The average residential bill on Oahu will rise by $7.08 a month next year if Hawaiian Electric Co. gets approval for two new rate increases.

The utility said it is seeking a 3.1 percent revenue increase to cover the operation and maintenance of the electrical grid on Oahu. Another 2.3 percent increase is being sought for initiatives HECO is deploying as part of its move to generate more of its electricity from renewable energy sources.

The rate increase would also help cover the cost of more than $670 million in investments completed in 2009 or to be completed in 2010 and 2011, HECO said yesterday.

Any rate jump would not go into effect until mid-2011 at the soonest, the utility said.

If approved by the Public Utilities Commission, the rate increase would be the third for Hawaiian Electric in the past four years.

HECO’s transitions to greater use of biofuels and other alternative forms of energy will come at a cost, said Robbie Alm, executive vice president.

"We know times are still tough in Hawaii’s economy, but the status quo of heavy oil dependence is not acceptable," said Alm. "We must make the investments to move away from that dependence now or risk even greater costs in the future," he said in a news release.

If approved, the impact of the rate increases would vary by customer category and amount of electricity used.

The "basic" rate increase of 3.1 percent would generate $54 million in additional revenue and boost the typical 600 kilowatt-hour monthly residential electric bill by $4.07, to $162.06 from $157.99, HECO said. The 2.3 percent additional increase being sought to cover renewable-energy initiatives would raise the average residential bill by an additional $3.01 a month for a total of $165.07.

The filing proposes several new initiatives to reduce the state’s dependence on fossil fuels and increase reliability of fuel supplies, including:

» Programs to increase the amount of electricity HECO buys from alternative sources.

» Upgrades to HECO’s electrical generation facilities to allow for the expanded use of biofuels.

» A fuel security program focused on maintaining larger fuel inventories, including biofuels.

» A replacement program for HECO’s existing transmission and distribution infrastructure to ensure reliability of service.