Dive Brief:
- Hawai’i Gov. Josh Green, D, on Wednesday announced the creation of a roughly $150 million recovery fund — financed in part by Hawaiian Electric — to compensate families of people who died, or who suffered severe injuries, as a result of the August wildfires on Maui.
- Hawaiian Electric will provide up to $75 million to the fund, which will come from the utility’s insurance rather than ratepayers, Scott Seu, president and CEO of parent company Hawaiian Electric Industries, said during an earnings call Thursday.
- “Payment will be offered on an expedited basis, providing an alternative to a lengthy legal process and the costs associated with it,” Seu said on the call. However, those who participate in the fund will waive their ability to get compensated again through litigation, he added.
Dive Insight:
Gov. Green’s initiative to support Maui’s recovery will include multiple phases, the first focused on providing financial support for victims who have lost a loved one, or were severely injured, in the fire, Seu noted. Those who opt in to the program will receive payments of more than $1 million as early as the second quarter of next year, according to the governor’s office.
The next phase of the effort will focus on property owners and businesses impacted by the fires, followed by statutory and regulatory proposals in early 2024 to help protect customers and businesses from climate risks, Seu said.
The company plans to push the filing of its 10-Q with the U.S. Securities and Exchange Commission until early next week to incorporate the creation of the fund. The utility has $165 million in liability insurance, and will still have $90 million of coverage after chipping in to the fund, Seu said.
The wildfires that broke out on Maui on Aug. 8 led to 97 fatalities, and impacted 2,200 structures on the island. Numerous lawsuits have been filed against Hawaiian Electric, alleging its involvement in sparking the fires. However, at a Congressional’ hearing in September, utility President and CEO Shelee Kimura defended its protocols around managing fire risk.
According to Kimura, a fire that began at 6:30 a.m. on Aug. 8 appears to have been caused by the utility’s power lines. However, this fire was contained by 9 a.m. the same morning. A separate fire that began later that afternoon — a time when all of the utility’s lines in the area were de-energized — eventually spread to Lahaina and its cause has not been determined, she said during the hearing.
As of Nov. 7, Hawaiian Electric had been named as a defendant in 64 lawsuits related to the windstorm and fires, Seu told analysts on the company’s Q3 earnings call, while HEI had been named in 65 lawsuits.
“We will vigorously defend the litigation, and we intend to contest both causation and negligence,” he added.
HEI reported net income for common stock of $41.1 million, or $0.37 per share, for Q3, compared to $62.1 million and $0.57 for the same quarter in 2022.
