HECO_2006_Rate_Case_DN_2006

Hawaiian Electric Company (HECO) 2006 Rate Case

Filed with the U.S. Securities and Exchange Commission 12-Sep-2007

Form 8-K for HAWAIIAN ELECTRIC CO INC

Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On September 6, 2007, HECO, the Consumer Advocate and the Department of Defense (DOD) (the parties) executed and filed an agreement on most of the issues in HECO's 2007 test year rate case proceeding. The agreement is subject to approval by the Public Utilities Commission of the State of Hawaii (PUC), which may accept or reject the agreement in part or in full. If the PUC does not accept the material terms of the agreement, any (and all) of the parties may withdraw from the agreement and pursue their respective positions in the proceeding without prejudice. ...

In accordance with Act 162 of the 2006 Session Laws of Hawaii, the PUC added the following issue to be addressed in the rate case in an order issued August 24, 2007: "Whether HECO's Energy Cost Adjustment Clause (ECAC) complies with the requirements of Hawaii Revised Statutes §269-16(g)?" In the settlement agreement, the parties agreed that the ECAC should continue in its present form for purposes of an interim rate increase and stated that they are continuing discussions with respect to the final design of the ECAC to be proposed for approval in the final decision and order. The parties will either submit a further stipulation or address the matter in their respective proposed findings on the pension asset issue (due in October 2007). The parties agreed that their resolution of this issue will not affect their agreement regarding revenue requirements in the proceeding.

http://biz.yahoo.com/e/070912/hawel.pk8-k.html

Docket 2006-0386. Decision and Order 23612, August 24, 2007

By this Order, the commission approves the proposed Stipulated Prehearing Order filed by HAWAIIAN ELECTRIC COMPANY, INC. (“HECO”), the DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS, DIVISION OF CONSUMER ADVOCACY, and the DEPARTMENT OF THE NAVY on behalf of the DEPARTMENT OF DEFENSE (collectively, the “Parties”) on July 23, 2007, attached hereto as Exhibit 1, with
modifications, discussed herein. ...

Statement of Issues
As set forth in the Parties’ proposed Stipulated Prehearing Order, the Parties agreed upon the following Statement of Issues for this proceeding:
1 Is HECO’s proposed rate increase reasonable?
a. Are the proposed tariffs, rates, charges and rules just and reasonable?
b. Are the revenue forecasts for Test Year 2007 at present rates and proposed rates reasonable?
c. Are the projected operating expenses for Test Year 2007 reasonable?
d Is the projected rate base for Test Year 2007 reasonable, and are the properties included in rate base used or useful for public utility purposes?
e. Is the requested rate of return fair?
2. What is the amount of the Interim Rate Increase, if any, to which HECO is
probably entitled under § 269-16(d) of the Hawaii Revised Statutes? (Stipulated Prehearing Order, Section I, at 2-3.)

The commission finds the foregoing issues to be reasonable. However, the commission determines that consideration of HECO’s energy cost adjustment clause (“ECAC”) should also be included as an issue in this docket, in accordance with Act 162, 2006 Session Laws of Hawaii (“Act 162”).
Act 162 amended HRS § 269-16 to provide that: ''Any automatic fuel rate adjustment clause requested by a public utility in an application filed with the commission shall be designed, as determined in the commission’s discretion, to:

(1) Fairly share the risk of fuel cost changes between the public utility and its customers;
(2) Provide the public utility with sufficient incentive to reasonably manage or lower its fuel costs and encourage greater use of renewable energy;
(3) Allow the public utility to mitigate the risk of sudden or frequent fuel cost changes that cannot otherwise reasonably be mitigated through other commercially available means, such as through fuel hedging contracts;
(4) Preserve, to the extent reasonably possible, the public utility’s financial integrity; and
(5) Minimize, to the extent reasonably possible, the public utility’s need to apply for frequent applications for general rate increases to account for the changes to its fuel costs.

The requirements of Act 162 became codified as HRS § 269-16 (g). Accordingly, the commission finds it appropriate to specifically include in this docket the issue of whether HECO’s ECAC complies with the requirements of HRS § 269—16(g).

Based on the foregoing, the commission amends the Statement of Issues in the Parties’ proposed Stipulated Prehearing Order by inserting Issue No. 3, as follows:

3. Whether HECO’s ECAC complies with the requirements of HRS § 269-16(g)?

http://www.hawaii.gov/dcca/areas/dca/dno/dno2007/

Docket 2006-0386. Decision and Order 23366, April 13, 2007

By this Order, the commission grants the Motion to Intervene and Become a Party filed by the DEPARTMENT OF THE NAVY on behalf of the DEPARTMENT OF DEFENSE (“DOD”) on February 20, 2007 (“DOD’s Motion”), and denies the Motion to Intervene filed by LIFE OF THE LAND (“LOL”) on January 5, 2007 (“LOL’s Motion”). ...

On January 18, 2007, HECO filed a Memorandum in Opposition to LOL’ s Motion ... in which HECO opposed LOL’s Motion on the following grounds:

(1) LOL has not shown that it has a statutory or constitutional right to intervene as a party in this proceeding;

(2) any general interest that LOL may have regarding general rate case issues can be adequately represented by the Consumer Advocate;

(3) LOL has not demonstrated that its intervention as a party would contribute to the development of a sound record regarding the reasonableness of HECO’s proposed rate increase;

(4) LOL’s participation could unduly delay the proceedings and unreasonably broaden the issues presented in this docket, as the issues that LOL seeks to raise address policy concerns (e.g., the continued use of fossil fuels and the rate of shift to renewable energy), which are not pertinent to general rate case issues, and would be more appropriately addressed in other proceedings; and

(5) LOL has not shown that it should be granted full-party status in this proceeding, given its limited interest in the primary issues in a general rate increase proceeding (i.e., revenue requirement issues).

No oppositions were filed in response to DOD’s Motion ...

In particular, the commission finds that the two issues of residential time-of-use rates and residential inclining block rates are principally rate design issues for which LOL has not sufficiently shown any specialized interest or knowledge that would justify intervenor status in this proceeding. As to the ECAC, although the commission must now consider under Act 162, Session Laws of Hawaii 2006 (“Act 162”) whether HECO’s proposed ECAC is designed sufficient incentive to reasonably manage or lower its fuel costs and encourage greater use of renewable energy, the commission finds that the Consumer Advocate can adequately represent LOL’s interests and develop a sound record on this issue.

Accordingly, for all of the above reasons, the commission concludes that LOL’s Motion should be denied.

http://www.hawaii.gov/dcca/areas/dca/dno/dno2007/