Utility Disconnection Reform
Many of us take our access to electricity - and the essential needs it fills - for granted, yet a growing number of Hawai‘i’s most vulnerable families are losing access to this vital service. In 2023, an estimated 6,400 households experienced utility disconnections—more than double pre-pandemic levels of 2,600. These disconnections disproportionately impact extremely low-income households, renters, and families in multi-family homes, many of whom spend over 15% of their income on electricity, compared to the state average of just 1.9%. As energy costs take up more of each household’s income, working families are forced to choose between paying electricity bills and paying rent, buying food, accessing health care, or taking out predatory loans that only drive them further into poverty.
In December 2022, the Hawai‘i Public Utilities Commission (PUC) opened the Energy Equity and Justice docket which launched commission-wide work to investigate equity. We have referenced this historic docket many times since its inception, particularly as it relates to community voices in decision-making. Most recently, the PUC focused on inequities in utility disconnections and explored policy reforms to reduce impact on vulnerable households. The Disconnection Reform Memo made by RMI highlights the urgency of tackling energy affordability challenges and ensuring basic energy access for all. The report found that financial struggles, compounded by rising costs of living and climate-driven extreme weather, have left many kūpuna, families, and medically vulnerable individuals at greater risk.
Report Findings
Energy Burden: Approximately 80,000 households in Hawai‘i are considered energy-burdened. The 48,000 “extremely low-income” families spending up to 15% of their income on electricity.
Disconnection Practices: Utility disconnections create severe financial, health, and safety challenges for households, disproportionately affecting medically vulnerable individuals, families with children, and communities of color.
Current Hawaiʻi Utility Practices:
HECO offers some low-interest payment programs for a limited time but lacks safeguards like arrearage management (i.e. debt forgiveness payment plans) and weather-related disconnection protections.
KIUC limits service to 600 watts (typically enough for a refrigerator and some lights) for overdue accounts, avoiding full disconnections. HECO has no such safeguard.
What Can We Do?
The report outlines potential policies to reduce disconnections and energy insecurity, including:
Low-Income Discount Rates: Directly reduce electricity costs for low-income households. Many utilities already have adopted bill assistance programs to offer a set amount of financial relief to low income ratepayers, which often takes the form of a static monthly bill credit. While these programs are better than nothing, they often fall short in addressing energy burden because they only offer a one-size-fits-all approach – whereas energy burden can vary dramatically from one household to another.
Percentage-of-Income Payment Plans (PIPPs): Cap utility bills at a manageable percentage of household income. PIPPs have been shown to be effective at addressing issues of affordability, and are currently in place in ten states, with some states, including Colorado and New Jersey, automatically enrolling households in PIPPs when they apply and qualify for the Low-Income Home Energy Assistance Program (LIHEAP).
Lifeline Electricity: Limit a customer’s power to a certain level rather than disconnecting service. The amount of power provided is typically enough for some but not all essential needs and creates an incentive for customers to pay their bill without cutting them off completely. KIUC already practices this in their disconnection process.
Fee Limitations and Arrearage Management Programs: Help customers pay off past-due balances through structured repayment plans. Some states ban disconnect/reconnect fees to help struggling families. Hawaiʻi doesn’t have this rule, which means people face even more fees on top of their unpaid bill in order to restart their utility service, making it that much harder to reconnect after disconnections.
Energy Efficiency Programs: Assist low-income households in reducing energy usage and costs by helping them to access efficiency upgrades.
Weather-Based Disconnection Protections: Prohibit shutoffs during extreme weather conditions, such as periods of high heat and humidity.
Since the report was shared, the PUC has hosted two public forums to hear from the utilities on their different disconnection practices; and from disconnection service providers like Catholic Charities and the Salvation Army, on the issues and challenges they face with constant underfunding in their work. A single mother of five presented her story of not having electricity for over a year because she couldn’t pay her bill and the associated disconnect and reconnect fees on top of it. Additionally, HECO shared that there are over 100 people on their special medical needs program waitlist, leaving vulnerable households unprotected. From both meetings, it is clear that reform must go beyond band-aid fixes. A comprehensive, portfolio approach including the policies described above is needed to address the root causes of disconnections and mitigate their impact on our most vulnerable families and our social fabric as a whole.
As the clean energy transition gains momentum, creating policies to ensure sufficient access to electricity to meet all families’ basic needs will be key to ensuring that no one is left behind and to building a more equitable, and sustainable energy future.
Take Action!
Let the PUC know you support systemic reforms to keep lights on for Hawai‘i’s most vulnerable households.
Submit Comments to the PUC:
Written testimony can be submitted online here.
Enter your information: name, address, and email address.
Enter docket number: DOCKET NO. 2024-0258
Enter subject line: Utility Disconnections Report
Position: Comment.
Comments: Enter comments or attach your own file. Specific format instructions are on the form.
Sample Comments:
Aloha Chair Asuncion, PUC Commissioners, and Staff,
My name is [Your Name], and I am a resident of [Your Island/Community]. I am deeply concerned about the wide-ranging impacts that utility disconnections are having on our most vulnerable families and the overall well-being of our community.
The Disconnection Reform Memo shared by the Commission found that approximately 80,000 families in Hawai‘i are considered energy-burdened. Extreme cases include “extremely low-income” households spending up to 15% of their income on electricity. Alarmingly, the number of households experiencing disconnections in 2023 also doubled compared to pre-pandemic levels, adding even more hardship to the lives of our most vulnerable and exacerbating the social and economic disparities that are tearing our social fabric apart.
Please work to ensure the adoption of crucial policies to address energy insecurity and reduce disconnections, including:
Low-Income Discount Rates to directly reduce electricity costs for struggling families.
Percentage-of-Income Payment Plans (PIPPs) which would be a great step forward to alleviate financial burdens on the most income strained households by capping bills at an affordable percentage of household income.
Fee Limitations and Arrearage Management Programs to help customers pay off overdue balances through structured plans.
Energy Efficiency Programs to assist low-income households in reducing usage and costs through upgrades.
Weather-Based Disconnection Protections to prohibit shutoffs during extreme weather conditions, such as high heat and humidity.
Lifeline Electricity Programs that delivers a minimum of electricity to meet basic household needs, such as refrigeration, regardless of ability to pay, such as KIUC’s policy to provide 600 watts for overdue accounts.
Hawai‘i’s energy future must prioritize equity and justice for all residents, ensuring no one is left behind in the transition to clean energy. Systemic reforms such as the policies above are essential to protect vulnerable households, deliver meaningful relief, and promote long-term affordability for all ratepayers
Mahalo for the opportunity to share comments and for the Commission’s efforts to ensure every household has access to the electricity they need to live safely and with dignity.
Sincerely,
[Your Name]