HECO fuel charges up 21% in 5 months - Pacific Business News (Honolulu):

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Since October, the fuel surcharge that passesa on to its customers has shot up21 percent. It now accountsz for 57 percent of theaveragwe customer's bill on with some Neighbor Island customers paying even While other utilities across the nation also levy fuel they are modest compared with the fuel costsd charged by Hawaiian Electric Co. and its and Other states rely on a mixof coal, natural gas, oil, nuclear power and hydroelectricity, but 90 percengt of Hawaii's power comeas from oil-fired generators. This week, oil pricess touched a record $110 per barrel, suggestinfg even higher prices lie ahea d forHawaii consumers.
Gary Groendyke, who owns the 16,000-square-footr Punahou Fitness & Spa in Honolulu, said he's now payingf $6,500 a month for electricity to power hisfitnesds machines, pool filters, saunas, steaj rooms and air "It's a really big concern because people are on membershipas here so I can't just arbitrarilgy raise their rates," Groendyke said. "My profit margi really starts taking hits andI don'g feel there's a whole lot I can do." Last October, HECO's fuel surcharge -- labeled "energy cost adjustment" on its bills -- was 12.368 centss per kilowatt-hour.
This means the average Oahu home, which uses 600 kilowatt-hours of electricity a month, paid a $74.22 surcharge. This month, with the fuel surcharge at 14.937 cents per the average homeowner will see a billfor $158.33 with a surchargwe of $89.62, $15 more than in The surcharge is calculated a month in advance baseed on projected fuel costs, and does not require the approvalk of the state Public Utilities The same formula is applied to both residential and commercial kilowatt-hour usage. HECO stresses that it doesn't profiy from the surcharge, which has been applied to all customert accountssince 1953.
"The energy cost adjustment clause ensuress customers that HawaiianElectric doesn't make a pennuy [and] guarantees they're only paying for actuapl cost of fuel," said HECO spokesmah Darren Pai. "The PUC and the [state Officed of] Consumer Advocacy review all of our fuel contract s and the surcharge appears as a separate line ontheird bills." HECO and its subsidiaries spent $774.1 milliomn on fuel oil in according to the most recent financial statement of parent compang , which also owns . The utilitiesd collectively sold 10.1 million kilowatt-hours in 2007.
The formulaz HECO uses to determin eeach month's fuel surcharge looks at its projectedr cost of fuel for providing electric servicre to customers and compares that with the fuel cost alreadyh included in the utility's "The difference is used to make the calculationb for the following month," Pai said. "In the event that the estimatris off, there is a reconciliatio n to make up the difference betwee n actual and estimated." One of the biggest problems for HECO is that it has been aggressivel y pushing energy conservation, but risingh fuel costs are wiping out savingsd from low-power light bulbs, luke-warm showers and most solaer systems.
Pai said HECO has received a numbefrof complaints, especially from thoswe who have invested hundreds or thousands of dollars in energy-efficienft equipment. "When customers do install things like solar water heaters but fuel costzs continue to drivetheir bills, it's very understandable that they're unhappy," he said. "But we try to do as much as possiblew to have incentives and help them control theenergy they'rse using." He said over the past 11 years HECO has paid out $52 milliomn in rebates to customers who have installed energy-efficientr systems.