HECO's First Annual Revenue Decoupling Mechanism Filing, March ...

ATTACHMENT 3PAGE 2 OF 4Hawaiian Electric Company, Inc.2010 O&M EXPENSE Escalation for O&M RAM($ Thousands)(A)2009Base O&MExpenseO&M Bargaining Unit Labor Only 44,062O&M Non-Labor 119,033Payroli Taxes 3,864Total Expenses 166,959(B)(C)2010O&M Expense EscalationEscalation Exp Amount3.43% 1,5111.10% 1,3093.43% 1332,953(D) = (A)-H(C)2010O&M Expensewith RAM45,573120,3423,997169,912Revenue Tax FactorO&M RAM (Total Expenses x Rev Tax Factor)1.09753,241(A) See Attachment 3, page 4 O&M worksheet (O&M Labor tab)(B) Escalation RatesLabor;Bargaining Unit Wage IncreaseLess: Productivity FactorLabor Escalation Rate4.19% (See Attachment 3.1)Approved in Final D&O in Docket No. 2008-0274, page 71 (part of Amended Joint0.76% Proposal), filed on August 31, 20103.43%Non-Labor:GDP Price Index for 2010 1.1% (See Attachment 3.2, page 2)C) Computation of O&M RAM = Base O&M Expense x Applicable Escalation Factor x Revenue Tax FactorComputation of Revenue Tax FactorPublic Service Tax RatePUC Fees RateFranchise Tax RateTotal Rev Tax RateRevenue Tax Facotor= 1 / (1 - Total Rev Tax Rate)0.058850.005000.025000.088851.0975