West Hawaii Today
Notice #: 0001411029-01
Legal Notices

On March 28, 2023, HAWAI’I ELECTRIC LIGHT COMPANY, INC. submitted its Spring Revenue Report to the HAWAI’I PUBLIC UTILITIES COMMISSION (PUC), in accordance with the provisions of the Performance-Based Regulation (PBR) Framework established by the PUC in December 2020. The PBR Framework includes, among other matters, a five-year multi-year rate plan (MRP) with an index-driven Annual Revenue Adjustment (ARA) that replaced the Rate Adjustment Mechanism (RAM), and which updates Company revenues according to an estimated rate of inflation and flows back to customers a customer dividend based on anticipated efficiencies that the Company will achieve during the MRP. In addition to the ARA, the Company may seek relief for extraordinary projects or programs through the Exceptional Project Recovery Mechanism (EPRM) formerly known as the Major Project Interim Recovery (MPIR) adjustment mechanism, recover costs for approved pilot projects, and earn financial rewards or penalties based on performance as provided through a portfolio of Performance Incentive Mechanisms (PIMs) and Shared Savings Mechanisms (SSMs). The PUC also ordered the continuation of (1) the Revenue Decoupling Mechanism (i.e., Revenue Balancing Account or RBA), (2) the pension and other postretirement benefit tracking mechanisms, and (3) Energy Cost Recovery Clause, Purchased Power Adjustment Clause, and other recovery mechanisms. There will be no general rate cases during the MRP. In the fourth year of the MRP, the PUC will comprehensively review the PBR Framework to determine if any modifications or revisions are appropriate. The Revenue Decoupling Mechanism is designed in part to encourage energy conservation and increase utilization of customer renewable energy resources by removing the link between the utility’s revenues and its sale of electricity. Simply stated, “decoupling” allows the utility to recover approved costs to provide service even if sales decline. It also allows the utility to file less frequent rate cases. In particular, under decoupling, the PUC approves in a formal rate case a revenue level needed to recover the investments and expenses the Company requires to provide electrical service to its customers. As electricity usage levels vary during the MRP, the RBA allows the utility to recover the costs for providing those services, but not earn additional profit from higher sales. The Spring Revenue Report proposes recovery of the RBA balance as of September 30, 2022, the ARA for 2023 and certain other adjustments through the RBA Rate Adjustment that Hawai’i Electric Light will assess as a percentage of the customer’s bill (excluding the Energy Cost Recovery), rather than a per-kilowatt-hour RBA Rate Adjustment credit or charge as in previous years. This replaces the existing RBA Rate Adjustment, effective June 1, 2023. According to the calculations provided in the March 28, 2023 filing, Hawai’i Electric Light Company’s recovery of the revenues through the RBA Rate Adjustment would increase by approximately $1.5 million on an annualized basis from the amount reflected in customer bills since January 1, 2023. If approved by the PUC, a current typical residential monthly bill for a household using 500 kilowatt-hours would increase by approximately $1.27, effective June 1, 2023. The actual impact of the rate adjustment, if approved, will vary by the individual customer’s actual electricity usage and how that impacts the applicable elements of the customer’s bill, which is the basis against which the RBA Rate Adjustment percentage is applied. For more information regarding the Revenue Decoupling Mechanism, please visit hawaiianelectric.com or contact: Hawai’i Electric Light Company, Inc. P. O. Box 1027 Hilo, HI 96721-1027 Hilo: 808-969-6999 Kona: 808-329-3584 Waimea: 808-885-4605 (WHT1411029 4/11/23)