Businesses leasing office space in Honolulu are having to grapple with electricity cost spikes in the form of mid-year increases to the energy component of their monthly rent.

The mid-year office rent adjustments are being made in the form of updated operating expense estimate charges, which landlords traditionally set just once at the beginning of each year and include in monthly rent bills.

"It's a big impact," said Joe Haas, senior managing director of commercial real estate firm CB Richard Ellis Inc. in Honolulu. "It makes life more difficult for everyone."

The unusual energy expense hike for office tenants is likely to be passed down to end users in many cases as a small fraction of the cost of goods or services, becoming another factor in what has become a struggle for some consumers and businesses to pay bills in Hawai'i's flattened economy.

Unlike residential customers or other commercial tenants such as retailers that pay for electricity every month based on the cost and amount of electricity used, large office building tenants typically pay their share of electricity based on an annual estimate and how much space they rent.

Operating expenses cover electricity that powers everything from computers and lights to elevators and air-conditioning, as well as other things such as maintenance.

Depending on operating expenses for the full year, tenants at year-end either receive a rebate if the estimate was high or a bill if the estimate was low.

This year, many estimates are going to be very low because of oil prices that have unexpectedly soared over $140 a barrel. So office tenants that don't receive interim operating expense hikes can expect a jolt at the end of the year when they have to pay for how much energy costs rose over estimates building owners made at the start of the year.

Larry Taff, executive vice president of operations for Pacific Office Properties Trust Inc., which owns seven Honolulu office properties including the Pan Am Building, said his company decided to increase the operating expense portion of tenant rents with a higher estimate related to energy so tenants wouldn't be shocked at the end of the year.

"We thought we should begin reflecting the (higher) utility cost sooner than later," he said. "We understand that there's pain out there. We didn't want to wait until the end of the year and have a big surprise."

Taff said Pacific Office is also exploring ways to reduce energy consumption in its buildings where it's not unusual for computers and lights to be left on overnight.

Haas of CB Richard Ellis said several Honolulu office building owners plan to make mid-year operating expense increases.

According to a survey of nine Honolulu office buildings by CB Richard Ellis, average operating expenses increased 14 cents a square foot this year through June, and 22 cents a square foot since the beginning of 2007.

For a tenant with 10,000 square feet of space, or roughly one floor in a high-rise, the average increase over the past 18 months equates to $39,600.

"It's huge," said Haas, whose company leases 16,000 square feet Downtown at Bishop Square. For the entire Bishop Square building, which is about 1 million square feet, the monthly electricity bill is about 40 cents a square foot, or $400,000. "That's a lot of money."

Hawaiian Electric Co. charges commercial customers different rates for electricity depending on the use and amount of use. Generally, average rates per kilowatt hour for large and medium office buildings on O'ahu were up about 30 percent in the first quarter over the average for all of last year, according the latest available figures from HECO.

The electricity increases may be difficult for some tenants to absorb or pass on to customers, but the hikes aren't expected to lead to significantly higher vacancies.

CB Richard Ellis said O'ahu office space occupancy is up for the first half of this year with businesses filling about 50,000 square feet of empty space. The positive absorption leaves about 950,000 square feet, or 8.2 percent, of vacant space in the market's 11.6 million square feet.

The CB Richard Ellis occupancy figures are based on a survey of 101 buildings in the two highest classes of property. An earlier report by another commercial real estate firm, Colliers Monroe Friedlander, covered the first three months of the year.

It said there was a decline in occupancy in the first quarter based on a survey of three classes of office space.