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Navy's bad estimate more than doubles Hawaii soldiers' bills

Jan. 12, 2014 - 06:00AM   |  
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Hundreds of soldiers 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 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. It was determined by Navy higher-ups in Washington that Hawaii had to recoup those losses in a single year, fiscal 2014, and 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.

About a dozen residents wrote Navy Times, an Army Times sister publication, to complain about the Navy’s actions.

“Why are we bailing you out for your mistake?” asked Beverly Moore, the wife of a senior chief petty officer based in Hawaii. “I didn’t make this mistake. This E-1 who lives down the street from me didn’t make this mistake.”

NAVFAC Hawaii’s commanding officer, Capt. Michael Williamson, explained to Navy Times the reason behind the rate hike.

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. From 2007 to 2012, the Navy underestimated that rate. Fluctuating oil prices, increased demand from china and Japan’s earthquake and tsunami all contributed to the problem.

One resident said, despite her best efforts to conserve, she’s getting bills between $150 and $400.

“I feel like we are drowning here in Hawaii and cannot wait to be able to leave this place,” she said.

Cpl. John Summers, a soldier serving with Army Pacific headquarters, said the program is unfair because of the inefficient homes they have to live in. Summers said he’s dealt with a busted air-conditioning unit, poorly sealed windows and a shoddy water heater.

“It’s difficult to make them energy-efficient,” said Summers, who recently got stuck with a $40 bill while he was out of town and the power was dialed down.

“My cats were the only creatures in the house,” Summers said.

Williamson said his office tried to avoid the 123 percent rate hike, which took effect Oct. 1. Williamson said his office proposed a potential buy-down 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 Navy should recoup its losses this fiscal year, Williamson said, and 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, in a statement.

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. The program is rolling out Navy-wide, and it’s similar to the Army’s Residential Communities Initiative Energy Conservation Program.

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 if you are conserving, perhaps your neighbor is willing to go to extremes, and you get stuck with a bill.

“This has irritated my wife and I to the point that ... we must unplug everything in our house and sit in the dark and the heat all day and all night,” said Petty Officer 2nd Class Robert Pusateri. “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.”

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

“We wash dishes by hand, had our A/C 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?”

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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