Hawaiian Electric Industries (HE) 8-K Entry into a Material Definitive Agreement

HECO Exhibit 10

[HECO letterhead]

January 28, 2013

The Honorable Chair and Members

of the Hawaii Public Utilities Commission

465 South King Street

Kekuanaoa Building, First Floor

Honolulu, Hawaii 96813

Dear Commissioners:

Subject:	Docket No. 2008-0083 – Hawaiian Electric 2009 Test Year Rate Case
	Stipulated Settlement Agreement between the Hawaiian Electric Companies and the Division of Consumer Advocacy regarding Certain Regulatory Matters

This letter (heretofore referred to as “Stipulated Settlement”) documents certain agreements between the Hawaiian Electric Companies1 and the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs (“Consumer Advocate”) (collectively referred to as the “Parties”) on certain regulatory matters as described below and in Exhibit 1.

The Parties agree to the following:

·Hawaiian Electric, HELCO and MECO will write-off, for accounting and ratemaking purposes, a total of $40 million of recorded capitalized costs in lieu of conducting the regulatory audits of the Campbell Industrial Park Combustion Turbine Unit 1 (“CIP CT-1”) and the Customer Information System (“CIS”) projects ordered in the Order Approving Consumer Advocate’s Recommendations regarding Focused Regulatory Audits, issued on May 2, 2011 in Docket No. 2008-0083.  This write-off amount is in addition to all credits received from the Hawaiian Electric Companies’ prior CIS vendor, which credits have already been used to reduce the capitalized costs of the CIS project.

·For purposes of accounting for the settlement, the entire write-off will be adjusted as part of the cost of the CIS project.  The write-off by company will be $29 million for Hawaiian Electric, $5.5 million for HELCO, and $5.5 million for MECO.

·The Hawaiian Electric Companies will include the net recoverable costs of CIP CT-1 and the CIS projects in rate base as of December 31, 2012.

1   The “Hawaiian Electric Companies” are Hawaiian Electric Company, Inc. (“Hawaiian Electric”), Hawaii Electric Light Company, Inc. (“HELCO”) and Maui Electric Company, Limited (“MECO”).

The Honorable Chair and Members

of the Hawaii Public Utilities Commission

January 28, 2013

Page 2

·The Hawaiian Electric Companies will include the net recoverable costs of the CIP CT-1 and the CIS projects not already included in rates as shown in Exhibit 3 in their 2013 Rate Adjustment Mechanism (“RAM”) Revenue Adjustments.  The Consumer Advocate will support RAM recovery in 2013 and the subsequent years thereafter and subsequent Hawaiian Electric, HELCO and MECO rate cases for the allowed portion of the CIP CT-1 project costs and CIS project costs in excess of the projects’ costs previously included in rate base, along with related accumulated depreciation, accumulated deferred income taxes, unamortized ITC, unamortized deferred CIS costs, the unamortized regulatory assets related to the carrying charges and deferred depreciation, as well as related project depreciation and regulatory asset amortization expenses.  Recovery of CIS costs through the RAM Revenue Adjustment mechanism is for the sole purpose of this settlement agreement and does not constitute a precedent for the recovery of software costs through the RAM Revenue Adjustment mechanism.

·HELCO will withdraw its 2013 test year rate case (Docket No. 2012-0099).  In lieu of the rate change HELCO would have received in the pending withdrawn rate case, the Company will submit annual RBA/RAM rate adjustment filings rolling forward the base year information from the prior HELCO rate case, Docket No. 2009-0164.  HELCO will not file a rate case until its next turn in the rate case cycle – i.e., for a 2016 test year.

·Hawaiian Electric will delay the filing of its 2014 test year rate case, and will file its 2014 test year rate case no earlier than January 2, 2014.  The Consumer Advocate will recommend that Hawaiian Electric be granted a waiver of Hawaii Administrative Rules (“HAR”) §6-61-87(4), that would enable Hawaiian Electric to file in 2014 a rate case application using a 2014 test year.

·Through calendar year 2016, the Hawaiian Electric Companies and the Consumer Advocate will recommend and support continuation of Hawaiian Electric Companies’ existing recovery mechanisms, which include the decoupling RBA and RAM, energy cost adjustment clause (“ECAC”), the Purchased Power Adjustment Clause (“PPAC”), the pension and OPEB tracking mechanisms, and the Renewable Energy Infrastructure Program (“REIP”) surcharge, in their present forms, except for the agreement for temporary acceleration of HECO’s RBA/RAM Revenue Adjustment described in the bullet below and the agreement to recover CIS costs through the RAM Revenue Adjustment described above.

·For only the 2014, 2015 and 2016 RAM Periods, Hawaiian Electric will be allowed to record the 2014, 2015 and 2016 RAM incremental revenues for the January 1 through December 31 calendar year (once Hawaiian Electric is able to assess the amount), and collect the RAM incremental revenues through the RBA Rate Adjustment (which includes the RAM Revenue Adjustment) from June 1 of each year to May 31 of the following year.  At the conclusion of that period, the current RAM provisions will again apply in accordance with the Amended Joint Proposal approved by the Final Decision and Order issued in the decoupling proceeding.

The Honorable Chair and Members

of the Hawaii Public Utilities Commission

January 28, 2013

Page 3

·MECO and the Consumer Advocate continue to support the Parties Stipulated Settlement in the MECO 2012 test year rate case (Docket No. 2011-0092).2  Given the other portions of this agreement, particularly in terms of the maintenance of the current financial structure and mechanisms, MECO and the Consumer Advocate even more strongly support the agreements set forth in the Parties Stipulated Settlement in the MECO 2012 test year rate case related to: (a) the rate of return on common equity used to determine the fair rate of return on rate base, (b) the ECAC, (c) the pension/OPEB tracking mechanisms, (d) decoupling and (e) the PPAC.

The Hawaiian Electric Companies’ customers, the Commission, the Consumer Advocate, the Hawaiian Electric Companies, and the Hawaiian Electric Companies’ investors will benefit if this Stipulated Settlement is approved.  First, with respect to the Hawaiian Electric Companies’ customers, approval of the Stipulated Settlement will reduce the CIP CT-1 and CIS investment costs that might otherwise be included in rates by $40 million, reduce revenues to be collected from customers as a result of the withdrawal of the HELCO 2013 test year rate case (with no filing of a HELCO rate case until the 2016 test year) and the delay in the filing of the Hawaiian Electric 2014 test year rate case, and prevent the further accrual of carrying costs pending the completion of the lengthy audit and post-audit process on the CIP CT-1 and CIS projects.

Second, the Stipulated Settlement will eliminate the need for the Commission, the Consumer Advocate and the Companies to dedicate the substantial resources, dollars and time necessary to complete the lengthy audit and post-audit process, and will allow them to focus those resources on the numerous priorities they face in improving the quality of customer service and transforming the electric utility industry in Hawaii from one based on oil-fired generation, to one based on energy efficiency and Hawaii’s indigenous renewable energy resources.

Third, with respect to the Hawaiian Electric Companies and their investors, approval of this Stipulated Settlement will resolve the substantial uncertainty as to when and how much of their investment in CIP CT-1 and CIS will be recovered.

The agreements set forth in this letter are for the purpose of simplifying and expediting the affected proceedings, and represent a negotiated compromise of the matters agreed upon, and do not constitute an admission by any party with respect to any of the matters agreed upon herein.

2   The Parties’ stipulated settlement is reflected in the Parties’ Stipulated Settlement Letter filed on April 20, 2012 and the Parties’ Revised Updated Stipulated Settlement Letter filed on May 14, 2012.

The Honorable Chair and Members

of the Hawaii Public Utilities Commission

January 28, 2013

Page 4

The Parties shall support and defend this Stipulated Settlement before the Commission.  If the Commission adopts an order approving all material terms of this Stipulated Settlement, the Parties will also support and defend the Commission’s order before any court or regulatory agency in which the order may be at issue.  If the Commission does not issue an order adopting all material terms of this Stipulated Settlement or makes material adjustments to this Stipulated Settlement, any or all of the Parties may withdraw from this Stipulated Settlement.  For the purposes of this Stipulated Settlement, whether a term is material shall be left to the discretion of the Party choosing to withdraw from this Stipulated Settlement.

