PUC urges wage cuts on electric company - Hawaii News Now - KGMB and KHNL

PUC urges wage cuts on electric company

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - The Public Utilities Commission, declining to approve a rate hike to Hawaii Electric Light Co. as it was submitted, has told the company to recalculate the proposed interim hike with increases in wages and benefits.

On a 2-1 vote taken the day after the election, the PUC tells HELCO it "must make certain adjustments to the wages, salaries and benefits" because of "economic challenges" faced by the state.. It "instructs" HELCO to make adjustments.

In a dissent, Commissioner Leslie Kondo calls the decision "arbitary" and "contrary to the public interest." A Hawaiian Electric Industries spokesman noted that the decision does not require the company to cut wages but simply disallows adding the cost of any wage increases to its proposed interim rate hike.

The action comes as Hawaiian Electric Industries conducts contract negotiations with the International Brotherhood of Electrical Workers. The old contract expired Sunday.

Kondo says the commission suggests a wage cut of 7.87% though it earlier found wages reasonable in rate hike decisions affecting Maui Electric and Hawaiian Electric, the other two utilities owned by HEI. The state consumer advocate accepts that HELCO lineman wages rank 11th of 14 power companies in the western United States.

The commission says wage increases are unreasonable in "the current economic environment."

Kondo says calling wage costs unreasonable now, when they found to be reasonable three years ago, effectively asks HEI to accurately predict future economic conditions, which he says is "unfair" to the company.

The commission said rate regulators in New York and Florida issued similar instructions to utilities in those states.

Kondo says the commission has already said the electric company should be "guaranteed" a return of 10.125%, which is more than the current return, and suggests that it is "unreasonable" to increase the return to shareholders while insisting employee wages be cut.

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