BY COLIN M. STEWART STEPHENS MEDIA ADVERTISING cstewart@hawaiitribune-herald.com HILO — Hawaii Electric Light Co. and its sister utilities together recorded a more than 30 percent bump in electric service income last year. Hawaiian Electric Industries Inc., the parent company of
BY COLIN M. STEWART
STEPHENS MEDIA
cstewart@hawaiitribune-herald.com
HILO — Hawaii Electric Light Co. and its sister utilities together recorded a more than 30 percent bump in electric service income last year.
Hawaiian Electric Industries Inc., the parent company of Big Island electricity provider HELCO, reported on Wednesday total earnings of $138.2 million in 2011. That marks a nearly 22 percent increase over the previous year’s net income of $113.5 million.
The company’s electric utility net income alone totaled $100 million, a 30.5 percent increase over the previous year’s total of $76.6 million.
HEI’s subsidiary utilities — including Maui Electric Co. Ltd., Hawaiian Electric Co., and HELCO — provide electricity to 95 percent of the state’s 1.2 million residents.
HEI also pulled in $38.2 million in earnings from the operation of American Savings Bank, Hawaii’s third-largest financial institution.
In a press release issued Wednesday afternoon, HEI President and CEO Constance H. Lau said her company’s improved earnings would “help us fund the upfront investments necessary to support Hawaii’s move to clean energy.”
“We are continuing to reinvest earnings in an aggressive infrastructure program to modernize the electric grid for reliability and to prepare it for significant amounts of renewable energy,” she said. “In 2011 alone, we invested over $200 million in utility infrastructure which is twice the utilities’ 2011 earnings.”
According to HELCO spokesman Curtis Beck, the electric company’s transmission lines were never designed to handle the fluctuating power loads generated by renewable sources like wind and sunlight, and those lines must be reinforced or replaced in order to ensure reliability as more renewable energy is added to the grid.
“It’s something we have to do as we plan for the future,” he said.
The majority of customers’ bill increases during 2011 had been driven by fuel prices, Lau said. The typical Oahu monthly electric bill, for example, was $158 at the beginning of 2011 and increased by about $57 due to higher fuel costs, while increasing only $4 from rate increases and other adjustments.
HEI utilities added 146 megawatts of renewable energy to their grids in 2011, an increase of 36 percent over the previous year. The company estimated that as much as 40 percent of the Big Island’s energy needs were supplied with renewable energy. The rest of the state’s customers received about 10 percent of their power from renewable sources.
Beck explained that HELCO and its sister companies are investing heavily in renewable energy sources, despite the fact that early in the process such efforts won’t show immediate results.
“This is part of a larger story,” he said. “In the short term, it will have an impact on bills, because of the cost of procuring that power, but the idea is that in the long run, as we get more and more contracts from geothermal, biomass … you name it, over the years as the cost of oil increases, at some point we do break even and start to recoup those investments and begin to benefit everybody.”
Late last month, HEI filed a report with the state Public Utilities Commission estimating the impact on electric rates for 2012 in response to lost revenue as a result of customers switching to photovoltaic generators. The report estimated that the company’s Net Energy Metering clients — those who are hooked up to the grid and can draw power when sunlight isn’t available, but who can also sell surplus energy generated by their solar panels to the utility at retail price — had cost the company approximately $7.4 million statewide.
According to Beck, HEI does not have any current plans to request a rate increase, but, he said, such a request could be submitted at any time this year.
Meanwhile, a Thursday press release by HELCO said that the state Public Utilities Commission had issued a decision on a 2010 rate case that could result in “a small reduction in electric rates for Hawaii Island electric customers going forward.”
HELCO must still perform the detailed calculations to implement the rate adjustment, which then must be submitted for approval by the utilities commission. The Hawaii State Office of Consumer Advocacy will also review the calculations.
Previously, the utilities commission had approved a 1.74 percent interim increase, or $6 million in revenues, which has been reflected on electric bills for more than a year, since January 2011.
The 2010 rate case, filed in 2009, was requested to help pay for the more than $200 million in capital improvements undertaken by the utility. Some examples include HELCO’s steam generating unit at Keahole, which generates power using waste heat from two existing generators rather than using oil, and two West Hawaii transmission line upgrades. The rate case also covered increasing operations and maintenance costs for the island’s electric system. HELCO’s original request was for a 6 percent increase, or $20.9 million in revenues.
