Hawaiian Electric Industries Inc., the operator of three Hawai'i utilities, said electricity sales will be down this year because of cooler, less humid weather and cutbacks by O'ahu residential customers as energy prices rose this year.

The company is forecasting a rebound in kilowatt-hour sales next year and another gain in 2008 as Hawai'i's economy continues to grow and businesses need more energy. The company, which owns Hawaiian Electric Co., Hawaii Electric Light Co. and Maui Electric Co., reported kilowatt-hour sales are off by 0.1 percent, from a year earlier, in the first nine months of 2006.

"We expect the sales trend to continue in the fourth quarter," said T. Michael May, president of Hawaiian Electric Co. in a conference call yesterday discussing the company's earnings.

In August the company indicated it might show a decline in kilowatt-hour sales. May said sales might finish the year down 0.3 percent.

Next year they are projected to rise by 1.2 percent and, the following, by 1.6 percent. A decline this year will be the first in eight years for Hawaiian Electric.

The company said long-term trends show increasing demand for electricity and the need for more generation capability. O'ahu and Maui generation are running harder and need more maintenance as a result. The company is forecasting higher operation and maintenance expenses through the remainder of the year as it takes care of some deferred maintenance.

The company on Wednesday reported earnings in the three months ended Sept. 30 fell by 16 percent to $32.3 million compared with a year earlier. The company said the profit decline was primarily caused by lower investment gains. Electricity demand was flat during the third quarter, while the company had lower profit at its American Savings Bank unit.

The company also said it expects to report increased liabilities on its balance sheet for its pension plan because of accounting changes that corporations nationwide are being asked to adopt.

HEI said it expects this noncash, pretax expense to range between $143 million and $189 million and that it will not affect earnings.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.