Hawaiian Electric seeks expert assistance, but no plans for restructuring.

Seeking Expert Advice: Hawaiian​ Electric Industries Faces Scrutiny

By Arunima Kumar and Arshreet Singh

(Reuters) – Hawaiian Electric Industries, the largest power ​supplier in the⁤ US island state, is under increasing scrutiny following the devastating Maui wildfires. However, ‍the company made it⁤ clear​ on Friday that ​their goal is not to restructure the utility.

Despite recent challenges, Hawaiian Electric Industries⁢ saw a‍ surge in its shares, rising over‍ 7% to $12.91 in volatile early trading.⁣ This comes after the company’s shares had⁣ plummeted by more than half since the ⁢Aug. 8 wildfires ‌that ravaged‌ the coastal Maui town of Lahaina, claiming the lives of at least 110 people.

Moody’s Investors Service, a prominent ratings agency, downgraded Hawaiian Electric Industries’ ​credit rating⁢ to ⁤junk status earlier in the day. This follows a similar downgrade by S&P Global Ratings. Investors are​ concerned about‍ the ‌potential financial and legal repercussions ⁢related‍ to‌ the wildfires.

While the company did not explicitly state ⁤the ⁤purpose of⁣ seeking ‍expert advice,⁤ it emphasized that⁤ it is a standard ‌practice for⁣ companies‍ in such situations. In a filing, Hawaiian Electric Industries stated, ‍”Like any‌ company ⁤in ⁤this situation would do, ‌and​ as we do in the normal course of business,⁤ we are​ seeking advice from various​ experts.”

When asked ⁣for further details ‌about their ⁢decision to seek ‍expert help,‌ Hawaiian Electric Industries did not respond.

The Honolulu-based company is⁤ currently facing class-action lawsuits that⁣ allege its⁤ culpability for the fires. The lawsuits claim that the utility ⁣failed to shut off power lines despite warnings of high ⁣winds that could potentially cause wildfires.

Hawaiian​ Electric⁢ Industries defended its actions, stating that shutting off power was ⁢not part of its high-wind management protocol. ⁢The company explained, “Preemptive, short-notice power shutoffs ‌have to be coordinated⁤ with‌ first ⁣responders, and in Lahaina, electricity powers some of the pumps ​that provide the water ‍needed for firefighting.”

According to‌ Wells ⁣Fargo analyst Jonathan Reeder, most North⁢ American utilities‌ do not have a formal⁤ Public Safety Power Shutoff program that outlines when and if such a drastic measure should be taken. He‌ added, “Shutting off​ power is not an easy decision for a utility to make as there⁣ are widespread ramifications to‌ safety when doing so.”

Unlike California,⁤ Hawaiian Electric Industries stated that there is no precedent in Hawaii for ‌applying ⁢”inverse condemnation” to a private party like an investor-owned⁢ utility. In California, this legal concept exposes utilities to liabilities from wildfires regardless of their negligence, ⁢as long as their​ equipment is involved.

While Hawaiian Electric Industries may not have a real precedent to rely​ on, there is significant legal uncertainty surrounding the situation, according to Reeder.

As of Thursday, approximately 1,900 customers in West Maui were still ‍without electricity, according to ‌Hawaiian Electric Industries. ‍This⁢ figure does not⁣ include the approximately 2,600 homes and businesses ⁤that⁣ were destroyed, representing less than 1% of the company’s customers.

(Reporting by Arshreet ⁣Singh, Arunima ​Kumar and Shreyashi Sanyal⁤ in Bengaluru; Editing by⁣ Arun Koyyur)

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