Oahu electrical bills are going up.

The state Public Utilities Commission approved an interim 2.5 percent base-rate increase by Hawaiian Electric Co. that will raise electrical bills for 304,261 customers on Oahu.

HECO residential customers will see their typical monthly bill increase by $2.82, to $135.14, based on December’s typical bill of $132.32 for an Oahu household using 500 kilowatt-hours of energy.

The state’s dominant utility, which initially had sought a 6.9 percent increase and then negotiated a settlement with the Consumer Advocate for a 3.5 percent hike, said Monday it was displeased with the reduced amount, which sliced its original request by about one-third. The PUC issued its order Friday.

“After going six years without a base rate increase, while investing in work to move Hawaii to reach 100 percent renewable energy in full support of our state’s recently adopted policy, we’re extremely disappointed with this outcome,” Alan Oshima, president and CEO of Hawaiian Electric, said Monday in a statement. “It’s especially disappointing because we worked for months to achieve what we believed was a fair negotiated settlement with the Consumer Advocate that was in the best interest of customers.”

HECO’s rate case filing in December 2016 for a 6.9 percent increase would have generated an additional $106 million a year. The settlement with the Consumer Advocate last month would have reduced that amount to 3.5 percent and $53.6 million. HECO said Monday it hasn’t calculated yet what its revenue will be under the reduced 2.5 percent revenue increase.

The company said it expects to file a motion for reconsideration with the PUC this week.

PUC Chairman Randy Iwase said if HECO files that motion, it would be prudent to delay implementation of the interim rate. He said the time it would take to make a decision on the reconsideration would depend upon the complexity of HECO’s motion.

Ultimately, regulators could rule differently when they issue their final decision. If the PUC decides in its final order to approve lower rates than the interim, HECO must refund customers the difference with interest. If a higher amount is approved, the increase will be applied only from the time it is approved, not retroactively.

In its order, the PUC disallowed the recovery of a portion of pension expenses that HECO wanted. HECO and the Consumer Advocate previously had agreed to the pension expense recovery in their settlement.

The PUC said because HECO decided to forgo a rate increase in its 2014 filing, it gave up its opportunity to seek an increase in revenue in that rate case as well as a chance to fully recover pension expenses from 2011 through 2014. HECO said Monday it was clear in its 2014 filing that it intended to seek recovery of the full pension expense at a later time because at the time of the filing, its customers already were in a challenging high bill environment.

“Ultimately for the ratepayers, when you say ‘forgo,’ it doesn’t mean ‘defer,’” Iwase said in a phone interview. “At some point you’ve got to mean what you say. ‘Forgo’ means you were not going to seek a recovery in that amount. We took them at their word. They were about as clear as mud because they used the word ‘forgo,’ not ‘defer.’ What we’ve done is we want to make sure the ratepayers get the benefits promised in 2014.”

HECO said employees’ pensions have been funded and are not affected by the decision.

The last rate case that HECO filed seeking an increase was in May 2010. HECO asked for a 6.6 percent increase at that time. The PUC ended up approving a 3.4 percent increase in September 2012. That resulted in a revenue increase of $58.1 million.

Sister utilities Hawaii Electric Light Co. on the Big Island and Maui Electric Co. are still waiting on different types of decisions.

In August the PUC issued an interim decision allowing HELCO to increase rates by 3.4 percent, or $9.94 million. HELCO initially had asked for an increase of 6.5 percent, or $19.3 million. The PUC has not issued its final order yet.

In October, MECO filed with the PUC for a rate increase of 9.3 percent, or $30 million. The PUC has not ruled yet on that request.