Sincerely,

/s/ Patsy H. Nanbu

Patsy H. Nanbu

Vice President-Regulatory Affairs

Enclosure

cc: Division of Consumer Advocacy

Concurred:

/s/ Jeffrey T. Ono

Jeffrey T. Ono

Executive Director

Division of Consumer Advocacy

Department of Commerce and Consumer Affairs

Exhibit 1

Page 1 of 3

DETAILS OF CERTAIN AGREEMENTS REACHED BETWEEN

HAWAIIAN ELECTRIC AND THE CONSUMER ADVOCATE

Hawaiian Electric Company, Inc. (“Hawaiian Electric”), Maui Electric Company, Limited (“MECO”) and Hawaii Electric Light Company, Inc. (“HELCO”) (collectively the “Hawaiian Electric Companies” or “Companies”) will write-off for accounting and ratemaking purposes, a total of $40 million of recorded capitalized costs in lieu of regulatory audits for the Campbell Industrial Park Combustion Turbine Unit 1 (“CIP CT-1”), Customer Information System (“CIS”) projects.  This write-off amounts are in addition to all credits received from the Hawaiian Electric Companies’ prior CIS vendor, which credits have already been used to reduce the capitalized costs of the CIS project.  For purposes of accounting for the settlement, the entire write-off will be adjusted as part of the cost of the CIS project.  The write off by company will be $29 million for Hawaiian Electric, $5.5 million for HELCO, and $5.5 million for MECO, as shown in Exhibit 2.

Campbell Industrial Park Combustion Turbine Unit 1

The Parties agree that the recorded plant in service amount of $194.9 million for CIP CT-1 (and the accumulated depreciation, accumulated deferred income taxes and unamortized state investment tax credits related to the recorded costs) shall be included in Hawaiian Electric’s rate base as of December 31, 2012 and in the 2013 and succeeding Rate Adjustment Mechanism (“RAM”) Revenue Adjustments and Hawaiian Electric rate cases until the Company retires the CIP CT-1 assets.1

The Parties agree that the independently conducted regulatory audit for the CIP CT-1 project set forth in the Order Approving Consumer Advocate’s Recommendations Regarding Focused Regulatory Audits issued on May 2, 2011 in Docket No. 2008-0083 (“Audit Order”) should not be conducted.

The recorded plant in service amount for CIP CT-1 and the related accumulated depreciation, accumulated deferred income taxes and unamortized state investment tax credits and regulatory assets related to depreciation and carrying charges estimated through the effective date of the Revenue Balancing Account (“RBA”) Rate Adjustment (that includes the Rate Adjustment Mechanism (“RAM”) Revenue Adjustment for these items) shall be included in the beginning and ending balance of Hawaiian Electric’s rate base for the RAM Revenue Adjustment for 2013 and subsequent years thereafter, and for subsequent Hawaiian Electric rate cases.  See Exhibit 3.

Hawaiian Electric will amortize the regulatory assets, directly resulting from the deferral of depreciation and the accrual of carrying charges, over six years, beginning on the effective date of the 2013 RAM Revenue Adjustment, and to include such amortization in the 2013 RAM Revenue Adjustment.

1   The “Parties” to this settlement agreement are the Hawaiian Electric Companies and the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs (“Consumer Advocate”).

Exhibit 1

Page 2 of 3

Consistent with the agreements on CIP CT-1 in the Parties’ Stipulated Settlement Letter filed on July 5, 2011 in the Hawaiian Electric 2011 test year rate case, Docket No. 2010-0080, (“Hawaiian Electric 2011 Rate Case Settlement Agreement”), the following shall continue until the Commission has approved this settlement and the rate adjustment to include the project costs in rates (through the RAM Revenue Adjustment of the RBA) goes into effect:

·record the depreciation on the project costs in excess of the respective projects’ Commission approved costs to a regulatory asset; and

·accrue carrying charges (based on an interest rate equivalent to the Company’s AFUDC rate) on the project costs in excess of the respective projects’ Commission approved costs (net of accumulated depreciation, accumulated deferred income taxes, and unamortized ITC) and depreciation expense, which have been deferred for later recovery, to a regulatory asset.

The RAM Revenue Adjustment for 2013 and the subsequent years thereafter and subsequent Hawaiian Electric rate cases would reflect the additional revenue requirements related to the allowed portion of the CIP CT-1 project costs in excess of the project’s costs previously included in rate base, along with related accumulated depreciation, accumulated deferred income taxes, unamortized ITC, and including the unamortized regulatory assets related to the carrying charge and deferred depreciation, as well as related depreciation expense and amortization of regulatory asset expenses.

Customer Information System

The Parties agree that the allocable share of the deferred cost balance of CIS (which is the total deferred cost of $57.4 million for the project (after considering the credits from the prior CIS vendor), and the accrued carrying charges of $2.2 million, less a write-off of $40 million) should be included in the rate base as of December 31, 2012 of Hawaiian Electric, MECO and HELCO and recovered in the 2013 and succeeding RAM Revenue Adjustments and Hawaiian Electric Companies rate cases until the deferred costs are fully amortized.

The Parties agree that the independently conducted regulatory audit for the CIS project set forth in the Audit Order should not be conducted.

The Parties agree that reflecting the write-off entirely under the CIS docket would result in a smaller amount of depreciation expense required to be recovered in the current revenue requirements for the CIS project and CIP CT-1 project, than if the write-off amount is allocated to both the CIS project and the CIP CT-1 project.2

Consistent with the agreements on CIS in the Hawaiian Electric 2011 Rate Case Settlement and the Parties’ Stipulated Settlement Letter filed on April 20, 2012 in the MECO 2012 test year rate case, Docket No. 2011-0092, (“MECO 2012 Rate Case Settlement Agreement”), the

2   Since the CIS project would be amortized over 12 years, and the average depreciation period for the CIP CT-1 project cost is 40 years, the amortization expense savings would be greatest if the amount is amortized over the shorter period (i.e., amortization savings on $40 million over 12 years amounts to $3.33 million compared to $1.00 million over 40 years).

Exhibit 1

Page 3 of 3

Parties agree that the Hawaiian Electric Companies shall continue to accrue AFUDC on the recoverable CIS project deferred costs, including the expenses removed from the Hawaiian Electric 2011 test year and the MECO 2012 test year, and CIS project expenses incurred through the in-service date as agreed in the Hawaiian Electric 2011 Rate Case Settlement Agreement and the MECO 2012 Rate Case Settlement Agreement, until the Commission has approved this Stipulated Settlement and the RBA Rate Adjustment that includes the CIS project costs goes into effect.  Amortization of CIS project deferred costs would commence on the effective date of the RBA Rate Adjustment for Hawaiian Electric, MECO and HELCO that includes the recovery of the project costs and the associated amortization expense.    The Parties agree that the RAM Revenue Adjustment for 2013 and subsequent years thereafter and subsequent rate cases for Hawaiian Electric, MECO and HELCO would reflect revenue requirements related to including the deferred CIS costs that the Parties agree to be recoverable, including the estimated carrying charges through the effective date of the RBA that includes the RAM revenue adjustment for these items and the amortization expense for the amortization of the recoverable deferred costs including carrying charges, with the recovery period not to exceed the twelve year amortization period approved by the Commission in Docket No. 04-0268.  See Exhibit 3.

RBA/RAM Revenue Adjustment

The Parties agree that for only the 2014, 2015 and 2016 RAM Periods, Hawaiian Electric will be allowed to record the 2014, 2015 and 2016 incremental revenues for the January 1 through December 31 calendar year (once Hawaiian Electric is able to assess the amount), and collect the RAM incremental revenues for the calendar year through the RBA Rate Adjustment (which includes the RAM Revenue Adjustment) on customer bills from June 1 of each year to May 31 of the following year.3

At the conclusion of that period, the current RAM provisions will again apply in accordance with the Amended Joint Proposal approved by the Final Decision and Order issued in the decoupling proceeding

3   In the case when an interim order or final order in a rate case is issued, the RAM revenue adjustment would be recalculated to determine the unrecovered recorded (accrued) revenues.  For example, if in 2014, an interim decision for a 2014 test year rate case becomes effective November 1, 2014, the RAM incremental revenues for the period from January 1, 2014 to October 31, 2014 would be calculated, and compared to RAM incremental revenues collected through the RBA Rate Adjustment, and the unrecovered amount would be reflected in the RBA Rate Adjustment to be collected from November 1, 2014 through May 31, 2015.

