MECO customers to receive refund

Maui Electric Co. residential customers will be receiving a refund of about $39 to $49 in the form of a credit on upcoming electric bills, according to a statement from the utility on Monday.

The Public Utilities Commission issued a decision Friday for Maui Electric’s 2012 rate case of a 1.29 percent, or a $5.3 million, increase in annual revenues. Last May, the PUC approved an interim rate increase of 3.16 percent, or $13.1 million.

The PUC’s final decision is $7.8 million less than the interim increase that Maui Electric has been charging since June 2012, and the utility has been ordered to refund its 68,000 Maui County customers $8.1 million, including interest.

In a statement last year, the utility said that the latest rate hike would be used to help cover operations and maintenance costs, but the commission found that certain operating expenses such as pensions, technical studies and the new customer information service computer system were “not reasonable and prudent.”

Commissioners added that many ratepayers had grown frustrated by high electric rates and poor customer service from Hawaiian Electric companies not only on Maui, but on Oahu and Hawaii island.

“Hawaii should have financially healthy electric utilities; however attractive financial returns are not a utility entitlement. Instead, excellent utility performance with affordable rates and superior customer service should drive utility financial performance,” PUC Commissioner Michael Champley said in a statement.

Maui Electric also has been ordered to file within 90 days a “system improvement and curtailment reduction plan” to lower its fuel costs and reduce curtailment of lower-cost wind energy.

Additionally, the utility’s profit level was lowered from 10 percent to 9 percent due to lower interest rates and “inefficiencies found in its system operations.”

The commission has started an investigation to re-examine HECO companies’ “decoupling” mechanism, which supposedly breaks the link between utility revenues and how much electricity customers use. By removing the incentive for utilities to increase the use of electricity, HECO reduces Hawaii’s dependence on imported oil, according to the company’s website.

“We understand the hardship on our customers from high energy prices. That is why we are working hard to replace high-priced oil through the use of clean energy,” Maui Electric Co. President Sharon Suzuki said in a statement.

However, the commission seeks to ensure that the decoupling and rate adjustment mechanisms “do not insulate HECO companies from making timely and necessary improvements to their business models, strategies and operational practices to serve customers and the public interest,” according to a commission statement.

In 2011, the commission conducted public hearings on Maui, Molokai and Lanai, in which most residents “expressed concerns with and/or opposition to the increase in rates proposed by (Maui Electric).”

While no time frame has been given as to how soon residents can expect to see their credited refund, the utility said in a statement Monday: “Maui Electric must perform detailed calculations to determine the exact amount of the refund. Those calculations must be submitted to the PUC for approval before the refund may be issued to customers.”

Former Maui Electric customers may also be eligible for the refund, though instructions will be publicized later, according to the utility. Current customers do not need to take any action to receive the credit.

* Eileen Chao can be reached at