Hawaii Lawmakers Wrangle HECO Rescue Bills as Session Deadline Looms
Hawaiian Electric Co. is making a final legislative push this month, asking lawmakers to help shore up its financial foundation, which crumbled after the 2023 Maui wildfire that killed 102 people and destroyed much of Lahaina.HECO and its parent company, which were found to have started the Lahaina fire, have made enormous progress since the August 2023 catastrophe. Most notably HECO settled lawsuits brought by more than 2,000 fire victims as part of a global settlement brokered by Gov. Josh Green and blessed by the Hawaiʻi Supreme Court in February.HECO says it still needs the Legislature’s help, chiefly in the form of protection from future wildfire lawsuits, in the hopes such a measure can help boost the company’s credit rating. The provision limiting the utility’s liability is now the most important piece of a wildfire mitigation bill that has gone through various iterations this session, said Jim Kelly, HECO’s vice president for government and community relations and corporate communications.Bond rating agencies slashed the credit rating of HECO’s parent, Hawaiian Electric Industries, after the fires, meaning the company must pay high interest rates to borrow money. What Hawaiʻi lawmakers do, Kelly said, will send a message to credit markets, which have seen 14 other western states limit wildfire liability for utilities, including Utah, Oregon, Nevada, Wyoming, Montana, Idaho, Arizona and New Mexico.“It sends a really strong signal to credit markets that are watching this closely,” Kelly said.If the utility’s bill can’t muster the needed votes, he said, “that raises questions about how much support there is for the local hometown utility.”The Senate has formally disagreed with House amendments to the wildfire mitigation bill, meaning lawmakers must work out differences during conference committee hearings.Meanwhile, Senate committees amended a House bill to establish a fund to pay the state’s portion of a $4 billion global settlement. If the House disagrees with the amendments, those differences also will have to be worked out in a conference committee including members of both chambers before the session ends May 2. Bill Gains Unlikely Advocate The wildfire bill originally called for setting up a wildfire recovery fund, a sort of self-insurance fund HECO could use to pay future wildfire claims. The $1 billion fund was to be financed with a new fee imposed on customers that could be used to secure loans. The bill also contained a limitation on liability.But lawmakers changed much of that over the course of the session.The latest version of the bill would also create a fund; however, it would be used not for insurance but rather to pay for utility infrastructure investments to mitigate wildfire risks. That fund also would be financed with a new fee on customers. The bill would also limit liability the utility could face up to $1 billion.The idea of imposing a new fee on utility customers has generated some opposition, most notably from the Hawaiʻi Regional Council of Carpenters. But even long-time antagonists of the utility company say the current bill creates a good deal for customers. Among the unlikely supporters is Henry Curtis, vice president of the activist group Life of the Land, who frequently faces off against HECO in cases before the Hawaiʻi Public Utilities Commission. A loan secured by a fee on customers carries a much lower interest rate than other types of loans, which would be passed on to customers through utility rates anyway, Curtis said.The PUC would help ensure that any such loan carried the lowest possible interest rate, said Curtis, who has testified in favor of the bill. Other supporters include the Chamber of Commerce Hawaiʻi, Hawaiʻi Farm Bureau, Ulupono Initiative and the International Brotherhood of Electrical Workers Local Union 1260. The only groups opposing the bill in its current form are the carpenters union and the Hawaiʻi Association for Justice, a trial lawyers association.Rep. Nicole Lowen has also at times faced off against HECO as chair of the House Energy and Environmental Protection Committee. But Lowen agrees that the securitized fee on utility customers might be the best option.“The work to implement the wildfire mitigation plan must be done, and the cost of financing that work gets passed on to ratepayers regardless,” she said. “By authorizing securitization for this purpose specifically, we would be saving ratepayers millions of dollars a year.” Still, HECO’s Kelly acknowledged the company expects challenges during the session’s waning days.“Nobody hates everything about (Senate Bill) 897, but nobody loves everything about it, either,” he said. “We’re just glad it’s still moving.”Among those expected to vet utility bills during the legislative end game is state Sen. Glenn Wakai. He previously held hearings on the utility’s proposed bills as chairman of the Senate Energy and Intergovernmental Affairs Committee.Wakai’s philosophy is to put what he calls “hooks” in Senate Bill 897 and other utility measures, to hold HECO accountable to the public and ratepayers in exchange for the laws to help the utility. For example, he said, utility executives should be prohibited from receiving bonuses above their base salaries if customers are paying an additional fee.In March, Civil Beat reported Hawaiian Electric Industries’ president and chief executive, Scott Seu, got a one-year compensation increase of $1.7 million, lifting his take-home pay to $3.2 million in 2024. Shelee Kimura, president and chief executive of HEI’s utility subsidiary, Hawaiian Electric Co., had a pay jump from $859,000 in 2023 to $1.5 million. The increases came despite HEI reporting a $1.4 billion net loss in 2024.Seu and Kimura subsequently repaid the incentive compensation they received for 2024, although they still got increases in their base salaries. Seu’s base went to $995,000 from $958,000; Kimura’s went to $650,000 from $575,000. Seu’s 2024 incentive was approximately $1.7 million and Kimura’s $606,000.Wakai said he also wants to see a plan from HECO to reduce rates over the long term.