Posted on: Thursday, November 11, 2004

EDITORIAL
Energy conservation starts the debate off

One could almost feel officials from Hawaiian Electric Co. wincing as they rolled out the news this week that they are asking for a 7.3 percent increase in their rates.

Even though it is the first rate hike request in about a decade, the company knows consumers won't react kindly.

But the company makes a good case that higher rates are needed to cover the cost of meeting soaring demand for electric power and to pay for a rapidly escalating program of energy conservation. Consumers might rightly wonder why they are being asked to pay both for increased capacity and conservation efforts.

In truth, it makes perfect sense. It will be years before Hawaiian Electric will have all the ducks in line to build a major new power plant. In the meantime, the only alternative for maintaining a stable energy system that allows our economy to grow is conservation, alternative sources of energy and greater co-generation efforts with private companies and the military.

These all take money.

It is far too early to judge whether the 7.3 percent net increase is on target, a bit high or barely enough. That will be the job of the PUC.

What we can say is that the company's expanded interest in conservation and alternative energy efforts is worth applauding — and paying for.

Some critics suggested that outside parties could do a better job of encouraging conservation than HECO. As reliable and responsible alternate energy or conservation programs emerge in the private sector, HECO, as a regulated utility, should — and presumably will — welcome them.

Besides the long-term good of conservation and alternatives, HECO has its own vested interest in promoting conservation. The more energy we save, the longer it will be before another power plant will have to be built.

Postponing that major capital cost is good for the company's books.

The electric company says an additional plant is an absolute necessity, sooner or later. But we'd argue that every year that goes by without major capital investment in a 19th-century approach to generating and distributing power, the closer we get to the day when a new centralized power plant is not needed.

And aggressive conservation policies, even if they pad our monthly bill, are the right thing for the state. Every megawatt saved reduces our dependence on imported oil.

The exact amount of this rate increase, as we said, will be decided by the PUC. But by framing the increase around the philosophy of encouraging conservation and alternate energy options, HECO has launched a most important community conversation.