HECO's Response to Consumer Advocate's Comments, 4/29/11

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The Honorable Chair and Membersofthe Hawaii Public Utilities CommissionApril 29, 2010Page 2Comments were filed by the Consumer Advocate and Hawaiian Electric on April 21,2011. Hawaiian Electric hereby transmits its response to the Consumer Advocate'scomments.Hawaiian Electric appreciates the willingness of the Consumer Advocate and theCommission to address this significant issue, which is critical to the effective implementationof decoupling, in an expedited manner.Very truly yours,Dean K. MatsuuraManager, Regulatory AffairsEnclosurecc:Division of Consumer AdvocacyDepartment of Defense
EXHIBIT 1PAGE 1 OF 19TRANSMITTAL NO. 11-02HAWAIIAN ELECTRIC COMPANY, INC.RESPONSE TO CONSUMER ADVOCATE’S COMMENTS ON ATTACHMENT 51. The Company’s PositionHawaiian Electric Company, Inc.’s (“Hawaiian Electric” or “Company”) position is thatthe Rate Adjustment Mechanism (“RAM”) determines an incremental revenue amount for aspecific calendar year (or partial year, in the case of a rate case test year) that the Company isallowed to collect. In the case of the RAM tariff provision 1 , the determination of the amount ofrevenues to be collected is based on the adjusted revenue requirement for the current calendaryear. Collection of the annual RAM amount does not begin until June 1 st of the current year.Hawaiian Electric Comments, Exhibit 1, at 5.2. The Consumer Advocate’s PositionThe Consumer Advocate apparently does not view the RAM as an adjustment mechanismthat necessarily allows recovery of the revenue used to calculate the RAM. Rather, it apparentlyviews the RAM as merely setting a new rate, rather than a means to recover a certain level ofrevenue. Whether or not the Company recovers the intended revenue adjustment depends onwhether or not the interim rate order in a test year stops the collection process.3. The Consumer Advocate’s Position Would Result in Unreasonable, Unfair andUnintended ConsequencesAdoption of the Consumer Advocate’s position would result in unreasonable, unfair andseriously unintended consequences.First, there is the obvious impact in a rate case test year. A general rate increaseapplication can be filed on July 1, using the next calendar year or a test year. The Commission’s1 Hawaiian Electric Company, Inc. Tariff Sheets No. 93-93H, effective March 1, 2011.3357864.1
Page 1: Hawaiian Electric Company, Inc.•
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HECO's Response to Consumer Advocate's Comments, 4/29/11

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