Exhibit 2

Page 1 of 1

Allocation of Total CIS Deferred Costs

(in Thousands)

As of 12/31/2012

	HECO		HELCO		MECO		Total
CIS Deferred Project Cost	$	41,482	$	8,025	$	7,859	$	57,366
Carrying charge since go-live	1,830				370		2,200
	43,312		8,025		8,229		59,566
Percentage	72.7%		13.5%		13.8%		100.0%
Write-off amount	29,085		5,389		5,526		40,000
write-off amount rounded	29,000		5,500		5,500		40,000
CIS costs as of 12/31/12	$	14,312	$	2,525	$	2,729	$	19,566

Exhibit 3

Page 1 of 2

CIP CT-1 Costs in 2013 RAM Calculations

Recoverable Costs:											Rate Base RAM
											Rate Base			Rate Base
											12/31/2012			12/31/2013
CIP CT-1
Plant In service	$194,929,577										$194,929,577			$194,929,577
Accumulated Depreciation	(10,379,709		)								(10,379,709		)	(15,060,387		)
Net Plant in Sevice as of 12/31/2012	$184,549,868										$184,549,868			$179,869,190
	Deferral Cost
				Additional
	To			Through			To
Deferred CIP CT-1 costs	12/31/2012			5/31/2013			5/31/2013
Depreciation deferral	$	1,165,412		$	342,530		$	1,507,942			a
ADIT deferral	(2,903,781		)	(363,200		)	(3,266,981		)		a
Unamortized State ITC deferral	(42,990		)	395			(42,595		)		a
Carrying Charge (AFUDC)	3,380,907			989,370			4,370,277				a
Deferrred costs	$	1,599,548		$	969,095		$	2,568,643			$	2,568,643
Additional annual amortization expense (deferred costs / 6 years)							428,107
Actual amortization expense (7/12 of annual amount)							249,729							$	2,318,914
Depreciation Expense							$	4,680,678		a
a   Per Workpapers for Exhibit 3 CT-1.

Exhibit 3

Page 2 of 2

CIS in 2013 RAM Calculations

Recoverable Costs:							Rate Base RAM
							Rate Base	Rate Base
							12/31/2012	12/31/2013
CIS
		HECO	HELCO	MECO	Total
	Total deferred cost
	as of 12/31/2012 per Settlement	14,312	2,525	2,729	19,566	b
	Carrying charge (AFUDC)
	January 1-May 31, 2013	454	78	82	614	c
	CIS deferred costs recoverable	14,766	2,603	2,811	20,180		20,180
	Additional amortization expense	1,231	217	234	1,682
	Amoritzation in 2013 RAM
	(7/12 of annual amortization)	718	127	137	981
	CIS deferred costs as of 12/31/2013	14,048	2,476	2,674	19,199			19,199
b	See Exhibit 2.
c	See Workpapers for Exhibit 3 CIS, p.1.

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 1 of 10

CIP CT-1

As of December 31, 2012 (Estimated as of 1/16/2013)

	Before Settlement Discussions
	Before exclusion		Deferred
Plant In service	194,929,577
Accumulated Depreciation	(10,379,709	)
Net Plant in Sevice	184,549,868
Amount included in rates	163,280,000		a/o 12/31/12		Jan - May 2013			a/0 5/31/13
CT-1 Plant in service			31,649,577					31,649,577
Accumulated Depreciation			(1,810,383	)	(342,531		)	(2,152,914		)
								-
Depreciation deferral			1,165,412		342,530			1,507,942
								-
ADIT deferral			(2,903,781	)	(363,200		)	(3,266,981		)
								-
Unamortized State ITC deferral			(42,990	)	395			(42,595		)
								-
Carrying Charge (AFUDC)			3,380,907			989,370			4,370,277
Deferred Balance 12/31/12			31,438,742		626,564			32,065,306

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 2 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

					Jun 2011				Jul 2011				Aug 2011				Sep 2011
					CIP CT-1		Change		CIP CT-1		Change		CIP CT-1		Change		CIP CT-1
Total Project Cost					195,050,054
(-) Less: NR/NE (removal/expense) Costs					(303,711	)
Beginning Month’s Capital Costs					194,746,343				194,746,343				194,751,036				194,753,563
Current Month’s Capital Costs					-				4,693				2,527				17,186
Ending Month’s Capital Costs					194,746,343				194,751,036				194,753,563				194,770,749
Amount included in rates					163,279,651				163,279,651				163,279,651				163,279,651
Gross Capital Cost in excess of Commission - approved amount					31,466,692				31,471,385				31,473,912				31,491,098
Gross Capital Cost in excess of Commission - approved amount					31,466,692		4,693		31,471,385		2,527		31,473,912		17,186		31,491,098
(-) Less:	related accumulated depreciation				(644,967	)	(38,826	)	(683,793	)	(65,970	)	(749,762	)	(65,966	)	(815,728	)
(-) Less:	related ADIT				(2,830,330	)	(174,576	)	(3,004,907	)	(83,933	)	(3,088,840	)	(502,933	)	(3,591,773	)
(-) Less:	related unamortized ITC				(44,389	)	111		(44,278	)	70		(44,208	)	70		(44,138	)
(+) Add:	regulatory asset - depreciation expense						38,826		38,826		65,967		104,792		65,966		170,758
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component						-		-		182,246		182,246		182,021		364,267
(=) Equals:	Total base for calculating carrying charge				27,947,006		(169,772	)	27,777,233		100,907		27,878,141		(303,656	)	27,574,484
Average Capital Cost base for calculating carrying charge									27,862,119				27,827,687				27,726,312
(x) Multiply:	Rate equivalent to AFUDC / 12								0.006541				0.006541				0.006541
(=) Equals:	Monthly carrying charge								182,246				182,021				181,358
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)									54,331				54,264				54,066
AFUDC - Equity (eff. 8/2012, rates were changed)									127,915				127,757				127,292
Total AFUDC (as calculated)									182,246				182,021				181,358
AFUDC - Debt (prior adjustment)									-				(901	)			(1,279	)
AFUDC - Equity (prior adjustment)									-				(2,121	)			(3,434	)
Prior months adjustments that should be recorded									-				(3,022	)			(4,713	)
AFUDC - Debt (revised adjustment)									54,331				53,363				52,787
AFUDC - Equity (revised adjustment)									127,915				125,636				123,857
Revised Total AFUDC (that should be recorded)									182,246				178,999				176,645
AFUDC - Debt (what was recorded)									55,232				54,642				52,589
AFUDC - Equity (what was recorded)									130,036				129,070				123,391
Total Recorded AFUDC (via JE) during the month									185,268				183,712				175,980
AFUDC - Debt (adjustment for following month)									(901	)			(1,279	)			198
AFUDC - Equity (adjustment for following month)									(2,121	)			(3,434	)			466
Adjustment that should be reflected on the following month									(3,022	)			(4,713	)			665
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]									69,210				69,124				68,872
True-Up AFUDC - Debt (prior adjustment)													69,210				138,333
True-Up AFUDC - Debt (that should be recorded)									69,210				138,333				207,206
True-Up AFUDC - Debt (what was recorded))									-				-				207,198
True-Up AFUDC - Debt (adjustment for the following month)									69,210				138,333				8
		Capital Cost			Jun-11				Jul-11				Aug-11				Sep-11
7,676,961		P0001050	127,256		7,804,217		-		7,804,217		-		7,804,217		-		7,804,217
3,801,520		P0001051	2,035		3,803,555		4,693		3,808,248		-		3,808,248		-		3,808,248
603,567		P0001052	2,595		606,162		-		606,162		-		606,162		-		606,162
1,809,875		P0001084	-		1,809,875		-		1,809,875		-		1,809,875		-		1,809,875
668,194		P0001134	-		668,194		-		668,194		-		668,194		-		668,194
753,115		P0001135	-		753,115		-		753,115		-		753,115		-		753,115
1,795,941		P0001136	137,896		1,933,837		-		1,933,837		-		1,933,837		-		1,933,837
212,405		P0001137	39,682		252,087		-		252,087		-		252,087		-		252,087
4,857,924		P0001340	-		4,857,924		-		4,857,924		-		4,857,924		-		4,857,924
1,261,761		P0001585	-		1,261,761		-		1,261,761		-		1,261,761		-		1,261,761
3,046,322		P0001880	-		3,046,322		-		3,046,322		-		3,046,322		-		3,046,322
7,107,036		P0001881	-		7,107,036		-		7,107,036		-		7,107,036		-		7,107,036
161,127,436		P4900000	18,533		161,145,969		-		161,145,969		2,527		161,148,496		17,186		161,165,682
		Less (NR/NE Cost)	(303,711	)	(303,711	)	-		(303,711	)	-		(303,711	)	-		(303,711	)
194,722,057			24,286		194,746,343		4,693		194,751,036		2,527		194,753,563		17,186		194,770,749
(1,809,875)							4,693				2,527				17,186		(1,809,875	)
192,912,182																	192,960,874

