Hawaiian Electric: As Iran conflict pushes up oil prices, electric bills will be higher

Hawaiian Electric customers should prepare for potential increases in energy costs in the coming months, driven by rising global oil prices linked to escalating geopolitical tensions, including the ongoing conflict involving Iran, according to a company press release.

As an island state that relies heavily on imported fuel for electricity generation and transportation, Hawai‘i is particularly sensitive to global fossil fuel price fluctuations. These increases will affect electric bills, fuel prices and other commodities.

“We recognize that Hawai‘i already faces a high cost of living and that any increase in energy costs places an additional burden on our families and businesses,” said Rebecca Dayhuff Matsushima, Vice President of Customer Service at Hawaiian Electric. “We want our customers to be informed, prepared and supported as we navigate this period together.”

Hawaiian Electric is forecasting that typical residential bills may rise between 20% and 30% over the next several months. Oʻahu customers will start seeing higher April bills, followed by Hawaiʻi Island and Maui County customers who will see increases in May and June.

To help ease the impact and provide greater financial flexibility, starting April 6 Hawaiian Electric is offering options to help smooth short-term billing spikes, including interest-free payment plans for up to six months. Customers service representatives are ready to assist in helping to create the best plan based on individual needs.

“We’re committed to supporting our communities during times of uncertainty and we’re hopeful this price surge ends quickly,” Dayhuff Matsushima said. “Providing interest-free payment options is one way we can help customers manage through temporary cost pressures while continuing to meet their energy needs.”

Why This Matters for Hawai‘i’s Energy Future

“This moment also underscores why Hawai‘i is on a long-term path to reduce and ultimately eliminate its dependence on imported oil. Global events like today’s highlight the risks of relying on fuel sources that are subject to geopolitical instability and price volatility. That’s why Hawaiian Electric has been working to diversify the resources used to generate electricity—expanding renewable energy such as solar, wind, and storage, while also pursuing a broader mix of technologies and fuels to strengthen reliability and resilience,” according to the release.

HECO reports that “the progress Hawai‘i has made in transitioning to renewable energy is already helping to reduce exposure to fossil fuel price swings.” The company reports that continued focus on this path is critical for achieving the state’s clean energy goals and providing more stable and predictable energy costs for customers over the long term.

Hawaiian Electric has reduced its use of oil by 55 million gallons annually since 2008 and is bringing more than a dozen fixed-price renewable energy projects online in the coming years, according to the release.

“A more diverse and locally sourced energy portfolio is essential for Hawai‘i,” Dayhuff Matsushima said. “It strengthens our energy security, reduces our exposure to global market volatility, and supports a more affordable and sustainable future for our communities.”

What Customers Can Do

Options are available to help customers manage their energy bills, including payment arrangements. Links to resources are available at hawaiianelectric.com.

Hawaiʻi Energy is an expert resource that offers rebates and practical energy-saving tips at hawaiienergy.com. Some actions to take now:

• Reduce the use of anything that generates heat – water heater, oven, clothes dryer, stove. Consider a heat pump water heater, now available with a rebate of up to $700 from Hawaiʻi Energy. It could cut your bill by up to 40%.
• Turn off air conditioning or set it at 78 degrees. Even turning it off for an hour helps.
• Use smart plugs or unplug electronics when not in use, including computers, printers, cable boxes, game devices and chargers.
• Consider rooftop solar. Hawaiian Electric offers Smart Renewable Energy programs designed to be simpler and more equitable in the long term.

“Hawaiian Electric remains committed to serving as a company of and for Hawai’i — focused on safety, reliability, resilience, and affordability — while continuing to invest in a cleaner, more secure energy future for the islands,” according to the release.

Hawaiian Electric reports that oil prices surged immediately after the Iran conflict began on Feb. 28 and have risen about 50% in March. Because of the volatility of the oil market and the constantly changing geopolitical situation, Hawaiian Electric reports it is difficult to forecast how long Hawaiʻi will see higher prices for gas, electricity, shipping and other oil-related commodities.

The formula for rates is regulated by the Public Utilities Commission and includes fuel costs that fluctuate with world markets.

“Hawaiian Electric makes no profit on the fuel used to generate electricity. Under a fuel-cost risk-sharing regulatory mechanism, the company’s shareholders are required to pay some of the cost when oil prices rise too high, resulting in a slightly lower rate for customers,” the company reports.