HILO, Hawai'i — Some low-income Big Island residents would pay less for electricity than wealthier residents under a new rate-hike request filed by Hawai'i Electric Light Co.

Under the proposal filed with the state Public Utilities Commission last week, HELCO is seeking an overall 9.2 percent rate increase for its residential customers, and rate increases ranging from 7 percent to 10.5 percent for its business and industrial consumers.

HELCO also is proposing a tiered rate structure for residential customers that would require the largest residential power users to pay the highest rates.

If the PUC approves the rate structure, the utility predicts most Big Island residents would see rate increase ranging from 3.8 percent to 7.6 percent. However, the largest residential power users would see rate increases of 13 percent or more, depending on how much power they use.

"We've got a lot of people who are low- to moderate-income, and what we are trying to do is get the residential customers to conserve, and this is one way to do it," said HELCO president Warren Lee.

As part of HELCO's proposed rate changes, the utility also proposed that rate increases for about 1,600 Big Island residents enrolled in the federal Low Income Home Energy Assistance Program be capped at no more than about 5 percent regardless of how much power they use.

The assistance program provides a federal utility subsidy to families that make 150 percent or less of the state poverty-level income.

Lee said the proposal to benefit low-income ratepayers was an acknowledgement that some low-income households use a lot of electricity because they have multiple families living under one roof.

If the utility's proposal is approved by the Public Utilities Commission, HELCO's electric rates would be the first in Hawai'i to be linked to the income of ratepayers.

HELCO has a total of about 75,000 residential and commercial customers, and the proposed new residential rate structure is almost the mirror opposite of the rate structure in place for the utility's business and commercial customers.

Under the "block rate" structure for HELCO's business customers, Big Island businesses pay lower rates for electricity the more they use, Lee said.

That makes sense because many large commercial customers already have conservation programs in place, Lee said. He said rate structure also encourages economic development.

The proposed rate changes would increase HELCO's revenue by $30 million a year, which Lee said is necessary to recoup the cost of improvements to the Big Island electrical grid, including about $100 million to install two new combustion turbine generators at the Kona plant at Keahole. Those generators began producing power in 2004.

HELCO's last rate hike was in 2000, when the PUC granted a 4.86 percent increase. However, the company's rate structure allows the utility to automatically increase electric bills when the price of fossil fuels increases, as it did this year.

The statewide average cost of electricity in Hawai'i is the highest in the nation. Big Island consumers now pay higher electric rates than on Maui and O'ahu, but lower rates than on Kaua'i, Moloka'i and Lana'i.

The utility says a typical customer on the Big Island without a solar-power system uses 500 kilowatt-hours per month and pays $155. By comparison, a typical consumer on Maui uses 600 kilowatt-hours and pays $173 per month; a typical consumer on O'ahu uses 600 kilowatt-hours and pays $119 a month.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.