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What changed in HAWAIIAN ELECTRIC INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HAWAIIAN ELECTRIC INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+684 added−980 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-29)

Top changes in HAWAIIAN ELECTRIC INDUSTRIES INC's 2024 10-K

684 paragraphs added · 980 removed · 384 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

82 edited+17 added−112 removed79 unchanged
Biggest changeYears ended December 31 2023 2022 2021 2020 2019 MWh sales (thousands) Residential 2,342.1 2,415.2 2,491.6 2,525.4 2,439.3 Commercial 2,586.7 2,628.8 2,572.5 2,456.0 2,793.0 Industrial 3,273.5 3,295.7 3,174.3 3,118.0 3,467.2 Other 24.4 14.3 22.7 20.8 40.5 8,226.7 8,354.0 8,261.1 8,120.2 8,740.0 MWh net generated and purchased (thousands) Net generated 5,343.0 5,011.9 4,501.0 4,629.2 4,972.7 Purchased 3,271.2 3,750.4 4,153.7 3,896.2 4,168.6 8,614.2 8,762.3 8,654.7 8,525.4 9,141.3 MWh customer-sited solar (thousands) 1,585.5 1,522.4 1,418.0 1,325.8 1,224.6 RPS (%) 1 33.3 31.8 38.4 34.5 28.4 Losses and system uses (%) 4.2 4.4 4.3 4.5 4.2 Energy supply (December 31) Net generating capability—MW 1,739 1,738 1,738 1,737 1,737 Firm and other purchased capability—MW 2 362 362 540 517 517 2,101 2,100 2,278 2,254 2,254 Net peak demand—MW 3 1,447 1,467 1,471 1,471 1,601 Btu per net kWh generated 11,102 10,941 10,988 10,834 10,860 Average fuel oil cost per MBtu (cents) 2,060.0 2,310.9 1,305.4 1,028.7 1,337.6 Customer accounts (December 31) Residential 416,072 413,744 414,713 412,484 409,689 Commercial 54,060 54,416 54,373 54,035 54,233 Industrial 702 696 698 694 700 Other 771 812 828 826 844 471,605 469,668 470,612 468,039 465,466 Electric revenues (thousands) Residential $ 1,028,415 $ 1,069,974 $ 843,655 $ 770,135 $ 791,398 Commercial 1,029,927 1,077,521 802,878 708,180 829,000 Industrial 1,156,909 1,211,242 853,293 754,775 884,722 Other 9,967 7,884 7,780 6,440 11,915 $ 3,225,218 $ 3,366,621 $ 2,507,606 $ 2,239,530 $ 2,517,035 Average revenue per kWh sold (cents) 39.21 40.30 30.35 27.58 28.80 Residential 43.91 44.30 33.86 30.50 32.44 Commercial 39.82 40.99 31.21 28.83 29.68 Industrial 35.34 36.75 26.88 24.21 25.52 Other 40.79 55.24 34.19 31.01 29.39 Residential statistics Average annual use per customer account (kWh) 5,628 5,821 6,022 6,145 5,967 Average annual revenue per customer account $ 2,471 $ 2,579 $ 2,039 $ 1,874 $ 1,936 Average number of customer accounts 416,177 414,910 413,725 410,973 408,768 1.
Biggest changeYears ended December 31 2024 2023 2022 2021 2020 MWh sales (thousands) Residential 2,295.4 2,342.1 2,415.2 2,491.6 2,525.4 Commercial 2,597.8 2,586.7 2,628.8 2,572.5 2,456.0 Industrial 3,301.3 3,273.5 3,295.7 3,174.3 3,118.0 Other 24.4 24.4 14.3 22.7 20.8 8,218.9 8,226.7 8,354.0 8,261.1 8,120.2 MWh net generated and purchased (thousands) Net generated 5,251.6 5,343.0 5,011.9 4,501.0 4,629.2 Purchased 3,549.1 3,271.2 3,750.4 4,153.7 3,896.2 8,800.7 8,614.2 8,762.3 8,654.7 8,525.4 MWh customer-sited solar (thousands) 1,691.2 1,585.5 1,522.4 1,418.0 1,325.8 RPS (%) 1 35.8 33.3 31.8 38.4 34.5 Losses and system uses (%) 6.4 4.2 4.4 4.3 4.5 Energy supply (December 31) Net generating capability—MW 1,647 1,739 1,738 1,738 1,737 Firm and other purchased capability—MW 2 366 362 362 540 517 2,013 2,101 2,100 2,278 2,254 Net peak demand—MW 3 1,424 1,447 1,467 1,471 1,471 Btu per net kWh generated 11,074 11,102 10,941 10,988 10,834 Average fuel oil cost per MBtu (cents) 1,868.2 2,060.0 2,310.9 1,305.4 1,028.7 Customer accounts (December 31) Residential 417,253 416,072 413,744 414,713 412,484 Commercial 53,810 54,060 54,416 54,373 54,035 Industrial 712 702 696 698 694 Other 761 771 812 828 826 472,536 471,605 469,668 470,612 468,039 Electric revenues (thousands) Residential $ 1,011,289 $ 1,028,415 $ 1,069,974 $ 843,655 $ 770,135 Commercial 1,013,567 1,029,927 1,077,521 802,878 708,180 Industrial 1,122,152 1,156,909 1,211,242 853,293 754,775 Other 10,004 9,967 7,884 7,780 6,440 $ 3,157,012 $ 3,225,218 $ 3,366,621 $ 2,507,606 $ 2,239,530 Average revenue per kWh sold (cents) 38.41 39.21 40.30 30.35 27.58 Residential 44.06 43.91 44.30 33.86 30.50 Commercial 39.02 39.82 40.99 31.21 28.83 Industrial 33.99 35.34 36.75 26.88 24.21 Other 41.05 40.79 55.24 34.19 31.01 Residential statistics Average annual use per customer account (kWh) 5,512 5,628 5,821 6,022 6,145 Average annual revenue per customer account $ 2,429 $ 2,471 $ 2,579 $ 2,039 $ 1,874 Average number of customer accounts 416,402 416,177 414,910 413,725 410,973 1.
As such, the Company invests in specific skill enhancement training as well as industry and leadership development programs. Hawaiian Electric . Hawaiian Electric offers Hawaiian Electric and HEI holding company employees skills and professional training programs, including leadership development courses, employee development courses, technical training, apprenticeship programs, operational, environmental compliance, cybersecurity awareness and required safety training.
As such, the Company invests in specific skill enhancement training as well as industry and leadership development programs. Hawaiian Electric offers Hawaiian Electric and HEI holding company employees skills and professional training programs, including leadership development courses, employee development courses, technical training, apprenticeship programs, operational, environmental compliance, cybersecurity awareness and required safety training.
For the Utility, safety is of paramount importance due to the inherent risks involved in certain aspects of its operations and the critical role the Utility plays in maintaining the electrical grid for the State of Hawaii. Hawaiian Electric . Hawaiian Electric is committed to maintaining a strong safety culture.
For the Utility, safety is of paramount importance due to the inherent risks involved in certain aspects of its operations and the critical role the Utility plays in maintaining the electrical grid for the State of Hawaii. Hawaiian Electric is committed to maintaining a strong safety culture.
Except as otherwise disclosed in this 12 report (see “Risk Factors” in Item 1A, and Notes 1 and 4 of the Consolidated Financial Statements), the Utilities believe that each subsidiary has appropriately responded to environmental conditions requiring action and that, as a result of such actions, such environmental conditions will not have a material adverse effect on the capital expenditures, earnings and competitive position of the Utilities.
Except as otherwise disclosed in this report (see “Risk Factors” in Item 1A, and Notes 1 and 4 of the Consolidated Financial Statements), the Utilities believe that each subsidiary has appropriately responded to environmental conditions requiring action and that, as a result of such actions, such environmental conditions will not have a material adverse effect on the capital expenditures, earnings and competitive position of the Utilities.
Accordingly, investors should routinely monitor such portions of HEI’s website, in addition to following HEI’s, Hawaiian Electric’s and ASB’s press releases, SEC filings and public conference calls and webcasts. Investors may also wish to refer to the PUC website at hpuc.my.site.com/cdms/s/ in order to review documents filed with and issued by the PUC.
Accordingly, investors should routinely monitor such portions of HEI’s website, in addition to following HEI’s and Hawaiian Electric’s press releases, SEC filings and public conference calls and webcasts. Investors may also wish to refer to the PUC website at hpuc.my.site.com/cdms/s/ in order to review documents filed with and issued by the PUC.
See also “HEI–Regulation” above. Environmental regulation . Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, are subject to periodic inspections by federal, state and, in some cases, local environmental regulatory agencies, including agencies responsible for the regulation of water quality, air quality, hazardous and other waste and hazardous materials.
See also “HEI Consolidated–Regulation” above. Environmental regulation . Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, are subject to periodic inspections by federal, state and, in some cases, local environmental regulatory agencies, including agencies responsible for the regulation of water quality, air quality, hazardous and other waste and hazardous materials.
Responsible parties under the ERL may be jointly, severally, and strictly liable for a release of a hazardous substance. Responsible parties include owners or operators of a facility where a hazardous substance is located and any person who at the time of disposal of the hazardous substance owned or operated any facility at which such hazardous substance was disposed.
Responsible parties under the ERL may be jointly, severally, and strictly 12 liable for a release of a hazardous substance. Responsible parties include owners or operators of a facility where a hazardous substance is located and any person who at the time of disposal of the hazardous substance owned or operated any facility at which such hazardous substance was disposed.
Title I of PURPA, which relates to retail regulatory policies for electric utilities, and Title VII of the Energy Policy Act of 1992, which addresses transmission access, also apply to the Utilities. The Utilities are also required to file various operational reports with the FERC.
Title I of PURPA, which relates to retail regulatory policies for electric utilities, and Title VII of the 11 Energy Policy Act of 1992, which addresses transmission access, also apply to the Utilities. The Utilities are also required to file various operational reports with the FERC.
ITEM 1. BUSINESS HEI Consolidated HEI and subsidiaries and lines of business. HEI is a holding company with its subsidiaries principally engaged in electric utility, banking, and non-regulated renewable/sustainable infrastructure businesses operating in the State of Hawaii.
ITEM 1. BUSINESS HEI Consolidated HEI and subsidiaries and lines of business. HEI is a holding company with its subsidiaries principally engaged in electric utility and non-regulated renewable/sustainable infrastructure businesses operating in the State of Hawaii.
In July 2022, Governor Ige signed Act 240 (H.B.2089), which amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation.
In July 2022, former Governor Ige signed Act 240 (H.B.2089), which amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation.
After 2030, progress on elimination of carbon from power generation assumes continued use of proven resources, including wind, solar, geothermal, hydroelectric, biofuels and energy storage, along with the development of new technologies. 5 Those technologies may include offshore wind, green hydrogen, wave energy and carbon-capture—all currently under development around the world—as well as other solutions that will emerge.
After 2030, progress on elimination of carbon from power generation assumes continued use of proven resources, including wind, solar, geothermal, hydroelectric, biofuels and energy storage, along with the development of new and existing technologies. Those technologies may include offshore wind, green hydrogen, wave energy and carbon-capture—all currently under development around the world—as well as other solutions that will emerge.
Under a 1988 PPA, as amended, Hawaiian Electric is committed to purchase 208 MW of firm capacity from Kalaeloa Partners, L.P. (Kalaeloa). The Kalaeloa facility, which is a Qualifying Facility (QF), is a combined-cycle operation, consisting 9 of two oil-fired combustion turbines burning low sulfur fuel oil (LSFO) and a steam turbine that utilizes waste heat from the combustion turbines.
Under a 1988 PPA, as amended, Hawaiian Electric is committed to purchase 208 MW of firm capacity from Kalaeloa Partners, L.P. (Kalaeloa). The Kalaeloa facility, which is a Qualifying Facility (QF), is a combined-cycle operation, consisting 8 of two oil-fired combustion turbines burning low sulfur fuel oil (LSFO) and a steam turbine that utilizes waste heat from the combustion turbines.
As of December 31, 2023, the Utilities’ ownership in generating assets was as follows: Property Location (island) Principal Fuel Type Generating Capacity (MW) Status Hawaiian Electric: Waiau 1 Oahu LSFO / Diesel 480.8 Active Kahe 1 Oahu LSFO 620.5 Active Campbell Industrial Park (CIP) 1 Oahu Diesel 129.0 Active Honolulu Power Plant 1 Oahu N/A — Retired in 2023 Schofield Generating Station 2 Oahu Biodiesel / ULSD 49.4 Active West Loch PV Project 3 Oahu Renewable (Solar) 20.0 Active Hawaii Electric Light 4 : Shipman Hawaii N/A — Retired in 2015 Waimea Hawaii ULSD 7.5 Active Keahole Hawaii Diesel / ULSD 77.6 Active Puna Hawaii HSFO / Diesel 36.7 Active Hill/Kanoelehua Hawaii HSFO / ULSD 55.4 Active Distributed generators at substation sites Hawaii ULSD 5.0 Active Maui Electric 5 : Kahului Maui HSFO 35.9 Active Maalaea Maui Diesel / ULSD 208.4 Active Miki Basin Lanai ULSD 9.4 Active Palaau Molokai ULSD 12.0 Active Distributed generators at substation sites Maui ULSD 3.8 Active 1 The four plants are situated on Hawaiian Electric-owned land having a combined area of 542 acres. 2 Hawaiian Electric has a 35-year land lease on 8.13 acres, effective September 1, 2016 (with an option to extend an additional 10 years), with the Department of the Army. 3 Hawaiian Electric has a 37-year land lease on 102 acres, effective July 1, 2017, with the Secretary of the Navy. 4 The plants are situated on Hawaii Electric Light-owned land having a combined area of approximately 44 acres.
As of December 31, 2024, the Utilities’ ownership in generating assets was as follows: Property Location (island) Principal Fuel Type Generating Capacity (MW) Status Hawaiian Electric: Waiau 1,2 Oahu LSFO / Diesel 388.2 Active Kahe 1 Oahu LSFO 620.5 Active Campbell Industrial Park (CIP) 1 Oahu Diesel 129.0 Active Honolulu Power Plant 1 Oahu N/A — Retired in 2023 Schofield Generating Station 3 Oahu Biodiesel / ULSD 49.4 Active West Loch PV Project 4 Oahu Renewable (Solar) 20.0 Active Hawaii Electric Light 5 : Shipman Hawaii N/A — Retired in 2015 Waimea Hawaii ULSD 7.5 Active Keahole Hawaii Diesel / ULSD 77.6 Active Puna Hawaii HSFO / Diesel 36.7 Active Hill/Kanoelehua Hawaii HSFO / ULSD 55.4 Active Distributed generators at substation sites 6 Hawaii ULSD 3.8 Active Maui Electric 7 : Kahului Maui HSFO 35.9 Active Maalaea Maui Diesel / ULSD 208.4 Active Miki Basin Lanai ULSD 9.4 Active Palaau Molokai ULSD 12.0 Active Distributed generators at substation sites Maui ULSD 3.8 Active 1 The four plants are situated on Hawaiian Electric-owned land having a combined area of 542 acres. 2 Waiau Units 3 and 4 were retired on December 31, 2024. 3 Hawaiian Electric has a 35-year land lease on 8.13 acres, effective September 1, 2016 (with an option to extend an additional 10 years), with the Department of the Army. 4 Hawaiian Electric has a 37-year land lease on 102 acres, effective July 1, 2017, with the Secretary of the Navy. 5 The plants are situated on Hawaii Electric Light-owned land having a combined area of approximately 44 acres.
Additionally, AES Hawaii provided 180 MW of firm capacity from its coal-fired cogeneration plant. The purchase power agreement expired on September 1, 2022 and was not renewed. The AES Hawaii coal plant has ceased operations. 3 Sum of the net peak demands on all islands served, noncoincident and nonintegrated. 8 Generation statistics.
Additionally, AES Hawaii provided 180 MW of firm capacity from its coal-fired cogeneration plant. The purchase power agreement expired on September 1, 2022 and was not renewed. The AES Hawaii coal plant has ceased operations. 3 Sum of the net peak demands on all islands served, noncoincident and nonintegrated. 7 Generation statistics.
The following table contains certain generation statistics as of and for the year ended December 31, 2023. The net generating and firm purchased capability available for operation at any given time may be more or less than shown because of capability restrictions or temporary outages for inspection, maintenance, repairs or unforeseen circumstances.
The following table contains certain generation statistics as of and for the year ended December 31, 2024. The net generating and firm purchased capability available for operation at any given time may be more or less than shown because of capability restrictions or temporary outages for inspection, maintenance, repairs or unforeseen circumstances.
One, 1.83-MW stand-by diesel generator is located within the Maui Electric-owned land at Kuihelani Substation. See “Hawaiian Electric and subsidiaries and service areas” above for a discussion of the nonexclusive franchises of Hawaiian Electric and subsidiaries. See “Generation statistics” above for a further discussion of some of the electric utility properties. Bank General.
One, 1.83-MW stand-by diesel generator is located within the Maui Electric-owned land at Kuihelani Substation. See “Hawaiian Electric and subsidiaries and service areas” above for a discussion of the nonexclusive franchises of Hawaiian Electric and subsidiaries. See “Generation statistics” above for a further discussion of some of the electric utility properties.
The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology. 2 Puna Geothermal Venture (PGV) with 34.6 MW of firm capacity went offline due to lava flow on Hawaii Island in May 2018, but returned to service in the first quarter of 2021 and is currently providing 25.7 MW.
The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology. 2 Puna Geothermal Venture (PGV) with 34.6 MW of firm capacity went offline due to lava flow on Hawaii Island in May 2018, but returned to service in the first quarter of 2021 and is currently providing 32.2 MW.
A diverse portfolio of resources will also enhance resilience to climate-related events. Sales of electricity.
A diverse portfolio of resources will also enhance resilience to climate-related events. 4 Sales of electricity.
Hawaiian Electric continues to work with various federal agencies to implement measures that will help them achieve their energy efficiency, resilience and clean energy objectives. 7 Selected consolidated electric utility operating statistics.
Hawaiian Electric continues to work with various federal agencies to implement measures that will help them achieve their energy efficiency, resilience and clean energy objectives. 6 Selected consolidated electric utility operating statistics.
Allocating adequate resources to enable seamless implementation of safety programs and holding leaders accountable for the implementation of safety programs and resulting health and safety performance are a strategic requirement. This commitment is shown in the Executive compensation which is tied to the achievement of recordable incidents and lost workdays targets.
Allocating adequate resources to enable seamless implementation of safety programs and holding leaders accountable for the implementation of safety programs and resulting health and safety performance are strategic requirements. This commitment is shown in executive compensation, which is tied to the achievement of recordable incidents and lost workdays targets.
Maintained under PBR. Annual Revenue Adjustment (ARA) Annually adjusts revenue levels during a Multi-Year Rate Period, determined by formula which includes an inflation factor, a predetermined productivity adjustment (currently set at zero), adjustments for exceptional circumstances not in the Utilities’ control and a customer dividend. Replaced the Revenue Adjustment Mechanism (RAM) effective June 1, 2021.
Annual Revenue Adjustment (ARA) Annually adjusts revenue levels during a Multi-Year Rate Period, determined by formula which includes an inflation factor, a predetermined productivity adjustment (currently set at zero), adjustments for exceptional circumstances not in the Utilities’ control and a customer dividend component. The ARA replaced the Revenue Adjustment Mechanism (RAM) effective June 1, 2021.
