecting Hawaii from volatile global energy markets and improving our energy security is to continue transitioning to locally-produced renewable energy as soon as practicable – including transportation. EV and ZEV rebates are an important strategy to help make the transition affordable for everyone,” Ige said.
West Hawaii Today reporter Megan Hadley and The Associated Press contributed to this report.
