Company cites costs of albizia clearing, system upgrades
Hawaii Electric Light proposed the first increase of base rates in nearly six years to help pay for operating costs, including expanded vegetation management focusing on albizia tree removal, as well as system upgrades to increase reliability, improve customer service and integrate more renewable energy.
The request is for a 6.5 percent increase in revenues, or $19.3 million.
Rate reviews are required by the Public Utilities Commission (PUC) every three years.
If approved, a typical residential bill for 500 kilowatt hours on Hawaii Island would increase by $9.31 a month to $171.16. The proposed rate change will be reviewed by regulators and would likely not take effect until the summer of 2017 at the earliest.
Thanks to lower fuel prices, bills reflecting the new rates, if approved today, would still be lower than a year ago.
In 2013, with PUC approval, Hawaii Electric Light withdrew its request to increase base rates, leaving in place the same base rates established in 2010.
As part of the current review, Hawaii Electric Light is proposing benchmarks to measure its performance in key areas, such as customer service, reliability and communication for the rooftop solar interconnection process and to link certain revenues to that performance.
$14M spent clearing albizia since 2014
Among the increased operating costs driving the rate change is an extensive vegetation management and tree removal initiative.
The threat from invasive albizia trees toppling in high winds became clear after Tropical Storm Iselle in 2014 and led the company to triple its annual spending on vegetation management. Since 2014, Hawaii Electric Light has spent $14 million on tree trimming and removal, concentrating on areas where falling albizias threaten utility equipment and highways.
The tree removal program, which is continuing, reduced the impacts of the recent tropical storms Darby and Madeline on roads and power lines, resulting in fewer outages and faster power restoration.
Investments in customer service pay off
Hawaii Electric Light has also spent more than $14 million over the past six years improving customer service systems, developing technical solutions to integrate more private rooftop solar, replacing and upgrading equipment to improve efficiency and reliability and developing detailed plans to achieve the state’s goal of 100 percent renewable energy. The company has absorbed a large portion of these increased costs in the years between rate cases without passing them on to customers.
Investments in more customer service staffing and new technology have resulted in significantly improved service, including reduced call-waiting times. The percentage of customer calls answered within 30 seconds went from 33 percent in 2010 to 93 percent in 2015. And in surveys of customers who called in to stop, start or change electric service in 2015, 94 percent said they were satisfied with the experience.
Renewable energy use grows to 49%, highest in state
Hawaii Electric Light has increased its use of renewable energy from 35 percent in 2010 to 49 percent today, using wind, hydroelectricity, solar and geothermal to replace oil imported to generate electricity. The company reduced its use of oil by 13 percent over the same period. Part of the proposed rate adjustment will help pay for continued improvements to the power grid to help integrate even more renewable resources while improving reliability.
By the end of 2016, Hawaii Electric Light will have made more than $290 million in capital investments over the past six years, including replacing and upgrading transmission lines in West Hawaii; modernizing generation equipment to increase efficiency; increasing grid capacity and system reliability; and adding or replacing lines and transformers as well as more than 4,500 poles for new and expanded service.
Hawaii Electric Light has “decoupled” rates – a regulatory model that periodically adjusts rates to remove the company’s need to increase sales to recover a level of PUC-approved costs for providing service to all customers. The company is required to submit full rate cases every three years for an updated review by the PUC of the current costs of service.