“There has to be some kind of give on their part,” he said. Utility Isn’t Sure It Can Raise Money To Pay Settlement Wakai is one of few legislators to take a hard look at another bill that would set up a fund to pay the state’s portion of the $4 billion wildfire settlement. Taxpayers are on the hook for $807.5 million.During a hearing in March, Wakai hauled Seu before the committee and grilled the company CEO on where HECO’s portion of the settlement money would come from. The holding company has raised about half of the $1.99 billion it has committed to the settlement. But it has acknowledged it might not be able to raise the rest without dire steps.“There is no assurance that future financing will be available in sufficient amounts, on a timely basis or on reasonable terms acceptable to us, if at all,” Hawaiian Electric Industries warned its shareholders in late February. In that case, the company said, the best alternative might be bankruptcy.Wakai had added a provision to the state settlement bill to make sure HECO pays its share first before the state steps in. He said it was fair since HECO is the party found to have started the fire. Although that provision was removed based on testimony by Hawaiʻi Attorney General Anne Lopez, Wakai may have the chance to add more of his hooks to the settlement funding measure during the conference committee process.“They have expectations that everyone else is going to save them when they have no idea how they’re going to save themselves,” he said of HECO. “That, I find, is quite concerning.”Perhaps the biggest question is whether these legislative measures will be enough to shore up the utility’s credit rating. HECO’s Kelly cautioned that nothing will happen instantly because much depends on the rating agencies.But Life of the Land’s Curtis said if the securitization bill passes, “There’s a reasonable chance that HECO will get a better credit rating.”“We’ll just keep on keeping on,” Kelly said. “The No. 1 thing is to make sure we don’t have another wildfire.”This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Photos You Should See - Feb. 2025
Hawaiian Electric Co. is making a final legislative push this month, asking lawmakers to help shore up its financial foundation, which crumbled after the 2023 Maui wildfire that killed 102 people and destroyed much of Lahaina
Hawaiian Electric Co. is making a final legislative push this month, asking lawmakers to help shore up its financial foundation, which crumbled after the 2023 Maui wildfire that killed 102 people and destroyed much of Lahaina.
HECO and its parent company, which were found to have started the Lahaina fire, have made enormous progress since the August 2023 catastrophe. Most notably HECO settled lawsuits brought by more than 2,000 fire victims as part of a global settlement brokered by Gov. Josh Green and blessed by the Hawaiʻi Supreme Court in February.
HECO says it still needs the Legislature’s help, chiefly in the form of protection from future wildfire lawsuits, in the hopes such a measure can help boost the company’s credit rating. The provision limiting the utility’s liability is now the most important piece of a wildfire mitigation bill that has gone through various iterations this session, said Jim Kelly, HECO’s vice president for government and community relations and corporate communications.
Bond rating agencies slashed the credit rating of HECO’s parent, Hawaiian Electric Industries, after the fires, meaning the company must pay high interest rates to borrow money. What Hawaiʻi lawmakers do, Kelly said, will send a message to credit markets, which have seen 14 other western states limit wildfire liability for utilities, including Utah, Oregon, Nevada, Wyoming, Montana, Idaho, Arizona and New Mexico.
“It sends a really strong signal to credit markets that are watching this closely,” Kelly said.
If the utility’s bill can’t muster the needed votes, he said, “that raises questions about how much support there is for the local hometown utility.”
The Senate has formally disagreed with House amendments to the wildfire mitigation bill, meaning lawmakers must work out differences during conference committee hearings.
Meanwhile, Senate committees amended a House bill to establish a fund to pay the state’s portion of a $4 billion global settlement. If the House disagrees with the amendments, those differences also will have to be worked out in a conference committee including members of both chambers before the session ends May 2.
Bill Gains Unlikely Advocate
The wildfire bill originally called for setting up a wildfire recovery fund, a sort of self-insurance fund HECO could use to pay future wildfire claims. The $1 billion fund was to be financed with a new fee imposed on customers that could be used to secure loans. The bill also contained a limitation on liability.
But lawmakers changed much of that over the course of the session.
