Q:   What is the Power Cost Adjustment?
      The Power Cost Adjustment provides BWS the ability to recover any electrical
      cost overages above and beyond what was used to calculate the rate increases.

      Per the Power Cost Adjustment provision, which was approved in the 2006 rate
      schedule, BWS may charge $0.01 per 1,000 gallons of water used for every
      $600,000 incremental overage.

      The BWS will annually review and modify the Power Cost Adjustment so that the
      adjustment only recovers unanticipated energy cost overages from the prior
      fiscal year.

Q:   What is the current Power Cost Adjustment Rate?
       From July 1, 2010 to June 30, 2011, the Power Cost Adjustment will be 2.8 cents
       for every 1,000 gallons of water you use.

       The adjustment would mean an average of $0.36 more a month, per household
       (based on monthly consumption of 13,000 gallons).

Q:   How was the current Power Cost Adjustment Rate calculated?
       The Power Cost Adjustment provides BWS the ability to recover any electrical cost
       overages above and beyond what was used to calculate the rate increases.

       Per the Power Cost Adjustment provision, which was approved in the 2006 rate
       schedule, BWS may charge $0.01 per 1,000 gallons of water used for every
       $600,000 incremental overage.

       Calculation:
           $1.7 million (FY09 electrical cost overage)
           /$600,000
           2.8 cents per 1,000 gallons (Power Cost Adjustment 7/1/2010 to 6/30/2011)

       The BWS will annually review and modify the Power Cost Adjustment so that the
       adjustment only recovers unanticipated energy cost overages from the prior
       fiscal year.

Q:   How long will I see this new Power Cost Adjustment on my bill?
       The Power Cost Adjustment charge will change annually so that the adjustment
       only recovers unanticipated energy cost overages from the prior fiscal year.

Q:   When did the Power Cost Adjustment first take effect?
      The first Power Cost Adjustment took effect in fiscal year 2009 (7/1/08 - 6/30/09).
      While the approved annual rate increases implemented beginning in 2006
      accounted for some projected electrical cost escalations, unexpected and
      dramatic increases in fuel prices caused the actual electrical costs to far exceed
      our projections.  The Power Cost Adjustment simply provides BWS the ability to
      recover any electrical cost overages above and beyond what was projected.

Q:   How was this Power Cost Adjustment approved?
      After a public hearing, the BWS Board of Directors adopted a schedule of rates
      and charges at its May 2006 meeting, which included a Power Cost Adjustment
      provision. 

Q:   What is BWS doing to manage its electricity costs?
      BWS is committed to cost-efficient operations, and we're doing many things to
      keep our electricity costs down.  This includes running our pumps, when possible,
      during non-peak hours and upgrading our equipment to more energy efficient
      models.  Additionally, we continuously explore ways to optimize and manage our
      energy consumption.

Q:   Do other utilities have similar Power Cost Adjustment charges?
      Yes.  Other county water utilities in the state have similar charges:

• Hawaii County - Power Cost Charge is $1.91 per 1,000 gallons of water used (as of July 1, 2010).
• Kauai County - Projected Power Adjustment Charge is 29 cents per 1,000 gallons (as of July 1, 2010).

     Other businesses also have similar charges:

• Hawaiian Electric Company - In June 2010, the Energy Cost Adjustment was at 17.1896 cents per kilowatt-hour.  This means the average Oahu homeowner (using 600 kilowatt-hours of electricity a month) paid a $103.14 surcharge.
• Matson Navigation Company - Fuel Surcharge as of February 2010 is 27.5%.
• United Airlines - In April 2008, added Fuel Surcharge of 5% on all domestic flights.

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