How the Ukraine conflict is affecting your electric bill

What’s happening

Customers should be prepared to see a sharp increase in electric bills because of the instability in the world energy market caused by the Russian invasion of Ukraine.
In solidarity with the Ukrainian people, the U.S. and other nations are isolating Russia economically and refusing to buy Russian oil.
Bills for residential customers are expected to increase about 10% on Oahu and 20% on Hawaii Island and in Maui County over the next several months.
We’re telling you now so you can plan your budget and take steps to reduce your energy use.

Why is this happening?

Two years ago, at the start of the pandemic, the cost of a barrel of oil fell to $18. It’s now close to $120.
These bill increases are on top of inflation driven by the post-pandemic economic recovery and higher oil prices.
The international community’s support for Ukraine, including the decision by the U.S. and other countries to suspend the purchases of Russian oil, and the economic sanctions placed on Russia are leading to higher prices at the gas pump and in your electric bill.
You shouldn’t worry about our fuel supply for generating electricity. Our fuel supplier is no longer buying Russian oil but there are plenty of places to buy oil on the world market, so supply isn’t an issue.
Fuel costs are passed through to customers, Hawaiian Electric makes no profit on it. Under a fuel-cost risk-sharing regulatory mechanism, the company’s shareholders may be required to pay some of the cost when oil prices rise, resulting in a slightly lower rate for customers.

How long will this last?

We can’t say with certainty when prices will stabilize. In the best case, we may see some reduction starting this summer. But that’s difficult to predict given the uncertainty of the international situation.
If the war in Ukraine continues and more countries choose not to buy Russian oil, the price could surge higher.
We will continue to communicate developments that impact the cost of fuel and your electric bill.

What can be done?

This is the time to do a thorough inventory of your appliances and devices and how you use them.

Reducing the use of anything that generates heat – water heater, oven, clothes dryer, stove – makes a big difference. Consider a heat pump water heater, now available with a $500 rebate from Hawaii Energy – it could cut your bill by up to 40%.
Turning off air conditioning or setting it at 78 degrees.
Using smart plugs or unplugging electronics when not in use – including computers, printers, cable boxes, game devices, chargers – can make a big difference.
Get rid of that second refrigerator in the garage – if it’s an older model it’s using a lot of electricity.
Hawaii Energy is an expert resource that offers rebates and practical energy-saving tips at hawaiienergy.com.
Consider rooftop solar. In addition to tax incentives, Hawaiian Electric is offering cash incentives through our Battery Bonus program to customers who install battery storage.
Shared solar will soon be available for customers who can’t put panels on their own roof but want to share in the savings and contribute to Hawaii’s clean energy transformation. Learn more about shared solar.
If you’re having trouble paying your bill, learn more about our payment arrangement options. Don’t wait until your balance gets bigger.

Other options

Power Partnerships are a way residential and commercial customers can get financial rewards for signing up with independent companies called “grid-service aggregators” under contract with the utility. These companies recruit customers with solar roofs, batteries, electric vehicles and other load flexibility devices to combine or “aggregate” their services to support the grid. The utility pays the aggregators to perform this valuable function. And customers are rewarded, generally with credits that reduce their monthly bills. Learn more about our customer incentive programs.
Electric vehicles can help reduce your household’s energy spending, especially if you take advantage of special rates that provide incentives to charge at certain times of the day. Learn more about our electric vehicle rates.

Looking ahead

It’s because of Hawaii’s vulnerability to oil prices that we’ve made important progress to get off oil over the past decade, with half of Maui’s electricity and a third of Oahu’s now generated by renewables. View our latest sustainability reports.
We’ve reduced the use of imported oil by 25% since 2008 and will be close to 70% renewable by the end of the decade.
Nearly 20 renewable energy projects are under construction or being planned.
If we hadn’t made that progress, electric bills would be even higher.
As more projects come online, we’ll be better insulated against the kind of oil price spikes caused by international events like Fukushima in 2011 and the ongoing crisis in Ukraine.
You have the commitment of everyone at Hawaiian Electric to keep moving us toward energy independence – if we keep working together we can do it.

Energy situation on Hawaii Island

Most of the renewable resources used on the island were contracted in the 1990s and 2000s. Back then, Hawaiian Electric was legally required to pay independent power producers “avoided cost,” an amount tied to the price of oil. It was an incentive to encourage the development of clean energy. It takes its name from the utility’s ability to “avoid” using oil by buying power from hydro or geothermal or wind instead.
For Hawaii Island consumers, that means that the old renewables don’t provide much refuge from the rising price of oil. When oil goes up, so does the amount Hawaiian Electric pays to operators like Puna Geothermal Venture (PGV), Tawhiri Power, Hawi Renewable Development (HRD) and Wailuku River Hydro.
Over the past decade, we’ve successfully renegotiated some of these contracts to get off avoided cost and lower customer rates. When we reached agreement with Puna Geothermal Venture on a new contract in late 2019, we said we expected typical bills to fall $13 a month by the time PGV finished its planned expansion. We also recently reached a new agreement with HRD.
Those agreements, which are currently pending before the Public Utilities Commission, will help reduce and stabilize future electric rates.