Energy cost recovery is a mechanism used by Hawaiian Electric to recoup fuel and purchased energy costs. These costs are adjusted on a monthly basis, depending on the cost of energy purchased from independent energy producers and the price of fuel used in power plants. If an IOU were to construct its own facility, the capital, operating and maintenance costs of the renewable facility would be recovered through a separate renewable energy cost recovery (RERC) clause, in addition to any administrative costs of the REC market. The energy cost recovery clause includes what was previously recovered in the basic energy-for-fuel charge on Oahu and the Island of Hawaii.
The adjustment for the cost of energy reflects increases or decreases in the cost of purchasing energy from independent energy producers and in the price of fuel compared to the levels used to establish the basic charge for fuel consumption in the last completed tariff case in Maui County. The monthly energy recovery factor provided for in the energy cost recovery clause is added to the sum of customer expenses and non-fuel energy expenses. This clause (which appears as an adjustment of the cost of energy on the bill) reflects the total cost of purchasing energy from independent energy producers and the price of fuel. Hawaiian Electric's energy cost recovery system is an important tool for ensuring that customers are charged fairly for their electricity usage. By adjusting monthly for changes in fuel and purchased energy costs, Hawaiian Electric can ensure that customers are not overcharged or undercharged for their electricity usage.