Expedited Pilot Process Fosters innovation by establishing an expedited implementation process for pilots that test new technologies, programs, business models and other arrangements. Proposed pilots are subject to PUC approval with a total annual cap of $10 million. Approved under PBR to allow for timely cost recovery of annual expenditures of approved pilot projects through an adjustment to target revenues.
Pilot Process Fosters innovation by establishing an expedited implementation process for pilots that test new technologies, programs, business models and other arrangements and allows for timely cost recovery of annual expenditures of approved pilot projects through an adjustment to target revenues. Proposed pilots are subject to PUC approval with a total annual cap of $10 million.
Other properties . The Utilities own overhead transmission and distribution lines, underground cables, pole (some jointly) and metal high voltage towers. Electric lines are located over or under public and nonpublic properties. 14 Hawaiian Electric owns a total of 133 acres of land on which substations, transformer vaults, distribution baseyards and the Kalaeloa cogeneration facility are located.
Other properties . The Utilities own overhead transmission and distribution lines, underground cables, pole (some jointly) and metal high voltage towers. Electric lines are located over or under public and nonpublic properties. Hawaiian Electric owns a total of 126.5 acres of land on which substations, transformer vaults, distribution baseyards and the Kalaeloa cogeneration facility are located.
Hamakua Energy’s energy prices vary primarily with the cost of naphtha. The Utilities estimate that 74% of the net energy they generate will come from fossil fuel oil in 2024 compared to 75% in 2023. Hawaiian Electric generally maintains an average system fuel inventory level equivalent to 47 days of forward consumption.
Hamakua Energy’s energy prices vary primarily with the cost of naphtha. The Utilities estimate that 69% of the net energy they generate will come from fossil fuel oil in 2025 compared to 74% in 2024. Hawaiian Electric generally maintains an average system fuel inventory level equivalent to 47 days of forward consumption.
The “Other” segment is composed of HEI’s corporate-level operating, general and administrative expenses and the results of Pacific Current, LLC (Pacific Current). Pacific Current was formed in September 2017 to focus on investing in non-regulated clean energy and sustainable infrastructure in the State of Hawaii to help reach the state’s sustainability goals.
The All Other non-reportable segment is composed of HEI’s corporate-level operating, general and administrative expenses and the results of Pacific Current, LLC (Pacific Current). Pacific Current was formed in September 2017 to focus on investing in non-regulated clean energy and sustainable infrastructure in the State of Hawaii to help reach the state’s sustainability goals.
The dual-train combined-cycle facility consists of two oil-fired combustion turbines and a steam turbine that utilizes waste heat from the combustion turbines, which primarily burns naphtha (a mixture of liquid hydrocarbons) and, starting in late 2019, biodiesel (comprising approximately 24% of HEP’s fuel mix in 2023).
The dual-train combined-cycle facility consists of two oil-fired combustion turbines and a steam turbine that utilizes waste heat from the combustion turbines, which primarily burns naphtha (a mixture of liquid hydrocarbons) and, starting in late 2019, biodiesel (comprising approximately 41.8% of HEP’s fuel mix in 2024).
Hawaiian Electric currently has two major firm capacity PPAs that provide a total of 276.5 MW of firm capacity, representing 18% of Hawaiian Electric’s total net generating and firm purchased capacity on the Island of Oahu as of December 31, 2023.
Hawaiian Electric currently has two major firm capacity PPAs that provide a total of 276.5 MW of firm capacity, representing 19% of Hawaiian Electric’s total net generating and firm purchased capacity on the Island of Oahu as of December 31, 2024.
Hawaii Electric Light has two major firm capacity PPAs that provide a total of 85.7 MW of firm capacity, representing 32% of Hawaii Electric Light’s total net generating and firm purchased capacity on the Island of Hawaii as of December 31, 2023.
Hawaii Electric Light has two major firm capacity PPAs that provide a total of 85.7 MW of firm capacity, representing 33% of Hawaii Electric Light’s total net generating and firm purchased capacity on the Island of Hawaii as of December 31, 2024.
The abilities of certain of HEI’s subsidiaries to pay dividends or make other distributions to HEI are subject to contractual and regulatory restrictions (see Note 15 of the Consolidated Financial Statements). HEI is headquartered in Honolulu, Hawaii and has three reportable segments—Electric utility, Bank, and Other. Electric Utility .
The abilities of certain of HEI’s subsidiaries to pay dividends or make other distributions to HEI are subject to contractual and regulatory restrictions (see Note 15 of the Consolidated Financial Statements). HEI is headquartered in Honolulu, Hawaii and has one reportable segment: Electric utility.
Pension and other post-employment benefit trackers Allow tracking of pension and other post-employment benefit costs and contributions above or below the cost included in rates in a separate regulatory asset/liability account. Maintained under PBR. Renewable energy infrastructure program Permits recovery of renewable energy infrastructure projects through a surcharge. Maintained under PBR.
Pension and other post-employment benefit trackers Allows tracking of pension and other post-employment benefit costs and contributions above or below the cost included in rates in a separate regulatory asset/liability account. Renewable energy infrastructure program Permits recovery of renewable energy infrastructure projects through a surcharge.
Hawaiian Electric, Hawaii Electric Light and Maui Electric (Utilities) are regulated operating electric public utilities engaged in the production, purchase, transmission, distribution and sale of electricity on the islands of Oahu; Hawaii; and Maui, Lanai and Molokai, respectively.
Electric utility Hawaiian Electric and subsidiaries and service areas. Hawaiian Electric, Hawaii Electric Light and Maui Electric (Utilities) are regulated operating electric public utilities engaged in the production, purchase, transmission, distribution and sale of electricity on the islands of Oahu; Hawaii; and Maui, Lanai and Molokai, respectively.
In addition to the firm capacity PPAs described below, the electric utilities also purchase energy on an as-available basis directly from nonutility generators and through its Feed-In Tariff programs, as well as through renewable dispatchable generation power purchase agreements. The electric utilities also receive renewable energy from customers under its Net Energy Metering and Customer Grid Supply programs.
In addition to the firm capacity PPAs described below, the electric utilities also purchase energy on an as-available basis directly from nonutility generators and through its Feed-In Tariff programs, as well as through renewable dispatchable generation power purchase agreements. The electric utilities also receive renewable energy from customers under its customer-sited DER programs.
PGV returned to service at a level providing limited output without firm capacity in the fourth quarter of 2020 and is currently providing 25.7 MW of capacity.
PGV returned to service at a level providing limited output without firm capacity in the fourth quarter of 2020 and is currently providing 32.2 MW of capacity.
Earnings Sharing Mechanism (ESM) Protects the Utilities and customers from excessive earnings or losses, as measured by the Utilities’ achieved rate making ROACE. Maintained under PBR, adjusted to reflect a symmetrical ESM for achieved rate making ROACE outside of a 300 basis points dead band above or below the current authorized ROACE of 9.5% for each of the Utilities.
Earnings Sharing Mechanism (ESM) Protects the Utilities and customers from excessive earnings or losses, as measured by the Utilities’ achieved rate making ROACE; reflecting a symmetrical ESM for achieved rate making ROACE outside of a 300 basis points dead band above or below the current authorized ROACE of 9.5% for each of the Utilities.
Hazardous waste and toxic substances controls. The operations of the electric utility are subject to EPA regulations that implement provisions of the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, also known as Superfund), the Superfund Amendments and Reauthorization Act (SARA), and the Toxic Substances Control Act (TSCA).
The operations of the electric utility are subject to EPA regulations that implement provisions of the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, also known as Superfund), the Superfund Amendments and Reauthorization Act (SARA), and the Toxic Substances Control Act (TSCA) as well as equivalent State laws and regulations.
PGV’s current capability of 25.7 MW has been incorporated into the utility’s firm contract power capability as of December 31, 2023. 3 Noncoincident and nonintegrated. Generating reliability and reserve margin. Hawaiian Electric serves the island of Oahu and Hawaii Electric Light serves the island of Hawaii.
PGV’s current limited capability of 32.2 MW has been incorporated into the utility’s firm contract power capability as of December 31, 2024. 3 Noncoincident and nonintegrated. Generating reliability and reserve margin. Hawaiian Electric serves the island of Oahu and Hawaii Electric Light serves the island of Hawaii.
These programs include access to an extensive Employee Assistance Program for employees and their family members, participation in various community charity walks, wellness related trainings and resources, an onsite vaccination program, preventive screenings, a wide variety of corporate wellness activities, gym and group fitness discounts, and financial wellness classes. ASB .
These programs include access to an extensive Employee Assistance Program for employees and their family members, participation in various community charity walks, wellness related trainings and resources, onsite mental health support, a wide variety of corporate wellness activities, gym and group fitness discounts, and financial wellness classes. Workforce Stability .
Maintained under PBR with a portfolio of SSMs and new PIMs added to encourage acceleration in renewables, grid services, interconnection of DERs, low-to-moderate income energy efficiency, advanced metering infrastructure, generation-based reliability (penalties only), interconnection of utility scale renewable projects, and cost control of non-ARA costs and allows for financial rewards for exemplary performance.
Adding a portfolio of SSMs and new PIMs is intended to encourage acceleration in renewables, grid services, interconnection of DERs, low-to-moderate income energy efficiency, advanced metering infrastructure, generation-based reliability (penalties only), interconnection of utility scale renewable projects, and cost control of non-ARA costs and allow for financial rewards for exemplary performance.
The Utilities periodically discover leaking oil-containing equipment such as USTs, piping, and transformers. Each subsidiary reports releases from such equipment when and as required by applicable law and addresses the releases in compliance with applicable regulatory requirements. Additional information.
The Utilities periodically discover leaking oil-containing equipment such as USTs, piping, and transformers. Each subsidiary reports releases from such equipment when and as required by applicable law and addresses the releases in compliance with applicable regulatory requirements. State and Federal Endangered Species Act.
See also “Electric utility—Hawaii Electric Light firm capacity PPAs” section below and Note 4 of the Consolidated Financial Statements for additional information on Pacific Current activities. The “Other” segment also includes ASB Hawaii, Inc. (ASB Hawaii) (a holding company), which owns ASB. Additional information .
See also “Electric utility—Hawaii Electric Light firm capacity PPAs” section below and Note 3 of the Consolidated Financial Statements for additional information on Pacific Current activities. The All Other segment also includes ASB Hawaii, Inc. (ASB Hawaii) (a holding company), which previously owned ASB. Additional information .
Hawaiian Electric believes that employee engagement is key to creating a desirable, inclusive, rewarding place to work and conducts employee engagement surveys on a regular cycle, and, more recently, change management surveys to assess and support the organizations’ adaptability to change. Hawaiian Electric is expanding its strategic workforce planning initiative to build its workforce to support future transformation plans.
Hawaiian Electric believes that employee engagement is key to creating a desirable, inclusive, rewarding place to work and conducts employee engagement surveys on a regular cycle. Hawaiian Electric is expanding its strategic workforce planning initiative to build its workforce to support future transformation plans. Properties.
Hawaii Electric Light’s and Maui Electric’s steam generating units burn high sulfur fuel oil (HSFO) and Hawaii Electric Light’s and Maui Electric’s Maui combustion turbine generating units burn diesel. Hawaii Electric Light’s and Maui Electric’s Maui, Molokai, and Lanai diesel engine generating units burn ULSD. See “Fuel contracts” in Hawaiian Electric’s MD&A.
Hawaii Electric Light’s and Maui Electric’s steam generating units burn high sulfur fuel oil (HSFO) and Hawaii Electric Light’s and Maui Electric’s Maui combustion turbine generating units burn diesel. Hawaii Electric Light’s and Maui Electric’s Maui, Molokai, and Lanai diesel engine generating units burn ULSD.
The Utilities followed through on the EoT Workplan in 2020, with three filings: the electric bus make ready infrastructure pilot, Charge Ready Hawaii commercial infrastructure pilot, and two commercial EV rates, EV-J and EV-P.
The Utilities followed through 10 on the EoT Workplan, with three filings: the electric bus make ready infrastructure pilot, Charge Ready Hawaii commercial infrastructure pilot, and two commercial EV rates, EV-J and EV-P. The Utilities completed the 18-month Smart Charge Hawaii Telematics pilot in December 2024.
The Company had total and full-time employees as follows: December 31 2023 2022 2021 Total Full-time Total Full-time Total Full-time employees employees employees employees employees employees HEI 1 75 75 79 79 49 49 Hawaiian Electric and its subsidiaries 2,654 2,564 2,605 2,511 2,504 2,469 ASB 977 958 1,072 1,050 1,096 1,079 3,706 3,597 3,756 3,640 3,649 3,597 1 Includes Pacific Current.
The Company had total and full-time employees as follows: December 31 2024 2023 2022 Total Full-time Total Full-time Total Full-time employees employees employees employees employees employees HEI 1 69 69 75 75 79 79 Hawaiian Electric and its subsidiaries 2,533 2,518 2,654 2,564 2,605 2,511 ASB 2 — — 977 958 1,072 1,050 2,602 2,587 3,706 3,597 3,756 3,640 1 Includes consolidated Pacific Current employees.
The following table sets forth the average cost of fuel oil used by Hawaiian Electric, Hawaii Electric Light and Maui Electric to generate electricity in 2023, 2022 and 2021: Hawaiian Electric Hawaii Electric Light Maui Electric Consolidated $/Barrel ¢/MBtu $/Barrel ¢/MBtu $/Barrel ¢/MBtu $/Barrel ¢/MBtu 2023 127.45 2,051.1 124.04 2,063.7 124.86 2,101.1 126.76 2,060.0 2022 144.63 2,339.5 131.36 2,183.4 135.39 2,274.5 141.49 2,310.9 2021 79.10 1,275.9 80.52 1,333.9 83.45 1,404.0 80.06 1,305.4 10 The average per-unit cost of fuel oil consumed to generate electricity for Hawaiian Electric, Hawaii Electric Light and Maui Electric reflects a different volume mix of fuel types and grades as follows: Hawaiian Electric Hawaii Electric Light Maui Electric % LSFO % Biodiesel/Diesel % HSFO % Diesel % HSFO % Diesel 2023 92 8 35 65 22 78 2022 93 7 36 64 24 76 2021 93 7 41 59 22 78 The prices that Hawaiian Electric and Hawaii Electric Light pay for purchased energy from certain older nonutility generators are generally linked to the price of oil.
See “Fuel contracts” in Hawaiian Electric’s MD&A. 9 The following table sets forth the average cost of fuel oil used by Hawaiian Electric, Hawaii Electric Light and Maui Electric to generate electricity in 2024, 2023 and 2022: Hawaiian Electric Hawaii Electric Light Maui Electric Consolidated $/Barrel ¢/MBtu $/Barrel ¢/MBtu $/Barrel ¢/MBtu $/Barrel ¢/MBtu 2024 114.42 1,839.5 117.55 1,960.3 115.93 1,945.6 115.00 1,868.2 2023 127.45 2,051.1 124.04 2,063.7 124.86 2,101.1 126.73 2,060.0 2022 144.63 2,339.5 131.36 2,183.4 135.39 2,274.5 141.49 2,310.9 The average per-unit cost of fuel oil consumed to generate electricity for Hawaiian Electric, Hawaii Electric Light and Maui Electric reflects a different volume mix of fuel types and grades as follows: Hawaiian Electric Hawaii Electric Light Maui Electric % LSFO % Biodiesel/Diesel % HSFO % Diesel % HSFO % Diesel 2024 93 7 32 68 26 74 2023 92 8 35 65 22 78 2022 93 7 36 64 24 76 The prices that Hawaiian Electric and Hawaii Electric Light pay for purchased energy from certain older nonutility generators are generally linked to the price of oil.
Hawaiian Electric and its operating utility subsidiaries, Hawaii Electric Light Company, Inc. (Hawaii Electric Light) and Maui Electric Company, Limited (Maui Electric), are regulated electric public utilities that provide essential electric service to approximately 95% of Hawaii’s population through the operation of five separate grids that serve communities on the islands of Oahu, Hawaii, Maui, Lanai and Molokai.
(Hawaii Electric Light) and Maui Electric Company, Limited (Maui Electric), are regulated electric public utilities that provide essential electric service to approximately 95% of Hawaii’s population through the operation of five separate grids that serve communities on the islands of Oahu, Hawaii, Maui, Lanai and Molokai. See also “Electric utility” section below. All Other .
See “Electric Utility” and “Bank” sections for a description of properties they own and lease. 4 Hamakua Energy, LLC (Hamakua Energy), an indirect wholly owned subsidiary of Pacific Current, which is included in the “Other” segment, owns a 60-MW dual-train combined-cycle facility and a total of approximately 93 acres located on the Hamakua coast on the island of Hawaii.
Hamakua Energy, LLC (Hamakua Energy), an indirect wholly owned subsidiary of Pacific Current, which is included in the “All Other” segment, owns a 60-MW dual-train combined-cycle facility and a total of approximately 93 acres located on the Hamakua coast on the island of Hawaii.
Hawaiian Electric Hawaii Electric Light Maui Electric Island of Oahu Island of Hawaii Island of Maui Island of Lanai Island of Molokai Total Net generating and firm purchased capability (MW) as of December 31, 2023 1 Conventional oil-fired steam units 999.5 50.1 35.9 — — 1,085.5 Diesel internal combustion engine — 29.5 98.6 9.4 9.8 147.3 Simple-cycle combustion turbines 230.8 46.3 — — 2.2 279.3 Dual train combined-cycle unit — 56.3 113.6 — — 169.9 Biodiesel internal combustion engine 57.4 — — — — 57.4 Firm contract power 2 276.5 85.7 — — — 362.2 1,564.2 267.9 248.1 9.4 12.0 2,101.6 Net peak demand (MW) 3 1,060.0 187.3 187.9 6.0 5.8 1,447.0 Reserve margin 47.5 % 43.0 % 34.6 % 56.7 % 106.9 % 45.2 % Annual load factor 69.0 % 67.6 % 62.6 % 66.7 % 61.2 % 68.0 % MWh net generated and purchased (thousands) 6,409.3 1,108.7 1,030.1 35.1 31.1 8,614.3 1 Hawaiian Electric units at normal ratings; Hawaii Electric Light and Maui Electric units at reserve ratings. 2 Nonutility generators - Hawaiian Electric: 208 MW (Kalaeloa Partners, L.P., oil-fired) and 68.5 MW (HPOWER, refuse-fired); Hawaii Electric Light: 60 MW (Hamakua Energy, oil-fired).
Hawaiian Electric Hawaii Electric Light Maui Electric Island of Oahu Island of Hawaii Island of Maui Island of Lanai Island of Molokai Total Net generating and firm purchased capability (MW) as of December 31, 2024 1 Conventional oil-fired steam units 906.9 50.1 35.9 — — 992.9 Diesel internal combustion engine — 29.5 98.6 9.4 9.8 147.3 Simple-cycle combustion turbines 230.8 46.3 — — 2.2 279.3 Dual train combined-cycle unit — 56.2 113.6 — — 169.8 Biodiesel internal combustion engine 57.4 — — — — 57.4 Firm contract power 2 276.5 90.0 — — — 366.5 1,471.6 272.1 248.1 9.4 12.0 2,013.2 Net peak demand (MW) 3 1,050.0 183.6 178.5 5.9 5.8 1,423.8 Reserve margin 40.0 % 48.2 % 39.0 % 59.3 % 106.9 % 41.4 % Annual load factor 71.8 % 68.9 % 65.1 % 67.9 % 62.3 % 70.6 % MWh net generated and purchased (thousands) 6,607.5 1,108.4 1,018.1 35.1 31.6 8,800.7 1 Hawaiian Electric units at normal ratings; Hawaii Electric Light and Maui Electric units at reserve ratings. 2 Nonutility generators - Hawaiian Electric: 208 MW (Kalaeloa Partners, L.P., oil-fired) and 68.5 MW (HPOWER, refuse-fired); Hawaii Electric Light: 60 MW (Hamakua Energy, oil-fired) and 34.6 MW (PGV, geothermal).
