Oahu electric rates dip in October after a rise in September fueled by a coal plant shutdown

It’s not really visible on electric bills, but the cost of energy this month fell a bit on Oahu and one other island.

The price per kilowatt-­hour of electricity in October ticked down on Oahu and Hawaii island as a result of lower oil prices and favorable expected renewable energy supply.

On Oahu there was a 1.4% price dip, which for a typical residential customer using 500 kilowatt-­hours of electricity amounts to a savings of $3.27 on a $233.52 bill, compared with $236.79 in September.

The reduction on Hawaii island was 0.9%, or $2.29 less than last month.

Consider the savings a small reprieve in conjunction with easing prices for some other commodities recently, including gas and used cars, while the price of other things continue to rise as inflation remains high overall.

Electricity, which costs more in Hawaii than the rest of the nation because of the state’s high dependency on oil delivered by ship to produce power, began surging this spring as oil prices took off in the wake of a global market disturbance driven in large part by high demand and Russia’s invasion of Ukraine.

Many utility customers on Oahu and Hawaii island, however, may not recognize that the price of electricity came down a little this month.

That’s because the price per kilowatt-hour isn’t printed on electric bills. Rather, bills list the charge for total use, and total use typically varies by household from month to month as well as by how many days of use are included in a bill. For Hawaiian Electric customers, this ranges from 27 to 33 days in any given month.

Bills also cover different portions of a month for different customers. Some customer bills might span the beginning of one month to the beginning of the next month, while other customer bills begin midmonth or later in the month to cover 27 to 33 days in all.

Ewa resident Poncho Maluo hasn’t noticed any price dip.

Maluo has 17 photovoltaic panels on his house and was used to bills around $200 or $225 in recent history until his past one topped $300.

“It kind of hurts,” he said. “I never thought I’d get a bill in the threes again because I have 17 panels, but here we are.”

Hawaiian Electric, which provides electricity to Oahu, Hawaii island and Maui County, passes on to customers increases or decreases in the cost of oil used to generate electricity.

“We charge what we paid for it,” said Jim Kelly, Hawaiian Electric vice president of corporate relations.

This cost is listed on bills as “Energy Cost Recovery” but is tied to total use. So if the utility’s cost of energy goes down but a customer uses more electricity because of the weather or other factors, then the cost recovery charge can be higher.

Electricity prices also can rise even with a decline in the cost of oil. That’s what happened this month on Maui, where a typical residential customer’s electricity expense edged up 0.4%, or by 82 cents.

Maui has more wind power capacity than rooftop solar, and October historically has been a hot month with less wind that forces Hawaiian Electric to produce more power using oil, which costs more than energy from wind farms. Hot weather also tends to increase electricity use, and if the utility needs to produce additional power using oil, then that can elevate the cost for customers.

A bigger change in the power generation mix took place on Oahu in September when the typical residential bill rose 3.8%, or $8.66, largely because a low-cost coal-fired power plant was retired.

The price rise on Oahu in September contrasted with declines on other islands ranging from 1% to 14%.

Those neighbor island price decreases in September reflected the first significant drop in oil prices since spring, while statewide price changes this month are a little up or down except for Molokai.

On Molokai, the average bill for a typical residential customer in October jumped 8%, or $16.84. This increase, according to Hawaiian Electric, was largely due to the timing of fuel purchases for electricity being consumed this month, and followed a 13.9% decline in September.

The average bill on Lanai this month was close to flat like Maui, with a 0.3% uptick representing an extra 74 cents. The amount of electricity used by typical households on Lanai and Molokai is only 400 kilowatt-hours, compared with 500 on other islands.

Kauai, where Kauai Island Utility Cooperative provides electricity service, has had the most stable electricity prices in Hawaii this year because it has the highest level of renewable energy production at about 70%. Prices for renewable energy are fixed under long-term contracts, unlike oil where prices can be volatile.

The typical residential bill on Kauai this month was $197.74, which was up 0.9%, or $1.86, from September but unchanged from August.

Compared with March, Kauai electricity prices this month are up about 4%. That compares with 27% on Oahu, 26% on Molokai, 14% on Maui, 12% on Lanai and 10% on Hawaii island.

The cost of electricity per kilowatt-hour produced from oil in recent months has been about three times that of newer commercial solar farm energy, or about 30 cents compared with between 9 cents and 13 cents. The coal-powered plant on Oahu had delivered electricity for 6 cents a kilowatt-hour.

Kelly said Hawaiian Electric customers should see less volatility in electricity prices in the coming years as more fixed-price renewable energy projects replace oil-fired power plants.

“Bills will become much more stable and predictable,” he said.

On Oahu, seven utility-­scale solar farms with battery storage are projected to begin producing electricity over the next two years. The first of these is expected to be in Waiawa in February. The state has mandated that all power sold by utilities be from renewable sources by 2045.