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 3 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

							Oct 2011				Nov 2011				Dec 2011
					Change		CIP CT-1		Change		CIP CT-1		Change		CIP CT-1		Change
Total Project Cost
(-) Less: NR/NE (removal/expense) Costs
Beginning Month’s Capital Costs							194,770,749				194,773,708				194,929,577
Current Month’s Capital Costs							2,958				155,869				-
Ending Month’s Capital Costs							194,773,708				194,929,577				194,929,577
Amount included in rates							163,279,651				163,279,651				163,280,000
Gross Capital Cost in excess of Commission - approved amount							31,494,057				31,649,926				31,649,577
Gross Capital Cost in excess of Commission - approved amount					2,958		31,494,057		155,869		31,649,926		(349	)	31,649,577		-
(-) Less:	related accumulated depreciation				(65,966	)	(881,694	)	(65,966	)	(947,660	)	(65,966	)	(1,013,626	)	(43,189	)
(-) Less:	related ADIT				(27	)	(3,591,800	)	208,347		(3,383,453	)	(27	)	(3,383,480	)	1,278,802
(-) Less:	related unamortized ITC				70		(44,068	)	69		(43,999	)	70		(43,929	)	(78	)
(+) Add:	regulatory asset - depreciation expense				65,967		236,725		65,966		302,691		65,967		368,658		43,188
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component				181,358		545,625		180,968		726,592		183,354		909,946		185,736
(=) Equals:	Total base for calculating carrying charge				184,360		27,758,844		545,253		28,304,097		183,049		28,487,146		1,464,459
Average Capital Cost base for calculating carrying charge							27,666,664				28,031,471				28,395,621
(x) Multiply:	Rate equivalent to AFUDC / 12						0.006541				0.006541				0.006541
(=) Equals:	Monthly carrying charge						180,968				183,354				185,736
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)							53,950				54,661				55,371
AFUDC - Equity (eff. 8/2012, rates were changed)							127,018				128,692				130,364
Total AFUDC (as calculated)							180,968				183,354				185,736
AFUDC - Debt (prior adjustment)							198				14				(517	)
AFUDC - Equity (prior adjustment)							466				34				(1,217	)
Prior months adjustments that should be recorded							665				48				(1,735	)
AFUDC - Debt (revised adjustment)							54,148				54,676				54,854
AFUDC - Equity (revised adjustment)							127,484				128,727				129,147
Revised Total AFUDC (that should be recorded)							181,632				183,402				184,001
AFUDC - Debt (what was recorded)							54,134				55,193				54,452
AFUDC - Equity (what was recorded)							127,450				129,944				128,200
Total Recorded AFUDC (via JE) during the month							181,584				185,137				182,652
AFUDC - Debt (adjustment for following month)							14				(517	)			402
AFUDC - Equity (adjustment for following month)							34				(1,217	)			947
Adjustment that should be reflected on the following month							48				(1,735	)			1,349
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]							68,724				69,630				70,535
True-Up AFUDC - Debt (prior adjustment)							8				1				(3	)
True-Up AFUDC - Debt (that should be recorded)							68,732				69,631				70,532
True-Up AFUDC - Debt (what was recorded))							68,731				69,634				70,019
True-Up AFUDC - Debt (adjustment for the following month)							1				(3	)			513
		Capital Cost					Oct-11				Nov-11				Dec-11
7,676,961		P0001050	127,256		-		7,804,217		-		7,804,217		-		7,804,217		-
3,801,520		P0001051	2,035		603		3,808,851		-		3,808,851		-		3,808,851		-
603,567		P0001052	2,595		-		606,162		-		606,162		-		606,162		-
1,809,875		P0001084	-		-		1,809,875		-		1,809,875		-		1,809,875		-
668,194		P0001134	-		-		668,194		-		668,194		-		668,194		-
753,115		P0001135	-		-		753,115		-		753,115		-		753,115		-
1,795,941		P0001136	137,896		-		1,933,837		-		1,933,837		-		1,933,837		-
212,405		P0001137	39,682		-		252,087		-		252,087		-		252,087		-
4,857,924		P0001340	-		-		4,857,924		-		4,857,924		-		4,857,924		-
1,261,761		P0001585	-		-		1,261,761		-		1,261,761		-		1,261,761		-
3,046,322		P0001880	-		-		3,046,322		-		3,046,322		-		3,046,322		-
7,107,036		P0001881	-		-		7,107,036		-		7,107,036		-		7,107,036		-
161,127,436		P4900000	18,533		2,355		161,168,037		155,869		161,323,906		-		161,323,906		-
		Less (NR/NE Cost)	(303,711	)	-		(303,711	)	-		(303,711	)	-		(303,711	)	-
194,722,057			24,286		2,958		194,773,707		155,869		194,929,576		-		194,929,576		-
(1,809,875)					2,958		(1,809,875	)	155,869		(1,809,875	)	-		(1,809,875	)	-
192,912,182							192,963,832				193,119,701				193,119,701

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 4 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

					Jan 2012				Feb 2012				Mar 2012				Apr 2012
					CIP CT-1		Change		CIP CT-1		Change		CIP CT-1		Change		CIP CT-1
Total Project Cost
(-) Less: NR/NE (removal/expense) Costs
Beginning Month’s Capital Costs					194,929,577				194,929,577				194,929,577				194,929,577
Current Month’s Capital Costs					-				-				-				-
Ending Month’s Capital Costs					194,929,577				194,929,577				194,929,577				194,929,577
Amount included in rates					163,280,000				163,280,000				163,280,000				163,280,000
Gross Capital Cost in excess of Commission - approved amount					31,649,577				31,649,577				31,649,577				31,649,577
Gross Capital Cost in excess of Commission - approved amount					31,649,577		-		31,649,577		-		31,649,577		-		31,649,577
(-) Less:	related accumulated depreciation				(1,056,815	)	(68,506	)	(1,125,321	)	(68,506	)	(1,193,827	)	(68,506	)	(1,262,333	)
(-) Less:	related ADIT				(2,104,678	)	(72,701	)	(2,177,379	)	(72,639	)	(2,250,018	)	(72,642	)	(2,322,660	)
(-) Less:	related unamortized ITC				(44,007	)	234		(43,773	)	79		(43,694	)	78		(43,616	)
(+) Add:	regulatory asset - depreciation expense				411,846		68,506		480,352		68,506		548,858		68,506		617,364
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component				1,095,682		187,676		1,283,358		192,749		1,476,107		193,505		1,669,612
(=) Equals:	Total base for calculating carrying charge				29,951,605		115,209		30,066,814		120,189		30,187,003		120,941		30,307,944
Average Capital Cost base for calculating carrying charge					29,219,375				30,009,209				30,126,908				30,247,473
(x) Multiply:	Rate equivalent to AFUDC / 12				0.006423				0.006423				0.006423				0.006423
(=) Equals:	Monthly carrying charge				187,676				192,749				193,505				194,280
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)					59,023				60,619				60,856				61,100
AFUDC - Equity (eff. 8/2012, rates were changed)					128,653				132,131				132,649				133,180
Total AFUDC (as calculated)					187,676				192,749				193,505				194,280
AFUDC - Debt (prior adjustment)					402				0				(0	)			(719	)
AFUDC - Equity (prior adjustment)					947				(0	)			0				(1,567	)
Prior months adjustments that should be recorded					1,349				0				0				(2,286	)
AFUDC - Debt (revised adjustment)					59,425				60,619				60,856				60,381
AFUDC - Equity (revised adjustment)					129,600				132,130				132,649				131,613
Revised Total AFUDC (that should be recorded)					189,025				192,749				193,505				191,994
AFUDC - Debt (what was recorded)					59,425				60,619				61,575				60,381
AFUDC - Equity (what was recorded)					129,600				132,130				134,216				131,613
Total Recorded AFUDC (via JE) during the month					189,025				192,749				195,791				191,994
AFUDC - Debt (adjustment for following month)					0				(0	)			(719	)			0
AFUDC - Equity (adjustment for following month)					(0	)			0				(1,567	)			(0	)
Adjustment that should be reflected on the following month					0				0				(2,286	)			(0	)
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]					69,133				71,002				71,280				71,566
True-Up AFUDC - Debt (prior adjustment)					513				(0	)			0				(842	)
True-Up AFUDC - Debt (that should be recorded)					69,646				71,001				71,281				70,723
True-Up AFUDC - Debt (what was recorded))					69,646				71,001				72,123				70,723
True-Up AFUDC - Debt (adjustment for the following month)					(0	)			0				(842	)			0
		Capital Cost			Jan-12				Feb-12				Mar-12				Apr-12
7,676,961		P0001050	127,256		7,804,217		-		7,804,217		-		7,804,217		-		7,804,217
3,801,520		P0001051	2,035		3,808,851		-		3,808,851		-		3,808,851		-		3,808,851
603,567		P0001052	2,595		606,162		-		606,162		-		606,162		-		606,162
1,809,875		P0001084	-		1,809,875		-		1,809,875		-		1,809,875		-		1,809,875
668,194		P0001134	-		668,194		-		668,194		-		668,194		-		668,194
753,115		P0001135	-		753,115		-		753,115		-		753,115		-		753,115
1,795,941		P0001136	137,896		1,933,837		-		1,933,837		-		1,933,837		-		1,933,837
212,405		P0001137	39,682		252,087		-		252,087		-		252,087		-		252,087
4,857,924		P0001340	-		4,857,924		-		4,857,924		-		4,857,924		-		4,857,924
1,261,761		P0001585	-		1,261,761		-		1,261,761		-		1,261,761		-		1,261,761
3,046,322		P0001880	-		3,046,322		-		3,046,322		-		3,046,322		-		3,046,322
7,107,036		P0001881	-		7,107,036		-		7,107,036		-		7,107,036		-		7,107,036
161,127,436		P4900000	18,533		161,323,906		-		161,323,906		-		161,323,906		-		161,323,906
		Less (NR/NE Cost)	(303,711	)	(303,711	)	-		(303,711	)	-		(303,711	)	-		(303,711	)
194,722,057			24,286		194,929,576		-		194,929,576		-		194,929,576		-		194,929,576
(1,809,875)					(1,809,875	)	-		(1,809,875	)	-		(1,809,875	)	-		(1,809,875	)
192,912,182					193,119,701				193,119,701				193,119,701				193,119,701

