Maui Electric seeks regulatory approval for increase in base rates

Maui Electric on Oct. 12 said that it has proposed the first increase to its base rates in nearly six years to help pay for operating costs, including system upgrades to increase reliability, integrate more renewable energy, and improve customer service.

The request is for a 9.3% increase in revenue, or $30m, the company said, adding that based on today’s rates, if approved, a typical Maui residential bill for 500 kWh would increase by $13.46 a month, to $161.10. On Lanai, a typical residential bill for 400 kWh would increase by $13.83 a month, to $160.55, and on Molokai, $11.25 a month, to $147.60, the company noted.

After review by the Hawai’i Public Utilities Commission (PUC), any approved change would likely not take effect until the last half of 2018, at the earliest, the company said.

Going forward, some of the company’s revenue will be tied to meeting new benchmarks to measure its performance in key areas, including customer service, reliability, and communication for the rooftop solar interconnection process, the company said.

Maui Electric noted that since 2014, it has invested more than $50m in replacing and upgrading equipment to improve the efficiency and resilience of the power grids on Maui, Molokai and Lanai. That work includes replacing more than 1,400 poles and 1,400 transformers, as well as upgrading power lines, the company said, noting that in addition to such upgrades, new projects such as the Kuihelani substation in Kahului and Kaonoulu substation in Kihei are needed to support increased energy demands resulting from the continued growth and anticipated development in the central and south Maui areas.

In an Oct. 11 statement, Maui Electric said that it will begin construction this month of the Kaonoulu substation on a certain side of Piilani Highway and Ohukai Road.

Construction is scheduled to be completed by summer 2018, the company said. The new substation – which the PUC approved in 2015 – will enable electricity to be reliably distributed to homes, schools, and businesses in the growing area of south Maui, the company said. The substation will also enable the integration of more renewable energy resources on the electric grid through improved monitoring and state-of-the-art communications equipment, the company said.

The substation will sit on about one acre of land about 1,000 feet from the Piilani Highway, the company said, adding that based on community feedback, a portion of the substation’s electrical lines will be underground. New lines will tap into the existing transmission and distribution lines currently running between the Maalaea and Kihei substations on Kaiola Place, and go underground across Kaiola Place and Piilani Highway.

In its Oct. 12 statement, the company said that it has increased its use of renewable energy from 14% in 2008 to 37% today, using a diverse mix of wind, hydroelectricity, biomass and solar. Part of the rate request helps to pay to keep service safe and reliable with the increasing amount of renewable energy on the electric grid, including nearly 12,000 private rooftop solar systems, the company said.

Many of the grid improvements are aimed at further accelerating Maui Electric’s switch from fossil fuel generation to a portfolio of renewable energy resources, with the goal of reaching 100% renewable electricity by 2045, the company said.

Investments in customer service staffing and new technology have resulted in improved service, including reduced call-waiting times, the company noted, adding that it is also continuing to clear invasive trees and other vegetation around poles and power lines. Because such vegetation management has resulted in improved reliability, the company plans to increase spending on these efforts, the company said.

Maui Electric noted that its rates are “decoupled,” which is a regulatory model that periodically adjusts rates to remove the company’s need to increase sales to recover a level of PUC-approved costs for providing service to all customers. The company said that it is required to submit to full rate reviews by regulators every three years.

About Corina Rivera-Linares 3052 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.