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Navy's bad estimate more than doubles electric bills for Hawaii airmen

Jan. 18, 2014 - 06:00AM   |  
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Airmen in Hawaii are facing a 123 percent rate hike in their electric bills — an increase brought on by the Navy’s failure to properly estimate the cost of energy.

The rate hike began this fiscal year and affects about 4,300 service members and their families living in Navy privatized housing around Pearl Harbor. This includes about 160 airmen and 400 soldiers.

Although not everyone in these homes receives a bill, those who do are averaging monthly costs of $135. Before the rate hike, bills were averaging $60. Higher energy users have incurred bills totaling several hundred dollars.

Over the past six years, Naval Facilities Engineering Command Hawaii vastly underestimated the cost of electricity, incurring operating losses of about $200 million. Navy higher-ups in Washington decided that Hawaii had to recoup those losses in a single year, fiscal 2014. Defense Department policy offers the Navy no alternative to a rate increase.

Residents, meanwhile, are taking drastic measures to reduce energy costs. Some families are living in the dark, unplugging everything in the house, throwing their breakers — one has even boiled water to do the dishes.

NAVFAC Hawaii’s commanding officer, Capt. Michael Williamson, explained the rate hike this way: The Navy buys power from the Hawaiian Electric Co., which operates its power plants using oil. The cost of electricity is directly related to the cost of oil, purchased through the Asia market. The Navy estimates electricity costs and adjusts its rate structure every two years.

But from 2007 to 2012, the Navy underestimated that rate. Fluctuating oil prices, increased demand from China and Japan’s 2011 earthquake and tsunami all contributed to the problem, Williamson said.

Williamson’s office tried to avoid the rate hike, which took effect Oct. 1, by proposing a potential buydown in which the Navy could use extra operating and maintenance funds from the year to reduce the rate. Sequestration made that difficult, and officials in Washington quashed the idea.

The electric rate is expected to drop in fiscal 2015. There’s still hope the rate could drop before then, however.

“Navy leadership, both in Hawaii and D.C., are taking a hard look at this issue and understand the effect it is having on our sailors and their families,” said Agnes Tauyan, the region’s director of public affairs.

Big bills, big rebates

Not everyone in Hawaii is complaining about the billing.

Navy homes in Hawaii were among the first to implement the Resident Energy Conservation Program, which charges high-energy users and rewards low-energy users with a rebate check. Those who fall within 10 percent of the average energy use neither receive a bill nor a rebate.

Under the program, about two-thirds of residents in Hawaii Navy housing each month are either getting no bill or a rebate.

But residents who are upset over big bills insist they aren’t energy hogs.

RECP was designed assuming a reasonable range of energy consumption. But in some neighborhoods, residents are conserving so much that they’re driving down the averages. So even those who are conserving may get stuck with a bill.

Kerry Roberts, the wife of an Air Force staff sergeant, said she and her husband “are living in the dark and the heat” and still owe.

“We wash dishes by hand, had our [air conditioning] fixed so it runs efficiently, we clean out the dryer vent, change our A/C filter, use cold water when possible and do laundry during the day. Yet we are still going over the average usage, according to the unfair standards that are in place,” she said. “We have gone so far as to turn everything off and leave the house altogether during the hottest part of the day to avoid sweating in our home for hours. To what extremes do we have to go to avoid yet another bill?”

Petty Officer 2nd Class Robert Pusateri expressed his frustration.

“I have tried to understand how to keep our electricity usage down, but I feel like every time we start to do the right thing, our bill just gets higher, which forces us to take more drastic measures,” he said.

Of the Navy’s $200 million shortfall, about $22 million is expected to fall to Forest City Military Communities Hawaii, which manages the Navy housing there. It’s unclear if Forest City will have to cut back on community services to make up for the loss.

“Once we have our 2014 budget finalized, we will need to inform our residents of any impacts prior to sharing with you,” Gregory Raap, regional vice president for Forest City, said in an email. “They should hear it from us before they read about it in the paper.”

It helps, Raap added, that basic allowance for housing in Hawaii is up. Residents there have seen a bump of about 15 percent.■

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