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 5 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

							May 2012				Jun 2012				Jul 2012
					Change		CIP CT-1		Change		CIP CT-1		Change		CIP CT-1		Change
Total Project Cost
(-) Less: NR/NE (removal/expense) Costs
Beginning Month’s Capital Costs							194,929,577				194,929,577				194,929,577
Current Month’s Capital Costs							-				-				-
Ending Month’s Capital Costs							194,929,577				194,929,577				194,929,577
Amount included in rates							163,280,000				163,280,000				163,280,000
Gross Capital Cost in excess of Commission - approved amount							31,649,577				31,649,577				31,649,577
Gross Capital Cost in excess of Commission - approved amount					-		31,649,577		-		31,649,577		-		31,649,577		-
(-) Less:	related accumulated depreciation				(68,506	)	(1,330,840	)	(68,506	)	(1,399,346	)	(68,506	)	(1,467,852	)	(68,506	)
(-) Less:	related ADIT				(72,639	)	(2,395,299	)	(72,641	)	(2,467,940	)	(72,640	)	(2,540,580	)	(72,641	)
(-) Less:	related unamortized ITC				78		(43,538	)	78		(43,460	)	78		(43,382	)	79
(+) Add:	regulatory asset - depreciation expense				68,506		685,870		68,506		754,376		68,506		822,882		68,506
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component				194,280		1,863,892		195,059		2,058,951		195,843		2,254,794		196,632
(=) Equals:	Total base for calculating carrying charge				121,718		30,429,662		122,496		30,552,158		123,281		30,675,439		124,070
Average Capital Cost base for calculating carrying charge							30,368,803				30,490,910				30,613,798
(x) Multiply:	Rate equivalent to AFUDC / 12						0.006423				0.006423				0.006423
(=) Equals:	Monthly carrying charge						195,059				195,843				196,632
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)							61,345				61,592				61,840
AFUDC - Equity (eff. 8/2012, rates were changed)							133,714				134,251				134,793
Total AFUDC (as calculated)							195,059				195,843				196,632
AFUDC - Debt (prior adjustment)							0				692				2,149
AFUDC - Equity (prior adjustment)							(0	)			1,510				4,685
Prior months adjustments that should be recorded							(0	)			2,202				6,834
AFUDC - Debt (revised adjustment)							61,345				62,284				63,989
AFUDC - Equity (revised adjustment)							133,714				135,761				139,478
Revised Total AFUDC (that should be recorded)							195,059				198,045				203,466
AFUDC - Debt (what was recorded)							60,653				60,135				60,237
AFUDC - Equity (what was recorded)							132,204				131,076				131,300
Total Recorded AFUDC (via JE) during the month							192,857				191,211				191,537
AFUDC - Debt (adjustment for following month)							692				2,149				3,752
AFUDC - Equity (adjustment for following month)							1,510				4,685				8,178
Adjustment that should be reflected on the following month							2,202				6,834				11,929
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]							71,853				72,141				72,432
True-Up AFUDC - Debt (prior adjustment)							0				812				2,518
True-Up AFUDC - Debt (that should be recorded)							71,853				72,953				74,950
True-Up AFUDC - Debt (what was recorded))							71,041				70,435				70,556
True-Up AFUDC - Debt (adjustment for the following month)							812				2,518				4,394
		Capital Cost					May-12				Jun-12				Jul-12
7,676,961		P0001050	127,256		-		7,804,217		-		7,804,217		-		7,804,217		-
3,801,520		P0001051	2,035		-		3,808,851		-		3,808,851		-		3,808,851		-
603,567		P0001052	2,595		-		606,162		-		606,162		-		606,162		-
1,809,875		P0001084	-		-		1,809,875		-		1,809,875		-		1,809,875		-
668,194		P0001134	-		-		668,194		-		668,194		-		668,194		-
753,115		P0001135	-		-		753,115		-		753,115		-		753,115		-
1,795,941		P0001136	137,896		-		1,933,837		-		1,933,837		-		1,933,837		-
212,405		P0001137	39,682		-		252,087		-		252,087		-		252,087		-
4,857,924		P0001340	-		-		4,857,924		-		4,857,924		-		4,857,924		-
1,261,761		P0001585	-		-		1,261,761		-		1,261,761		-		1,261,761		-
3,046,322		P0001880	-		-		3,046,322		-		3,046,322		-		3,046,322		-
7,107,036		P0001881	-		-		7,107,036		-		7,107,036		-		7,107,036		-
161,127,436		P4900000	18,533		-		161,323,906		-		161,323,906		-		161,323,906		-
		Less (NR/NE Cost)	(303,711	)	-		(303,711	)	-		(303,711	)	-		(303,711	)	-
194,722,057			24,286		-		194,929,576		-		194,929,576		-		194,929,576		-
(1,809,875)					-		(1,809,875	)	-		(1,809,875	)	-		(1,809,875	)	-
192,912,182							193,119,701				193,119,701				193,119,701

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 6 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

