In a state where electric rates have soared to more than three times the national average, and where a family can easily fork out hundreds of dollars a month to power a household, are we doomed to live by candlelight, cook on open flames, and endure cold showers?

After all, a portion of a crucial energy plan passed in 2010 is causing energy rates to rise — and that is in addition to a steeper increase in power costs caused by the jump in oil prices. That is part of why Hawaii’s Public Utilities Commission opened an investigation on Monday that aims, in part, to figure out whether a change in the way prices are calculated is unfair to consumers.

The plan, known as “decoupling,” involved a new ratemaking structure for utilities. It contained financial incentives to encourage the energy company to become substantially more environmentally friendly. (Hawaii aims to use 40 percent renewable energy by 2030, while simultaneously reducing electricity consumption by 30 percent.)

It “appears inherently problematic that electric sales are declining while utility costs and investments continue to increase,” the PUC wrote in an order to revisit decoupling. They warned of a possible “downward spiral” in which rising prices spark declining use, and cause additional rate increases.

They also expressed concern about HECO’s incentives to spend on infrastructure even as consumers use less and less electricity, while rates just keep rising.

People in Hawaii already use 38 percent less energy than the average American household, according to the U.S. Energy Information Administration.

And three years after decoupling went into effect, the annual energy price tag for the average resident on Oahu has jumped by more than $100, according to Darren Pai, a utility spokesman.

(HECO also owns the utilities on the islands of Hawaii and in Maui County. On the Big Island, where residents pay some of the highest rates in the state, people are paying an additional $25. A company spokesman said that HECO isn’t yet able to assess the impact of decoupling on energy bills on Maui.)

Decoupling breaks the link between a utility’s revenues and customers’ electricity use. The plan guarantees the energy monopoly a minimum amount of revenue to cover its costs.

The result of decoupling, as explained by its many advocates, seems counter-intuitive: The more electricity that the population uses, the less people will pay per kilowatt hour, and if everyone uses less electricity, the price of energy will go up for the kilowatts that they do use.

But ideally, this change in rates is minimal. If high prices spur customers to consume less, their overall bill should be lower even if they are paying a slightly higher rate per kilowatt hour, said Ted Peck, who led the state energy office when the decoupling policy was implemented.

Historically, American utility executives generally sold as much electricity as they could in order to maximize profits. But at the turn of the 21st century, policy shifts increasingly discouraged consumption and encouraged conservation amid growing awareness about climate change and the environment. Costs for sources of electricity were also on the rise and in the case of oil, which Hawaii most depends on for electricity, erratic.

But there were problems: How do you reduce energy consumption without undermining the financial health of utilities, and how do you prevent those companies from simply trying to sell more power to earn more money? The answer was decoupling.

“The whole idea is that you get the utility on the right side of efficiency,” said Peck.

But with decoupling came a national and local, debate about whether it was too good of a deal for the utilities (by reducing financial risk), and a bad one for consumers. In the end, some argue, that it could even undermine the ultimate goal: energy efficiency.

“If decoupling raises rates per kilowatt-hour actually used, it decreases customers’ motivation to conserve, as they continue to see their bill rise regardless of their efforts,” wrote Robert Michaels, a professor of economics at California State University, in a piece published by the Institute for Energy Research.

Supporters of decoupling argue that it doesn’t raise rates at all, or only slightly. And a 2013 report by the Natural Resources Defense Council found that the impacts of decoupling on rates are “small to miniscule.”

“The debate about decoupling is generally not about the money,” wrote the report’s authors.

Three years into its decoupling experiment, Hawaii’s regulators aren’t necessarily convinced. They worry that the state has structured its decoupling policy in a way that leaves, or that could leave, consumers vulnerable to unfair rate increases.

Electricity bills are not the only way utilities earn revenue. HECO also earns money off of its investments, such as upgrading power plants and building power lines. The utility is given a rate of return on this investment.

“The more money they spend, the more money they make,” said Peck.

And the more money HECO invests, the more money consumers have to pay in their rates to cover those costs.

Regulators worry that there aren’t sufficient checks and balances to make sure that the power company isn’t increasing costs with an eye on maximizing profits at the expense of ratepayers.

Sustained decreases in utility electric sales at HECO companies have not produced any “discernible indications” that the company feels “financially compelled to implement corresponding decreases” in utility expenses that should naturally happen, according to the commissioners.

Furthermore, the majority of HECO’s expenditures in the years since decoupling was implemented appear to be related to projects that don’t require prior approval by the commission, according to the PUC.

HECO invested $170 million in its operations and power plants in 2011. In 2012, this number jumped to $256 million, according to PUC documents. And HECO is projected to spend $292 million in 2013.

The HECO spokesman said that the utility does work to control costs, and he noted that decoupling doesn’t guarantee a set amount of profit.

“We take our responsibilities to our customers seriously,” Pai wrote by email. “We are continuing to make improvements and will take a hard look at the PUC’s concerns.”

Pai also pointed out that the high cost of oil, not decoupling, is the primary cause of high electricity bills.

Despite the investigation into decoupling, commissioners said that the ratemaking policy is essential to Hawaii’s goals of reducing electricity consumption and shifting toward renewable energy — but it must be structured in a way that protects consumers.

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