In June 2018, the PUC initiated a proceeding to review the Utilities’ Electrification of Transportation (EoT) Strategic Roadmap, which provided an economic analysis for light duty electric vehicles on the island of Oahu, Maui and Hawaii. In July 2019 the Utilities filed a study analyzing data regarding the critical backbone for electric vehicle charging needs in their service territories.
In June 2018, the PUC initiated a proceeding to review the Utilities’ Electrification of Transportation (EoT) Strategic Roadmap, which provided an economic analysis for light duty electric vehicles on the island of Oahu, Maui and Hawaii.
As of December 31, 2023, the Utilities’ ownership in fuel storage facilities was as follows: Facility Location (island) Fuel Type Capacity (barrels in thousands) Generation Serviced Hawaiian Electric: Barbers Point Tank Farm Oahu LSFO 1,000 Kahe, Waiau Generation sites - various (in aggregate) Oahu LSFO 770 Various Generation sites - various (in aggregate) Oahu Diesel 132 Various Generation sites - various (in aggregate) Oahu Biodiesel 11 Various Hawaii Electric Light 1 : Generation sites - various (in aggregate) Hawaii HSFO 48 Various Generation sites - various (in aggregate) Hawaii Diesel 82 Various Maui Electric 2 : Generation sites - various (in aggregate) Maui HSFO 81 Various Generation sites - various (in aggregate) Maui Diesel 95 Various 1 There are an additional 19,200 barrels of diesel and 24,770 barrels of HSFO storage capacity for Hawaii Electric Light-owned fuel off-site at Island Energy Services, LLC-owned terminalling facilities. 2 There are an additional 56,358 barrels of diesel oil storage capacity off-site at Aloha Petroleum, Ltd-owned terminalling facilities.
The distributed generators are located within Maui Electric-owned substation sites having a combined area of approximately three acres. 13 As of December 31, 2024, the Utilities’ ownership in fuel storage facilities was as follows: Facility Location (island) Fuel Type Capacity (barrels in thousands) Generation Serviced Hawaiian Electric: Barbers Point Tank Farm Oahu LSFO 1,025 Kahe, Waiau Generation sites - various (in aggregate) Oahu LSFO 771 Various Generation sites - various (in aggregate) Oahu Diesel 147 Various Generation sites - various (in aggregate) Oahu Biodiesel 11 Various Hawaii Electric Light 1 : Generation sites - various (in aggregate) Hawaii HSFO 57 Various Generation sites - various (in aggregate) Hawaii Diesel 87 Various Maui Electric 2 : Generation sites - various (in aggregate) Maui HSFO 84 Various Generation sites - various (in aggregate) Maui Diesel 109 Various 1 There are an additional 19,249 barrels of diesel and 24,675 barrels of HSFO storage capacity for Hawaii Electric Light-owned fuel off-site at Island Energy Services, LLC-owned terminalling facilities. 2 There are an additional 56,358 barrels of diesel oil storage capacity off-site at Aloha Petroleum, Ltd-owned terminalling facilities.
The Utilities target compensation at market rates, and due to the significant increase in competitive market pay for linemen over the past few years, provided an 11.4% market rate adjustment and a 4% annual incentive effective February 1, 2024. The International Brotherhood of Electrical Workers Local 1260 represents roughly half of the Utilities’ workforce covered by a collective bargaining agreement.
The Utilities target compensation at market rates, and due to the significant increase in competitive market pay for linemen over the past few years, provided an 11.4% market rate adjustment and a 4% annual incentive for linemen effective February 1, 2024.
See “Commitments and contingencies-Regulatory proceedings-Performance-based regulation framework” in Note 4 of the Consolidated Financial Statements. 6 A summary of these regulatory mechanisms, most of which have been either maintained, modified, or approved under PBR as noted, is as follows: Mechanism Description PBR Framework (effective June 2021) Sales decoupling Provides predictable revenue stream by fixing net revenues at the level approved in last rate case (revenues not linked to kWh sales).
See “Commitments and contingencies-Regulatory proceedings-Performance-based regulation framework” in Note 4 of the Consolidated Financial Statements. 5 These regulatory mechanisms are summarized as follows: Mechanism Description Sales decoupling Provides predictable revenue stream by fixing net revenues at the level approved in last rate case (revenues not linked to kWh sales).
Hawaiian Electric also offers tailored leadership development programs, including supervisor training to transition new supervisors to critical operational, administrative, and leadership roles as well as leadership and employee assessments geared to improve productivity and effectiveness in the workplace. Leadership development metrics are included in executive and management incentive plans.
Hawaiian Electric also offers tailored leadership development programs, including supervisor training to transition new supervisors to critical operational, administrative, and leadership roles as well as leadership and employee assessments geared to improve productivity and effectiveness in the workplace. Learning and development initiatives align with individual and organizational performance, and are reinforced in the annual performance evaluation process.
The distributed generators are located within Hawaii Electric Light-owned substation sites having a combined area of approximately four acres. 5 The four plants are situated on Maui Electric-owned land having a combined area of 60.7 acres. The distributed generators are located within Maui Electric-owned substation sites having a combined area of approximately three acres.
The distributed generators are located within Hawaii Electric Light-owned substation sites having a combined area of approximately four acres. 6 One of the four distributed generators (Panaewa D24, 1.25 MW) was damaged in a substation fire in January 2024. 7 The four plants are situated on Maui Electric-owned land having a combined area of 60.7 acres.
Hawaiian Electric . Hawaiian Electric seeks to provide compensation and benefits that are comprehensive, market-competitive, and internally equitable to attract, engage, and retain highly skilled employees.
The Company’s employees are its greatest asset and the Company strives to create a highly desirable place to work. Hawaiian Electric seeks to provide compensation and benefits that are comprehensive, market-competitive, and internally equitable to attract, engage, and retain highly skilled employees.
Mahipapa, LLC (Mahipapa ) , a wholly owned subsidiary of Pacific Current, owns a 7.5- MW biomass facility located on approximately 65 acres of land and leases 3,500 acres on the island of Kauai. Electric utility Hawaiian Electric and subsidiaries and service areas.
Kaʻieʻie Waho Company, LLC (Kaʻieʻie Waho), a wholly owned subsidiary of Pacific Current, owns a 6-MW solar photovoltaic facility located on approximately 20 acres on the southern coast of the island of Kauai. 3 Mahipapa, LLC (Mahipapa ) , a wholly owned subsidiary of Pacific Current, owns a 7.5- MW biomass facility located on approximately 65 acres of land and leases 3,500 acres on the island of Kauai.
For example, the 2022 RPS achieved under the revised RPS calculation would have been 39.1% under the prior method versus 31.8% under the revised method.
The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology. For example, the 2022 RPS achieved under the revised RPS calculation would have been 39.1% under the prior method versus 31.8% under the revised method.
Years ended December 31 2023 2022 2021 (dollars in thousands) Customer accounts* Electric sales revenues Customer accounts* Electric sales revenues Customer accounts* Electric sales revenues Hawaiian Electric 309,631 $ 2,324,044 306,978 $ 2,422,232 308,721 $ 1,772,183 Hawaii Electric Light 89,477 458,157 88,757 479,566 88,103 375,775 Maui Electric 72,497 443,017 73,933 464,823 73,788 359,648 471,605 $ 3,225,218 469,668 $ 3,366,621 470,612 $ 2,507,606 * As of December 31.
Years ended December 31 2024 2023 2022 (dollars in thousands) Customer accounts* Electric sales revenues Customer accounts* Electric sales revenues Customer accounts* Electric sales revenues Hawaiian Electric 310,336 $ 2,246,646 309,631 $ 2,324,044 306,978 $ 2,422,232 Hawaii Electric Light 90,522 475,556 89,477 458,157 88,757 479,566 Maui Electric 71,678 434,810 72,497 443,017 73,933 464,823 472,536 $ 3,157,012 471,605 $ 3,225,218 469,668 $ 3,366,621 * As of December 31.
However, the Utilities will continue to replace significant amounts of fossil fuel generation with renewable energy between now and 2030 and expect to meet or exceed the State of Hawaii’s RPS goals.
As a result of these challenges, the Utilities expect the planned 70% reduction in carbon emissions to be achieved later than the original 2030 target date. However, the Utilities will continue to replace significant amounts of fossil fuel generation with renewable energy between now and 2030 and expect to meet or exceed the State of Hawaii’s RPS goals.
As a result of the D&O, Pacific Current intends to focus its future growth activities on projects not subject to a power purchase agreement with the Utilities or projects outside of the Utilities’ service territory. HEI and ASB Hawaii are subject to Federal Reserve Board (FRB) regulation, supervision and reporting requirements as savings and loan holding companies.
As a result of the D&O, Pacific Current intended to focus its future growth activities on projects not subject to a power purchase agreement with the Utilities or projects outside of the Utilities’ service territory.
The ability of the Utilities to meet RPS milestones after 2030 may be impacted by the Utilities’ current credit ratings. In 2023, the Utilities’ RPS was 33.3%. Affiliate transactions .
The ability of the Utilities to meet RPS milestones after 2030 may be impacted by the Utilities’ current credit ratings, which may impact independent power producers’ ability to secure low-cost financing. In 2024, the Utilities’ RPS was 35.8%. Affiliate transactions .
Energy cost recovery clause (ECRC) and purchased power adjustment clause (PPAC) Allows for timely recovery of fuel and purchased power costs to reduce earnings volatility. Symmetrical fossil fuel cost risk-sharing (98% customer/2% utility) mechanism established for Hawaiian Electric, Hawaii Electric Light and Maui Electric capped at $2.5 million, $0.6 million and $0.6 million annually, respectively. Maintained under PBR.
Symmetrical fossil fuel cost risk-sharing (98% customer/2% utility) mechanism established for Hawaiian Electric, Hawaii Electric Light and Maui Electric capped at $2.5 million, $0.6 million and $0.6 million annually, respectively.
In November 2017, Hamakua Energy, an indirect subsidiary of HEI, purchased the plant from HEP. Hawaii Electric Light has a 35-year PPA, as amended, with Puna Geothermal Venture (PGV) for 34.6 MW of firm capacity from its geothermal steam facility, which will expire on December 31, 2027.
The sale is expected to close in March 2025. See “Sale of Hamakua Holdings, LLC” in Note 3 of the Consolidated Financial Statements. Hawaii Electric Light has a 35-year PPA, as amended, with Puna Geothermal Venture (PGV) for 34.6 MW of firm capacity from its geothermal steam facility, which will expire on December 31, 2027.
Seasonality . kWh sales of the Utilities follow a seasonal pattern, but they do not experience extreme seasonal variations experienced by some electric utilities on the U.S. mainland.
Seasonality . kWh sales of the Utilities follow a seasonal pattern, but they do not experience extreme seasonal variations experienced by some electric utilities on the U.S. mainland. In Hawaii, kWh sales tend to increase in the warmer, more humid months as a result of increased demand for air conditioning and higher visitor arrivals.
They filed a request in the fourth quarter of 2021 to expand and make permanent the public charging pilot with an additional 150 DCFCs and 150 level 2 charging stations at 75 locations. In December 2023, the Utilities filed their supplemental reply statement of position and the request is ready for decision making.
The Utilities operate 32 public DC fast chargers (DCFC) as part of the EV-U pilot and EV-MAUI tariff. They filed a request in the fourth quarter of 2021 to expand and make permanent the public charging pilot with an additional 150 DCFCs and 150 level 2 charging stations at 75 locations.
In July 2022, Governor Ige signed Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation. The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology.
Energy savings resulting from energy efficiency programs do not count toward the RPS since 2014 (only electrical generation using renewable energy as a source counts). In July 2022, former Governor Ige signed Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation.
Its power plant is situated on approximately 59 acres and the remaining 34 acres includes surrounding parcels of which 30 acres are located on the ocean front. Kaʻieʻie Waho Company, LLC (Kaʻieʻie Waho), a wholly owned subsidiary of Pacific Current, owns a 6-MW solar photovoltaic facility located on approximately 20 acres on the southern coast of the island of Kauai.
Its power plant is situated on approximately 59 acres and the remaining 34 acres includes surrounding parcels of which 30 acres are located on the ocean front.
ASB’s focus on meaningful growth and development opportunities positions the Bank to recruit and retain top talent. Safety and health . As a core value, the Company strives to create workplace environments that prioritize the physical and emotional well-being of its employees.
Ongoing leadership succession planning ensures the identification and development of successors, high potential individuals, and nurtures a leadership pipeline. Safety and health . As a core value, the Company strives to create workplace environments that prioritize the physical and emotional well-being of its employees.
HEI leases office space from nonaffiliated lessors in downtown Honolulu under leases that expire in December 2027.
HEI leases office space from a nonaffiliated lessor in downtown Honolulu under leases that expire in December 2027. See “Electric Utility” section for a description of properties owned and leased.
In 2023, the electric utilities’ revenues and net income amounted to approximately 89% and 97% respectively, of HEI’s consolidated revenues and net income, compared to approximately 91% and 78% in 2022 and approximately 89% and 72% in 2021, respectively.
In 2024, the electric utilities’ revenues and net loss amounted to approximately 100% and 93% respectively, of HEI’s consolidated revenues and loss from continuing operations. The electric utilities’ revenues and net income amounted to approximately 99% and 133% in 2023 and approximately 100% and 117% in 2022, respectively, of HEI’s consolidated revenues and income from continuing operations.
For additional information about Hawaiian Electric, see Hawaiian Electric’s MD&A, Hawaiian Electric’s “Quantitative and Qualitative Disclosures about Market Risk” and Hawaiian Electric’s Consolidated Financial Statements, including the Notes thereto. 13 Properties.
The Utilities have developed best management practices, protocols and in some areas are developing habitat conservation plans and obtaining related permits to help protect these species. Additional information. For additional information about Hawaiian Electric, see Hawaiian Electric’s MD&A, Hawaiian Electric’s “Quantitative and Qualitative Disclosures about Market Risk” and Hawaiian Electric’s Consolidated Financial Statements, including the Notes thereto. Properties.
In addition, the continued adoption of energy efficiency measures and distributed energy resources contributed to the reduction in kWh sales. Significant customers . The Utilities derived approximately 12%, 12% and 11% of their operating revenues in 2023, 2022 and 2021, respectively from the sale of electricity to various federal government agencies.
This is partially offset by the reduction of sales due to privately owned customer photovoltaic (PV) systems which generate the most energy during the aforementioned warmer months. Significant customers . The Utilities derived approximately 11%, 12% and 12% of their operating revenues in 2024, 2023 and 2022, respectively from the sale of electricity to various federal government agencies.
In 2015, Hawaii’s RPS law was amended to require electric utilities to meet an RPS of 15%, 30%, 40%, 70% and 100% by December 31, 2015, 2020, 2030, 2040 and 2045, respectively. Energy savings resulting from energy efficiency programs do not count toward the RPS since 2014 (only electrical generation using renewable energy as a source counts).
In August 2020, the Utilities committed to electrifying 100% of its class 1 vehicles (sedans, SUVs and light trucks) by 2035. Renewable Portfolio Standards. In 2015, Hawaii’s RPS law was amended to require electric utilities to meet an RPS of 15%, 30%, 40%, 70% and 100% by December 31, 2015, 2020, 2030, 2040 and 2045, respectively.
For additional information about HEI, see HEI’s MD&A, HEI’s “Quantitative and Qualitative Disclosures about Market Risk” and HEI’s Consolidated Financial Statements.
Prior to December 31, 2024, ASB Hawaii owned ASB, a federally chartered, full-service Hawaii community bank. ASB was a reportable segment of HEI, until its sale on December 31, 2024. For additional information about HEI, see HEI’s MD&A, HEI’s “Quantitative and Qualitative Disclosures about Market Risk” and HEI’s Consolidated Financial Statements.
See “Bank—Legislation and regulation” in HEI’s MD&A for a discussion of effects of the Dodd-Frank Act on HEI and ASB. Environmental regulation . HEI and its subsidiaries are subject to federal and state statutes and governmental regulations pertaining to water quality, air quality and other environmental factors.
The sale transaction is not expected to have a material impact to the Company’s consolidated financial statements. Environmental regulation . HEI and its subsidiaries are subject to federal and state statutes and governmental regulations pertaining to water quality, air quality and other environmental factors.
In addition, the Utilities have committed to achieving net zero carbon emissions from power generation by 2045 or sooner. These commitments are aligned with the Intergovernmental Panel on Climate Change recommendation of no more than 1.5°C average global warming to avoid potentially devastating climate events.
In addition, the Utilities have committed to achieving net zero carbon emissions from power generation by 2045 or sooner.
Penalties for non-compliance depend on the severity of the violation, and can range from daily fines to divestiture of the Utilities by the holding company. On January 26, 2023, the PUC approved the Utilities’ internal code of conduct. The PUC also directed the Utilities to make language changes to parts of the Utilities’ 2023 Compliance Plan.
Penalties for non-compliance depend on the severity of the violation, and can range from daily fines to divestiture of the Utilities by the holding company. The second external audit is anticipated to commence in the second quarter of 2025 and the selection of the external auditor is pending PUC review and approval. Other regulations.
On January 26, 2024, a new three-year contract was ratified and will be in effect from November 1, 2024 through October 31, 2027. The contract provides for a 3% general wage increase in each year of the three-year contract, double time for callouts, and a 1% incentive payment upon achievement of specified objectives. Diversity & inclusion .
The International Brotherhood of Electrical Workers Local 1260 represents roughly half of the Utilities’ workforce covered by a collective bargaining agreement. On January 26, 2024, a new three-year contract was ratified and will be in effect from November 1, 2024 through October 31, 2027.
The increase in employees from 2021 is related to Pacific Current’s acquisition of a closed-loop biomass plant in 2022. The employees of HEI and its direct and indirect subsidiaries, other than the electric utilities, are not covered by any collective bargaining agreement.
For 2024, 2023, and 2022, HEI corporate had 44, 45, and 41 employees, respectively. 2 Beginning December 31, 2024, as a result of the sale transaction, ASB was no longer a subsidiary of HEI. The employees of HEI and its direct and indirect subsidiaries, other than the electric utilities, are not covered by any collective bargaining agreement.
See the “Environmental regulation” discussions in the “Electric utility” and “Bank” sections below, and Note 1 of the Consolidated Financial Statements. Human Capital Resources. Employees .
See the “Environmental regulation” discussion in the “Electric utility” section below, and Note 1 of the Consolidated Financial Statements. Human Capital Resources. The Company’s workforce and culture are critical to its ability to achieve its business strategies. As such, the Company seeks to attract, retain and develop a talented workforce and create a high-performing, inclusive and safety-driven culture. Employees .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe ability of HEI’s subsidiaries to pay dividends or make other distributions to HEI, in turn, is subject to the risks associated with their operations and to contractual and regulatory restrictions, including: • the provisions of an HEI agreement with the PUC, which could limit the ability of HEI’s principal electric public utility subsidiary, Hawaiian Electric, to pay dividends to HEI in the event that the consolidated common stock equity of the Utilities falls below 35% of total capitalization of the electric utilities; • the provisions of an HEI agreement entered into with federal bank regulators in connection with its acquisition of its bank subsidiary, ASB, which requires HEI to contribute additional capital to ASB (up to a maximum amount of additional capital of $28.3 million as of December 31, 2023 under the Regulatory Capital Maintenance/Dividend Agreement dated May 26, 1988, between HEI, HEIDI (HEI Diversified Inc.) and the Federal Savings and Loan Insurance Corporation) upon request of the regulators in order to maintain ASB’s regulatory capital at the level required by regulation; • obligations under federal law and Federal Reserve Board policy, which require that a savings and loan holding company serve as a source of financial and managerial strength for any FDIC-insured depository institution that it controls, and accordingly, if ASB were to be in financial distress or to otherwise be viewed by the regulators as in unsatisfactory condition, HEI could be required to provide additional capital or liquidity support or take other action, in support of ASB.
