05-16-2019, 03:28 PM
they would rather send 10% of 0.40/KWH to the shareholders
Utilities are generally considered low risk, low return equity investments. They are allowed to adjust their rates in order to reach a target return on shares as a way to encourage shareholder investment. The current rate of return is 9.5%:
Hawaiian Electric's current Authorized ROE of 9.5% was approved by the PUC
https://www.hawaiianelectric.com/about-u.../financial
Utilities are monopolies so a government agency, the PUC, sets a limit on shareholder return as there is no competition that would act as a price control in a free market. The return on equity (ROE) is a compromise between what is deemed fair for both shareholders and customers of the utility.
Utilities are generally considered low risk, low return equity investments. They are allowed to adjust their rates in order to reach a target return on shares as a way to encourage shareholder investment. The current rate of return is 9.5%:
Hawaiian Electric's current Authorized ROE of 9.5% was approved by the PUC
https://www.hawaiianelectric.com/about-u.../financial
Utilities are monopolies so a government agency, the PUC, sets a limit on shareholder return as there is no competition that would act as a price control in a free market. The return on equity (ROE) is a compromise between what is deemed fair for both shareholders and customers of the utility.
“We do this thing not because it is easy, but because we thought it would be easy.”