The closure of the AES Corporation coal-fired power plant is expected to result in a 7% increase in residential electricity bills, or an average increase of $15 a month. The power purchase agreement between AES and Hawaiian Electric of the plant located at Campbell Industrial Park ends at midnight on September 1, according to Hawaiian Electric.
Businesses are on different rate schedules than residential, depending on how much electricity they use, Hawaiian Electric Vice President of Government and Community Relations and Corporate Communications, Jim Kelly, told PBN. The rate increase will add about 3 cents per kilowatt hour to the rate businesses are currently paying, which varies depending on what rate they are on, Kelly said. Government and nonprofits pay the same rates as residential customers.
“Any increase in costs to businesses right now is going to have a negative impact on our economy,” Chamber of Commerce Hawaii’s Associate Vice President of Business Advocacy and Development, Trevor Abarzua, told PBN. “Companies are still getting back on their feet from the pandemic and the cost to do business is much higher due to inflation and the supply chain issues.”
The cost of discontinuing the use of coal for power was originally expected to result in an increase of about $2 more per month for typical customers, but then oil prices surged earlier this year following the Russian invasion of Ukraine, Hawaiian Electric said. The increase will start showing up for customers in bills they receive in October.
“With the increase in costs to electric bills, businesses will have less capital to invest in their business or hire additional staff,” Abarzua told PBN. “While there are many factors that go into the increase in electric bills, we hope there is a quick solution so businesses can use their resources to help grow their business and ultimately the economy.”
Following the end of the 30-year contract, Hawaiian Electric says they will use renewable resources and existing power plants to meet Oahu’s needs.
The Chamber of Commerce will work with legislative leaders, HECO, and other community organizations to see what can be done to help alleviate the costs of electricity for businesses that are still struggling from the state of the economy, according to Abarzua.
“The Chamber understands that Hawaiian Electric is just following the law when it comes to closing the Campbell Industrial Park Coal Plant and increasing their rates due to the shutdown,” Abarzua told PBN. “While it comes at an inopportune time for businesses because of all that is going on with the economy (COVID recovery, inflation, and supply chain issues) we know long term this is what’s best for the environment and for the State of Hawaii.”
“Also, HECO has additional renewable energy projects that are underway currently on Oahu, and that once those projects are at full capacity it will produce more electricity and reduce costs for businesses.”