PUC Order Will Result in MECO Rates Increases in Maui County

Maui Electric Company. Photo by Wendy Osher.

By Wendy Osher

The Public Utilities Commission issued an order on Friday, approving the annual sales decoupling tariff filings for Hawaiian Electric Company and its subsidiaries, the agency announced today.

The effect of this annual adjustment will be an increase in a typical residential customer’s bill.

The estimated increase on Maui for a customer that uses 600 kWh per month is $4.90; and the estimated increase on Lānaʻi and Molokaʻi for a customer that uses 400 kWh per month will be $3.27, according to the PUC.

The agency says the anticipated increase for Hawaiian Electric Company customers that use 600 kWh per month is $4.89; and $3.92 for a Hawaii Electric Light Company customer that uses 500 kWh per month.

The increases were effective as of June 1, 2014.

The PUC attributes the increases in large part to an increase in capital expenditures by the utility and declines in sales over the past year.

The PUC notes that this is the fourth consecutive annual filing for Hawaiian Electric Company, and the second for Maui Electric Company.

The sales decoupling mechanism is described as a policy step to support the utility’s efforts to reduce dependence on imported oil.  The PUC released the following information saying the mechanism is comprised of two tariffs that serve different purposes:

• The Revenue Balancing Account tariff is designed to decouple or break the link between sales and total electric revenues and thereby removes the utilities’ disincentives to increase energy efficiency and integrate customer-sited generation, such as rooftop photovoltaic systems.
• The Rate Adjustment Mechanism is a formula driven mechanism intended to compensate the HECO Companies for changes in utility costs and infrastructure investment between rate cases and thereby reduces the frequency of rate cases.

In a separate proceeding, the PUC is expected to issue a decision by the end of the year on whether or not changes should be made to the Rate Adjustment Mechanism “to more appropriately track utility performance measures and incentivize cost savings to customers.”