Hawaiian Electric Co. seeks rescue amid financial turmoil after Maui wildfires

In the wake of the devastating 2023 Maui wildfire in Hawaii, which resulted in the tragic loss of 102 lives and extensive destruction in Lahaina, Hawaiian Electric Co. (HECO) is facing severe financial challenges. The company's financial foundation was significantly undermined following the disaster, prompting it to appeal to state lawmakers for assistance. As part of this legislative push, the utility is seeking to establish a fund aimed at addressing its obligations linked to a $4 billion global settlement related to the wildfires. Lawmakers are currently engaged in negotiations concerning various aspects of the proposed bills, with the Senate and House differing on key amendments. The urgency of the situation has increased as bond rating agencies have downgraded the credit rating of HECO's parent company, Hawaiian Electric Industries, following the catastrophe. This downgrade has resulted in higher borrowing costs for the company, further complicating its financial landscape. Hawaiian Electric Industries’ president and CEO, Scott Seu, recently received a significant compensation raise, sparking discussions about the management's financial decisions amidst the crisis. Furthermore, the proposal to impose a new fee on utility customers to finance the fund is generating mixed responses among lawmakers and local groups. During discussions, some legislators, like state Senator Glenn Wakai, have expressed skepticism about HECO’s ability to raise funds for its part of the settlement. He emphasized the importance of understanding how the utility plans to manage its financial obligations, given its current situation. The outcome of the legislative efforts remains uncertain, and different stakeholders have varying degrees of support for the proposed measures. Supporters argue that if legislation passes, there is a reasonable chance for HECO to improve its credit rating, while opponents raise concerns over potential financial burdens on local residents. Ultimately, the situation serves as a litmus test for the support the local utility can expect from lawmakers and the community at large. The fate of these legislative measures, which are crucial for Hawaiian Electric Co.'s recovery, underscores the broader implications for utility management and public trust in the wake of disaster recovery efforts.