Consumers on O'ahu will likely be paying more for electricity later this year but not as much as Hawaiian Electric Co. initially proposed.

In a filing with the Securities and Exchange Commission, HECO said it will seek a 3.4 percent rate hike in place of the 5.4 percent increase it had requested earlier. The change means a typical customer would save about 53 cents a month.

The revised increase, which is subject to approval from the state Public Utilities Commission, is separate from a 1.9 percent rate increase sought by HECO to pay for its energy conservation and energy efficiency programs. It is also separate from the "energy cost adjustment," which rises in response to increased fuel costs and has gone up 16.6 percent in the past year.

If the 3.4 percent increase is approved, the typical residential electrical bill of 600 kilowatt hours would increase by $4.29 a month to $116.98, said company spokeswoman Lynne Unemori. Under the previous 5.4 percent increase, that bill would have risen by about $4.82 to $117.51.

The PUC, which held hearings on the rate request last week, will likely rule on it by December. The change in electric bills would follow shortly after a PUC decision. The new 3.4 percent rate increase will generate about $42 million in revenues.

Unemori said the rate increase will help pay for major capital projects, including underground cables in the downtown area and new transmission lines for the Kapi'olani corridor and O'ahu's North Shore.

The revised rate request represents a compromise with state consumer advocate John Cole and the Department of Defense, a major electricity user, Unemori said. Cole said his office had questioned several items in HECO's rate proposal, including the company's request for an 11.5 percent return on equity. HECO yesterday said it agreed to a 10.7 percent rate of return in response to Cole's objections.

In November, HECO initially asked for a 7.3 percent rate increase but the PUC told the company to divide its rate request into two separate requests.

The largest portion — the proposed 5.4 percent increase now reduced to 3.4 percent — is to pay for capital projects. A separate 1.9 percent increase will be used to pay for conservation and energy saving programs, such as $750 rebates offered to homeowners with solar water heaters.

According to Cole, the substantive portions of the second rate case won't come before the PUC until next year.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.