UPDATE: Hawaiian Electric Industries Inc. has just announced a groundbreaking investment plan of nearly $2 billion aimed at enhancing wildfire safety and power generation across Hawaii. This ambitious plan, revealed during a conference call with stock analysts on September 30, 2023, comes as the utility strives to recover from significant wildfire-related challenges, including a devastating incident in Maui that claimed 102 lives.
In a critical move to secure the future of Hawaii’s electricity supply, Hawaiian Electric (HEI) is set to allocate between $1.75 billion and $2.35 billion from 2026 to 2028 for capital improvement projects. This spending marks a significant increase from the $400 million invested this year, with annual expenditures projected to range from $550 million to $850 million.
The company will finance this initiative through retained profits and newly issued debt, including a recently expanded $600 million credit facility and approximately $500 million raised from institutional investors. HEI’s president and CEO, Scott Seu, emphasized that these financial strategies will enhance liquidity and support critical investments in safety, reliability, and resilience across the islands.
In light of the ongoing wildfire recovery efforts, HEI reported a $31 million profit for the third quarter, a stark improvement from a $104 million loss during the same period last year. This recovery is crucial as the company manages its commitment to a $4 billion settlement for fire victims, which includes payments due in four annual installments starting no earlier than early 2026.
The company has taken proactive steps to mitigate the risk of future wildfires, implementing a Public Safety Power Shutoff program and investing in significant equipment upgrades. Since the beginning of 2024, HEI has replaced or upgraded 3,628 wood poles, replaced 36 miles of copper power lines with stronger aluminum lines, and upgraded 10,361 fuses alongside replacing 2,989 lightning arresters with fire-safe models.
Seu highlighted the advancements made by stating, “These are just a few examples of the many advancements we’ve made to help ensure the safety of our communities.” The company is also enhancing its wildfire safety strategy, currently under review by the state Public Utilities Commission (PUC), which could lead to higher rates for customers.
As Hawaiian Electric moves forward with these developments, shareholders are feeling the impact, with HEI stock closing at $11.20 on Monday, a decline from pre-wildfire levels of $37.36. This news comes at a pivotal time for the utility, as it balances the need for improved safety measures with financial pressures stemming from ongoing wildfire litigation.
Stay tuned for more updates as Hawaiian Electric continues to navigate these critical challenges and implement its comprehensive safety strategy to protect both its customers and the environment.