					Aug 2012				Sep 2012				Oct 2012				Nov 2012
					CIP CT-1		Change		CIP CT-1		Change		CIP CT-1		Change		CIP CT-1
Total Project Cost
(-) Less: NR/NE (removal/expense) Costs
Beginning Month’s Capital Costs					194,929,577				194,929,577				194,929,577				194,929,577
Current Month’s Capital Costs					-				-				-				-
Ending Month’s Capital Costs					194,929,577				194,929,577				194,929,577				194,929,577
Amount included in rates					163,280,000				163,280,000				163,280,000				163,280,000
Gross Capital Cost in excess of Commission - approved amount					31,649,577				31,649,577				31,649,577				31,649,577
Gross Capital Cost in excess of Commission - approved amount					31,649,577		-		31,649,577		-		31,649,577		-		31,649,577
(-) Less:	related accumulated depreciation				(1,536,358	)	(68,506	)	(1,604,864	)	(68,506	)	(1,673,370	)	(68,506	)	(1,741,877	)
(-) Less:	related ADIT				(2,613,221	)	(72,639	)	(2,685,860	)	(72,640	)	(2,758,500	)	(72,641	)	(2,831,141	)
(-) Less:	related unamortized ITC				(43,303	)	78		(43,225	)	78		(43,147	)	78		(43,069	)
(+) Add:	regulatory asset - depreciation expense				891,388		68,506		959,894		68,506		1,028,400		68,506		1,096,906
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component				2,451,426		184,517		2,635,943		185,225		2,821,169		185,900		3,007,069
(=) Equals:	Total base for calculating carrying charge				30,799,509		111,956		30,911,465		112,663		31,024,128		113,337		31,137,465
Average Capital Cost base for calculating carrying charge					30,737,474				30,855,487				30,967,796				31,080,796
(x) Multiply:	Rate equivalent to AFUDC / 12				0.006003				0.006003				0.006003				0.006003
(=) Equals:	Monthly carrying charge				184,517				185,225				185,900				186,578
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)					54,805				55,015				55,216				55,417
AFUDC - Equity (eff. 8/2012, rates were changed)					129,712				130,210				130,684				131,161
Total AFUDC (as calculated)					184,517				185,225				185,900				186,578
AFUDC - Debt (prior adjustment)					3,752				5,297				6,973				8,782
AFUDC - Equity (prior adjustment)					8,178				11,835				15,802				20,081
Prior months adjustments that should be recorded					11,929				17,131				22,775				28,863
AFUDC - Debt (revised adjustment)					58,557				60,312				62,189				64,199
AFUDC - Equity (revised adjustment)					137,890				142,045				146,486				151,242
Revised Total AFUDC (that should be recorded)					196,446				202,357				208,675				215,441
AFUDC - Debt (what was recorded)					53,260				53,339				53,407				64,199
AFUDC - Equity (what was recorded)					126,055				126,243				126,405				151,242
Total Recorded AFUDC (via JE) during the month					179,315				179,582				179,812				215,441
AFUDC - Debt (adjustment for following month)					5,297				6,973				8,782				(0	)
AFUDC - Equity (adjustment for following month)					11,835				15,802				20,081				(0	)
Adjustment that should be reflected on the following month					17,131				22,775				28,863				(0	)
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]					51,460				51,658				51,846				52,035
True-Up AFUDC - Debt (prior adjustment)					4,394				5,845				7,419				9,117
True-Up AFUDC - Debt (that should be recorded)					55,855				57,503				59,265				61,152
True-Up AFUDC - Debt (what was recorded))					50,010				50,084				50,148				61,152
True-Up AFUDC - Debt (adjustment for the following month)					5,845				7,419				9,117				(0	)
		Capital Cost			Aug-12				Sep-12				Oct-12				Nov-12
7,676,961		P0001050	127,256		7,804,217		-		7,804,217		-		7,804,217		-		7,804,217
3,801,520		P0001051	2,035		3,808,851		-		3,808,851		-		3,808,851		-		3,808,851
603,567		P0001052	2,595		606,162		-		606,162		-		606,162		-		606,162
1,809,875		P0001084	-		1,809,875		-		1,809,875		-		1,809,875		-		1,809,875
668,194		P0001134	-		668,194		-		668,194		-		668,194		-		668,194
753,115		P0001135	-		753,115		-		753,115		-		753,115		-		753,115
1,795,941		P0001136	137,896		1,933,837		-		1,933,837		-		1,933,837		-		1,933,837
212,405		P0001137	39,682		252,087		-		252,087		-		252,087		-		252,087
4,857,924		P0001340	-		4,857,924		-		4,857,924		-		4,857,924		-		4,857,924
1,261,761		P0001585	-		1,261,761		-		1,261,761		-		1,261,761		-		1,261,761
3,046,322		P0001880	-		3,046,322		-		3,046,322		-		3,046,322		-		3,046,322
7,107,036		P0001881	-		7,107,036		-		7,107,036		-		7,107,036		-		7,107,036
161,127,436		P4900000	18,533		161,323,906		-		161,323,906		-		161,323,906		-		161,323,906
		Less (NR/NE Cost)	(303,711	)	(303,711	)	-		(303,711	)	-		(303,711	)	-		(303,711	)
194,722,057			24,286		194,929,576		-		194,929,576		-		194,929,576		-		194,929,576
(1,809,875)					(1,809,875	)	-		(1,809,875	)	-		(1,809,875	)	-		(1,809,875	)
192,912,182					193,119,701				193,119,701				193,119,701				193,119,701

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 7 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

					Dec 2012		Jan 2013		Feb 2013
				Change	CIP CT-1	Change	CIP CT-1	Change	CIP CT-1	Change
Total Project Cost
(-) Less: NR/NE (removal/expense) Costs
Beginning Month’s Capital Costs					194,929,577		194,929,577		194,929,577
Current Month’s Capital Costs					-		-		-
Ending Month’s Capital Costs					194,929,577		194,929,577		194,929,577
Amount included in rates					163,280,000		163,280,000		163,280,000
Gross Capital Cost in excess of Commission - approved amount					31,649,577		31,649,577		31,649,577
Gross Capital Cost in excess of Commission - approved amount				-	31,649,577	-	31,649,577	-	31,649,577	-
(-) Less:	related accumulated depreciation			(68,506)	(1,810,383)	(68,506)	(1,878,889)	(68,506)	(1,947,395)	(68,506)
(-) Less:	related ADIT			(72,640)	(2,903,781)	(72,640)	(2,976,421)	(72,640)	(3,049,061)	(72,640)
(-) Less:	related unamortized ITC			79	(42,990)	79	(42,911)	79	(42,832)	79
(+) Add:	regulatory asset - depreciation expense			68,506	1,165,412	68,506	1,233,918	68,506	1,302,424	68,506
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component			186,578	3,193,647	187,260	3,380,907	196,338	3,577,245	197,085
(=) Equals:	Total base for calculating carrying charge			114,017	31,251,481	114,699	31,366,181	123,777	31,489,957	124,524
Average Capital Cost base for calculating carrying charge					31,194,473		31,308,831		31,428,069
(x) Multiply:	Rate equivalent to AFUDC / 12				0.006003		0.006271		0.006271
(=) Equals:	Monthly carrying charge				187,260		196,338		197,085
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)					55,620		58,328		58,550
AFUDC - Equity (eff. 8/2012, rates were changed)					131,641		138,009		138,535
Total AFUDC (as calculated)					187,260		196,338		197,085
AFUDC - Debt (prior adjustment)					(0)		0		58,329
AFUDC - Equity (prior adjustment)					(0)		(0)		138,009
Prior months adjustments that should be recorded					(0)		(0)		196,338
						��
AFUDC - Debt (revised adjustment)					55,619		58,329		116,879
AFUDC - Equity (revised adjustment)					131,641		138,009		276,544
Revised Total AFUDC (that should be recorded)					187,260		196,338		393,423
AFUDC - Debt (what was recorded)					55,619
AFUDC - Equity (what was recorded)					131,641
Total Recorded AFUDC (via JE) during the month					187,260		-		-
AFUDC - Debt (adjustment for following month)					0		58,329		116,879
AFUDC - Equity (adjustment for following month)					(0)		138,009		276,544
Adjustment that should be reflected on the following month					(0)		196,338		393,423
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]					52,225		68,472		68,733
True-Up AFUDC - Debt (prior adjustment)					(0)		0		68,473
True-Up AFUDC - Debt (that should be recorded)					52,225		68,473		137,206
True-Up AFUDC - Debt (what was recorded))					52,225
True-Up AFUDC - Debt (adjustment for the following month)					0		68,473		137,206
		Capital Cost			Dec-12		Jan-13		Feb-13
7,676,961		P0001050	127,256	-	7,804,217	-	7,804,217	-	7,804,217	-
3,801,520		P0001051	2,035	-	3,808,851	-	3,808,851	-	3,808,851	-
603,567		P0001052	2,595	-	606,162	-	606,162	-	606,162	-
1,809,875		P0001084	-	-	1,809,875	-	1,809,875	-	1,809,875	-
668,194		P0001134	-	-	668,194	-	668,194	-	668,194	-
753,115		P0001135	-	-	753,115	-	753,115	-	753,115	-
1,795,941		P0001136	137,896	-	1,933,837	-	1,933,837	-	1,933,837	-
212,405		P0001137	39,682	-	252,087	-	252,087	-	252,087	-
4,857,924		P0001340	-	-	4,857,924	-	4,857,924	-	4,857,924	-
1,261,761		P0001585	-	-	1,261,761	-	1,261,761	-	1,261,761	-
3,046,322		P0001880	-	-	3,046,322	-	3,046,322	-	3,046,322	-
7,107,036		P0001881	-	-	7,107,036	-	7,107,036	-	7,107,036	-
161,127,436		P4900000	18,533	-	161,323,906	-	161,323,906	-	161,323,906	-
		Less (NR/NE Cost)	(303,711)	-	(303,711)	-	(303,711)	-	(303,711)	-
194,722,057			24,286	-	194,929,576	-	194,929,576	-	194,929,576	-
(1,809,875)				-	(1,809,875)	-	(1,809,875)	-	(1,809,875)	-
192,912,182					193,119,701		193,119,701		193,119,701

