For the second time in its 20-year history, Kauaʻi Island Utility Cooperative has asked the Hawaiʻi Public Utilities Commission (PUC) for an increase in rates. This increase is designed to provide the cooperative with an approximate 9.42% increase in its electric revenues. For the average residential customer using 500 kilowatt hours per month, the increase would be roughly $19 per month. The rate increase is subject to approval by the PUC and any increase is not expected to impact member bills until the second half of 2023 at the earliest.
“There’s never a good time to increase rates,” said KIUC’s President and Chief Executive Officer, David Bissell. “However, since our last base rate increase in 2010, growth in electricity sales has lagged far behind inflation, so an adjustment is necessary.”
While KIUC has experienced a 5% increase in electricity sales over the past 12 years, inflation has cumulatively increased by 37% during this period, as measured by the Consumer Price Index.
“The gap in sales growth versus inflation is no longer sustainable,” said Bissell. He noted that necessary investment in utility infrastructure, operational cost increases, and significant costs associated with developing a Habitat Conservation Plan (HCP) for endangered species will reduce annual margins to a level that would no longer be compliant with lender covenants.
Spread out over the 12-year period since the last increase, the proposed adjustment is the equivalent of less than 1% per year. “We’ve worked hard to keep our cost increases at or below the level of inflation. Our cost control efforts included restructuring debt, reducing employee head count, and reducing the amount of diesel used and replacing it with fixed-price renewable generation,” said Bissell.
More information on the rate case, which was filed with the PUC today, can be found on KIUC’s website: www.kiuc.coop/ratecase. Members wishing to stay up-to-date on KIUC news, including information on the rate case, are encouraged to sign up for email notifications: www.kiuc.coop/stayconnected.