HECO customers weigh in on proposed rate increase
The state Public Utilities Commission is gathering public input on an application by Hawaiian Electric to raise base rates over the next two years, and comments including opposition from ratepayers are piling up.
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The state Public Utilities Commission is gathering public input on an application by Hawaiian Electric to raise base rates over the next two years, and comments including opposition from ratepayers are piling up.
Hawaiian Electric made an initial request to the PUC in March followed by a detailed application in July to boost annual revenue by $170 million, or 5.3%, over most of the next five years largely to cover high inflation, more expensive insurance premiums and accelerated value depreciation for fossil fuel power generation units anticipated for retirement sooner than previously planned.
The utility, which has 472,000 customers on Oahu, Hawaii Island, Maui, Molokai and Lanai, is seeking most of the annual revenue increase — $125 million — in 2027 followed by an additional $45 million in 2028.
Proposed higher rates vary by island, and would increase monthly bills for typical residential customers by an estimated $8 to $12 in 2027 and then by $2 to $3 in 2028. Typical monthly residential use on Oahu, Hawaii Island and Maui is 500 kilowatt-hours, and on Lanai and Molokai is 400 kilowatt-hours.
If approved, the higher revenue and base rates would be locked in until 2032, except for a regulatory adjustment for inflation from 2027 to 2031.
The PUC began holding public hearings on different islands last week to receive feedback on the proposal, and meetings continue this week with one today on Lanai, one Thursday on Molokai and one Friday on Oahu. Friday’s meeting also has an online link to participate virtually by videoconference.
A list of meeting places and times is at puc.hawaii.gov.
Prior meetings were held in Kona on Sept. 22 and on Maui Tuesday. A Hilo meeting scheduled for Sept. 24 was postponed due to Hurricane Nolo and has yet to be rescheduled.
The commission also is accepting written comments that can be submitted on its website under Docket No. 2026-0162.
According to a coalition called Local Power Hawaii, more than 260 Hawaiian Electric customers had submitted public comments on the proposal as of Monday.
Leimomi Kekina of Aiea expressed her opposition to higher rates in comments submitted Tuesday.
“Stop stealing my money!” Kekina wrote. “NO! NO! NO to your proposed rate increase!!!”
Many other submissions are based on form letters from individuals sent in connection with Local Power Hawaii partner organization Our Hawaii, and ask the PUC to reject the requested base rate hike also referred to as rate rebasing.
“We understand utilities have real costs like inflation, insurance, depreciation,” the letters say. “But ‘rebasing’ is a technical word for a hard ask: charge working people more, permanently, to cover a company’s own cost overruns and prior regulatory commitments.”
Local Power Hawaii, in an announcement on Tuesday, criticized HECO’s plan.
“Why should Hawaii’s hardworking families pay more to HECO when we’re all suffering from longer and more frequent grid outages just as scientists predicted would happen because of more intense storms from climate change,” Marti Townsend, a local environmental attorney and coalition member, said in a statement. “It’s irresponsible to give HECO more money without first ensuring that the money local families are already paying goes to fixing the grid, and that any proposal for additional ratepayer contributions will give us the more affordable, resilient and sustainable grid that we all want and need.”
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Hawaiian Electric spokesperson Darren Pai said in a written statement Tuesday that the company knows these are especially challenging times to seek a rate increase, and that the company only adjusts base rates every five years under current PUC regulations.
“We would prefer not to ask, but this request is necessary to allow us to continue providing the service our customers rely upon in an our rapidly changing world,” he said. “We make every effort to operate as efficiently as possible and moderate any rate increase.”
Hawaiian Electric officials have said that its base rate increase is needed to cover inflation, insurance and accelerated depreciation that have largely been out of the company’s control since base rates last changed in 2021.
The company also has said that the additional revenue sought isn’t connected to expenses and financial losses incurred to compensate victims of the Maui wildfires, or to investments being made to reduce wildfire risks.
Hawaiian Electric is obligated to pay $2 billion over four years to victims of the Aug. 8, 2023, fires that killed 102 people and destroyed most of Lahaina, as part of a $4 billion litigation settlement involving other defendants.
To reduce wildfire risk, the utility expects to spend $450 million between 2025 and 2027 after spending $120 million in 2024.
Since 2021, PUC regulations have tied Hawaiian Electric revenue to performance metrics that include improving reliability, lowering costs, better customer service and increasing renewable energy.
This “performance-based regulation,” or PBR framework, was crafted in 2020 by the PUC at the direction of the Legislature under a 2018 law called the Ratepayer Protection Act that followed a move in 2010 to “decouple” utility profits from the volume of electricity sold.
The PBR framework went into effect June 1, 2021, and replaced a historical cost-of-service model in which Hawaiian Electric earned profits tied to capital improvement spending and typically would seek annual rate changes.
Hawaiian Electric said that since 2021 over $100 million in cost savings have been realized by customers, and that Hawaii was one of only four states where electricity rates fell from 2024 to 2025.
Customer bills this year have surged even for people using less electricity because dramatically higher prices for oil used to make most power for the utility get passed on to ratepayers as a component of their bills separate from base rates.
A group of key stakeholders that include the PUC has been working to modify the PBR framework to better benefit ratepayers and the utility. That work, expected to result in a new 5-year framework in 2027, is related to but separate from the proposed revenue and rate increase.
Whether Hawaiian Electric deserves its requested revenue and base rate hike, or perhaps less, will be determined by the three-member commission after it considers public testimony and holds a quasi-judicial hearing at which the utility, other approved stakeholders and the state Consumer Advocate representing ratepayers will present their positions with the ability to call and cross-examine expert witnesses. No hearing date for that has been scheduled yet.
