Dive Brief:

• The Hawaii Public Utilities Commission has issued an interim order denying a $2.8 million revenue increase for Hawaii Electric Light Co., with regulators questioning the utility's efforts to control costs as it modernizes its electric grid.
• HELCO, a subsidiary of Hawaiian Electric Co. (HECO), initially filed last year for a $13.4 million, 3.4% base rate increase, but subsequently lowered the request after reaching some agreements with the state's consumer advocate. The utility serves Hawaii Island ​and says the increase is necessary to continue providing reliable service while also meeting state energy goals.
• HELCO officials say they work to keep non-fuel and purchased-power expenses in check, but must balance frugality against a need to procure more renewables and replace the 38 MW Puna Geothermal Venture plant, which was lost in the 2018 eruption of the Kīlauea volcano.

Dive Insight:

HELCO is still reviewing the interim decision, and officials say the company works to "address cost issues every day." 

"It’s something we have to balance with new and continuing work, including the procurement of new renewable resources, defense against cyberattacks and the need to increase the use of our power plants to make up for the loss of the geothermal resource after the Kilauea eruption," HELCO spokesman Jim Kelly said in an email.

The PUC will continue to receive new information before making a final decision, he added. 

The state's consumer advocate noted that regulators concluded HELCO "had not met its burden of proving that it is probably entitled to an increase in revenues on an interim basis that is in addition to current effective revenues."

In the interim order, regulators recognized that some of HELCO's cost control efforts "are not easily quantifiable." However, they also stated the utility "appears to have made no attempt to provide operational metrics against which the commission may reasonably judge the efficacy of HELCO' s efforts to control its non-fuel-and-purchased-power [operations and maintenance] expenses."

According to the interim decision, HELCO's non-fuel-and-purchased-power O&M expenses increased approximately 17% in the three years since its last rate case.

HELCO sister utility HECO, which serves Oahu, is currently the subject of a management audit that the PUC launched in September. The consultant tapped to do the audit is already interviewing members of the HECO management team, Kelly said.

While they are separate utilities, Kelly said "it’s likely that findings in the audit could apply to Hawaii Electric Light operations in the future."