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Electrical Power Cost Differential
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12-30-2009, 05:18 AM
Can anyone enlighten me as to the reason for the difference in cost for electricity during construction as opposed to after a certificate of residence has been issued? Since there is no difference in cost to the power company, is this a political surcharge? Can anyone point me to the legislation which established this two tier pricing?
12-30-2009, 06:43 AM
Not really sure as to why there is a two tier pricing, but isn't the cost difference a good reason to actually finish the project rather than have it sit there in an unfinished state for years, like so many do anyway? Finish the project, get a "discount" on your electric?
12-30-2009, 06:58 AM
The difference is due to the fact that building a house is in the 'commercial' realm. That is why there are permits & such. ETA: Look at it this way: building a house is a commercial venture, living in a house is a residential venture... ETAII it is also looked at a service that is TEMPORARY (that is what the agreement is..), most short term services cost more - inc. rents & such.
When the house is permitted it leaves the commercial realm & is in the residential realm. If you were to convert the structure to a commercial venture, the rate would return to commercial rates. ETA II if the structure is used as a dwelling, it is residential - if things like farm usage exceeds the residential use, the rate switches to a commercial rate... very common things everywhere... not just here! The HELCO rates are here: http://www.heco.com/portal/site/heco/menuitem.508576f78baa14340b4c0610c510b1ca/?vgnextoid=3b749349798b4110VgnVCM1000005c011bacRCRD&vgnextchannel=2c65a51aaabd6110VgnVCM1000005c011bacRCRD&vgnextfmt=default&vgnextrefresh=1&level=0&ct=article
12-30-2009, 07:30 AM
quote:Click on the link Carey posted. Look to the left and click on HELCO Rules. Read Rule #1. That has the two definitions regarding residential and single family dwelling.
12-30-2009, 08:27 AM
Cary -
I disagree on the residential versus commercial aspects but I also dont get to sit on the Regulated industries commission and set HELCO's pricing! For Helco to bill you at "permanent" power rates, you must get the final on your bldg permit which on owner/builder can be 3 years on average. In mike's case in particular I know he has power connected to his permanent power pole. It isnt any of this 3 legged wooden pole crap. In fact when his lot got hit by lighting this month, the type of installation of his poles is probably what kept him from losing his complete service. The definition that HELCO is using of the word "temporary" in Rule 1 would actually not apply to people who have poles like Mike's. But Helco has set its own guidelines as to what is permanent and what is temporary. Mike's poles are not going anywhere quickly! Maybe with a big huge backhoe or something. Building a house is not in my mind, for an owner, a commercial venture by any means. If in fact, if it was, it would not be such an emotionally intense undertaking for so many. One very gifted businessman told me that your home is your worst real estate purchase ever investment-wise. Again, HELCO got an advantage and never let go of that advantage. -Cat
12-30-2009, 10:42 AM
Cat - I am not saying anything about building your own home, the codes & permits are written for home building (as a profession) and most allow for home owner exemptions from the trade requirements on most to all of the permitted/code work. If you can agree that home building is a profession, and that permitting & codes are written for that profession, then you can see many of the aspects that seem like regulatory mumbo gumbo through the homeowners lens are actually for the home building professionals. Why have them for the owner/builder? a permit is much like any minimum standards requirement.... under-written for some & over-written for others, & just right for the mainstream users (many who are doing things they way they are because that is the way they do it, because that is the way it is written... a cycle that may not make sense, but keeps going)
In saying all of this, I am not saying I agree with it, but having done regulatory testimony in the late 70's & early 80's for the CPSC, I do kinda see many of the WHY's.... It is amazing what things are done if some are left to their own devices.... Most utilities that I know of treat a structure that is not fully permitted differently that a permitted residential structure. Most have a temporary designation if the structure is in permitting process, or not permitted. Some of this is to cover any loss of power issues that may arise... others for the amazing things that people do, left to their own devices...
12-30-2009, 01:27 PM
So that is the point. Owner builders should not be paying the temporary electric costs once they have their permanent pole up - they should have permanent electric rates. Helco doesnt have to make a trip back once they have connected the permanent pole. Usually you take your final inspection in and they change the status. This is not about the codes. In fact the codes have nothing to do with it. It is about the point where Helco can hit enter on their computer screen and change a rate.
Cary, it is all about money entirely not about a "profession". Helco knows that an owner builder will on average take longer to build than a GC. So they make money on that fact. You can bet that if the "profession" complained and lobbied for it to be changed - it most probably would be changed. HELCO, unions, contractor's lobbyists, etc all eat their meat off the same table.
12-30-2009, 02:30 PM
If this were a Hawaii only thing, the local money grab reasoning may have merit, but it is not. Many utilities have it.... I am not stating here that I agree with it, just that it is not uncommon, & most likely is not as sinister as some would take it. It is more likely the easy way out.
Part of the reasoning maybe in that a structures purpose can change during building. The permit process would note a change from residential to ag or commercial use and visa versa. With the zoning most of the island has, there is leeway for structures to change purpose. Say a builder started with an idea to build an ag shed, then changed it to a residential structure.... I think we will all agree that the eventual electric rates should reflect the finished residential purpose, with the lower residential rates.... since you have agreed that the utility may not go back, they would need to rely on the permit to show official change of use (this is good for the owner, as the rates would be lower...) Now what if the builder started with a residential structure & changed to a commercial venture - given everything above, the rates should go into the commercial realm. It is only at the end of a permitting process that the structure is 'complete', & the permit is for a structure with a stated purpose, before the end of the permitting, its' use can be very flexible.... change orders happen frequently during building... ETA: Also, it may just be that the temp. agreement is not the same as the agreement for residential supply. If both parties are in agreement that it is a temp. arrangement that can be terminated, then there may not be the same ramifications for denial of service (for the utility, if work is not done in a manner that is acceptable to the utility, they can withdraw service... ) & the cost of termination may be borne throughout the service period...
12-30-2009, 03:01 PM
quote: Change orders may happen frequently but they typically are not for change of use. Change orders usually refer to changes in aesthetics of some sort or adding a driveway when you only had a apron on the contract. A change order in the residential realm refers to a contractual item in common usage. A change of use requires a redraw plan and resubmittal to Bldg Dept. What may happen that you are trying to refer to is a person who permits say an ag shed within 50' of his residence and then turns it into a auto repair garage. And actually in this case, he may already have his final and keep residential power until Helco notices it. Rarely do OB's do this - it often times where they take an ag shed or garage and convert it to living space. But overall what we are referring to is the point where temporary becomes permanent. I do believe Helco/(HECO actually) has that point set back too far. Why dont they set it at the point where you get your electric final? That would make sense. |
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