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The Honolulu Advertiser
Posted on: Wednesday, November 13, 2002

HECO to cut rate as business incentive

By Frank Cho
Advertiser Staff Writer

Hawaiian Electric Co. Inc. is planning for the first time to offer discounted electricity rates to qualifying businesses that locate new or expand existing facilities on O'ahu, according to a filing with state regulators.

The utility said it would charge a lower rate, between 17 percent and 19 percent lower, for small and large businesses that increase their demand for electricity by at least 25 kilowatts, or about eight times that of a typical residential user.

The business would also need to demonstrate that the energy cost savings played a significant role in its decision to expand or locate facilities on O'ahu.

Qualifying companies would be eligible for the discount for five years and receive a discount of 2 cents per kilowatt-hour for the first three years, and 1.5 cents for the remaining two years.

The state Public Utilities Commission is reviewing the proposal. The discount would take effect Dec. 5 unless the commission rejects it or sets an alternate date.

"A rate discount like this can help us both revitalize and diversify Hawai'i's economy," said T. Michael May, HECO president.

The discounts are expected to help Hawai'i compete with other states that have similar programs to attract businesses and encourage economic investment.

To ensure the discount program does not become a burden for HECO, the electric utility has proposed limiting participating companies at 50 and capping electricity increases at 1,000 kilowatts per customer.

HECO will also cap the total electric load eligible for the discount at 10 megawatts.

"HECO's proposal is an excellent example of how private industry initiatives can complement state and county efforts to stimulate our economy," said Mike Fitzgerald, president and chief executive officer of Enterprise Honolulu, a nonprofit economic development organization.

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