Biggest changeThe ability of HEI’s subsidiaries to pay dividends or make other distributions to HEI, in turn, is subject to the risks associated with their operations and to contractual and regulatory restrictions, including: • the provisions of an HEI agreement with the PUC (PUC Agreement), which could limit the ability of HEI’s principal electric public utility subsidiary, Hawaiian Electric, to pay dividends to HEI in the event that the consolidated common stock equity of the Utilities falls below 35% of total capitalization of the electric utilities.
The results 22 of competitive bidding, competition from IPPs, customer self-generation, and potential cooperative ownership or municipality structures for electric utility service, and the rate at which technological developments facilitating nonutility generation of electricity, combined heat and power technology, off-grid microgrids, and customer energy storage may render the operations of the Utilities less competitive or outdated and adversely affect the Utilities and the results of their operations.
The results of competitive bidding, competition from IPPs, customer self-generation, and potential cooperative ownership or municipality structures for electric utility service, and the rate at which technological developments facilitating nonutility generation of electricity, combined heat and power technology, off-grid microgrids, and customer energy storage may render the operations of the Utilities less competitive or outdated and adversely affect the Utilities and the results of their operations.
Since the time the 28 2030 goal was established, delays and cancellations in the commercial operation of new renewable third-party generation resources and higher costs as a result of supply chain disruptions and inflationary pressures, as well as federal policies related to solar panel imports, have slowed the pace of progress toward reducing GHG emissions.
Since the time the 2030 goal was established, delays and cancellations in the commercial operation of new renewable third-party generation resources and higher costs as a result of supply chain disruptions and inflationary pressures, as well as federal policies related to solar panel imports, have slowed the pace of progress toward reducing GHG emissions.
In addition, there is increasing cybersecurity risk associated with the broad adoption of a remote working environment. If the Company is unable to prevent or adequately respond to and resolve an incident, it may have a material impact on the Company’s business, financial condition, results of operations and reputation. Utilities .
In addition, there is increasing cybersecurity risk associated with the broad adoption of a remote working environment. If the Company is unable to prevent or adequately 18 respond to and resolve an incident, it may have a material impact on the Company’s business, financial condition, results of operations and reputation. Utilities .
For additional information for certain risk factors enumerated below and other risks of the Company and its operations, see “Cautionary Note Regarding Forward-Looking Statements” above and HEI’s MD&A, HEI’s “Quantitative and Qualitative Disclosures about Market Risk,” the Notes to the Consolidated Financial Statements, Hawaiian Electric’s MD&A and Hawaiian Electric’s “Quantitative and Qualitative Disclosures About Market Risk.” Holding company and company-wide risks.
For additional information for certain risk factors enumerated below and other risks of the Company and its operations, see “Cautionary Note Regarding Forward-Looking Statements” above and HEI’s MD&A, HEI’s “Quantitative and Qualitative Disclosures about Market Risk,” the Notes to the Consolidated Financial Statements, Hawaiian Electric’s MD&A and Hawaiian Electric’s “Quantitative and Qualitative Disclosures About Market Risk.” 14 Holding company and company-wide risks.
The most recent amendment to Hawaii’s RPS law occurred in July 2022, which Governor Ige signed Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation. The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology.
The most recent amendment to Hawaii’s RPS law occurred in July 2022, which former Governor Ige signed Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation. The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology.
Under the PBR Framework, the Utilities’ annual revenue adjustment (ARA) includes a customer dividend consisting of a negative adjustment of 0.22% compounded annually and a flow through of the “pre-PBR” savings commitment from the 25 management audit recommendations developed in the 2020 test year rate case.
Under the PBR Framework, the Utilities’ annual revenue adjustment (ARA) includes a customer dividend consisting of a negative adjustment of 0.22% compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in the 2020 test year rate case.
However, the protection provided by such insurance is limited in significant respects and, in some instances, there is no coverage. Some of the insurance coverages have substantial deductibles or has limits on the maximum amounts that may be recovered.
However, the protection provided by such insurance is limited in significant respects and, in some instances, there is no coverage. Some of the insurance coverages have substantial deductibles or have limits on the maximum amounts that may be recovered.
The change in the definition is to be 27 applied prospectively to future milestone measurements and will require that the Utilities acquire more renewable energy than under the previous RPS calculation to comply with the RPS milestones.
The change in the definition is to be applied prospectively to future milestone measurements and will require that the Utilities acquire more renewable energy than under the previous RPS calculation to comply with the RPS milestones.
Operational Risk—Electric utility generating facilities are subject to operational risks that could result in unscheduled plant outages, unanticipated and/or increased operation and maintenance expenses and increased power purchase costs . Operation of electric generating facilities involves certain risks which can adversely affect energy output and efficiency levels.
Operational Risk—Electric utility generating facilities are subject to operational risks that could result in unscheduled plant outages, unanticipated and/or increased operation and maintenance expenses, increased power purchase costs, and decreased reliability . Operation of electric generating facilities involves certain risks which can adversely affect energy output, efficiency levels, and reliability.
In common with other companies in its line of business, the Utilities’ overhead and underground transmission and distribution systems (with the exception of substation buildings and contents), which have a replacement value roughly estimated at $12 billion, are largely not insured against loss or damage because the amount of transmission and distribution system insurance capacity is limited and the premiums are cost prohibitive.
In common with other companies in its line of business, the Utilities’ overhead and underground transmission and distribution systems (with the exception of substation buildings and contents), which have a replacement value roughly 19 estimated at $13 billion, are largely not insured against loss or damage because the amount of transmission and distribution system insurance capacity is limited and the premiums are cost prohibitive.
A material reduction or delay in dividends or other distributions by one or both of Hawaiian Electric and ASB for an extended period of time, such as a continuation or expansion of the reduction in dividends that HEI currently is experiencing due to the Maui windstorm and wildfires, could have a material adverse effect on the Company’s business, financial condition and results of operations.
A material reduction or delay in dividends or other distributions by Hawaiian Electric for an extended period of time, such as a continuation or expansion of the reduction in dividends that HEI currently is experiencing due to the Maui windstorm and wildfires, could have a material adverse effect on the Company’s business, financial condition and results of operations.
Congress, the Hawaii legislature and governmental agencies have adopted, or are considering adopting, a number of measures that will significantly affect the Utilities, as described below. Renewable Portfolio Standards law . The 2001 Hawaii Legislature adopted a law requiring the Utilities to meet a renewable portfolio standard, which has been amended over the years.
The federal and state executive branches, Congress, the Hawaii legislature and governmental agencies have adopted, or are considering adopting, a number of measures that will significantly affect the Utilities, as described below. Renewable Portfolio Standards law . The 2001 Hawaii Legislature adopted a law requiring the Utilities to meet a renewable portfolio standard, which has been amended over the years.
The Utilities have plans to address this issue in 2024 through managing maintenance schedules of existing generations, and if necessary, may request for voluntary customer conservation during periods of high power demands. The environment for resource planning has increased in complexity and uncertainty and the Utilities will continue using a portfolio approach to meet its obligation to serve.
The Utilities have plans to address these issues through managing maintenance schedules of existing generations, and if necessary, may request for voluntary customer conservation during periods of high power demands. The environment for resource planning has increased in complexity and uncertainty and the Utilities will continue using a portfolio approach to meet its obligation to serve.
As a holding company with no significant operations of its own, HEI’s cash flows and consequent ability to service its obligations and pay dividends on its common stock is dependent upon its receipt of dividends or other distributions from its operating subsidiaries and its ability to issue common stock or other 20 equity securities and to incur additional debt.
As a holding company with no significant operations of its own, HEI’s cash flows and consequent ability to service its obligations and pay dividends on its common stock is dependent upon its receipt of dividends or other distributions from Hawaiian Electric and its ability to issue common stock or other equity securities and to incur additional debt.
Because HEI’s and Hawaiian Electric’s credit ratings were downgraded, HEI and Hawaiian Electric are unable to sell commercial paper and were required to draw on more expensive bank lines of credit and to defer capital or other expenditures.
Because HEI’s and Hawaiian Electric’s credit ratings were downgraded, HEI and Hawaiian Electric are unable to sell commercial paper and were required to draw on more expensive 15 bank lines of credit and prioritize capital and other expenditures.
If events or circumstances should change, such that the criteria are no longer satisfied, the Utilities expect that their regulatory assets (amounting to $295 million as of December 31, 2023), net of regulatory liabilities (amounting to $1,151 million as of December 31, 2023), would be charged to the statement of income in the period of discontinuance.
If events or circumstances should change, such that the criteria are no longer satisfied, the Utilities expect that their regulatory assets (amounting to $227 million as of December 31, 2024), net of regulatory liabilities (amounting to $1,218 million as of December 31, 2024), would be charged to the statement of income in the period of discontinuance.
Credit and Capital Market Risk—The Company, and its lowered credit rating, is subject to risks associated with the Hawaii economy, including catastrophic events such as the Maui windstorm and wildfire (in the aggregate and on an individual island basis), volatile U.S. capital markets and changes in the interest rate and credit market environment that have or could result in higher retirement benefit plan funding requirements, declines in ASB’s interest rate margins and investment values, higher delinquencies and charge-offs in ASB’s loan portfolio and restrictions on the ability of HEI or its subsidiaries to borrow money or issue securities .
Credit and Capital Market Risk—The Company, and its lowered credit rating, is subject to risks associated with the Hawaii economy, including catastrophic events such as the Maui windstorm and wildfire (in the aggregate and on an individual island basis), volatile U.S. capital markets and changes in the interest rate and credit market environment that have or could result in higher retirement benefit plan funding requirements and restrictions on the ability of HEI or its subsidiaries to borrow money or issue securities .
On August 8, 2023, a number of brush fires in the West Maui (Lahaina) and Upcountry Maui areas caused widespread property damage, including damage to property of the Utilities, and 101 confirmed fatalities in Lahaina at this time (the Maui windstorm and wildfires).
On August 8, 2023, a number of brush fires in the West Maui (Lahaina) and Upcountry Maui areas caused widespread property damage, including damage to property of the Utilities, and 102 confirmed fatalities in Lahaina (the Maui windstorm and wildfires).
Holding Company Risk—HEI is a holding company that derives its income from its operating subsidiaries and depends on the ability of those subsidiaries to pay dividends or make other distributions to HEI and on its own ability to raise capital . HEI is a legal entity separate and distinct from its various subsidiaries.
Holding Company Risk—HEI is a holding company that derives its income from its principal operating subsidiary, Hawaiian Electric, and depends on the ability of Hawaiian Electric to pay dividends or make other distributions to HEI and on its own ability to raise capital . HEI is a legal entity separate and distinct from its subsidiaries.
Extreme weather events and other natural disasters, particularly those exacerbated by climate change such as the Maui windstorm and wildfires, could materially affect Hawaiian Electric’s assets, particularly if they fail or are found to have contributed to a wildfire .
Extreme weather events and other natural disasters, particularly those exacerbated by climate change such as the Maui windstorm and wildfires, could materially affect Hawaiian Electric’s assets and infrastructure, particularly if such infrastructure is damaged or is found to have contributed to other catastrophic events such as a wildfire .
Also, an extreme event can lead to significant claims for damages, including for loss of life and property, and has been the case with the Maui windstorm and wildfires. Therefore, these events could materially affect the Company’s business, reputation, financial condition and results of operations.
Also, an extreme event can lead to significant claims for damages, including for loss of life and property, and has been the case with the Maui windstorm and wildfires. Therefore, these events could have a material adverse effect on the Company’s business, reputation, financial condition and results of operations.
Approximately 79% of the net energy generated or purchased by the Utilities in 2023 was generated from the burning of fossil fuel oil, and purchases of power by the Utilities provided about 38% of their total net energy generated and purchased for the same period.
Approximately 75% of the net energy generated or purchased by the Utilities in 2024 was generated from the burning of fossil fuel oil, and purchases of power by the Utilities provided about 40% of their total net energy generated and purchased for the same period.
The 24 Company also has $165 million of excess liability insurance, subject to a $0.3 million retention, for third party claims including claims related to wildfires, and $145 million directors and officers liability insurance, subject to a $1.0 million retention, to cover claims related to shareholder and derivative lawsuits.
The Company also has $165 million of excess liability insurance and $25 million of miscellaneous professional liability insurance for third party claims, including claims related to wildfires, with a retention of $0.3 million and $0.1 million, respectively, and $145 million directors and officers liability insurance to cover claims related to shareholder and derivative lawsuits, with a retention of $1.0 million.
Weather Conditions Risk—Electric utility operations are significantly influenced by weather conditions and natural disasters . The Utilities’ results of operations can be affected by the weather and natural disasters. Weather conditions, particularly temperature and humidity, directly influence the demand for electricity. Additionally, severe weather and natural disasters may become more intense and/or frequent because of global climate changes.
The Utilities’ results of operations can be affected by the weather and natural disasters. Weather conditions, particularly temperature and humidity, directly impact the demand for electricity. Additionally, severe weather and natural disasters may become more intense and/or frequent because of global climate changes.
Their operations are more vulnerable to service interruptions than that of many U.S. mainland utilities because none of the systems of the Utilities are interconnected with the systems on the other islands they serve.
The business of the Utilities is concentrated on the individual islands they serve in the State of Hawaii. Their operations are more vulnerable to service interruptions than that of many U.S. mainland utilities because none of the systems of the Utilities are interconnected with the systems on the other islands they serve.
Because the core businesses of HEI’s subsidiaries are providing local public electric utility services (through Hawaiian Electric and its subsidiaries) and banking services (through ASB) in Hawaii, the Company’s operating results are significantly influenced by: Hawaii’s economy, which in turn is influenced by economic conditions in the mainland U.S.
The two largest components of Hawaii’s economy are tourism and the federal government (including the military). Because the core businesses of HEI’s subsidiaries are providing local public electric utility services (through Hawaiian Electric and its subsidiaries), the Company’s operating results are significantly influenced by: Hawaii’s economy, which in turn is influenced by economic conditions in the mainland U.S.
Governmental taxing authorities could challenge a tax return position taken by HEI or its subsidiaries and if the taxing authorities prevail, HEI’s consolidated tax payments and/or expense, including applicable penalties and interest, could increase significantly.
Tax Legislation Risk—Adverse tax rulings or developments or changes in tax legislation could result in significant increases in tax payments and/or expense . Governmental taxing authorities could challenge a tax return position taken by HEI or its subsidiaries and if the taxing authorities prevail, HEI’s consolidated tax payments and/or expense, including applicable penalties and interest, could increase significantly.
For example, pension funding requirements are affected by the market performance of the assets in the master pension trust maintained for pension plans, and by the discount rate used to estimate the service and interest cost components of net periodic pension cost and value obligations.
Changes in the U.S. capital markets can also have significant effects on the Company. For example, pension funding requirements are affected by the market performance of the assets in the master pension trust maintained for pension plans, and by the discount rate used to estimate the service and interest cost components of net periodic pension cost and value obligations.
Recent natural disasters such as the Kilauea eruption in 2018, Mauna Loa eruption in 2022, and the Maui windstorm and wildfires in 2023, resulted in disruption or destruction of electric utility operations. When these types of events occur, they can cause outages and property damage and require the Utilities to incur significant additional expenses that may not be recoverable.
Recent natural disasters such as the Kilauea eruption in 2018, Mauna Loa eruption in 2022, and the Maui windstorm and wildfires in 2023, have disrupted electric utility operations. These types of events can cause outages, property damage and result in significant additional expenses that may not always be recoverable.
Unless and until these debt ratings are upgraded to investment grade, the Company will continue to have restricted access to capital markets and other sources of debt and equity financings, if at all, in a timely manner and on acceptable terms.
Unless and until these debt ratings are upgraded to investment grade, the Company will continue to have restricted access to capital markets and other sources of debt and equity financings, if at all, in a timely manner and on acceptable terms. Recent projects, such as, wildfire mitigation plan, grid modernization, reliability and resilience all require significant capital expenditures to implement.
These initiatives include, but are not limited to, programs to enable more customer-sited generation. The implementation of these or other programs may adversely impact the results of operations, financial condition and liquidity of the Utilities. Bank risks.
These initiatives include, but are not limited to, programs to enable more customer-sited generation. The implementation of these or other programs may adversely impact the results of operations, financial condition and liquidity of the Utilities. 24 ITEM 1B. UNRESOLVED STAFF COMMENTS HEI: None. Hawaiian Electric: Not applicable.
Such ratings are not recommendations to buy, sell or hold any securities; such ratings may be subject to revision or withdrawal at any time by the rating agencies; and each rating should be evaluated independently of any other rating. 21 Changes in the U.S. capital markets can also have significant effects on the Company.
Such ratings are not recommendations to buy, sell or hold any securities; such ratings may be subject to revision or withdrawal at any time by the rating agencies; and each rating should be evaluated independently of any other rating.
Accordingly, the Company’s financial condition, liquidity, cash flows and results of operations may be adversely impacted if debt credit ratings are maintained at below investment grade for an extended period of time.
The Company may not be able to obtain the necessary financing to achieve its business objectives as a result of the downgrades. Accordingly, the Company’s financial condition, liquidity, cash flows and results of operations may be adversely impacted if debt credit ratings are maintained at below investment grade for an extended period of time.
For example, severe weather and its related impacts could cause significant harm to the Utilities’ physical facilities. Third Party Performance Risk—Electric utility operations depend heavily on third-party suppliers of fuel and purchased power . The Utilities rely on fuel suppliers and shippers, and IPPs to deliver fuel and power, respectively, in accordance with 26 contractual agreements.
Third Party Performance Risk—Electric utility operations depend heavily on third-party suppliers of fuel and purchased power . The Utilities rely on fuel suppliers and shippers, and IPPs to deliver fuel and power, respectively, in accordance with contractual agreements.
Competitive and Technological Risk—Increasing competition and technological advances could cause HEI’s businesses to lose customers or render their operations obsolete . The banking industry in Hawaii, and certain aspects of the electric utility industry, are competitive.
Competitive and Technological Risk—Increasing competition and technological advances could cause HEI’s businesses to lose customers or render their operations obsolete . Certain aspects of the electric utility industry are competitive. The success of HEI’s subsidiaries in meeting competition and responding to technological advances will continue to have a direct impact on HEI’s consolidated financial performance.
The Utilities’ pension tracking mechanisms help moderate pension expense; however, a significant reduction in the discount rate or in the value of the Company’s defined benefit pension plan assets could result in a substantial increase in the gap between the projected benefit obligations under the plans and the value of plan assets, resulting in increases in funding requirements.
The Utilities’ pension tracking mechanisms help moderate pension expense; however, a significant reduction in the discount rate or in the value of the Company’s defined benefit pension plan assets could result in a substantial increase in the gap between the projected benefit obligations under the plans and the value of plan assets, resulting in increases in funding requirements. 16 HEI and the Utilities are also exposed to interest rate risk primarily due to their periodic borrowing requirements, the discount rate used to determine pension funding requirements and the possible effect of interest rates on the electric utilities’ rates of return.
Such an event can result in lost revenue and increased expenses for the Utilities, but it also can result in regulatory penalties and disallowances if Hawaiian Electric is unable to restore power on a timely basis.