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 8 of 10

HECO

Major Projects:  CIP CT-1

Monthly Carrying Charge Calculation

				Mar 2013		Apr 2013		May 2013
				CIP CT-1	Change	CIP CT-1	Change	CIP CT-1
Total Project Cost
(-) Less: NR/NE (removal/expense) Costs
Beginning Month’s Capital Costs				194,929,577		194,929,577		194,929,577
Current Month’s Capital Costs				-		-		-
Ending Month’s Capital Costs				194,929,577		194,929,577		194,929,577
Amount included in rates				163,280,000		163,280,000		163,280,000
Gross Capital Cost in excess of Commission - approved amount				31,649,577		31,649,577		31,649,577
Gross Capital Cost in excess of Commission - approved amount				31,649,577	-	31,649,577	-	31,649,577
(-) Less:	related accumulated depreciation			(2,015,901)	(68,506)	(2,084,407)	(68,506)	(2,152,914)
(-) Less:	related ADIT			(3,121,701)	(72,640)	(3,194,341)	(72,640)	(3,266,981)
(-) Less:	related unamortized ITC			(42,753)	79	(42,674)	79	(42,595)
(+) Add:	regulatory asset - depreciation expense			1,370,930	68,506	1,439,436	68,506	1,507,942
(+) Add:	regulatory asset - carrying charge of AFUDC debt/equity component			3,774,330	197,864	3,972,194	198,647	4,170,841
(=) Equals:	Total base for calculating carrying charge			31,614,482	125,303	31,739,784	126,086	31,865,870
Average Capital Cost base for calculating carrying charge				31,552,219		31,677,133		31,802,827
(x) Multiply:	Rate equivalent to AFUDC / 12			0.006271		0.006271		0.006271
(=) Equals:	Monthly carrying charge			197,864		198,647		199,436
Monthly Carrying Charge Breakdown
AFUDC - Debt (eff. 8/2012, rates were changed)				58,782		59,014		59,249
AFUDC - Equity (eff. 8/2012, rates were changed)				139,082		139,633		140,187
Total AFUDC (as calculated)				197,864		198,647		199,436
AFUDC - Debt (prior adjustment)				116,879		175,661		234,676
AFUDC - Equity (prior adjustment)				276,544		415,626		555,259
Prior months adjustments that should be recorded				393,423		591,287		789,934
AFUDC - Debt (revised adjustment)				175,661		234,676		293,924
AFUDC - Equity (revised adjustment)				415,626		555,259		695,446
Revised Total AFUDC (that should be recorded)				591,287		789,934		989,370
AFUDC - Debt (what was recorded)
AFUDC - Equity (what was recorded)
Total Recorded AFUDC (via JE) during the month				-		-		-
AFUDC - Debt (adjustment for following month)				175,661		234,676		293,924
AFUDC - Equity (adjustment for following month)				415,626		555,259		695,446
Adjustment that should be reflected on the following month				591,287		789,934		989,370
True-Up AFUDC - Debt (0.4434% - 0.1950%) [eff. 8/12 (0.3457% - 0.1783%)]				69,005		69,278		69,553
True-Up AFUDC - Debt (prior adjustment)				137,206		206,211		275,489
True-Up AFUDC - Debt (that should be recorded)				206,211		275,489		345,041
True-Up AFUDC - Debt (what was recorded))
True-Up AFUDC - Debt (adjustment for the following month)				206,211		275,489		345,041
		Capital Cost		Mar-13		Apr-13		May-13
7,676,961		P0001050	127,256	7,804,217	-	7,804,217	-	7,804,217
3,801,520		P0001051	2,035	3,808,851	-	3,808,851	-	3,808,851
603,567		P0001052	2,595	606,162	-	606,162	-	606,162
1,809,875		P0001084	-	1,809,875	-	1,809,875	-	1,809,875
668,194		P0001134	-	668,194	-	668,194	-	668,194
753,115		P0001135	-	753,115	-	753,115	-	753,115
1,795,941		P0001136	137,896	1,933,837	-	1,933,837	-	1,933,837
212,405		P0001137	39,682	252,087	-	252,087	-	252,087
4,857,924		P0001340	-	4,857,924	-	4,857,924	-	4,857,924
1,261,761		P0001585	-	1,261,761	-	1,261,761	-	1,261,761
3,046,322		P0001880	-	3,046,322	-	3,046,322	-	3,046,322
7,107,036		P0001881	-	7,107,036	-	7,107,036	-	7,107,036
161,127,436		P4900000	18,533	161,323,906	-	161,323,906	-	161,323,906
		Less (NR/NE Cost)	(303,711)	(303,711)	-	(303,711)	-	(303,711)
194,722,057			24,286	194,929,576	-	194,929,576	-	194,929,576
(1,809,875)				(1,809,875)	-	(1,809,875)	-	(1,809,875)
192,912,182				193,119,701		193,119,701		193,119,701

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 9 of 10

HECO

Major Projects:  CT-1

Monthly Carrying Charge Calculation

	Depreciation	AFUDC Equity	AFUDC Debt
	18670120	18670122	18670121
Jul-11	38,826	130,036	55,232
Aug-11	65,966	129,070	54,642
Sep-11	65,966	123,391	52,589
Oct-11	65,967	127,450	54,134
Nov-11	65,966	129,944	55,193
Dec-11	65,967	128,200	54,452
2011 Total	368,658	768,091	326,242
Jan-12	43,188	129,600	59,425
Feb-12	68,506	132,130	60,619
Mar-12	68,506	134,216	61,575
Apr-12	68,506	131,613	60,381
May-12	68,506	132,204	60,653
Jun-12	68,506	131,076	60,135
Jul-12	68,506	131,300	60,237
Aug-12	68,506	126,055	53,260
Sep-12	68,506	126,243	53,339
Oct-12	68,506	126,405	53,407
Nov-12	68,506	151,242	64,199
Dec-12	68,506	131,641	55,620
2012 Total	796,754	1,583,725	702,850
Jan-13	68,506	138,009	58,328	Estimated
Feb-13	68,506	138,535	58,550	Estimated
Mar-13	68,506	139,082	58,782	Estimated
Apr-13	68,506	139,633	59,014	Estimated
May-13	68,506	140,187	59,249	Estimated
2013 Total	342,530	695,446	293,924
Total Deferred	1,507,942	3,047,262	1,323,016
AFUDC (Equity)		3,047,262
AFUDC (Debt)		1,323,016
Carrying Charge (AFUDC)		4,370,278

