HELCO seeks rate hike

Hawaii Electric Light Co. is seeking a 3.4 percent increase in base rates it says is needed to keep up with operation costs.

The proposal announced Friday afternoon is part of a rate review required every three years and is subject to approval by the state Public Utilities Commission.

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Any increase is not expected to take effect until late 2019.

HELCO estimates the rate hike will generate $13.4 million in additional revenue.

It would cost a typical residential customer using 500 kilowatt-hours of electricity another $8.21 per month.

In a press release, the utility said part of the increase would be used to fund grid modernization efforts, repairs to facilities damaged by the Kilauea eruption and increasing operation at power plants because of the loss of Puna Geothermal Venture, increased vegetation management, repairing and repowering the Waiau hydro plant, enhancing cybersecurity, and equipment upgrades or repairs.

Additionally, HELCO says the funds would help pay for power grid improvements to integrate more renewable energy sources.

PGV has a capacity of 38 megawatts and remains offline. Ormat Technologies, which owns the lava-locked facility, says it plans to restart. It began building a road over the cooling lava channel this week.

The loss of the geothermal power plant required HELCO to increase production at its steam power plants, which burn oil.

The utility’s monthly rates can fluctuate based on the price of oil.

In early 2018, the utility generated 63 percent of its power from renewable sources. That’s down to about half without PGV, HELCO said.

On Thursday, HELCO President Jay Ignacio said he hadn’t done an analysis, but he doesn’t think losing PGV had a significant impact on rates since most of the power purchased from the plant already is tied to the price of oil.

For instance, the first 25 megawatts is paid at “avoided costs,” meaning HELCO pays PGV the cost difference for not needing to burn as much oil to produce power. Ignacio said there are different rate schedules for power supplied above that amount.

“The last increment (of 8 megawatts) was where we really got favorable rates not connected to the price of oil,” he said.

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Ignacio said PGV was producing at above capacity shortly before the eruption forced it to shutdown.

Email Tom Callis at tcallis@hawaiitribune-herald.com.

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