How Much HECO Is Spending On Those Ads, & More PUC Testimony

Richard Ha writes:

You've probably seen the slick newspaper and TV ads. Hawaii Electric Company (HECO) has spent more than half a million dollars recently to convince us they are trying their hardest to do the right thing. The company is very good at public relations.

For example, the ads say HECO has increased geothermal energy on the Big Island by 25 percent. That sounds wonderful – but that is from a base of only 30 MW. It also says that Aina Koa Pono will only result in $1 per month difference to a typical rate payer.

The big picture is that HECO has resisted closing down its oil-fired plants for years. But now, people are saying enough is enough.

Here is another concerned community member's testimony against Aina Koa Pono and the proposed 4.2 percent rate increase. Send yours to hawaii.puc@hawaii.gov by tomorrow.

To: 'Hawaii.PUC@hawaii.gov'
Subject: Dockets Docket # 2012-0185 & 2012-0099
 
Aloha Chair Morita and commissioners:

I am strongly against the AKP biofuel supply contract and the increase in the Helco electricity rates.
 
I have lived here on the Big Island in Puna, close to Pahoa for the last 14 years and am the owner of a bed & breakfast operation in Leilani Estates. I have a family with two children and two acres of property. If any of the two dockets go through it will increase the cost of doing business for me and infringe on the viability of my operation. The nature of my business requires for electricity to be available to our guests and there are many times, when I cannot control the use of it, because guests staying at my B&B may not be as conscientious in preserving energy as I am: fans, lights, radios or TVs are left on even though the visitors are not in their rooms. In order to cover additional operational cost my only option would be to increase our B&B rates, however, with the current economy this will result in a decrease of bookings, as people traveling always look for bargains and are not willing to pay higher accommodation rates, if they can get a “beat-the-price” online offer for some of the hotels as package deal with much better conditions.
 
On the Big Island, electricity rates have been 25 percent higher than Oahu's rate for as long as people can remember. It has contributed to the Big Island having one of the lowest median family incomes in the state and the attendant social problems that come with a struggling economy. As a family this affects our children and the way we are able to give back into the economy and our communities.

Rising electricity rates act like a regressive tax – people at the bottom of the economic ladder suffer the most. But it is worse; as electricity prices rise, folks that can afford to leave the grid will do so, leaving the folks unable to leave to assume more of the grid infrastructure cost. It is a catch 22. For me with my business depending on consistent electricity supply, it would be impossible to leave the grid and I would be directly impacted by the increased rates and future consumer decisions.
 
1.       Aina Koa Pono Biofuel Project – Docket 2012-0185: Rate payers will subsidize the difference between the actual oil price and the $200 that AKP will be guaranteed for 20 years. It is more than possible that actual oil prices would be substantially below $200 for the whole contract period. That will result in a heavy subsidy that rate payers must bear. The $200 per barrel rate is much too high. And the cost differential that is anticipated to be passed through to the rate payer is unconscionable. The PUC should not approve as just and reasonable that the utility should be allowed to establish a Biofuel Surcharge provision that will allow the pass through of the cost differential to the consumer as well as the actual cost pass through itself.

2.      HELCO Rate Increase – Docket 2012-0099: HELCO states in its full page newspaper advertisement that only 3% of its revenue goes to profits. In 2011 HELCO reported $138.2 million in net earnings. Most small businesses in Hawaii do not have a 3% profit margin, most net earnings are much lower and that includes my Bed & Breakfast business. Increased electricity rates would narrow this margin even more. I am entirely opposed to an increase in electricity rates. As a business owner it is HELCO’s responsibility to keep the grid in operating condition. This is not the responsibility of the end users nor should we be charged for it. It is a crucial part of the operating expenses and investments in the future, that a business has to strategically make. It is the same for my business, if I let my rooms fall into disrepair or do not invest in new mattresses every few years, people will stop coming. It is in my best interest to make these investments as I am wanting to stay in business. It is the same for a utility company. Not all investments can be directly compensated by increased rates. The market and consumers will only bare so much – and as consumers, we are saying – no more! Profits will go up and down, depending on what investments have to be made – and that is true for all businesses. But as a business owner we all know that these investments are long term and also mean decreases in the company’s corporate taxes. Also, how much do you think the HELCO advertising campaign costs? Without knowing exact figures I am sure it is in the millions. As end consumers, we are paying for that, too! What a waste of good money…
 
Petra Wiesenbauer