Ulupono Initiative responds to the Hawai‘i Public Utilities Commission’s decision that sidesteps legislative mandate

Mar 10, 2025

HONOLULU — The Hawai‘i Public Utilities Commission (PUC) recently issued an order (Order No. 41575; Docket No. 2018-0088) that chooses an outdated process that could drive up electricity bills, slow down clean energy progress, and ignore the very system designed to hold the utility accountable.

Instead of following the Performance-Based Regulation (PBR) law that the Legislature put in place to protect customers and push Hawaiian Electric to improve, the PUC is reverting to an old-school rate case that rewards spending over performance.

Hawai‘i’s PBR law, HRS §269-16.1, was designed to:

• Cut waste and drive efficiency so customers don’t overpay for outdated infrastructure;
• Hold utilities accountable by tying their profits to performance, not just how much they spend;
• Lower costs for families and businesses, while ensuring rate hikes lead to better service; and
• Speed up the transition to 100% renewable energy and a more reliable grid that can handle wildfires, storms, and modern energy needs.

However, instead of sticking to this plan, the PUC is going backwards—pushing a traditional rate case that could take years, cost more, and leave customers footing the bill.

This decision sidesteps the legislative mandate and undermines the state’s clean energy future. It risks pushing utility customers into higher costs without guaranteeing better service, and it undermines the very reason PBR exists—to make sure utilities focus on results, not just spending.

“We are disappointed in the PUC’s decision. Rather than adopting an innovative, streamlined review  that could have addressed financial concerns without unnecessary regulatory burden, this decision returns Hawaiian Electric customers to an outdated process that is costly, time-consuming, and potentially counterproductive,” said Michael Colón, Ulupono Initiative’s director of energy.

In its decision, the PUC chose not to explore smarter solutions, such as:

• Making targeted adjustments to utility revenue recovery, instead of evaluating all utility costs;
• Stronger accountability measures to ensure customers get real value for what they pay;
• Tying costs directly to actual performance, so ratepayers aren’t forced to cover unnecessary spending; and/or
• Cost recovery focused on State policy and customers’ needs, such as wildfire prevention and grid resilience.

While Ulupono recognizes the current financial stress the utility faces, a full rate case may lead to significant cost increases for customers, without sufficient guarantees of improved service, efficiency, or cost containment. Hawai‘i’s leaders have set a bold vision for clean, affordable, and reliable energy, but this decision moves in the wrong direction. Ulupono believes the PUC should reconsider future decisions and realign with PBR by:

• Following the law and legislative intent to ensure utility profits are tied to performance, not outdated spending habits;
• Keeping electricity affordable by stopping unnecessary rate increases;
• Increase the value of incentive mechanisms to truly incentivize utility performance;
• Accelerating clean energy and grid improvements, not slowing them down with old processes; and
• Creating a smarter, modern regulatory system that serves customers—not just the utility’s bottom line.

“Hawai‘i deserves a system that rewards innovation, accountability, and lower costs for families—not one that keeps us stuck in the past, paying more for the same old problems,” Colón added. “The Legislature put performance-based regulation in place for a reason. We need to uphold that vision.”

Link to Ulupono’s Dec. 5, 2024, brief here.