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Molokai Customers to Get Electric Refund

An electric bill refund is on the way for Molokai customers of Maui Electric Company (MECO). A recent decision by the Public Utilities Commission (PUC) on Maui County electric rates will result in an estimated $39 to $49 refund.

Last year, MECO applied for a rate increase with the PUC. An interim rate of 3.16 percent in annual revenues, or $13.1 million, was approved by the PUC and charged to customers in their bills since June 2012. In a final rate decision issued last week, however, the PUC approved a MECO revenue increase of about half that — 1.29 percent revenue increase, or $5.3 million.

The difference — about $8.1 million — including interest, will be refunded to Maui County electric customers in a one-time refund of $39 to $49 for typical customers, according to MECO’s parent company, Hawaiian Electric Company (HECO). Former customers during rate increase will also be eligible for the refund. Current MECO ratepayers do not need to take any action to receive the credit.

In their decision, the PUC noted poor utility service provided to customers by HECO.

“…Ratepayers at each of the HECO companies are growing increasingly frustrated by high electric rates and poor customer service,” stated the PUC press release. [The decision is] intended to hold the HECO companies responsible and accountable for their performance,” added PUC Chair Hermina Morita.

The PUC also ordered MECO to file a plan within 90 days to lower its fuel costs and reduce curtailment of lower cost wind energy.

“The HECO Companies need to employ sound business practices focused on customer value,” said PUC commissioner Michael Champley. “Hawaii should have financially healthy electric utilities; however, attractive financial returns are not a utility entitlement. Instead, excellent utility performance with affordable rates and superior customer service should drive utility financial performance.”

“We understand the hardship on our customers from high energy prices,” said Sharon Suzuki, MECO president. “That is why we are working hard to replace high priced oil through use of clean energy.”

The PUC also approved an annual adjustment for Hawaiian Electric utilities called decoupling that will increase typical residential monthly bills. Decoupling, first approved in Hawaii three years ago, is a regulatory model adopted by many states to support efforts toward higher integration of renewable energy and increased energy efficiency.

“Decoupling breaks the traditional link between utility revenues and sales of electricity,” explained a HECO press release. “It encourages the utilities to help customers lower their electricity use and their bills, and has helped facilitate the growth of clean energy throughout the state.”

Almost 14 percent of Hawaiian Electric Companies’ electricity came from renewable energy sources as of the end of 2012, according to HECO. That’s close to the state’s goal of 15 percent by next year.

The approved 2013 decoupling adjustment, effective this month, will increase typical Oahu customers’ bills by 2.8 percent, or $5.53 monthly. The estimated impact on Molokai, Lanai and Maui residents’ bills is still being calculated to take into account the refund MECO customers will receive, according to HECO.

HECO officials said this year’s decoupling adjustment will allow Hawaiian Electric Companies to recover costs from capital improvements made since 2011. The examples listed in the HECO do not mention any Molokai projects or improvements.

The PUC announced it also plans to conduct a review of the decoupling rate adjustment mechanism to ensure it serves public interest.

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