MECO Requests 6.7% Rate Increase

Maui Electric Company (MECO) filed a request with the Public Utilities Commission (PUC) last week for a 6.7 percent rate increase for Maui County customers next year. If granted, the typical ratepayer’s bill would increase by about $13 per month in mid-2012, according to a MECO press release.

MECO’s request was prompted by “the need to recover costs of improving existing and adding new facilities in 2011 and 2012 that will help to maintain reliable electric service, reduce emissions and add more renewable energy to our grid,” said MECO Communications Supervisor Kau`i Awai-Dickson.

On Molokai, that would include upgrades at MECO’s Pala`au Power Plant, including adding new exhaust devices to “increase efficiency and improve service reliability” on generating units, Awai-Dickson said. MECO would also install a new supervisory control and data acquisition (SCADA) system to quickly identify and correct problems at the plant, she added.

MECO projects the increase would raise about $27.5 million in net revenues to go toward those projects and others. The exact monthly increase per customer would vary because of MECO’s tiered payment structure, in which customers who use less electricity pay lower rates. A typical monthly bill on Molokai would increase to $243 for 500 kilowatt-hours (kWh).

Several Molokai residents said it would be difficult to factor an additional $13 per month into their personal budgets. Reginald Cablayan said the high costs of electricity on Molokai make him want to move off the grid, while another resident said she already struggles to pay her current electrical bill.

Molokai Mini-Mart owner Kirk Greenman said he’d like Molokai to be more self-sufficient to keep energy costs down.

“It’s tough … to continue to be in business when rates keep going up and nobody has any bright ideas to keep them low,” he said.

MECO expects the PUC to hold a public hearing on the increase later this year, according to the release.

“We know that any increase is difficult for our customers,” MECO President Ed Reinhardt said in a press release. “It is critical that we continue to make investments that will enable us to add more clean energy to our grid and ensure service that our customers can continue to count on.”

Included in MECO’s goals for improvements are “reliably integrating existing and future renewable energy resources into MECO’s three isolated, island electrical grids,” such as a battery energy storage system at MECO’s Wailea Substation on Maui and an energy storage system on a distribution circuit in Central Maui.

Awai-Dickson said the investments have “no impact on the [proposed] ‘Big Wind’ project,” in which wind farms would be built on Molokai and Lanai to generate 200 megawatts of clean energy for Oahu.

Additionally, she said it’s too early to tell whether these improvements could impact the 15 percent renewable energy threshold already met on the Kaunakakai circuit. Currently, when the threshold is reached, a technical review is often needed to evaluate the impact of adding more energy to the circuit, which could impact the quality of electrical service for the entire grid.

A study examining the grid and what improvements would be needed in order to raise the 15 percent threshold was originally slated to be released in July. But Hawaii Electric Company Executive Vice President Robbie Alm said it has been delayed because data gathering took longer than anticipated. The report should be available in August, he said.