Viella Pierce got used to self-rationing at the gas station.

A couple of years ago, Hawaii’s high cost of living — including the price of gasoline — resulted in Pierce pumping barely a gallon at a time into her car’s tank.

“I rarely drove,” she said. “I’d put (in) like five bucks if I had to go anywhere, which gets you like nothing. It gets you far enough to get to work and do the routine all over again.”

At home, she was similarly vigilant about not wasting electricity in a state with by far the highest power rates in the country.

She would walk around obsessively turning things off. The conversation in her head went like this: “Oh, the fan’s on — no one’s standing there. Turn it off!”

The cost pressures faced by people like Pierce are part of why, at the worst of times, island residents have opened their electric bills with feelings of resignation, despair or even outright hostility toward the power company.

It has had a lot to do with high oil prices. What we pay for gas and electricity are directly linked since Hawaii — despite its ambitious renewable energy efforts — still satisfies nearly 70 percent of its electricity needs by burning imported oil. The cost is passed directly on to customers.

But times have changed. The cost of oil is a fraction of what it was less than two years ago.

So, for Civil Beat’s ongoing series on the cost of living, we asked analysts at the Department of Business, Economic Development and Tourism to crunch the numbers and calculate how much lower oil prices might be saving you.

Their conclusion: The typical household in the islands saved nearly $1,000 on gasoline and electric bills in 2015, compared to what it spent the previous year.

Gas at $2.279 at Aloha Island Mart at the cross streets of Kapahulu Ave and Kaimuki Ave

Cheap oil is helping to restore some buying power to island residents.

Anthony Quintano/Civil Beat

There have been many times over the last decade when soaring electric and gasoline prices made Hawaii’s big oil gamble seem painfully short-sighted. But from mid-2014 to last month, oil lost three-quarters of its value.

The result is that the typical household spent $544 less on gasoline in 2015 than it did the previous year, and $426 less on electricity bills, according to DBEDT’s preliminary analysis.

Add in the second half of 2014, when this wave of oil savings first began to filter into energy prices in the islands, and that’s another $59 in gas and $18 in electric savings per household.

So the average household savings over that 18-month period that ended on Jan. 1 was $1,047. Larger-than-average consumers, of course, saved far more.

Given that oil prices dropped to a 12-year low last month — when the cost of a barrel of crude oil sank to $26 before recovering slightly — several local economists said there should be substantial additional savings for the first months of 2016.

“I’m sure households can see that relief, and it is real … but that is just a small minority share of the total savings for Hawaii,” said Michael Roberts, an associate professor of economics at the University of Hawaii.

His point: Residents aren’t the only ones using electricity, and they aren’t the only ones who should benefit from lower prices.

A little less than one-third of oil imported into the islands is used to generate electricity, according to Hawaiian Electric, with about another third going to the jet fuel that brings in tourists, and the remaining portion going to gasoline and diesel that power our cars and boats. But only about 13 percent of all energy in the state is consumed at home so money saved there is just a fraction of the overall savings in the islands.

In terms of electricity, Roberts has calculated that 72 percent of the savings from cheaper oil-generated electricity goes to hotels, commercial buildings and the military.

This means the primary benefits to the state economy are to be found in lower costs for businesses, municipalities and the military that can result in additional spending and hiring, while also acting as a buffer to inflation.

“If they are pumping it back into the economy, in jobs, it would be a bigger savings (for the state),” Roberts said.

Viella Pierce Talks To Civil Beat About Savings From Low Gas Prices In Hawaii from Civil Beat on Vimeo.

Looking at the big picture, economist Paul Brewbaker calculated that Hawaii’s total economic output may have risen by one full percentage point in 2015 “just because of falling oil prices,” and that a similar effect is likeley for the early months of this year.

Carl Bonham, who is the executive director of the University of Hawaii Economic Research Organization, said the overall economic boost for Hawaii from cheap oil appears to be on the order of $1.35 billion.

Your Savings

The crude oil that is selling in the mid-$30s is not what Hawaiian Electric Co. and the Kauai Island Utility Cooperative, which provides power on the Garden Island, use to generate electricity.

They buy a low-sulfur oil blend from Asia that is more expensive, but the prices tend to run parallel.

And while oil market prices can fall — or rise — precipitously, the prices don’t usually filter through to customers for three or four months, according to Hawaiian Electric officials.

But the Hawaiian Electric Co. does pass along “all of the savings from lower oil prices” to customers, according to company spokesman Darren Pai, who said that bills are the lowest they have been in six years.

The typical bill on Oahu in March will be down to $123 for a household that uses 500 kilowatt-hours of electricity, according to numbers provided by HECO.

A similar household on Maui will pay $139 this month, while Big Island utility customers will spend an average of $154, which is on par with what customers of the energy cooperative on Kauai will pay.

Cheaper oil isn’t likely to lead to any sort of price revolution in the islands, even if it lessens pressure on businesses and residents, like Pierce.

She was interviewed in front of a Kapahulu Avenue gas station where she was filling up her tank in front of a sign advertising unleaded fuel at just $2.27 per gallon. That’s a little more than half of its peak average price in recent years.

Pierce explained that high prices helped to convince her to get rid of her car, which she replaced with a fuel-efficient motorcycle she initially filled up for about $15.

She now fills her tank for just $9 — and that lasts her for weeks.

Viella answers questions from Civil Beat Reporter, Eric Pape, on how current low prices on fuel have effected her lifestyle.

Viella Pierce said that high fuel prices had helped convince her to get rid of her gas-guzzling car.

Anthony Quintano/Civil Beat

Pierce got married last year and she shares a truck with her husband. But she says they rarely use it.

Their electric bill has fallen by $30, she said, and the overall savings allows them to worry less, be more generous and enjoy the islands more.

“It’s just been nice to be able to take the ‘extra’ left over from what would be filling up my tiny little tank and applying it to other things,” she said.

The extra money goes into her savings and better quality ingredients for home cooking, and also means no longer “trying to pinch every penny out of every purchase or second guessing how much you should tip.”

She said the freed-up money makes her feel more comfortable taking scenic trips around the island with her husband “just to enjoy the views — just like everybody else.”

Her responses echoed those of many of the 50 Civil Beat followers who took a snap poll on Twitter to say what they do with the money they are saving on energy. Seventy-two percent said they are using it to pay other bills, 12 percent said they ate out a little more, 6 percent said the additional money goes toward their vacation budget, and 10 percent said “other.”

Energy In Hawaii

Nationally, nearly 7 percent of all spending by city-dwellers goes to energy, according to Bureau of Labor Statistics data from January.

Given that Hawaii’s average electricity costs are more than double the national average, and that our gasoline generally sits at or near the top of national price rankings, people in the islands likely spend a far higher percentage of their income than elsewhere on energy.

The high price of energy, after all, filters into the cost of nearly every product and service in the islands.

“Oil is huge here. It is a much larger share of the economy than in any other state, by a long shot,” said Roberts.

So while the savings may not feel like enough to change the lives of people like Pierce, improving buying power is all about saving money when, and where, they can — even if it is just to pay the benefits forward.

Pierce, who works as a server in a fine-dining restaurant in Honolulu, said she sometimes suffered from “server guilt” when she couldn’t afford to tip enough in recent years.

“It is nice when there is a couple bucks extra from the gas tank — if I’m paying cash — and I can drop that on the table. That feels good.”

You can read personal stories about the human impact of Hawaii’s high cost of living on our Connections story page, and then click on the red pen and share your own.

And join Civil Beat’s Facebook group on the cost of living in Hawaii to continue the conversation and discuss practical and political solutions.

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