The Maine Public Utilities Commission has authorized Emera Maine to increase its electric delivery rates by $4,453,645 or 5.32% based on a return on common equity of 9.35%. The rate increase will be implemented through the “across the board” methodology based on the billing determinants on October 2, 2017. The company had proposed that any distribution rate calculation not include the tax savings associated with the federal Tax Cuts and Jobs Ac (TCJA) and instead permit Emera to accumulate the on-going tax savings as a regulatory liability. The commission disagreed, finding that the TCJA has significantly decreased the company’s expenses for the rate effective year, and while it certainly is possible for the commission to defer such a reduction in rates in order to promote rate stability, such action should be viewed as an exception to the general rule and should not be viewed as a long-term remedy. It also noted that, while it is often the case that the commission has very limited flexibility to recognize financial concerns raised by consumers, in this case, due to the reduction of corporate tax rates, it does in fact have some ability to lower rates and still provide the utility with a reasonable opportunity to recover its expenses. Re Emera Maine, Docket No. 2017-00198, Jun. 28, 2018 (Me.P.U.C.).
The Hawaii Public Utilities Commission has authorized the Hawaii Electric Light Company, Inc. (HELCO) to increase rates by $1.528 million. HELCO had originally requested that the commission approve a revenue increase of $19,291 million. The commission accepted a settlement agreement and a separate recommendation by the state Consumer Advocate that rate of return on common equity (ROE) be set at 9.50%. The settlement parties had agreed on all of the issues except for the issue of whether the ROE should be reduced by 25 basis points from the initial estimate of 9.75% based solely on the impact of a rate decoupling mechanism employed by the company. The commission cited an earlier rate case ruling for Maui Electric Company (MECO), another subsidiary of the Hawaiian Electric family of electric operating utilities, where it had agreed with the Consumer Advocate’s testimony that MECO has lower financial risk than comparable average companies due to MECO’s higher-than-average common equity ratio and lower operational risk MECO faces as a result of the company’s implementation of its revenue decoupling and other regulatory mechanisms. Re Hawaii Electric Light Co., Inc., Docket No. 2015-0170, Final Decision & Order No. 35559, Jun. 29, 2018 (Hawaii P.U.C.).