MECO Raises Rates to Customer Dismay

The Hawaii Public Utilities Commission (PUC) approved a interim rate increase for Maui Electric Company (MECO) last week that went into effect Sunday.

MECO applied for a permanent increase of 9.7 percent in September. While the PUC is still considering that application, they issued an interim decision allowing the company to raise rates for customers on Molokai, Maui and Lanai by 3.3 percent for a $10.3 million revenue increase.

The typical household on Molokai will pay $5.21 more per month, bringing the total monthly bill to $187.67, according to a release from MECO last week based on a monthly usage of 500 kilowatt hours. The typical household on Maui will now pay $186.02, while the typical household on Lanai will pay $196.87.

Customers on Molokai said they were upset by the rate increase – no matter how slight.

“It’s an increase, it doesn’t matter how much it is,” said resident Janis Dela Cruz.

She and her husband, Lyndon, own Simon and Friends Pet Shop in Kaunakakai, where they pay about $250 per month for electricity. For their home in Kalae, they pay between $250 and $300 per month.

Dela Cruz said she has tried reducing their usage to cut costs – unplugging appliances and turning off the hot water heater when they’re not home – but has seen little savings as a result.

“I do everything I can to save energy and it does nothing,” she said.

Increase for Benefits
The interim rate increase will be in effect until the PUC issues a final decision on MECO’s application. If it decides on a lower increase than the interim rate, the difference would be refunded to customers with interest, according to MECO.

In its decision, the PUC determined that MECO is “probably entitled” to raise rates based on a decline in sales and “the need to maintain its financial integrity.” MECO Communications Specialist Kau`i Awai-Dickson said the “slight decrease in sales” is likely a result of customers’ conservation efforts.

There is no deadline for the PUC to issue its final decision, according to Michael Azama, the PUC staff attorney overseeing MECO’s application. MECO’s last rate change was in December 2007, when it increased by 3.7 percent.

In its release, MECO said the revenue increase will help pay for system maintenance and improvements for greater service reliability, including upgrading power plants and underground lines, conducting frequent inspections of utility poles and lines and tree trimming around lines.

Most of the work will be on Maui and only benefit customers there. At least one project — a new photovoltaic system in Kahului – will support greater renewable energy use. 

Some work is planned for Molokai, according to Awai-Dickson, though she could not provide details on the plans.

No Alternative
Customers looking for relief from rising costs have few options short of going off the grid. Renewable energy use is capped to ensure stability of service – because it is produced intermittently, the grid can only handle so much. The PUC has set a 15 percent limit for each circuit, or subsection of the grid.

The Kaunakakai circuit hit that limit in June. Now, customers wanting to switch to solar or wind energy must commission a feasibility study to determine the effects of their proposed system on the grid. Such a study costs between $30,000 and $35,000, according to MECO, and must be paid for by the customer.

Teri Waros, who owns Kalele Bookstore & Divine Expressions, said she feels like a prisoner of MECO. The store’s monthly electricity bill is $500 – its second highest expense after rent. She said she would like to switch to renewable energy but can’t afford the costly feasibility study.

As for the revenue MECO stands to gain from the rate increase, Waros said it should invest it in renewable energy support that would allow more customers to make the switch.

“If it’s anything short of getting the grid acceptable for alternative energy, than I don’t agree with how they’re spending their money,” she said. “That should be everyone’s focus.”