These risks are increasing, as climate change has exacerbated some of the conditions that lead to these extreme weather events and natural disasters. Such an event can result in lost revenue and increased expenses for the Utilities, but it also can result in regulatory penalties and disallowances if Hawaiian Electric is unable to restore power on a timely basis.
Further, delay or failure to complete the integration of information systems and processes may result in delays in regulatory cost recovery, or the failure to realize the benefits anticipated to be derived from these initiatives. 23 The Utilities’ disaster recovery plans may not be successful in preventing the loss of customer data, service interruptions and disruptions to operations or damage to important facilities.
Further, delay or failure to complete the integration of information systems and processes may result in delays in regulatory cost recovery, or the failure to realize the benefits anticipated to be derived from these initiatives.
Multiple lawsuits have been filed against the Utilities and HEI alleging, among other things, that they were negligent in failing to prevent the wildfires that led to the property destruction and loss of life.
The Maui Department of Fire and Public Safety (MFD) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) reports classified the cause of the fire as “accidental.” Multiple lawsuits have been filed against the Utilities and HEI alleging, among other things, that they were negligent in failing to prevent the wildfires that led to the property destruction and loss of life.
New or significant advances in technology (e.g., significant advances in internet or mobile banking) or customer adoption of alternative banking channels could render the operations of ASB less competitive or obsolete. • The Utilities face competition from IPPs; customer self-generation, with or without cogeneration; customer energy storage; and the potential formation of community-based, cooperative ownership or municipality structures for electrical service on all islands it serves.
For example: • The Utilities face competition from IPPs; customer self-generation, with or without cogeneration; customer energy storage; and the potential formation of community-based, cooperative ownership or municipality structures for electrical service on all islands it serves.
Due to this measure, it is possible that, if energy from a renewable source is more expensive than energy from fossil fuel, the PUC may still approve the purchase of energy from the renewable source, resulting in higher costs. Global climate change and greenhouse gas emissions reduction .
Due to this measure, it is possible that, if energy from a renewable source is more expensive than energy from fossil fuel, the PUC may still approve the purchase of energy from the renewable source, resulting in higher costs. Executive orders . In January 2025, President Trump issued multiple Executive Orders (EOs) that impact both IIJA and IRA funding.
In June 2018, House Bill 2182 was signed into law as Act 15 and took effect on July 1, 2018. Among its provisions, Act 15 aligned the state’s clean energy and carbon sequestration efforts with climate initiative goals and established a statewide carbon neutral goal by 2045.
Among its provisions, Act 15 aligned the state’s clean energy and carbon sequestration efforts with climate initiative goals and established a statewide carbon 23 neutral goal by 2045.
Extreme weather-related incidents and other natural disasters, including volcanic eruptions, mudslides, hurricanes, tsunamis and other storms, can interfere with the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver electricity to customers. These risks are increasing, as climate change has exacerbated some of the conditions that lead to these extreme weather events and natural disasters.
Extreme weather-related incidents and other natural disasters, including volcanic eruptions, mudslides, hurricanes, tsunamis and other storms, can interfere with the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver electricity to customers. Damage to Hawaiian Electric’s infrastructure can also cause or contribute to additional loss through events such as wildfires.
See “Performance-based regulation framework” and “Regulatory assets for Maui windstorm and wildfires related costs” in Note 4 of the Consolidated Financial Statements. Based on the current operations of the Utilities and regulatory framework, including the impact of the approved PBR Framework, the Utilities continue to follow regulatory accounting under Accounting Standards Codification (ASC) 980.
Based on the current operations of the Utilities and regulatory framework, including the impact of the approved PBR Framework, the Utilities continue to follow regulatory accounting under Accounting Standards Codification (ASC) 980.
Any adverse decision by the PUC concerning the level or method of determining electric utility rates at the end of the MRP, including the items and amounts that may be included in rate base, the returns on equity or rate base found to be reasonable, the potential consequences of exceeding or not meeting such returns, the denial of exceptional project recovery applications during the MRP, adverse impact of adjustments made to the PBR Framework, decisions on recovery of exogenous items under the PBR Framework, or any prolonged delay in rendering a decision in a rate or other proceeding could have a material adverse effect on Hawaiian Electric’s consolidated results of operations, financial condition and liquidity.
Any adverse decision by the PUC concerning the level or method of determining electric utility rates at the end of the MRP, including the items and amounts that may be included in rate base, the returns on equity or rate base found to be reasonable, the potential consequences of exceeding or not meeting such returns, the denial of exceptional project recovery applications during the MRP, adverse impact of adjustments made to the PBR Framework, decisions on recovery of exogenous items under the PBR Framework, or any prolonged delay in rendering a decision in a rate or other proceeding could have a material adverse effect on Hawaiian Electric’s consolidated results of operations, financial condition and liquidity. 20 To improve the timing and certainty of the recovery of their costs, the Utilities have proposed and/or received approval of various cost recovery mechanisms, including an ECRC (includes a PUC-ordered 98%/2% risk-sharing split between customers and the Utilities for fossil fuel price variations from baseline prices, with a current annual aggregate exposure cap of +/- $3.7 million), a PPAC, and pension and OPEB tracking mechanisms, as well as a decoupling mechanism, an exceptional project recovery mechanism (EPRM) (formerly Major Project Interim Recovery (MPIR) adjustment mechanism), and a Renewable Energy Infrastructure Program surcharge.
While the timing, extent and ultimate effects of climate change cannot be determined with any certainty, climate change is predicted to result in sea level rise, which could potentially impact coastal and other low-lying areas (where much of the Utilities’ electric infrastructure is sited), and could cause erosion of beaches, saltwater intrusion into aquifers and surface ecosystems, higher water tables and increased flooding and storm damage due to heavy rainfall.
Climate Change Risk—Electric utility operations may be significantly influenced by climate change . While the timing, extent and ultimate effects of climate change cannot be determined with any certainty, climate change is predicted to cause sea level rise, which could impact coastal and low-lying areas where much of the Utilities’ electric infrastructure is located.
HEI cannot predict future changes in interest rates, nor be certain that interest rate risk management strategies it or its subsidiaries have implemented will be successful in managing interest rate risk. Interest rate risk also represents a market risk factor affecting the fair value of ASB’s investment securities.
Interest rates are sensitive to many factors, including general economic conditions and the policies of government and regulatory authorities. HEI cannot predict future changes in interest rates, nor be certain that interest rate risk management strategies it or its subsidiaries have implemented will be successful in managing interest rate risk.
The Utilities also obtained PUC approval to defer certain non-labor expenses incurred from August 8, 2023 through December 31, 2024 that are not already a part of base rates. If the PUC denies recovery of any deferred costs, such costs would be charged to expense in the period that those costs are no longer considered probable of recovery.
Related to the Maui windstorm and wildfires, the Utilities obtained PUC approval to defer certain non-labor expenses incurred from August 8, 2023 through December 31, 2025 that are not already a part of base rates.
Any failure to meet customer energy requirements could negatively impact the satisfaction of the Utilities’ customers, which could have an adverse impact on the Utilities’ business, reputation and results of operations. Related to the Maui windstorm and wildfires, the Utilities continue to expect potential generation shortfalls on Maui in 2024.
Any failure to meet customer energy requirements could negatively impact the satisfaction of the Utilities’ customers, which could have an adverse impact on the Utilities’ business, reputation and results of operations. The Energy Reserve Margin, the planning criteria used to determine generation adequacy, is the percentage which the system generation capacity must exceed the system load in each hour.
Additionally, changes in tax legislation or IRS interpretations could increase the Company’s tax burden and adversely affect the Company’s financial position, results of operations, and cash flows. Litigation Risk—The Company could be subject to the risk of uninsured losses in excess of its accruals for litigation matters, such as litigation related to the Maui windstorm and wildfires .
Additionally, changes in tax legislation or IRS interpretations could increase the Company’s tax burden and adversely affect the Company’s financial position, results of operations, and cash flows. Geographic Concentration Risk—The Company is subject to the risks associated with the geographic concentration of its businesses and current lack of interconnections that could result in service interruptions at the Utilities .
Additionally, on August 31, 2023, the PUC issued an order temporarily suspending the ESM until further notice. The intent of the order is to address the unintended consequence of customers potentially bearing the costs associated with the Maui windstorm and wildfires through the operation of the ESM without prior PUC review.
The intent of the order is to address the unintended consequence of customers potentially bearing the costs associated with the Maui windstorm and wildfires through the operation of the ESM without prior PUC review. See “Performance-based regulation framework” and “Regulatory assets for Maui windstorm and wildfires related costs” in Note 4 of the Consolidated Financial Statements.
ASB is subject to the risks of borrower defaults and bankruptcies, special hazard losses not covered by the required insurance and the insurance company’s inability to pay claims on existing policies. Environmental Regulation—Increased federal and state environmental regulation will require an increasing commitment of resources and funds and could result in construction delays or penalties and fines for non-compliance .
The aggregate damages and costs associated with the Maui windstorm and wildfires could significantly exceed the Company’s policy limits. Environmental Regulation—Increased federal and state environmental regulation will require an increasing commitment of resources and funds and could result in construction delays or penalties and fines for non-compliance .
If the Utilities and HEI are held responsible for damages caused by the Maui windstorm and wildfires, it could have a material impact on HEI’s and Hawaiian Electric’s financial condition, liquidity, cash flows and results of operations.
The amount of any liability arising from the Maui windstorm and wildfires (which could exceed amounts currently reserved for the settlement liability), whether determined at trial or through a negotiated settlement, could have a material adverse impact on HEI’s and Hawaiian Electric’s financial condition, liquidity, cash flows and results of operations.
The effects of climate change on the weather (for example, floods, hurricanes, heat waves or drought conditions, the latter of which could increase wildfire risk), sea levels, and water availability and quality, all have the potential to materially adversely affect the results of operations, financial condition and liquidity of the Utilities.
These factors along with changes in sea levels, water availability and water quality have the potential to materially and adversely affect the Utilities’ results of operations, financial condition, and liquidity. For example, severe weather and its related impacts could cause significant harm to the Utilities’ physical facilities.
Removed
The Maui windstorm and wildfires were fueled by extreme winds and drought-like conditions in those parts of Maui. According to the Maui Police Department’s Preliminary After-Action Report, in addition to the loss of life, over 3,450 acres burned and over 3,000 structures were destroyed in those areas. In Lahaina, a fire was reported at about 6:30 a.m.
Added
As of December 31, 2024, HEI and the Utilities have approximately $13 million, nil and $122 million of insurance coverage remaining under the excess liability, professional liability, and directors and officers liability policies, respectively, after deducting applicable retention amounts, amounts that have been recovered under insurance policies (including the One ‘Ohana Initiative contribution), and amounts expected to be recovered for incurred costs and recognized as a receivable as of year-end.
Removed
(the “Morning Fire”) and appears to have been caused by power lines that fell in high winds and spread into a field near Lahaina Intermediate School.
Added
As of February 14, 2025, the Fitch, Moody’s and S&P ratings of HEI and Hawaiian Electric were as follows: Fitch Moody’s S&P HEI: Long-term issuer default, long-term corporate family and issuer credit, respectively B B1 B- Short-term issuer default, commercial paper and commercial paper, respectively B NP B Outlook Stable Stable Negative Hawaiian Electric: Long-term issuer default, long-term and issuer credit, respectively B Ba3 B- Short-term issuer default, commercial paper and commercial paper, respectively B NP B Senior unsecured debt/special purpose revenue bonds B+ Ba3 * Cumulative preferred stock (selected series) * B3 * Outlook Stable Stable Negative * Not rated.
Removed
The Maui Fire Department responded promptly to the Morning Fire, and according to the Fire Department’s public statement that morning, by 9 a.m. the Morning Fire was “100% contained.” The Maui fire chief subsequently reported that the Fire Department had determined that the Morning Fire was “extinguished” and left the scene.
Added
Note: The above ratings reflect only the view, at the time the ratings are issued or affirmed, of the applicable rating agency, from whom an explanation of the significance of such ratings may be obtained.
Removed
Shortly before 3 p.m. that day, while the power remained off, Utility crew members saw a small fire in the same field about 75 yards away from Lahainaluna Road. They immediately called 911 and reported the fire (the “Afternoon Fire”).
Added
Such ratings are not recommendations to buy, sell or hold any securities; such ratings may be subject to revision or withdrawal at any time by the rating agencies; and each rating should be evaluated independently of any other rating.
Removed
At the time of the Afternoon Fire, the Company’s power lines in the area where that fire ignited were not energized and had not been energized for more than six hours. By the time the Maui Fire Department arrived back on the scene, it was not able to contain the Afternoon Fire and it spread out of control toward Lahaina.
Added
As of December 31, 2024, the consolidated common stock equity of HEI’s electric utility subsidiaries was 33% of their total capitalization based on the current definition under the PUC Agreement and, as a result, the Utilities are restricted in cash payment of their dividend to HEI at this time (see Note 15 of the Consolidated Financial Statements.); • the provisions of preferred stock resolutions and debt instruments of HEI and its subsidiaries.
Removed
No determination as to the cause of the Afternoon Fire has been made. The Company believes that most of the property damage and all of the fatalities are from the Afternoon Fire.
Added
There may be future conditions or events that raise substantial doubt about our ability to continue as a going concern, and it is possible that any plan developed to alleviate such doubt may be unsuccessful. In addition, any capital raised may result in dilution to our current shareholders .
Removed
The Company has $165 million in insurance coverage for third party claims, but the aggregate losses associated with the Maui windstorm and wildfires could significantly exceed that amount. Also, the Company is incurring legal and consulting fees to manage the lawsuits and financial implications related to the Maui windstorm and wildfires, and those amounts are likely to be material.
Added
For the year ended December 31, 2024, the Company incurred losses from continuing operations of approximately $1.32 billion. For the year ended December 31, 2024, the Utilities incurred net losses of approximately $1.23 billion.
Removed
In addition, ASB may continue its suspension of its quarterly dividend to conserve cash to help ensure its maximum possible liquidity and capital position; • the minimum capital and capital distribution regulations of the OCC that are applicable to ASB and capital regulations that become applicable to HEI and ASB Hawaii; • the receipt of a letter from the FRB communicating the OCC’s and the FRB’s non-objection to the payment of any dividend ASB proposes to declare and pay to ASB Hawaii and HEI; and • the provisions of preferred stock resolutions and debt instruments of HEI and its subsidiaries.
Added
The net losses for the year ended December 31, 2024, were primarily due to the accruals of estimated wildfire liabilities in the second and third quarters of 2024, totaling approximately $1.92 billion related to the Maui windstorm and wildfire tort-related legal claims.
Removed
The two largest components of Hawaii’s economy are tourism and the federal government (including the military).
Added
The Company previously disclosed in its Quarterly Report on Form 10-Q for the quarter ending June 30, 2024, that based on its financial and liquidity condition, and because it had not yet implemented a capital financing plan to address proposed wildfire settlement payments, there was substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern.
Removed
Because the earnings of ASB depend primarily on net interest income, interest rate risk is a significant risk of ASB’s operations.
Added
Management believes the Company’s cash and cash equivalents amount of $751 million and GLST1’s restricted cash amount of $479 million, both as of December 31, 2024, the available capacity on Hawaiian Electric’s asset-based lending facility (ABL Facility) (see Note 6 of the Consolidated Financial Statements included herein), additional liquidity under HEI’s recently registered ATM program as well as expenditure reduction efforts effectively alleviate any conditions that may cause substantial doubt regarding HEI’s and Utilities’ ability to continue as a going concern.
Removed
HEI and the Utilities are also exposed to interest rate risk primarily due to their periodic borrowing requirements, the discount rate used to determine pension funding requirements and the possible effect of interest rates on the electric utilities’ rates of return. Interest rates are sensitive to many factors, including general economic conditions and the policies of government and regulatory authorities.
Added
The Company has adequate cash to meet its financial obligations and sustain operations in the short term, including available sufficient liquidity to fund the first installment of the settlement of wildfire tort claims expected to be made no earlier than the fourth quarter of 2025 and its other cash obligations for the next 12 months following the issuance of its financial statements.
Removed
Increases and decreases in prevailing interest rates generally translate into decreases and increases in the fair values of those instruments, respectively.
Added
The plans that have been implemented have mitigated the conditions that previously caused the substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern as of the date of filing their 2024 second quarter financial statements.
Removed
Disruptions in the credit markets, a liquidity crisis in the banking industry or increased levels of residential mortgage delinquencies and defaults may result in decreases in the fair value of ASB’s investment securities and an impairment, requiring ASB to write down its investment securities. As of December 31, 2023, ASB’s investment in U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Utilities cybersecurity program adopts security measures designed to protect the confidentiality, integrity, and availability of information technology systems, network infrastructure and other assets. The Utilities’ security measures, such as awareness and training, monitoring, etc. are designed to prevent, detect, and minimize the effects of a cybersecurity incident.
Biggest changeThe Utilities’ security measures, such as awareness and training, monitoring, etc. are designed to prevent, detect, and minimize the effects of a cybersecurity incident. These measures are periodically evaluated and audited against the NIST CSF by internal audit and independent third-party cybersecurity specialists.
The Utilities have a cybersecurity program in place, which is integrated into the overall risk management program and includes a risk management strategy and risk assessment policy, which are disseminated and maintained by the Chief Information Security Officer (CISO), revisited annually and, which govern the enterprise cybersecurity risk and maturity assessment process.
The Utilities have a cybersecurity program in place, which is integrated into the overall risk management program and includes a risk management strategy and risk assessment policy, which are disseminated and maintained by the Chief Information Security Officer (CISO), revisited annually and govern the enterprise cybersecurity risk and maturity assessment process.
The HEI CFO oversees all IT and cybersecurity matters at HEI, including having oversight responsibility for the services delivered under the SLA. Since the HEI CFO does not have the expertise in cybersecurity, the HEI CFO works with the Hawaiian Electric CISO and, if necessary, with third-party cybersecurity consultants on assessing, identifying, and managing material cybersecurity matters impacting HEI.
The HEI CFO oversees all IT and cybersecurity matters at HEI, including having oversight responsibility for the services delivered under the SLA. Since the HEI CFO does not have expertise in cybersecurity, the HEI CFO works with the Hawaiian Electric CISO and, if necessary, with third-party cybersecurity consultants on assessing, identifying, and managing material cybersecurity matters impacting HEI.
Refer to Hawaiian Electric’s cybersecurity discussion for more information. The SLA services provide by Hawaiian Electric are mainly for applications and systems on Hawaiian Electric’s infrastructure, networks and servers. The SLA does not cover support for certain software applications that were procured outside of Hawaiian Electric’s procurement and IT policies and procedures.
Refer to Hawaiian Electric’s cybersecurity discussion for more information. The SLA services provided by Hawaiian Electric are mainly for applications and systems on Hawaiian Electric’s infrastructure, networks and servers. The SLA does not cover support for certain software applications that were procured outside of Hawaiian Electric’s procurement and IT policies and procedures.
Despite the Utilities security measures, all of their systems are vulnerable to disability, failures or unauthorized access caused by natural disasters, cybersecurity incidents, security breaches, user error, unintentional defects created by system changes, military or terrorist actions, power or communication failures or similar events.
Despite the Utilities’ security measures, all of their systems are vulnerable to disability, failures or unauthorized access caused by natural disasters, cybersecurity incidents, security breaches, user error, unintentional defects created by system changes, military or terrorist actions, power or communication failures or similar events.
For further information, see “The Company is subject to 34 information technology and operational system failures, network disruptions, cyber attacks and breaches in data security that could materially and adversely affect its businesses and reputation” in Item 1A. Risk Factors. Governance .
