Hawaiian Electric Co.'s customers on O'ahu will see their monthly electricity bill increase by about $6.61 a month under an interim rate increase approved by the state Public Utilities Commission.

The PUC yesterday approved HECO's request for a 4.96 percent rate hike for its 293,000 residential customers, in a deal that will generate nearly $70 million in annual revenues for the utility.

The interim rate increase, which also took effect yesterday, comes after HECO agreed in September to scale back its rate request from 7.1 percent to at least 5.3 percent.

"We know any rate increase isn't easy for our customers but we have a responsibility to maintain the electric system and the fact is, those costs are going up," said Robbie Alm, HECO senior vice president of public affairs.

Shares of HECO's parent company, Hawaiian Electric Industries Inc., rose 35 cents yesterday to close at $22.42 on the New York Stock Exchange.

Hawai'i residents already pay the highest electricity rates in the nation. And those rates have risen steadily during the past year as fuel costs have soared.

Under the PUC's order, the typical residential household using 600 kilowatt-hours a month will see their monthly bill go from $136.39 to $143, HECO said.

The electric company is seeking an additional 0.34 percent increase, which would generate another $5.5 million in annual revenues.

The outstanding portion of HECO's rate request is still under review by the PUC. The PUC will issue a final order on the 4.96 percent interim rate hike and the outstanding 0.34 percent amount at a later date.

If the PUC's final order is lower than the 4.96 percent interim rate increase, HECO's O'ahu customers will receive a refund reflecting the difference.

The rate increase approved by the PUC is identical to the terms of a settlement reached last month between HECO, the state Consumer Advocate and the Department of Defense, which is the company's largest customer.

HECO's last rate approval came in 2005, when the PUC granted a 3.3 percent interim rate hike, which has increased the company's annual revenues by $41 million. Prior to that order, which still requires a final ruling, HECO's last rate increase came in 1995.

In a news release, the local utility said the interim rate increase will help pay for more than $250 million in new capital projects that were completed in 2006 and 2007. They include: