HECO under fire at hearing
By Deborah Adamson
Advertiser Staff Writer
Residents voiced their concerns to state officials last night about Hawaiian Electric Co.'s proposed 7.3 percent rate increase, bringing up issues ranging from its effect on the elderly and the poor to better scrutiny of how the utility would spend the money.
"Where will the elderly and the poor be able to get the extra 7.3 percent?" said Caron Wilberts of Kaimuki. "It really would hurt the people of Hawai'i — 7.3 percent out of the elderly's Social Security is a great increase."
About 65 people attended the public hearing before the state Public Utilities Commission at the auditorium of Kaimuki High School. The commission is considering HECO's proposal to increase rates and will render a final decision within 10 months.
If approved, the 7.3 percent hike would increase a typical residential electric bill by $6.51 per month, to $99.03. A typical customer uses about 600 kilowatt hours per month.
Honolulu users already pay one of the highest electric rates in the country, about 14.4 cents per kilowatt hour. The average rate nationwide is about 8 cents per kilowatt hour, according to the U.S. Department of Energy.
HECO filed for a rate increase in November, the first such request by the company since 1995. The utility said the higher rate, which is expected to bring in $74.2 million in additional revenue, is necessary to meet growing electricity demands across O'ahu as the economy improves.
"As Hawai'i's economy has struggled, we have worked hard over the past decade to avoid asking for an increase," Robbie Alm, HECO's senior vice president of public affairs, told the commission. "But we cannot hold off any longer."
About $44 million of the new money would be used to pay for new and existing programs that encourage the conservation of energy.
Moreover, HECO plans to build a 100-megawatt "peak hour" power plant at Campbell Industrial Park, develop alternative energy resources, including wind power and methane gas recovery from O'ahu landfills, and encourage the use of small power plants in buildings like hotels and hospitals.
HECO would formally request a 9.9 percent base rate increase, but that amount includes the transfer of an existing surcharge for conservation programs to the base rate. So the net increase on electric bills would be 7.3 percent.
Kenwynn Goo, a Kailua resident, bristled at the request for the rate increase.
"Why should HECO actually implement a rate increase?" he said at the hearing. "HECO had revenues of $410 million in the third quarter of 2004 and net income was also up by 28 percent to $26.2 million."
To support his assertion that HECO doesn't need to raise rates, Goo cited public comments made by Robert Clarke, chief executive of HECO parent Hawaiian Electric Industries, that a robust economy in Hawai'i should increase the utility's revenues.
"If Hawaiian Electric's own chief executive is making a statement that he foresees increased revenues collected due to a robust economy ... then HECO doesn't need a rate increase," Goo said.
"HECO's absolute power is corrupting absolutely."
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
