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MECO is proposing 9.3 percent rate hike

Maui Electric Co. is proposing a 9.3 percent increase to its base power rates — its first such increase in nearly six years — to help pay for operating costs, including system upgrades to increase reliability, integrate more renewable energy and improve customer service, the utility announced.

The rate increase would generate $30 million more in revenue.

If approved by the Public Utilities Commission, a typical Maui residential bill for 500 kilowatt-hours would increase by $13.46 a month to $161.10. On Lanai, a typical home bill for 400 kilowatt-hours would raise bills by $13.83 a month to $160.55, and on Molokai bills would increase $11.25 a month to $147.60, also for 400 kilowatt-hours.

After a review by the commission, the new higher rates would likely not take effect until the last half of 2018, at the earliest, the utility said.

Full rate reviews are required by regulators every three years.

The company reported that some of its revenue would be tied to meeting new benchmarks to measure its performance in key areas, including customer service, reliability and communication for rooftop solar interconnections.

“I understand the impact that higher bills would have on the families and businesses we serve,” said Sharon Suzuki, Maui Electric Co. president. “We work hard to manage our costs while maintaining a high level of service and further reducing our carbon footprint. We’ll continue to look for ways to help customers lower their overall energy bills through greater efficiency and incentivized options to use energy at different times of day, such as time-of-use rates.”

Maui Electric reported that, since 2014, it has invested more than $50 million in replacing and upgrading equipment to improve the efficiency and resilience of its power grids on Maui, Molokai and Lanai. The work included replacing more than 1,400 poles, 1,400 transformers and upgrading of power lines, the utility said.

Also, new substations such as those at Kuihelani near Maui Lani in Kahului and the Ka’ono’ulu in Kihei are needed to support increased energy demands resulting from population growth and anticipated development in Central and South Maui, MECO said.

Also, Maui Electric’s use of renewable energy has increased from 14 percent in 2008 to 37 percent today, the utility said. The renewable energy mix includes wind, hydroelectric, biomass and solar power.

“Part of the rate request helps to pay to keep service safe and reliable with the increasing amount of renewable energy on the electric grid, including nearly 12,000 private rooftop solar systems,” the utility said.

Grid improvements aimed at accelerating Maui Electric’s transition from fossil fuel generation to a portfolio of renewable energy sources include the modification of equipment such as generating units at the Maalaea Power Plant to run at lower output, the utility said. Running at lower output would allow the addition of more renewable energy sources, such as wind and solar.

The company’s goal is to achieve power generation of 100 percent renewable energy by 2045.

MECO said its investments in customer service staffing and new technology have resulted in significantly improved service, including reduced call-waiting times.

The percentage of customer calls answered within 30 seconds improved from 40 percent in 2012 to 90 percent in 2016, the utility reported.

Other work undertaken by the company includes clearing invasive trees and other vegetation around poles and power lines, resulting in fewer and briefer outages during storms to some of the county’s remote areas, such as East Maui and East Molokai, the utility said.