For further information, see “The Company is subject to 25 information technology and operational system failures, network disruptions, cyber attacks and breaches in data security that could materially and adversely affect its businesses and reputation” in Item 1A. Risk Factors. Governance .
The Utilities rely on evolving and increasingly complex operational and information systems, networks and other technologies, which are interconnected with the systems and network infrastructure owned by third parties, to support a variety of business processes and activities, including procurement and supply chain, invoicing and collection of payments, customer relationship management, human resource management, the acquisition, generation and delivery of electrical service to customers, and to process financial information and results of operations for internal reporting purposes and to comply with regulatory, financial reporting, legal and tax requirements.
The Utilities rely on evolving and increasingly complex operational and information systems, networks and other technologies, which are interconnected with the systems and network infrastructure owned by third parties, to support a variety of business processes and activities, including procurement and supply chain, invoicing and collection of payments, customer relationship management, human resource management, the acquisition, generation and delivery of electrical service to customers, and to process financial information and results of operations for internal and external reporting and compliance with regulatory, financial reporting, legal and tax requirements.
The CWG also evaluates cybersecurity areas highlighted by the ARCs including areas the CWG deems higher risk or topical and reports back to the ARCs on a quarterly basis. The CWG also coordinates with the Company’s management on semi-annual trainings and annual tabletop exercises for the Board of Directors. Electric utility System overview .
The CWG also evaluates cybersecurity areas highlighted by the ARCs including areas the CWG deems higher risk or topical and reports back to the ARCs on a quarterly basis. The CWG also coordinates with the Company’s management on regular trainings and tabletop exercises for the Board of Directors. Electric utility System overview .
HEI’s board of directors and CWG are tasked with overseeing risks from cybersecurity threats through routine quarterly, or as needed, updates and periodic deep-dive sessions. These updates provide updates on cybersecurity incidents, as well as overall cybersecurity risk reduction program maturity, emerging and current cybersecurity risks, and the cybersecurity threat landscape.
HEI’s Board of Directors and CWG are tasked with overseeing risks from cybersecurity threats through routine quarterly, or as needed, updates and periodic deep-dive sessions. These updates cover cybersecurity incidents, as well as overall cybersecurity risk reduction program maturity, emerging and current cybersecurity risks, and the cybersecurity threat landscape.
ITEM 1C. CYBERSECURITY Cybersecurity risk oversight and management is a critical component of the Company’s overall enterprise risk management and top priority for the Company and its Board of Directors. The Company’s Board of Directors have delegated management of Enterprise Risk Management, which includes cybersecurity, to the HEI/Hawaiian Electric Audit and Risk Committees and ASB Risk Committees (collectively, the ARCs).
ITEM 1C. CYBERSECURITY Cybersecurity risk oversight and management is a critical component of the Company’s overall enterprise risk management and top priority for the Company and its Board of Directors. The Company’s Board of Directors has delegated management of Enterprise Risk Management, which includes cybersecurity, to the HEI and Hawaiian Electric Audit and Risk Committees (collectively, the ARCs).
The ARCs exercise their oversight responsibility of cybersecurity through quarterly (or more frequently if necessary) cybersecurity risk updates and incidents, if any, by management (primarily the Utilities’ Chief Information Security Officer and Chief Information Officer, and the ASB Director, Information Security).
The ARCs exercise their oversight responsibility of cybersecurity through quarterly (or more frequently if necessary) cybersecurity risk updates and reports of incidents, if any, by management (primarily the Utilities’ Chief Information Officer and Chief Information Security Officer).
These controls are required to protect HEI’s financial and other sensitive information, as well as to prevent cybersecurity breaches on Hawaiian Electric’s infrastructure, networks and servers. In the event of a cybersecurity breach on these unsupported applications, HEI employs third party cybersecurity consultants to assess and resolve issues resulting from a breach, depending on its severity.
These controls are required to protect HEI’s financial and other sensitive information, as well as to prevent cybersecurity breaches on Hawaiian Electric’s infrastructure, networks and servers. In the event of a cybersecurity breach on these applications not supported by Hawaiian Electric, HEI employs third party cybersecurity consultants to assess and resolve issues resulting from a breach, depending on its severity.
The CISO has over 30 years of experience in assessing and managing cyber risks, is responsible for day-to-day management of cybersecurity risks and regularly reports to the Board of Directors through the CWG. Bank Digital information, information technology and automation are essential components of the ASB’s operations and growth strategy.
The CISO has over 30 years of experience in assessing and managing cyber risks, is responsible for day-to-day management of cybersecurity risks and regularly reports to the Board of Directors through the CWG.
In early 2023, in recognition of the increased cybersecurity threats and heightened cybersecurity risks facing the Company, the ARCs formed the Cybersecurity Working Group (CWG) comprised of three directors, one from each of the Company’s Board of Directors.
In early 2023, in recognition of the increased cybersecurity threats and heightened cybersecurity risks facing the Company, the ARCs formed the Cybersecurity Working Group (CWG), which is currently comprised of two directors, one from each of the HEI and Hawaiian Electric Boards of Directors.
The program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), and leverages a risk-based approach to optimize its security investment and advance its security program’s maturity and security posture over time.
The program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), and leverages a risk-based approach to optimize security investment and advance the security program’s maturity and security posture over time. The Utilities’ cybersecurity program adopts security measures designed to protect the confidentiality, integrity, and availability of information technology systems, network infrastructure and other assets.
The disaster recovery plans are established to help prevent the loss of customer data, service interruptions and disruptions to operations or damage to important facilities. In addition, the Utilities also maintain cyber liability insurance that covers certain damages caused by cyber incidents.
The Utilities have disaster recovery and incident response plans in place to protect their businesses from information technology service interruptions. The disaster recovery plans are established to help prevent the loss of customer data, service interruptions and disruptions to operations or damage to important facilities.
HEI relies on Hawaiian Electric to provide most of its IT/CRM-related services pursuant to a Service Level Agreement (SLA), amended, as of November 1, 2023 between HEI and Hawaiian Electric. HEI also employs third party cybersecurity consultants to assist in managing CRM-related matters.
All Other segment HEI does not have an information technology (IT) or cybersecurity risk management (CRM) department, including the resources or expertise, to manage IT/CRM-related matters and processes. HEI relies on Hawaiian Electric to provide most of its IT/CRM-related services pursuant to a Service Level Agreement (SLA), amended, as of November 30, 2023 between HEI and Hawaiian Electric.
These measures are periodically evaluated and audited against the NIST CSF by internal audit and independent third-party cybersecurity specialists. The CISO actively monitors developments in the area of cybersecurity and is involved in various related government and industry groups and briefs the Company’s Board quarterly or as needed on relevant cybersecurity issues.
The CISO actively monitors developments in the area of cybersecurity and is involved in various related government and industry groups and briefs the Company’s Board quarterly or as needed on relevant cybersecurity issues. The Utilities continue to make investments in their cybersecurity program, including personnel, technologies, cyber insurance and training of Utilities personnel.
Removed
The Utilities continue to make investments in their cybersecurity program, including personnel, technologies, cyber insurance and training of Utilities personnel. The Utilities have disaster recovery and incident response plans in place to protect their businesses from information technology service interruptions.
Added
In addition, the Utilities also maintain cyber liability insurance that covers certain damages caused by cyber incidents.
Removed
ASB relies on evolving and increasingly complex operational and information systems, networks and other technologies, which are interconnected with the systems and network infrastructure owned by third parties to support a variety of business processes and activities.
Added
HEI also employs third party cybersecurity consultants to assist in managing CRM-related matters.
Removed
Such activities include delivery of banking services to retail and commercial customers, customer relationship management and processing financial information and results of operations for internal and external reporting purposes. We primarily use third-party systems and infrastructure to create, collect, store, and process sensitive information, including personal information of customers, employees and their dependents.
Removed
ASB’s Management Committee establishes the Bank’s strategy and makes risk-informed decisions, which includes assessing and responding to cybersecurity risk. The Bank’s Risk Committee of the Board of Directors oversee risks from cybersecurity threats. Oversight includes quarterly or as needed reporting on cybersecurity risk management activities, program maturity, current and emerging cybersecurity risks, and the cybersecurity threat landscape.
Removed
ASB maintains a cybersecurity program that is integrated into the overall risk management program and is overseen by the Director, Information Security and governed by an Information Security policy, standards and procedures.
Removed
The cybersecurity program employs a risk-based approach for managing risks through a combination of automated tools, manual processes, and third-party assessments to identify, assess, mitigate and monitor potential cybersecurity risks. In addition to policies, standards and procedures, ASB’s cybersecurity program also includes periodic risk and maturity assessments, awareness and training, monitoring, and an incident response plan.
Removed
Periodic risk assessments are conducted that are aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework and ASB leverages the results of such assessments to help optimize security investments and advance the cybersecurity program’s maturity and security posture over time.
Removed
The Bank’s Risk Committee of the Board annually reviews and approves ASB’s Information Security Policy and Gramm-Leach-Bliley Act programs and receives quarterly, or as needed, reporting on any key cybersecurity developments. The Bank actively monitors cybersecurity developments and is involved in various industry groups and cybersecurity professional organizations.
Removed
While the Bank continues to make investments in the cybersecurity program, including personnel, technologies and training of Bank personnel, there can be no assurance that these systems or their expected functionality will be implemented, maintained, or expanded effectively; nor can security measures completely eliminate the possibility of a cybersecurity breach.
Removed
While in depth processes and technological solutions are in place to help minimize the potential for a successful cyberattack, ASB maintains a cybersecurity incident response plan to help ensure a timely, consistent and compliant response to actual or attempted cybersecurity incidents.
Removed
The Response Plan includes (1) detection, (2) analysis, which may include timely notice to the Board if deemed material or appropriate, (3) containment, (4) eradication, (5) recovery and (6) post-incident review. ASB maintains a formal information security training program for all teammates that includes training on matters such as phishing and email security best practices.
Removed
Teammates are also required to complete compulsory training on data privacy and the Code of Conduct. The Bank engages with third parties to assess and test its cybersecurity posture including having independent third parties perform internal and external penetration testing as well as social engineering and phishing testing of teammates.
Removed
Results of third-party testing are reported to the Management Committee and Risk Committee of the Board. 35 ASB relies on its information technology systems and networks in connection with many of its business activities. Some of these networks and systems are managed by third-party service providers and are not under the Bank’s direct control.
Removed
The Bank has implemented processes to manage the cybersecurity risks associated with its use of third-party service providers.
Removed
To date, ASB is not aware of any risks from cybersecurity threats, including or as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Bank, including their business strategy, results of operations or financial condition.
Removed
For further information, see “Cybersecurity Events or other disruptions of our information technology systems could adversely affect our business” in Item 1A, Risk Factors of this Annual Report. Other segment HEI does not have an information technology (IT) or cybersecurity risk management (CRM) department, including the resources or expertise, to manage IT/CRM-related matters and processes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeBusiness,” in HEI’s MD&A and in the Notes 2, 4 and 5 of the Consolidated Financial Statements.
Biggest changeBusiness,” in HEI’s MD&A and in the Notes 2 and 4 of the Consolidated Financial Statements.
The outcomes of litigation and administrative proceedings are necessarily uncertain and there is a risk that the outcome of such matters could have a material adverse effect on the financial position, results of operations or liquidity of HEI or one or more of its subsidiaries for a particular period in the future. 36
The outcomes of litigation and administrative proceedings are necessarily uncertain and there is a risk that the outcome of such matters could have a material adverse effect on the financial position, results of operations or liquidity of HEI or one or more of its subsidiaries for a particular period in the future. 26

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeKimura 50 Hawaiian Electric President and Chief Executive Officer since 1/22 · Hawaiian Electric Senior Vice President, Customer Service and Public Affairs, 3/21 to 12/21 · Hawaiian Electric Senior Vice President, Customer Service, 2/19 to 3/21 · Hawaiian Electric Senior Vice President, Business Development & Strategic Planning, 1/17 to 2/19 · Hawaiian Electric Vice President, Corporate Planning & Business Development, 5/14 to 1/17 · HEI Director, Investor Relations, Strategic Planning & Budget, 11/09 to 5/14 · HEI Manager, Corporate Finance and Investments, 8/04 to 11/09 Ann C.
Biggest changeKimura 51 Hawaiian Electric President and Chief Executive Officer since 1/22 · Hawaiian Electric Senior Vice President, Customer Service and Public Affairs, 3/21 to 12/21 · Hawaiian Electric Senior Vice President, Customer Service, 2/19 to 3/21 · Hawaiian Electric Senior Vice President, Business Development & Strategic Planning, 1/17 to 2/19 · Hawaiian Electric Vice President, Corporate Planning & Business Development, 5/14 to 1/17 · HEI Director, Investor Relations, Strategic Planning & Budget, 11/09 to 5/14 · HEI Manager, Corporate Finance and Investments, 8/04 to 11/09 Family relationships; executive arrangements There are no family relationships between any HEI executive officer and any other HEI executive officer or any HEI director or director nominee.
Seu 58 HEI President and Chief Executive Officer since 1/22 HEI Director since 1/22 ASB Director since 1/22, Chair 1/22 to 8/23 ASB Hawaii Director since 1/22 · Hawaiian Electric President and Chief Executive Officer, 2/20 to 12/21 · Hawaiian Electric Director, 2/20 to 12/21 · Hawaiian Electric Senior Vice President, Public Affairs, 1/17 to 2/20 · Hawaiian Electric Vice President, System Operation, 5/14 to 12/16 · Hawaiian Electric Vice President, Energy Resources and Operations, 1/13 to 4/14 · Hawaiian Electric Vice President, Energy Resources, 8/10 to 12/12 · Hawaiian Electric Manager, Resource Acquisition Department, 3/09 to 8/10 · Hawaiian Electric Manager, Energy Projects Department, 5/04 to 3/09 · Hawaiian Electric Manager, Customer Installations Department, 1/03 to 5/04 · Hawaiian Electric Manager, Environmental Department, 4/98 to 12/02 · Hawaiian Electric Principal Environmental Scientist, 1/97 to 4/98 · Hawaiian Electric Senior Environmental Scientist, 5/96 to 12/96 · Hawaiian Electric Environmental Scientist, 8/93 to 5/96 Scott T.
Seu 59 HEI President and Chief Executive Officer since 1/22 HEI Director since 1/22 ASB Director 1/22 to 12/24, Chair 1/22 to 8/23 ASB Hawaii Director since 1/22 · Hawaiian Electric President and Chief Executive Officer, 2/20 to 12/21 · Hawaiian Electric Director, 2/20 to 12/21 · Hawaiian Electric Senior Vice President, Public Affairs, 1/17 to 2/20 · Hawaiian Electric Vice President, System Operation, 5/14 to 12/16 · Hawaiian Electric Vice President, Energy Resources and Operations, 1/13 to 4/14 · Hawaiian Electric Vice President, Energy Resources, 8/10 to 12/12 · Hawaiian Electric Manager, Resource Acquisition Department, 3/09 to 8/10 · Hawaiian Electric Manager, Energy Projects Department, 5/04 to 3/09 · Hawaiian Electric Manager, Customer Installations Department, 1/03 to 5/04 · Hawaiian Electric Manager, Environmental Department, 4/98 to 12/02 · Hawaiian Electric Principal Environmental Scientist, 1/97 to 4/98 · Hawaiian Electric Senior Environmental Scientist, 5/96 to 12/96 · Hawaiian Electric Environmental Scientist, 8/93 to 5/96 Scott T.
DeGhetto 60 HEI Executive Vice President, Chief Financial Officer and Treasurer, since 10/23 · Prior to joining the Company in October 2023: Moelis & Company, Managing Director, Power, Utilities & Renewable Energy, 2011-2023. Kurt K.
DeGhetto 61 HEI Executive Vice President, Chief Financial Officer and Treasurer, since 10/23 · Prior to joining the Company in October 2023: Moelis & Company, Managing Director, Power, Utilities & Renewable Energy, 2011-2023. Kurt K.
Murao 54 HEI Executive Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary since 1/20 · HEI Vice President - Legal & Administration and Corporate Secretary, 10/16 to 12/19 · HEI Associate General Counsel, 3/11 to 10/16 Shelee M. T.
Murao 55 HEI Executive Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary since 1/20 · HEI Vice President - Legal & Administration and Corporate Secretary, 10/16 to 12/19 · HEI Associate General Counsel, 3/11 to 10/16 Shelee M. T.
There are no arrangements or understandings between any HEI executive officer and any other person pursuant to which such executive officer was selected. 37 PART II ITEM 5.
There are no arrangements or understandings between any HEI executive officer and any other person pursuant to which such executive officer was selected. 27 PART II
ITEM 4. MINE SAFETY DISCLOSURE HEI and Hawaiian Electric: Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS (HEI) The executive officers of HEI are listed below. Mss. Kimura and Teranishi are officers of HEI subsidiaries rather than of HEI, but are deemed to be executive officers of HEI under SEC Rule 3b-7 promulgated under the 1934 Exchange Act.
ITEM 4. MINE SAFETY DISCLOSURE HEI and Hawaiian Electric: Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS (HEI) The executive officers of HEI are listed below. Ms. Kimura is an officer of an HEI subsidiary rather than of HEI, but is deemed to be an executive officer of HEI under SEC Rule 3b-7 promulgated under the 1934 Exchange Act.
Removed
Teranishi 49 ASB President and Chief Executive Officer since 5/21 ASB Director since 5/21 · ASB Executive Vice President, Operations, 2/18 to 5/21 · ASB Senior Vice President, Director of Operations, 1/17 to 1/18 · ASB Senior Vice President, Customer Experience, 5/14 to 1/17 · ASB Senior Vice President, Director of Retail Credit Management, 4/13 to 4/14 · ASB Senior Vice President, Director of Consumer Credit Management, 4/11 to 4/13 · ASB Senior Vice President, Director of Regulatory Compliance, 9/07 to 3/11 Family relationships; executive arrangements There are no family relationships between any HEI executive officer and any other HEI executive officer or any HEI director or director nominee.
Removed
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES HEI: Certain of the information required by this item is disclosed in Note 15, “Regulatory restrictions on net assets” and “Equity compensation plan information” under “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Form 10-K.
Removed
HEI’s common stock is traded on the New York Stock Exchange under the ticker symbol “HE.” As of February 15, 2024, HEI had 4,753 registered shareholders (i.e., holders of record of HEI common stock), 16,928 DRIP participants and total record shareholders of 21,681.
Removed
The HEI Board of Directors evaluates the dividend quarterly and considers many factors in the evaluation including, but not limited to, the Company’s results of operations, the long-term prospects for the Company, and the current and expected future economic conditions.
Removed
In August 2023, due to the potential impact from the Maui windstorm and wildfires, the HEI Board of Directors voted to suspend the quarterly cash dividend, starting after the second quarter of 2023 dividend.
Removed
This action is intended to allow the Company to maximize liquidity and allocate cash to rebuilding and restoring power and help ensure a strong future for the Utility and Bank.
Removed
Purchases of HEI common shares were made during the fourth quarter to satisfy the requirements of certain plans as follows: ISSUER PURCHASES OF EQUITY SECURITIES Period* Total Number of Shares Purchased ** Average Price Paid per Share ** Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs October 1 to 31, 2023 22,544 $ 12.38 — NA November 1 to 30, 2023 10,401 12.93 — NA December 1 to 31, 2023 39,788 13.52 — NA Total 72,733 — NA NA Not applicable. * Trades (total number of shares purchased) are reflected in the month in which the order is placed. ** The purchases were made to satisfy the requirements of the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP), the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP), and the ASB 401(k) Plan for shares purchased for cash or by the reinvestment of dividends by participants under those plans and none of the purchases were made under publicly announced repurchase plans or programs.