Workpapers for Exhibit 3 CT-1

CT-1 Deferred Cost

Page 10 of 10

HECO
Major Projects:  CIP CT-1
A/D Adjustment & AFUDC Rates						Annual
						Depreciation
					Excess	for entire
		Original		Difference	Revised	(incl. Excess)
Accumulated Depreciation Adjustment		CIP CT-1		CIP CT-1	CIP CT-1	CIP CT-1
Total Project Cost (as of Dec 31, 2010)		192,912,182
Amount included in rates		161,469,776
		31,442,406
Depreciation Expense
2011 Depr Exp (Jan - Jul)		465,906
2011 Depr Exp (Monthly)		38,826
Rev 2011 Depr Exp (Aug - Dec)		791,597		(197,279)	594,318
Rev 2011 Depr Exp (Monthly)		65,966		(16,440)	49,527
2012 Depr Exp (Jan - Dec)					822,074
2012 Depr Exp (Monthly)					68,506
2013 Depr Exp (Jan - Dec)					822,074	4,680,678
2013 Depr Exp (Monthly)					68,506	390,057
Accumulated Depreciation
2010 Accum Depr (12/31/11)		412,014		955	412,969
2011 Depr Exp (Jan - Jun)		232,953		64,206	297,159
Total Accum Depr (6/30/11)		644,967		65,161	710,128
2011 Depr Exp (Jul)		38,826		10,701	49,527
Total Accum Depr (7/31/11)		683,793		75,862	759,655
2011 Depr Exp (Aug - Dec)		329,832		(82,200)	247,632.50
Total Accum Depr (12/31/11)		1,013,625		(6,338)	1,007,287
2012 Depr Exp (Jan)		43,189			49,527
Total Accum Depr (1/31/12)		1,056,814			1,056,814
2012 Depr Exp (Feb-Dec)					753,568
Total Accum Depr (12/31/12)					1,810,381
2013 Depr Exp (Jan-Dec)					822,074
Total Accum Depr (12/31/13)					2,632,455
Monthly 2011 AFUDC Debt rate	= rate in ELLIPSE table	0.001950		0.001950
Monthly 2011 AFUDC Equity rate	= rate in ELLIPSE table	0.004591		0.004591
		0.006541		0.006541
Annual 2011 AFUDC Debt rate	= rate in ELLIPSE table	0.023552		0.023552
Annual 2011 AFUDC Equity rate	= rate in ELLIPSE table	0.055449		0.055449
		0.079001		0.079001
Annual 2011 Actual Debt rate	Recalculated	0.053209		0.053209
Monthly 2011 Actual Debt rate	Recalculated	0.004434		0.004434
Monthly 2011 Actual Debt (true-up) rate	(0.004434 - 0.001950)	0.002484	��	0.002484
January - July 2012
Monthly 2012 AFUDC Debt rate	= rate in ELLIPSE table	0.002020		0.002020
Monthly 2012 AFUDC Equity rate	= rate in ELLIPSE table	0.004403		0.004403
		0.006423		0.006423
Monthly 2012 Actual Debt rate	Recalculated	0.004386		0.004386
Monthly 2012 Actual Debt (true-up) rate	(0.004386 - 0.002020)	0.002366		0.002366
		2012
July - December 2012 (“Catch-up” Amount)		“Catch-up Amount”		“Annual Amount”
Monthly 2012 AFUDC Debt rate	= rate in ELLIPSE table	0.001783		0.001863
Monthly 2012 AFUDC Equity rate	= rate in ELLIPSE table	0.004220		0.004408
		0.006003		0.006271
Monthly 2012 Actual Debt rate	Recalculated	0.003457		0.004050
Monthly 2012 Actual Debt (true-up) rate	(0.00345719 - 0.001783)	0.001674		0.002187

Notes:

o AFUDC rate is 0.6541% per month in 2011. Budgets reviews rate quarterly.

(Annual rate = 7.9001%)

o AFUDC amount for current month is computed on prior end-of-month balance plus

1/2 of current month’s additions

o AFUDC is added on AFUDC -- 0.6541% rate is reduced to reflect this compounding.

ADIT & Unamortized ITC related to Excess Project Costs

Calculated by HEI Tax (as provided by Mary Zane)

Workpapers for Exhibit 3 CIS

CIS Carrying Charges

Page 1 of 4

HECO & Subsidiaries

Estimate CIS Carrying Charge

January 2013 - May 2013 (Estimated 1/16/2013)

	HECO	HELCO	MECO	Total
CIS costs as of 12/31/12	14,312	2,525	2,729	19,566
Estimated AFUDC: (Jan 2013 - May 2013)
AFUDC - Debt	135	22	22	179
AFUDC - Equity	319	56	60	435
Total AFUDC	454	78	82	614

Workpapers for Exhibit 3 CIS

CIS Carrying Charges

Page 2 of 4

HECO

Monthly Carrying Charge on deferred CIS system development project costs (Post Go-live)

2013

(Do this calculation on 3rd work day, after Gail Shimabukuro has reclassed non-deferrable on-costs to expense on 2nd work day)

		AFUDC Equity	AFUDC Debt	Acct Balance
	CIS Def Cost	Cr. 42002000	Cr. 42004000	Dr. 18670202
	(Acct 186050)	Dr. 42002000	Dr. 42004000
G.L. balance 12/31/12	14,312.00
Costs incurred in 1/13
Add AFUDC @ .6423%	0.00	63.09	26.66	89.75
Add’l costs after AFUDC calc
G.L. balance 1/31/13	14,312.00			89.75
Costs incurred in 2/13	0.00
Add AFUDC @ .6423%	0.00	63.48	26.83	90.31
Add’l costs after AFUDC calc
G.L. balance 2/28/13	14,312.00			180.06
Costs incurred in 3/13
Add AFUDC @ .6203%	0.00	63.88	27.00	90.88
G.L. balance 3/31/13	14,312.00			270.94
Costs incurred in 4/13
Add AFUDC @ .6203%	0.00	64.28	27.17	91.45
Add’l costs after AFUDC calc
G.L. balance 4/30/13	14,312.00			362.39
Costs incurred in 5/13
Add AFUDC @ .6203%	0.00	64.68	27.34	92.02
G.L. balance 5/31/13	14,312.00	319.41	135.00
Monthly 2012 AFUDC Debt rate	0.001863	= rate in ELLIPSE table		0.001863	= rate in ELLIPSE table
Monthly 2012 AFUDC Equity rate	0.004408	= rate in ELLIPSE table		0.004408	= rate in ELLIPSE table
	0.00627100			0.00627100

Notes:

o AFUDC rate is 0.6423% per month in 2012 (through July 2012).  AFUDC rate is 0.6203% per month in 2012 (August onward).

Budgets reviews rate quarterly.  (Annual rate = 7.7578% through July 2012,  7.5728% from August onward)

o AFUDC amount for current month is computed on prior end-of-month balance plus

1/2 of current month’s additions

o AFUDC is added on AFUDC -- 0.6423% (or 0.6203%) rate is reduced to reflect this compounding.

Workpapers for Exhibit 3 CIS

CIS Carrying Charges

Page 3 of 4

Hawaii Electric Light Company, Inc.

Calculation of AFUDC on CIS costs as of 12/31/12

AFUDC rates:	debt	equity
*Apr 2012 - Dec 2012	0.1933%	0.4835%	0.6768%

			ineligible			AFUDC base	AFUDC	AFUDC	AFUDC base
	labor	overheads	on-costs	other	total	BOM	debt	equity	EOM
Jan-13	-	-	-	2,525.00	2,525.00	1,262.50	2.44	6.10	2,533.54
Feb-13	-	-	-	-	-	2,533.54	4.90	12.25	2,550.69
Mar-13	-	-	-	-	-	2,550.69	4.93	12.33	2,567.95
Apr-13	-	-	-	-	-	2,567.95	4.96	12.42	2,585.33
May-13	-	-	-	-	-	2,585.33	5.00	12.50	2,602.83
	-	-	-	2,525.00	2,525.00		22.23	55.60
						Total AFUDC		77.83

*    AFUDC rates based on current information available.  2013 AFUDC rates still being finalized.

Workpapers for Exhibit 3 CIS

CIS Carrying Charges

Page 4 of 4

Maui Electric Company, Limited

Estimated CIS Carrying Charges

January - May 2013

Month/Yr	Estimated Monthly AFUDC Debt Rate	Estimated Monthly AFUDC Equity Rate	Principal Balance	Carrying Charge based upon AFUDC Debt Rate	Carrying Charge based upon AFUDC Equity Rate	Cumulative Balance	Monthly Carrying Charge
						-
Dec-12	0.1755%	0.4843%	-	-	-	-
Jan-13	0.1755%	0.4843%	2,729.00	2.39	6.61	2,738.00	9.00
Feb-13	0.1755%	0.4843%	-	4.81	13.26	2,756.07	18.07
Mar-13	0.1755%	0.4843%	-	4.84	13.35	2,774.26	18.19
Apr-13	0.1755%	0.4843%	-	4.87	13.44	2,792.57	18.31
May-13	0.1755%	0.4843%	-	4.90	13.52	2,810.99	18.42
			2,729.00	21.81	60.18	2,810.99	81.99