The latest version of the bill would also create a fund; however, it would be used not for insurance but rather to pay for utility infrastructure investments to mitigate wildfire risks. That fund also would be financed with a new fee on customers. The bill would also limit liability the utility could face up to $1 billion.
The idea of imposing a new fee on utility customers has generated some opposition, most notably from the Hawaiʻi Regional Council of Carpenters. But even long-time antagonists of the utility company say the current bill creates a good deal for customers.
Among the unlikely supporters is Henry Curtis, vice president of the activist group Life of the Land, who frequently faces off against HECO in cases before the Hawaiʻi Public Utilities Commission. A loan secured by a fee on customers carries a much lower interest rate than other types of loans, which would be passed on to customers through utility rates anyway, Curtis said.
The PUC would help ensure that any such loan carried the lowest possible interest rate, said Curtis, who has testified in favor of the bill.
Other supporters include the Chamber of Commerce Hawaiʻi, Hawaiʻi Farm Bureau, Ulupono Initiative and the International Brotherhood of Electrical Workers Local Union 1260. The only groups opposing the bill in its current form are the carpenters union and the Hawaiʻi Association for Justice, a trial lawyers association.
Rep. Nicole Lowen has also at times faced off against HECO as chair of the House Energy and Environmental Protection Committee. But Lowen agrees that the securitized fee on utility customers might be the best option.
“The work to implement the wildfire mitigation plan must be done, and the cost of financing that work gets passed on to ratepayers regardless,” she said. “By authorizing securitization for this purpose specifically, we would be saving ratepayers millions of dollars a year.”
Still, HECO’s Kelly acknowledged the company expects challenges during the session’s waning days.
“Nobody hates everything about (Senate Bill) 897, but nobody loves everything about it, either,” he said. “We’re just glad it’s still moving.”
Among those expected to vet utility bills during the legislative end game is state Sen. Glenn Wakai. He previously held hearings on the utility’s proposed bills as chairman of the Senate Energy and Intergovernmental Affairs Committee.
Wakai’s philosophy is to put what he calls “hooks” in Senate Bill 897 and other utility measures, to hold HECO accountable to the public and ratepayers in exchange for the laws to help the utility.
For example, he said, utility executives should be prohibited from receiving bonuses above their base salaries if customers are paying an additional fee.
In March, Civil Beat reported Hawaiian Electric Industries’ president and chief executive, Scott Seu, got a one-year compensation increase of $1.7 million, lifting his take-home pay to $3.2 million in 2024. Shelee Kimura, president and chief executive of HEI’s utility subsidiary, Hawaiian Electric Co., had a pay jump from $859,000 in 2023 to $1.5 million. The increases came despite HEI reporting a $1.4 billion net loss in 2024.
Seu and Kimura subsequently repaid the incentive compensation they received for 2024, although they still got increases in their base salaries. Seu’s base went to $995,000 from $958,000; Kimura’s went to $650,000 from $575,000. Seu’s 2024 incentive was approximately $1.7 million and Kimura’s $606,000.
Wakai said he also wants to see a plan from HECO to reduce rates over the long term.
“There has to be some kind of give on their part,” he said.
Utility Isn’t Sure It Can Raise Money To Pay Settlement
Wakai is one of few legislators to take a hard look at another bill that would set up a fund to pay the state’s portion of the $4 billion wildfire settlement. Taxpayers are on the hook for $807.5 million.
During a hearing in March, Wakai hauled Seu before the committee and grilled the company CEO on where HECO’s portion of the settlement money would come from. The holding company has raised about half of the $1.99 billion it has committed to the settlement. But it has acknowledged it might not be able to raise the rest without dire steps.
“There is no assurance that future financing will be available in sufficient amounts, on a timely basis or on reasonable terms acceptable to us, if at all,” Hawaiian Electric Industries warned its shareholders in late February.
In that case, the company said, the best alternative might be bankruptcy.
Wakai had added a provision to the state settlement bill to make sure HECO pays its share first before the state steps in. He said it was fair since HECO is the party found to have started the fire. Although that provision was removed based on testimony by Hawaiʻi Attorney General Anne Lopez, Wakai may have the chance to add more of his hooks to the settlement funding measure during the conference committee process.
“They have expectations that everyone else is going to save them when they have no idea how they’re going to save themselves,” he said of HECO. “That, I find, is quite concerning.”
Perhaps the biggest question is whether these legislative measures will be enough to shore up the utility’s credit rating. HECO’s Kelly cautioned that nothing will happen instantly because much depends on the rating agencies.
But Life of the Land’s Curtis said if the securitization bill passes, “There’s a reasonable chance that HECO will get a better credit rating.”
“We’ll just keep on keeping on,” Kelly said. “The No. 1 thing is to make sure we don’t have another wildfire.”
This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.
Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.