Hawaiian Electric’s Future; marked by concerns and uncertainties

Hawaiian Electric is the state’s largest utility and a significant contributor to the state’s economy.

HEI (Hawaiian Electric Inc.) had about $124 million in cash on hand after the end of the second quarter, June 2024.  The utility’s cash imbalance has raised ongoing concerns and doubts about the utility’s future.

On Friday (Aug. 9) the utility disclosed it did not have a financing plan in place for the $1.99 billion Maui wildfire settlement it reached earlier this month.  The company also took a goodwill impairment charge of $82.2 million during the second quarter.

Hawaiian Electric representatives further added on Friday that the company has incurred a net loss of $1.30 billion, largely due to the wildfire-related charge of $1.71 billion during the quarter.

The utility will also suspend dividend payments to its parent (HEI) because of going concerns and mounting financial liabilities.

Bailing Water

The utility, and its parent HEI said they were working closely with financial advisers to develop a financing plan for their share of the settlement and they could finance it through a mix of debt, common equity, equity-linked securities, and other potential, but unqualified options.

The utility insists it does not intend to raise electricity rates to pay for the settlement, HEI CEO Scott Seu said on a post-earnings conference call earlier this week.

Hawaiian Electric is also looking at strategic options for its retail banking operating unit, American Savings Bank unit.

Hawaiian Electric Company, Inc., the utility, is a subsidiary of Hawaiian Electric Industries (HEI). As a holding company, HEI (the parent entity) does not sell products or services in the state and therefore is not regulated by Hawaii’s PUC.