Hawaii’s Electricity Bills Spiked 22% in May

Hawaii already had the most expensive electricity in the country. Then the war in Iran happened.

America’s 50th state has no domestic fossil fuel industry and no access to the continental United States’ natural gas pipeline network, and is therefore uniquely dependent on imported oil to generate electricity. (The state’s last coal plant shut down in 2022.)

While Hawaii’s electricity prices and household bills have spiked along with oil prices since the United States and Israel attacked Iran in late February, the average electricity bill in Hawaii shot up to $248 in May, compared to an already-high $203 in April, according to the latest data in Heatmap and MIT’s Electricity Price Hub, released Monday. The average price of electricity rose by 6 cents per kilowatt-hour, from 46 cents in April to 52 cents in May. Nationally, average prices stand at around 17.5 cents and are up 3.6% (or just over half a cent) from May of last year, with national average bills of $140 per month up about $6 from a year ago.

Hawaii’s eye-watering prices far outmeasure even the state’s peers in expensive electricity. May bills for California were $137, for instance, while prices were 25 cents per kilowatt-hour. In Massachusetts, where prices have also spiked this spring, they only got to 38 cents per kilowatt-hour. Maine, which has been struggling with high prices thanks to high costs linked to storm recovery, prices in May were 28 cents per kilowatt-hour, up about 10% from a year ago, but down substantially from the 35 cents per kilowatt-hour in February.

The situation in Hawaii was pretty much a foregone conclusion way back in April. Hawaii’s Department of Commerce and Consumer Affairs warned customers that bills from Hawaiian Electric, which serves almost the entire state, would almost certainly go up between 20% and 30% from then through June.

“We told our customers to prepare for potential increases in energy costs in the coming months, driven by rising global oil prices linked to escalating geopolitical tension,” Scott Seu, Hawaiian Electric’s chief executive, said in an April earnings call. “Affordability is a core focus of ours, and affordability pressures have intensified given the recent increase in fuel prices across the globe.”

Some Hawaii ratepayers will have the opportunity to claim a one-time credit on their bills this month as part of an annual rate relief drive by the Hawaii Home Energy Assistance Program. The state program is administered through local nonprofits and provides bill credits for households that claim some form of social assistance, like food stamps or Social Security or disability payments administered through Social Security

The benchmark global oil price was sitting at around $70 per barrel in the weeks leading up to the opening of the U.S.-Israel-Iran war, and is now around $95, down from a high of $118. While Hawaii ratepayers probably won’t feel comforted this is far from the worst-case scenario for runaway oil prices as public and private inventories of oil have largely filled the gaps. If the story of the energy effects of the Iran War in the United States is that some combination of trapped natural gas, inventory releases, and healthy domestic production have made the oil price hike manageable, it may only be in the non-insular United States.

According to analysis of price hub data from our partners at CleanEcon, customers in the Lanai division of Hawaiian Electric’s Maui service area faced an 18 cents per kilowatt-hour rise just from “recovery” for high energy supply prices, a nearly 60% hike, which on its own added $76 to average bills compared to the beginning of this year.

The good news is that due to its famously agreeable climate, Hawaiian households consume little electricity compared to the rest of the country. But with those electricity rates, who can blame them.