LIHU‘E — Residents can expect their electricity bills, on average, to increase by about $8 each month beginning in June “at the latest,” said Kaua‘i Island Utility Cooperative Chief Financial Officer David Bissell. The increase is due to an “overall
LIHU‘E — Residents can expect their electricity bills, on average, to increase by about $8 each month beginning in June “at the latest,” said Kaua‘i Island Utility Cooperative Chief Financial Officer David Bissell.
The increase is due to an “overall interim revenue” growth for KIUC of around 4.6 percent from the “residential class” following an approval from the Hawai‘i Public Utilities Commission on Friday, according to a press release.
Commercial entities are slated to receive an average increase of about 2.5 percent, Bissell said.
This is the first rate increase from the co-op since the mid-1990s and is expected to not only help balance margins, but stabilize financials and make members slightly less susceptible to fluctuations, Bissell said Saturday. “In my opinion, this will be a minor impact.”
KIUC originally filed for a rate increase of 10.5 percent in June 2009, which would have equaled a nearly $13 million increase in overall revenue.
The state Division of Consumer Advocacy, the Department of Navy and Kaua‘i Marriott evaluated the case and filed their own positions, Bissell said.
Among other things, increased sales projections and increased fuel costs from the time of the original application filing are reflected in the stipulation and in the PUC’s interim rate decision, the press release says.
“Finally, we all came together” and a settlement was reached among all parties, Bissell said.
In the agreed-upon case filing on April 8, KIUC was to receive an interim revenue of some $3.5 million, or 2.25 percent, “above projected revenue for 2010 under existing rates,” says the press release. Only a “few adjustments” were made by the PUC which resulted in a revenue increase some $350,000 lower than agreed upon by the parties.
KIUC had more than $218 million of Rural Utilities Service loans and about $6.5 million of Cooperative Finance Corporation debt as of Dec. 31, 2008, according to legal documents.
The co-op is “still getting the revenue we needed,” Bissell said. And since the original filing, the economy has been showing improvement and the “impact of increased sales” are projected.
Visitor arrivals increasing is “primarily” expected but, “of course, there is no guarantee in it,” he said.
The PUC will continue reviewing the details of the request and will issue a final decision, “which may or may not result in further adjustments to these amounts,” says the release.
Roughly half of members’ monthly bills are based upon fuel cost and the other portion reflects KIUC’s base rate, according to Bissell.
“We know that any rate increase isn’t easy for our members,” said KIUC President and CEO Randy Hee in the press release. But with the rate structure, KIUC’s margins and financial stability “will be much less dependent on volatile fossil fuel prices.”
Visit www.kiuc.coop for more information.
• Coco Zickos, business and environmental writer, can be reached at 245-3681 (ext. 251) or czickos@kauaipubco.com.
