MECO Ordered to Refund Customers Due to Poor Service

June 4, 2013, 8:35 AM HST · Updated June 4, 11:52 AM
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MECO workers file photo by Wendy Osher.

MECO workers file photo by Wendy Osher.

By Wendy Osher

Maui Electric Company has been ordered to refund customers due to “inefficient performance” and customer dissatisfaction, following a decision by the Public Utilities Commission.

MECO’s allowed profit level was also reduced from 10% to 9%, due to “lower interest rates” and discovered  “inefficiencies,” according to the commission.

The estimated refund to Maui residents, with interest, is $8.1 million, resulting in a one-time refund in the range of $39 to $49 for a typical Maui Electric residential customer, according to information released by MECO.

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According to a company statement, “The amount approved by the PUC is $7.8 million less than the interim increase in annual revenues, or $5.3 million for customers on Maui, Molokai and Lanai. An earlier interim increase of $13.1 million, has been reflected in customer bills since June 2012.”

Company officials say the difference, including interest, will be refunded to customers in the form of a credit on electric bills.

In addition to the 2012 rate case decision, the PUC also issued a decision on decoupling adjustments for Hawaiian Electric Utilities.

Decoupling is described as a regulatory model that breaks the traditional link between utility revenues and sales of electricity.  Company officials say it encourages the utilities to help customers lower their electricity use, and has helped facilitate the growth of clean energy projects.

Company officials say the estimated impact of decoupling on Maui Electric Customers is expected to be largely offset by lower rates implemented as a result of the rate case decision.

In a statement released by MECO President Sharon Suzuki, she said, “We understand the hardship on our customers from high energy prices. That is why we are working hard to replace high priced oil through the use of clean energy.”

According to company officials, more than 20% of electricity used by MECO customers comes from renewable sources.

The commission has ordered MECO to file a “System Improvement and Curtailment Reduction Plan” to lower fuel costs and reduce curtailment of lower cost wind energy within 90 days.

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