Dive Brief:
- A recovery fund that will provide victims of the Maui wildfires with compensation, as an alternative to litigation, now amounts to $175 million and is set to be launched on March 1, Scott Seu, president and CEO of Hawaiian Electric’s parent company Hawaiian Electric Industries told analysts during an earnings call Tuesday.
- Hawaiian Electric will contribute as much as $75 million to the fund, while entities like the state, Maui County, Kamehameha Schools, Spectrum and Hawaiian Telcom will chip in for the remaining amount, Seu said.
- Separately, Hawaiian Electric on Tuesday initiated rolling outages on Hawaii Island due to multiple large generators that were either unavailable or operating at reduced output, as well as “near zero” wind and hydro resources.
Dive Insight:
HEI on Tuesday reported 2023 consolidated net income of $199.2 million – an earnings per share of $1.81 – compared to $241.1 million and $2.20 for the previous year. This included $14.1 million of after-tax expenses related to the wildfire, the company said.
The Maui wildfires in August led to around 97 fatalities and affected some 2,200 structures on the island. Hawaiian Electric is facing lawsuits alleging that its power lines sparked the fire, and according to an August report from Moody’s Investors Service, the company faces financial and cost recovery risks as a result.
In September, Hawaiian Electric President and CEO Shelee Kimura told federal lawmakers that a Maui fire that began on Aug. 8 at 6:30 a.m. appears to have been caused by the utility’s infrastructure, but it was contained shortly thereafter. A separate fire that began that afternoon — when Hawaiian Electric’s power lines were de-energized — eventually spread to Lahaina, she said.
In November, Hawai’i Gov. Josh Green, D, announced the creation of the recovery fund — then around $150 million — to compensate the families of the victims of the fire. The speed at which the fund was put together is encouraging, Seu said on the call.
“The next phase of this process will seek to support property owners and businesses who have been severely impacted by the fire,” he added.
Policymakers in Hawai’i are also introducing legislative solutions to address wildfire risk and ensure support for Maui’s recovery, Seu noted, pointing to a variety of bills that have been introduced in the state this legislative session.
“The legislative session began last month, and in the range of bills that have been introduced, we're seeing a whole-of-society approach to ensuring our state, utilities and communities have the tools needed to address the challenges we face,” he said.
Some of the proposals include, for example, creating a fund that would help property owners seek cost recovery from future fires, and implement wildfire prevention measures under the authority of the state Public Utilities Commission.
One of these bills, HB 2407, would have electric utilities develop, implement and administer wildfire protection plans, which would be reviewed and approved by the commission, along with allowing the utility to recover the costs of implementing these measures.
Also on Tuesday, Hawaiian Electric first urged customers to conserve electricity — especially between 5 p.m. and 9 p.m. — and later initiated rolling outages, after independent power producer Hamakua Energy went offline unexpectedly, while multiple other plants were unavailable due to maintenance and repairs. As of 9:45 p.m., power had been restored to all customers, the utility reported.
