The Hawaii Public Utilities Commission (PUC) has issued an interim decision approving Maui Electric Company’s first base-rate increase in more than six years.
The approved interim rate will increase the typical Maui monthly residential bill for 500 kilowatt-hours by $5. On Lanai, a typical monthly residential bill for 400 kWh will increase by $5 and on Molokai by $4.62.
The 3.8 percent increase – about $12.4 million in annual revenue – will help pay for operational improvements, including system upgrades to increase reliability, improve customer service, and integrate more renewable energy.
The interim rate is less than the company’s original request last October for a 9.3 percent increase, or $30 million.
The new rate is scheduled to take effect on Aug. 23, 2018.
An interim decision is one step in the ratemaking process.
The PUC will continue to review the request and will later issue a final decision.
If a lower final amount is approved, the difference will be refunded to customers with interest.
Since 2014, Maui Electric invested more than $50 million replacing and upgrading equipment to improve the efficiency and resilience of the power grids on Maui, Molokai and Lanai.
That work includes the replacement of more than 1,400 poles, 1,400 transformers, and upgrading of power lines.
The company continues to clear invasive trees and other vegetation threatening poles and power lines, resulting in fewer and briefer outages to remote areas, such as East Maui and East Molokai.
Costs to manage vegetation have steadily grown from about $1 million in 2012 to more than $3 million in 2018.
Maui Electric is also using more renewable energy to generate electricity, increasing its use from 14 percent in 2008 to 34 percent today, applying a diverse mix of wind, hydroelectricity, biofuel and solar, including nearly 12,000 private rooftop solar systems.
Part of the rate request will enable the company to invest in new technologies to continue integrating higher amounts of renewable energy on the islands’ electric grids.
“This request helps pay to keep service safe and reliable to our growing communities, while at the same time making real progress in replacing fossil fuels with renewables,” said Sharon Suzuki, president of Maui Electric. “I understand the impact higher bills have on families and businesses we serve, so we’ll continue to look for more ways to help customers reduce their overall energy bills through greater efficiency and new options like Time-of-Use rates, demand response programs, and electric vehicle adoption.”