Removed
Average prices per share are calculated exclusive of any commissions payable to the brokers making the purchases for the DRIP, the HEIRSP and the ASB 401(k) Plan.
Removed
Of the “Total number of shares purchased,” 2,194 of the 72,733 shares were purchased for the DRIP; 63,800 of the 72,733 shares were purchased for the HEIRSP; and the remaining of the 6,739 shares were purchased for the ASB 401(k) Plan.
Removed
The repurchased shares were issued for the accounts of the participants under registration statements registering the shares issued under these plans. Hawaiian Electric: Since a corporate restructuring on July 1, 1983, all the common stock of Hawaiian Electric has been held solely by its parent, HEI, and is not publicly traded.
Removed
Accordingly, information required with respect to “Market information” and “holders” is not applicable to Hawaiian Electric.
Removed
The dividends declared and paid on Hawaiian Electric’s common stock for the quarters of 2023 and 2022 were as follows: Quarters ended 2023 2022 (in thousands) March 31 $ 32,250 $ 31,475 June 30 32,250 31,475 September 30 32,250 31,475 December 31 32,250 31,475 Total $ 129,000 $ 125,900 Also, see “Liquidity and capital resources” in HEI’s MD&A.
Removed
See the discussion of regulatory and other restrictions on dividends or other distributions in Note 15 of the Consolidated Financial Statements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

0 edited+12 added−16 removed0 unchanged
Removed
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers (e) On February 23, 2024, the Compensation and Human Capital Management Committee of Hawaiian Electric Industries, Inc.
Added
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES HEI: Certain of the information required by this item is disclosed in Note 15, “Regulatory restrictions on net assets” and “Equity compensation plan information” under “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Form 10-K.
Removed
(the “Company”) recommended board of director approval of three separate executive severance arrangements that provide benefits for the Company’s executive officers who are employed at each of the Company, Hawaiian Electric Company, Inc. (“Hawaiian Electric”), and American Savings Bank, F.S.B. (“American Savings”) and also recommended approval of a Retention Bonus Agreement between American Savings and Ann Teranishi (the “Retention Agreement”).
Added
HEI’s common stock is traded on the New York Stock Exchange under the ticker symbol “HE.” As of February 14, 2025, HEI had 4,587 registered shareholders (i.e., holders of record of HEI common stock), 16,267 DRIP participants and total record shareholders of 20,854.
Removed
On February 23, 2024, the Board of Directors of the Company approved the Hawaiian Electric Industries, Inc. Executive Severance Plan (the “HEI Plan”), the Board of Directors of Hawaiian Electric approved the Hawaiian Electric Company, Inc.
Added
The HEI Board of Directors evaluates the dividend quarterly and considers many factors in the evaluation including, but not limited to, the Company’s results of operations, the long-term prospects for the Company, and the current and expected future economic conditions.
Removed
Executive Severance Plan (the “Hawaiian Electric Plan”) and the Board of Directors of American Savings approved the Executive Severance Board Policy (the “American Savings Policy” and collectively, the “Severance Plans”) and the Retention Agreement. On February 23, 2024, American Savings and Ms. Teranishi each executed the Retention Agreement. The Severance Plans and Retention Agreement are described in more detail below.
Added
In August 2023, due to the potential impact from the Maui windstorm and wildfires, the HEI Board of Directors voted to suspend the quarterly cash dividend, starting after the second quarter of 2023 dividend.
Removed
The HEI Plan and Hawaiian Electric Plan The HEI Plan and Hawaiian Electric Plan are substantially the same and provide for the payment of severance and other benefits to eligible executives in the event of a termination of employment by the respective company without cause or by the eligible executive for good reason, with each of cause and good reason as defined in the respective severance plan (each, an “HEI/Hawaiian Electric Qualifying Termination”), in each case in lieu of benefits provided by any other company severance arrangement, provided, however, that if the eligible executive is party to a change in control agreement, the severance plans will not apply to an HEI/Hawaiian Electric Qualifying Termination in the event of a change in control whereby benefits are provided to such eligible executive pursuant to such change in control agreement.
Added
This action is intended to allow the Company to maximize liquidity and allocate cash to rebuilding and restoring power and help ensure a strong future for the Utility and Bank (prior to its sale on December 31, 2024).
Removed
In the event of an HEI/Hawaiian Electric Qualifying Termination and subject to employee confidentiality and non-disparagement obligations and execution of a general release of claims, the HEI Plan and Hawaiian Electric Plan each provide for, as it relates to HEI’s executive officers, the following payments and benefits: (i) a lump sum payment in an amount equal to two times the annualized base salary as of the date of termination for the CEO of the respective company, including currently Scott Seu at HEI and Shelee Kimura at Hawaiian Electric, and one and one-half times for Executive Vice Presidents and Senior Vice Presidents, including currently Scott DeGhetto and Kurt Murao at HEI, (ii) a lump sum payment in an amount equal to the 193 eligible employee’s pro-rata annual target bonus for the year of termination, (iii) accelerated pro-rata vesting of long-term equity or cash awards, with performance-based awards vesting at target, (iv) payment of the employer portion of any COBRA premium for a period of twenty-four months for Mr.
Added
Purchases of HEI common shares were made during the fourth quarter to satisfy the requirements of certain plans as follows: ISSUER PURCHASES OF EQUITY SECURITIES Period* Total Number of Shares Purchased ** Average Price Paid per Share ** Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs October 1 to 31, 2024 37,236 $ 9.70 — NA November 1 to 30, 2024 28,641 10.22 — NA December 1 to 31, 2024 24,228 10.20 — NA Total 90,105 — NA NA Not applicable. * Trades (total number of shares purchased) are reflected in the month in which the order is placed. ** The purchases were made to satisfy the requirements of the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP), the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP), and the ASB 401(k) Plan, prior to the sale of ASB, for shares purchased for cash or, if applicable, by the reinvestment of dividends by participants under those plans and none of the purchases were made under publicly announced repurchase plans or programs.
Removed
Seu and Ms. Kimura and eighteen months for Messrs. DeGhetto and Murao, and (v) outplacement services for six months in an amount not to exceed $10,000.
Added
Average prices per share are calculated exclusive of any commissions payable to the brokers making the purchases for the DRIP, the HEIRSP and the ASB 401(k) Plan, prior to the sale of ASB.
Removed
American Savings Policy The American Savings Policy provides for the payment of severance and other benefits to eligible executives in the event of a termination of employment by American Savings without cause or, in the event of a change in control of American Savings, by American Savings without cause or by the eligible executives for good reason, with each of cause and good reason as defined in the American Savings Policy (each, an “ASB Qualifying Termination”).
Added
Of the “Total number of shares purchased,” 31,970 of the 90,105 shares were purchased for the DRIP; 47,096 of the 90,105 shares were purchased for the HEIRSP; and the remaining of the 11,039 shares were purchased for the ASB 401(k) Plan, prior to the sale of ASB.
Removed
In the event of an ASB Qualifying Termination, the American Savings Policy provides the CEO of American Savings, currently Ann Teranishi, the following payments and benefits: (i) a lump sum payment in an amount equal to one and one-half times the highest annual base salary paid during the three years preceding the date of termination, (ii) continued participation in the company’s health benefit plans for a period of eighteen months, and (iii) in the case of an ASB Qualifying Termination within two years of the date of a change in control, accelerated vesting of restricted stock and restricted cash awards, provided that, where it is applicable, Ms.
Added
The repurchased shares were issued for the accounts of the participants under registration statements registering the shares issued under these plans. Hawaiian Electric: Since a corporate restructuring on July 1, 1983, all the common stock of Hawaiian Electric has been held solely by its parent, HEI, and is not publicly traded.
Removed
Teranishi’s existing change in control agreement will govern the applicable severance benefits in lieu of those provided under the American Savings Policy. Retention Agreement The Retention Agreement provides that Ms. Teranishi shall receive retention bonus payments totaling one and one-half times Ms.
Added
Accordingly, information required with respect to “Market information” and “holders” is not applicable to Hawaiian Electric.
Removed
Teranishi’s base salary as of January 1, 2024 (“Retention Bonus”) paid in five equal installments every six months beginning on March 15, 2024, subject to Ms. Teranishi continuing employment in good standing through each respective payment date, provided that if Ms.
Added
The dividends declared and paid on Hawaiian Electric’s common stock for the quarters of 2024 and 2023 were as follows: Quarters ended 2024 2023 (in thousands) March 31 $ 13,000 $ 32,250 June 30 13,000 32,250 September 30 — 32,250 December 31 — 32,250 Total $ 26,000 $ 129,000 Also, see “Liquidity and capital resources” in HEI’s MD&A.
Removed
Teranishi’s employment is terminated (i) by American Savings for any reason other than for cause or (ii) following a change in control, other than (A) by American Savings for cause, (B) by reason of death or disability, or (C) by Ms.
Added
See the discussion of regulatory and other restrictions on dividends or other distributions in Note 15 of the Consolidated Financial Statements.
Removed
Teranishi without good reason (each as defined in the Retention Agreement), all outstanding Retention Bonus payments will be accelerated and paid as soon as practicable following the date of termination. In addition, in the event that Ms. Teranishi’s employment is involuntarily terminated without cause or she resigns for good reason, Ms.
Removed
Teranishi will be awarded the benefits for which she is eligible under the American Savings Policy in accordance with the terms of that policy.
Removed
The foregoing descriptions of the Severance Plans and Retention Agreement are qualified in their entirety by the full terms of the HEI Plan, Hawaiian Electric Plan, American Savings Policy and Retention Agreement, copies of which are attached to this Form 10-K as Exhibit 10.19, Exhibit 10.20, Exhibit 10.21 and Exhibit 10.22, respectively, and incorporated herein by reference. ITEM 9C.
Removed
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS HEI and Hawaiian Electric: None PART III

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

213 edited+223 added−290 removed100 unchanged
Biggest change(dollars in millions, except per share amounts) 2023 % change 2022 % change 2021 Revenues $ 3,682 (2) $ 3,742 31 $ 2,850 Operating income 353 (7) 381 (1) 386 Net income for common stock 199 (17) 241 (2) 246 Net income (loss) by segment: Electric utility $ 194 3 $ 189 6 $ 178 Bank 53 (33) 80 (21) 101 Other (48) (73) (28) 15 (33) Net income for common stock $ 199 (17) $ 241 (2) $ 246 Basic earnings per share $ 1.82 (17) $ 2.20 (2) $ 2.25 Diluted earnings per share $ 1.81 (18) $ 2.20 (2) $ 2.25 Dividends per share $ 1.08 (23) $ 1.40 3 $ 1.36 Weighted-average number of common shares outstanding (millions) 109.7 — 109.4 — 109.3 Dividend payout ratio 59 % 60 % 73 % In 2023, net income for HEI common stock decreased (17)% to $199 million ($1.81 diluted earnings per share), compared to $241 million ($2.20 diluted earnings per share) in 2022, due to $27 million lower net income at ASB and $20 million higher net loss at the “Other” segment, partly offset by $5 million higher net income at the Utilities.
Biggest change(dollars in millions, except per share amounts) 2024 % change 2023 % change 2022 Revenues $ 3,220 (2) $ 3,288 (4) $ 3,421 Operating income (loss) (1,707) NM 275 (2) 280 Income (loss) from continuing operations for common stock $ (1,323) NM $ 146 (9) $ 161 Income (loss) from discontinued operations 1 (103) NM 53 (33) 80 Net income (loss) for common stock $ (1,426) NM $ 199 (17) $ 241 Net income (loss) by segment: Electric utility $ (1,226) NM $ 194 3 $ 189 Other (96) (100) (48) (73) (28) Income (loss) from continuing operations for common stock $ (1,323) NM $ 146 (9) $ 161 Continuing operations - Basic earnings (loss) per common share $ (10.42) NM $ 1.33 (10) $ 1.47 Discontinued operations - Basic earnings (loss) per common share 1 (0.81) NM 0.49 (33) 0.73 Basic earnings (loss) per share $ (11.23) NM $ 1.82 (17) $ 2.20 Continuing operations - Diluted earnings (loss) per common share $ (10.42) NM $ 1.33 (10) $ 1.47 Discontinued operations - Diluted earnings (loss) per common share 1 (0.81) NM 0.48 (34) 0.73 Diluted earnings (loss) per share $ (11.23) NM $ 1.81 (18) $ 2.20 Dividends per share $ — (100) $ 1.08 (23) $ 1.40 Weighted-average number of common shares outstanding (millions) 126.9 16 109.7 — 109.4 Dividend payout ratio — % 59 % 60 % 1 Includes the results of ASB’s operations through the date of the sale of the common shares, and the loss on the sale of the common shares.
Community-based renewable energy . In December 2017, the PUC adopted a community-based renewable energy (CBRE) program framework which allows customers who cannot, or chose not to, take advantage of private rooftop solar to receive the benefits of renewable energy to help offset their monthly electric bills and support clean energy for Hawaii. The program has two phases.
In December 2017, the PUC adopted a community-based renewable energy (CBRE) program framework which allows customers who cannot, or chose not to, take advantage of private rooftop solar to receive the benefits of renewable energy to help offset their monthly electric bills and support clean energy for Hawaii. The program has two phases.
The downgrades of Hawaiian Electric’s credit ratings will continue to adversely impact the Utilities’ ability to access capital markets and other sources of debt and equity financing, if at all, in a timely manner and on acceptable terms.
The downgrades of Hawaiian Electric’s credit ratings will continue to adversely impact the Utilities’ ability to access capital markets and other sources of debt and equity financing, if at all, in a timely manner and on acceptable terms. Credit ratings .
The downgrades of Hawaiian Electric’s credit ratings will continue to adversely impact the Utilities’ ability to access capital markets and other sources of debt financing, if at all, in a timely manner and on acceptable terms. In addition, the downgrades of the Hawaiian Electric’s credit ratings triggered certain cash or payment requirements with the Utilities’ vendors.
The downgrades of Hawaiian Electric’s credit ratings will continue to adversely impact the Utilities’ ability to access capital markets and other sources of debt financing, if at all, in a timely manner and on acceptable terms. In addition, the downgrades of Hawaiian Electric’s credit ratings triggered certain cash or payment requirements with the Utilities’ vendors.
While the timing of the Utilities’ carbon reduction goals will be adjusted, key elements of the 2030 plan have already been completed or remain on track to be completed by 2030, including the closure of the state’s last coal-fired IPP plant that occurred in September 2022, increasing rooftop solar by more than 50% over 2021 levels, retiring six fossil fuel generating units, increasing grid-scale and customer-owned storage, expanding geothermal resources, and creating customer incentives for 51 using clean, lower-cost energy at certain times of the day and using less fossil-fueled energy at night.
While the timing of the Utilities’ carbon reduction goals will be adjusted, key elements of the 2030 plan have already been completed or remain on track to be completed by 2030, including the closure of the state’s last coal-fired IPP plant that occurred in September 2022, increasing rooftop solar by more than 50% over 2021 levels, retiring six fossil fuel generating units, increasing grid-scale and customer-owned storage, expanding geothermal resources, and creating customer incentives for using clean, lower-cost energy at certain times of the day and using less fossil-fueled energy at night.
This includes full HEI Board review of sustainability-related strategies, Audit & Risk Committee oversight of sustainability-related risks, Compensation & Human Capital Management Committee responsibility for sustainability-related compensation matters and human capital management and Nominating and Corporate Governance Committee responsibility for ensuring an appropriate board governance framework is in place with respect to sustainability. • Robust sustainability and risk management expertise among board members, including directors with direct experience in renewable energy, climate change policy and strategy, and risk and environmental management. • Expanded sustainability goals as part of HEI and Utility executive incentive compensation. • Sustainability considerations explicitly woven into strategic planning efforts and enterprise risk management processes.
This includes full HEI Board review of sustainability-related strategies, Audit & Risk Committee oversight of sustainability-related risks, Compensation & Human Capital Management Committee responsibility for sustainability-related compensation matters and human capital management and Nominating and Corporate Governance Committee responsibility for ensuring an appropriate board governance framework is in place with respect to sustainability. • robust sustainability and risk management expertise among board members, including directors with direct experience in renewable energy, climate change policy and strategy, and risk and environmental management. • sustainability goals as part of HEI and Utility executive incentive compensation. • sustainability considerations explicitly woven into strategic planning efforts and enterprise risk management processes.
The Utilities and Pacific Biodiesel Technologies, LLC (PBT) signed an agreement on December 13, 2021 for supply of biodiesel on all islands commencing January 1, 2023, which was approved by the PUC on December 1, 2022. Hawaiian Electric also has a spot buy contract with PBT to purchase additional quantities of biodiesel at or below the price of diesel.
The Utilities and Pacific Biodiesel Technologies, LLC (PBT) signed an agreement on December 13, 2021 for supply of biodiesel on all islands commencing January 1, 2023, which was approved by the PUC on December 1, 2022. Hawaiian Electric also has a spot buy contract with PBT to purchase additional quantities of biodiesel at or 55 below the price of diesel.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA) that provides for $258 billion in energy-related provisions over a 10-year period. The provisions of the IRA are intended to, among other things, lower gasoline and electricity prices, incentivize clean energy investment and promote reductions in carbon emissions.
On August 16, 2022, former President Biden signed into law the Inflation Reduction Act of 2022 (IRA) that provides for $258 billion in energy-related provisions over a 10-year period. The provisions of the IRA are intended to, among other things, lower gasoline and electricity prices, incentivize clean energy investment and promote reductions in carbon emissions.
Changes in obligations associated with the factors noted above may not be immediately recognized as costs on the income statement, but generally are recognized in future years over the remaining average service period of plan participants. 48 The discount rate used to calculate the Company’s benefit obligations is a significant assumption that affects the Company’s benefit obligations.
Changes in obligations associated with the factors noted above may not be immediately recognized as costs on the income statement, but generally are recognized in future years over the remaining average service period of plan participants. The discount rate used to calculate the Company’s benefit obligations is a significant assumption that affects the Company’s benefit obligations.
The Utilities provide electricity on all the principal islands in the state, other than Kauai, to approximately 95% of the state’s population, and operate five separate grids. The Utilities’ mission is to provide innovative energy leadership for Hawaii, to meet the needs and expectations of customers and communities, and to empower them with affordable, reliable and clean energy.
The Utilities provide electricity on all the principal islands in the state, other than Kauai, to approximately 95% of the state’s population, and operate five separate grids. The Utilities’ mission is to provide innovative energy leadership for Hawaii, to meet the needs and expectations of customers and communities, and to empower them with safe, reliable, affordable clean energy.
On March 16, 2022, the PUC issued a D&O, approving the PGV ARPPA, subject to conditions, that include requiring completion of a final environmental review prior to construction. 57 On March 28, 2022, Puna Pono Alliance filed a Motion for Reconsideration seeking reconsideration, modification and/or vacation of the D&O. On June 6, the PUC denied Puna Pono’s Motion for Reconsideration.
On March 16, 2022, the PUC issued a D&O, approving the PGV ARPPA, subject to conditions, that include requiring completion of a final environmental review prior to construction. On March 28, 2022, Puna Pono Alliance filed a Motion for Reconsideration seeking reconsideration, modification and/or vacation of the D&O. On June 6, the PUC denied Puna Pono’s Motion for Reconsideration.
Additional debt and/or equity financing, if available, may be utilized to invest in the Utilities, Bank or Pacific Current; to pay down commercial paper or other short-term borrowings, if any; to pay interest costs; or to fund unanticipated expenditures, such as increases in the costs of, or an acceleration of, the construction of capital projects of the Utilities or unanticipated utility capital expenditures.
