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The Honolulu Advertiser

Posted on: Tuesday, May 21, 2002

Electricity bills likely to rise

By Frank Cho
Advertiser Staff Writer

Electric power officials are warning consumers that rising oil costs are pushing electricity costs upward again after a steady decline for more than a year.

"We do see an upward movement in fuel oil prices, but we don't know yet how long this trend will continue," said Fred Kobashikawa, a spokesman for Hawaiian Electric Co. Inc.

Electricity costs are down about 5 percent overall from a year ago, as the cost of the oil used by utilities has dropped to about $27 a barrel from more than $30.

It has been the first drop in electricity costs for Hawai'i consumers since 1997, electric company officials said.

Exactly how much rising oil prices will affect electricity costs is not clear. Hawaiian Electric declined to disclose how much it is paying on future oil contracts.

Still, any increased costs could erase much of the gains made by consumers in the past year, and could pinch the state's economy as it seeks to regain its footing after the downturn in the wake of the Sept. 11 attacks.

Hawaiian Electric said that for each $1 change in the price of a barrel of fuel oil, electricity prices will change by about 0.151 cents per kilowatthour hour. The typical household customer uses about 600 kilowatt hours of electricity each month.

For the past year, local consumers had enjoyed a break on electricity costs because of the declining fuel oil costs.

Big Island ratepayers have seen the biggest drop in electric costs, with residents this month paying an average of 6.34 percent less than they did a year ago, according to Hawaii Electric Light Co. Inc., a subsidiary of Hawaiian Electric on O'ahu.

The average monthly residential bill on the Big Island is now $123.65 compared to $132.02 a year ago.

Maui consumers are paying about $102.45 a month on average, down about 4.57 percent from $107.45 last May.

On O'ahu, consumers pay $82.04 on average, or about 5 percent less compared to the same time a year ago.

Steve Golden, a spokesman for Kaua'i Electric, said that customers on that island have seen similar declines in their electric bills.

Hawai'i power providers are able to pass oil costs on to customers through an "energy cost adjustment" provision without seeking regulatory approval first.

The utilities, which are already earning at or near their allowed rate of return, said they will not profit from any increases related to rising fuel costs because they are allowed to increase rates only enough to cover the increased fuel costs.

When the cost of the fuel is excluded, electricity rates have remained substantially unchanged for customers on O'ahu and Maui over the past several years. Big Island consumers, however, absorbed an $8 million rate increase in 2001 to pay for improvements.

Reach Frank Cho at 525-8088, or fcho@honoluluadvertiser.com.