Additional debt and/or equity financing, if available, may be utilized to invest in the Utilities or Pacific Current; to pay down commercial paper or other short-term borrowings, if any; to pay interest costs; or to fund unanticipated expenditures, such as increases in the costs of, or an acceleration of, the construction of capital projects of the Utilities or unanticipated utility capital expenditures.
The Utilities have developed a CBRE Portal where Subscriber Organizations can apply for small project capacity and manage subscribers for all CBRE 54 projects in the program. Customers can also use the CBRE Portal to solicit subscription quotes, compare, and subscribe to a project once the Subscriber Organization has added their project to the portal. Microgrid services tariff proceeding .
The Utilities have developed a CBRE Portal where Subscriber Organizations can apply for small project capacity and manage subscribers for all CBRE projects in the program. Customers can also use the CBRE Portal to solicit subscription quotes, compare, and subscribe to a project once the Subscriber Organization has added their project to the portal. Microgrid services tariff proceeding .
On November 15, 2021, President Biden signed into law the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), which includes approximately $550 billion of new federal spending to be allocated over the next five years through various programs.
On November 15, 2021, former President Biden signed into law the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), which includes approximately $550 billion of new federal spending to be allocated over the next five years through various programs.
On September 21, 2022, the Utilities were informed by Pulama Lanai of a project being planned on Lanai to remove the two large resorts from the grid, which represent approximately 40% of the load of the island and raises great uncertainty around the future energy needs for Lanai.
On September 21, 2022, the Utilities were informed by Pulama Lanai of 49 a project being planned on Lanai to remove the two large resorts from the grid, which represent approximately 40% of the load of the island and raises great uncertainty around the future energy needs for Lanai.
In the absence of an unexpected material adverse change in the financial condition of the electric utilities or ASB, such restrictions are not expected to significantly affect the operations of HEI or its ability to meet its debt or other cash obligations. See Note 15 of the Consolidated Financial Statements.
In the absence of an unexpected material adverse change in the financial condition of the electric utilities, such restrictions are not expected to significantly affect the operations of HEI or its ability to meet its debt or other cash obligations. See Note 15 of the Consolidated Financial Statements.
The overall goal of the Grid Modernization Strategy is to deploy modern grid investments at an appropriate priority, sequence and pace to cost-effectively maximize flexibility, minimize the risk of redundancy and obsolescence, deliver customer benefits and enable greater DER and renewable energy integration.
The overall goal of the Grid Modernization Strategy (GMS) is to deploy modern grid investments at an appropriate priority, sequence and pace to cost-effectively maximize flexibility, minimize the risk of redundancy and obsolescence, deliver customer benefits and enable greater DER and renewable energy integration.
Net enterprise-wide GHG emissions in measured categories have decreased over time, driven largely by reductions in the utility’s generation-related emissions intensity. The Company’s sustainability reports can be found at www.hei.com/sustainability. 40 HEI consolidated results of operations.
Net enterprise-wide GHG emissions in measured categories have decreased over time, driven largely by reductions in the utility’s generation-related emissions intensity. The Company’s sustainability reports can be found at www.hei.com/sustainability. HEI consolidated results of operations.
In July 2022, Governor Ige signed Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation. The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology.
In July 2022, former Governor Ige signed Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation. The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology.
See “Regulatory proceedings” in Note 4 of the Consolidated Financial Statements. 52 Integrated Grid Planning . Achieving high levels of renewable energy and a carbon free electric system will require modernizing the grid through coordinated energy system planning in partnership with local communities and stakeholders.
See “Regulatory proceedings” in Note 4 of the Consolidated Financial Statements. Integrated Grid Planning . Achieving high levels of renewable energy and a carbon free electric system will require modernizing the grid through coordinated energy system planning in partnership with local communities and stakeholders.
See “Transition to a decarbonized and sustainable energy future—Community-based renewable energy” for additional information. • On March 17, 2022, the CBRE LMI RFPs for Oahu, Maui and Hawaii were opened and proposals were received.
See “Transition to a decarbonized and sustainable energy future—Community-based renewable energy” for additional information. • On March 17, 2022, the CBRE LMI RFPs for Oahu, Maui and Hawaii Island were opened and proposals were received.
It has also outlined key impacts for the Company under two climate scenarios, including a scenario targeted to limit global temperature rise to 2 degrees Celsius or lower. The Company’s most recent reports include HEI’s enterprise-wide GHG emissions inventory, providing the basis to further guide the Company's strategies and enable greater transparency around its progress on climate issues.
It has also outlined key impacts for the Company under two climate scenarios, including a scenario targeted to limit global temperature rise to two degrees Celsius or lower. The Company’s most recent reports include HEI’s enterprise-wide GHG emissions inventory, providing the basis to further guide the Company's strategies and enable greater transparency around its progress on 32 climate issues.
A summary of the GSPAs that were approved by PUC in December 2020 is as follows: Utilities Fast Frequency Response - 1 (MW) Fast Frequency Response - 2 (MW) Capacity - Load Build (MW) Capacity - Load Reduction (MW) Hawaiian Electric — 26.7 14.5 19.4 Hawaii Electric Light 6.0 — 3.2 4.0 Maui Electric 6.1 — 1.9 4.7 Total 12.1 26.7 19.6 28.1 A summary of the utility self-build projects is as follows: Utilities Number of contracts BESS Size (MW/MWh) Guaranteed commercial operation dates Hawaii Electric Light 1 * 12/12 12/30/22 Maui Electric 1 40/160 11/30/26 Total 2 52/172 * The Utility Self-Build project was denied by the PUC on May 25, 2022 and the Utilities have filed a motion for reconsideration with the PUC.
A summary of the GSPAs that were approved by PUC in December 2020 is as follows: Utilities Fast Frequency Response - 1 (MW) Fast Frequency Response - 2 (MW) Capacity - Load Build (MW) Capacity - Load Reduction (MW) Hawaiian Electric — 26.7 14.5 19.4 Hawaii Electric Light 6.0 — 3.2 4.0 Maui Electric 6.1 — 1.9 4.7 Total 12.1 26.7 19.6 28.1 A summary of the utility Stage 2 self-build projects is as follows: Utilities Number of projects BESS Size (MW/MWh) Guaranteed commercial operation dates Hawaii Electric Light 1 * 12/12 12/30/22 Maui Electric 1 40/160 11/30/26 Total 2 52/172 * The utility Self-Build project was denied by the PUC on May 25, 2022 and the Utilities filed a motion for reconsideration with the PUC.
This alignment with state policy is reflected in management compensation programs and the Utilities’ long-range plans, which include aspirational targets in order to catalyze action and accelerate the transition away from fossil fuels throughout its operations at a pace more rapid than dictated by current law.
This alignment with state policy is reflected in management compensation programs and the Utilities’ long-range plans, which include aspirational targets in order to catalyze action and accelerate the transition away from fossil fuels throughout their operations at a pace more rapid than dictated by current law.
See Note 11 of the Consolidated Financial Statements for retirement benefit plan obligations and estimated contributions for 2024. See “Biofuel sources” in the “Developments in renewable energy efforts” section above for additional information for fuel oil purchase obligation. See Notes 4 and 9 of the Consolidated Financial Statements for a discussion of power purchase commitments and operating leases obligations, respectively.
See Note 11 of the Consolidated Financial Statements for retirement benefit plan obligations and estimated contributions for 2025. See “Biofuel sources” in the “Developments in renewable energy efforts” section above for additional information for fuel oil purchase obligation. See Notes 4 and 9 of the Consolidated Financial Statements for a discussion of power purchase commitments and operating leases obligations, respectively.
After evaluation of these proposals and with concurrence of the independent observer, the Utilities filed a letter on September 9, 2022, proposing to close the Molokai CBRE RFP and to work with the lone bidder to improve certain aspects of its two proposed projects outside of the RFP process for the benefit of the residents of Molokai.
After evaluation of these proposals and with concurrence of the independent observer, the Utilities filed a letter on September 9, 2022, proposing to close the Molokai CBRE RFP and to work with the lone bidder to improve certain aspects of their two proposed projects outside of the RFP process for the benefit of the residents of Molokai.
For a discussion of 2021 operating, investing and financing activities, please refer to the “ Liquidity and capital resources” section in Item 7, “Management Discussion and Analysis of Financial Condition and Results of Operations—Electric utility,” in the Company’s 2022 Form 10-K. Material cash requirements .
For a discussion of 2022 operating, investing and financing activities, please refer to the “ Liquidity and capital resources” section in Item 7, “Management Discussion and Analysis of Financial Condition and Results of Operations—Electric utility,” in the Company’s 2023 Form 10-K. Material cash requirements .
There were no new issuances of common stock through the Dividend Reinvestment Program (DRIP) from January 2023 through September 4, 2023, December 6 through December 31, 2023, in 2022 or in 2021 and HEI satisfied the share purchase requirements of the DRIP through open market purchases of its common stock.
There were no new issuances of common stock through the Dividend Reinvestment Program (DRIP) from January 2023 through September 4, 2023, December 6 through December 31, 2023, in 2024 or in 2022 and HEI satisfied the share purchase requirements of the DRIP through open market purchases of its common stock.
To date, the Utilities filed seven requests with the PUC for approval of amendments related to previously-approved PPAs for changes in pricing and/or guaranteed commercial operations dates to support completion of the projects while maintaining system reliability. The PUC has approved all seven amendments. To date, three projects reached commercial operations.
To date, the Utilities filed seven requests with the PUC for approval of amendments related to previously-approved PPAs for changes in pricing and/or guaranteed commercial operations dates to support completion of the projects while maintaining system reliability. The PUC has approved all seven amendments.
While the accounts receivable balance has decreased since December 2022, it remains elevated coming out of the pandemic and has led to higher bad debt expense and higher write-offs in 2022 and 2023, following the end of the moratorium on disconnections.
While the accounts receivable balance has decreased since December 2023, it remains elevated coming out of the pandemic and has led to higher bad debt expense and higher write-offs in 2023 and 2024, following the end of the moratorium on disconnections.
As of December 31, 2023, the fair value of the assets held in trusts to satisfy the obligations of the Utilities’ retirement benefit plans did not exceed the retirement benefit plans’ benefit obligation. Minimum funding requirements for retirement benefit plans have not been included in the table above.
As of December 31, 2024, the fair value of the assets held in trusts to satisfy the obligations of the Utilities’ retirement benefit plans did not exceed the retirement benefit plans’ benefit obligation. Minimum funding requirements for retirement benefit plans have not been included in the table above.
HEI also periodically makes short-term loans to Hawaiian Electric to meet Hawaiian Electric’s cash requirements, including the funding of loans by Hawaiian Electric to Hawaii Electric Light and Maui Electric, but no such short-term loans to Hawaiian Electric were outstanding as of December 31, 2023.
HEI also periodically makes short-term loans to Hawaiian Electric to meet Hawaiian Electric’s cash requirements, including the funding of loans by Hawaiian Electric to Hawaii Electric Light and Maui Electric, but no such short-term loans to Hawaiian Electric were outstanding as of December 31, 2024.
However, the potential damages and losses related to the Maui windstorm and wildfires and related lawsuits (see further information in Note 2 of the Consolidated Financial Statements), the economic impact of higher fuel prices, inflation, higher interest rates, tightening of monetary policy, and geopolitical situations, create significant uncertainty, and the Utilities cannot predict the extent or duration of these conditions, the future effects that these conditions will have on the Utilities’ cost of capital and their ability to access additional capital, or the future impacts on the Utilities’ financial position, results of operations, and cash flows. 65 Selected short-term and long-term contractual obligations and commitments .
The potential damages and losses related to the Maui windstorm and wildfires and related lawsuits (see further information in Note 2 of the Consolidated Financial Statements), the economic impact of higher fuel prices, inflation, higher interest rates, tightening of monetary policy, and geopolitical situations, create significant uncertainty, and the Utilities cannot predict the extent or duration of these conditions, the future effects that these conditions will have on the Utilities’ financing plan, cost of capital and their ability to access additional capital, or the future impacts on the Utilities’ financial position, results of operations, and cash flows. 61 Selected short-term and long-term contractual obligations and commitments .
The Utilities’ capital expenditures are forecasted to be funded primarily through a combination of retained earnings and proceeds from other sources of debt financings (see also discussion regarding other material cash requirements under “Financial Condition–Liquidity and capital resources,” contained in the “Electric utility” and “Bank” sections below).
The Utilities’ capital expenditures are forecasted to be funded primarily through a combination of retained earnings and proceeds from other sources of debt financings (see also discussion regarding other material cash requirements under “Financial Condition–Liquidity and capital resources,” contained in the “Electric utility” section below).
For more information of the Utilities’ incremental expenses related to the Maui windstorm and wildfires for the year ended December 31, 2023 , see “Results of operations— Maui windstorm and wildfires related expenses, net ” in HEI’s MD&A.
For more information of the Utilities’ incremental expenses related to the Maui windstorm and wildfires for the year ended December 31, 2024 , see “Results of operations— Maui windstorm and wildfires related expenses, net ” in HEI’s MD&A.
The Company has taken additional prudent measures to strengthen its financial position while continuing to provide reliable service to its customers and reinforcing our commitment to serving the community for the long term.
The Company has taken additional prudent measures to strengthen its financial position while continuing to provide reliable service to its customers and reinforcing HEI’s commitment to serving the community for the long term.
For the 2024 calendar year, the forecasted 2024 GDPPI was 2.18% (net of the 0.22% customer dividend), measured in October 2023, and became effective in rates on January 1, 2024. • The non-compounded portion of the ARA adjustment includes a subtractive component, representing the management audit savings commitment, or refund to customers, which was approved by the PUC for the years 2021 through 2025.
For the 2025 calendar year, the forecasted 2025 GDPPI was 1.98% (net of the 0.22% customer dividend), measured in October 2024, and became effective in rates on January 1, 2025. • The non-compounded portion of the ARA adjustment includes a subtractive component, representing the management audit savings commitment, or refund to customers, which was approved by the PUC for the years 2021 through 2025.
A portion of the net assets of Hawaiian Electric and ASB is not available for transfer to HEI in the form of dividends, loans or advances without regulatory approval.
A portion of the net assets of Hawaiian Electric is not available for transfer to HEI in the form of dividends, loans or advances without regulatory approval.
As of December 31, 2023, the fair value of the assets held in trusts to satisfy the obligations of the Company’s retirement benefit plans did not exceed the retirement benefit plans’ benefit obligation.
As of December 31, 2024, the fair value of the assets held in trusts to satisfy the obligations of the Company’s retirement benefit plans did not exceed the retirement benefit plans’ benefit obligation.
Based on the level of total generation in 2023, a 1% shortfall in meeting the 2030 RPS requirement of 40% would translate into a penalty of approximately $2.1 million.
Based on the level of total generation in 2024, a 1% shortfall in meeting the 2030 RPS requirement of 40% would translate into a penalty of approximately $2.1 million.
This contingency contract has been extended to November 2024, and will continue with no volume purchase requirements. 59 Requests for renewable proposals, expressions of interest, and information . • On November 22, 2021, CBRE RFPs for Molokai and Lanai were opened.
This contingency contract has been extended to November 2025, and will continue with no volume purchase requirements. Requests for renewable proposals, expressions of interest, and information . • On November 22, 2021, CBRE RFPs for Molokai and Lanai were opened.
The Stage 3 RFPs for Oahu and Maui opened for bids on January 20, 2023. For Oahu, the Utilities are seeking 500 to 700 MW of renewable firm capacity, and at least 965 GWh of renewable dispatchable energy annually.
The Stage 3 RFPs for Oahu and Maui opened for bids on January 20, 2023. For Oahu, the Utilities sought 500 to 700 MW of renewable firm capacity, and at least 965 GWh of renewable dispatchable energy annually.
There were no new issuances of common stock through the HEIRSP or the ASB 401(k) Plan in 2023, 2022 or 2021 and HEI satisfied the share purchase requirements of the HEIRSP and ASB 401(k) Plan through open market purchases of its common stock.
There were no new issuances of common stock through the HEIRSP 401(k) Plan in 2024, 2023 or 2022 and HEI satisfied the share purchase requirements of the HEIRSP 401(k) Plan through open market purchases of its common stock.
Hawaiian Electric, Hawaii Electric Light and Maui Electric (Utilities) are regulated operating electric public utilities engaged in the production, purchase, transmission, distribution and sale of electricity on the islands of Oahu; Hawaii; and Maui, Lanai and Molokai, respectively. Bank .
Hawaiian Electric, Hawaii Electric Light and Maui Electric (Utilities) are regulated operating electric public utilities engaged in the production, purchase, transmission, distribution and sale of electricity on the islands of Oahu; Hawaii; and Maui, Lanai and Molokai, respectively. All Other .
The key sustainability priorities the Company is working to advance include: • decarbonizing the Company’s operations and the broader Hawaii economy; • promoting Hawaii’s economic health and improving affordability for all residents; • ensuring resilience as the Company adapts to a changing climate, which is exacerbating conditions that can lead to increasing risk of droughts, severe storms, flooding, wildfires and other extreme weather events and natural disasters; • maintaining resilience as the Company navigates the clean energy transition; • advancing digitalization of the Company’s operations to better serve customers and increase efficiency while protecting against cyber-security challenges; • promoting diversity, equity and inclusion both within the Company and in the ways the Company interacts with and impacts external stakeholders; • increasing employee engagement; and • identifying and integrating climate-related risks and opportunities throughout the Company’s planning and decision-making.
Those sustainability priorities included: • decarbonizing the Company’s operations and the broader Hawaii economy; • promoting Hawaii’s economic health and improving affordability for all residents; • ensuring resilience, including safety, as the Company adapts to a changing climate, which is exacerbating conditions that can lead to increasing risk of droughts, severe storms, flooding, wildfires and other extreme weather events and natural disasters; • maintaining resilience as the Company navigates the clean energy transition; • advancing digitalization of the Company’s operations to better serve customers and increase efficiency while protecting against cyber-security challenges; • promoting inclusion both within the Company and in the ways the Company interacts with and impacts external stakeholders; • increasing employee engagement; and • identifying and integrating climate-related risks and opportunities throughout the Company’s planning and decision-making.
The change in the definition is effective from July 2022 forward and will require that the Utilities acquire more renewable energy than under the previous RPS calculation to comply with the RPS milestones; however, the Utilities expect to continue to meet the RPS milestones under the amended RPS law. (See “Developments in renewable energy efforts” below).
The change in the definition is effective from July 2022 forward and will require that the Utilities acquire more renewable energy than under the previous RPS calculation to comply with the RPS milestones; however, the Utilities expect to continue to meet the RPS milestones under the amended RPS law.
The increase in the Utilities’ 2023 net income compared to 2022 was principally due to higher ARA revenues, which included the customer dividend delivered to customers, partially offset by higher operating expenses. See “Electric utility,” “Bank,” and “HEI Consolidated—Other segment” sections below for additional information on year-to-year fluctuations.
The increase in the Utilities’ 2023 net income compared to 2022 was principally due to higher ARA revenues, which included the customer dividend delivered to customers, partially offset by higher operating expenses. See “Electric utility” and “HEI Consolidated—All Other segment” sections below for additional information on year-to-year fluctuations.
The Other segment comprises the results of Pacific Current, which invests in non-regulated clean energy and sustainable infrastructure in the State of Hawaii to help reach the state’s sustainability goals, and HEI’s corporate-level operating, general and administrative expenses.
The All Other segment primarily comprises the results of Pacific Current, which invested in non-regulated clean energy and sustainable infrastructure in the State of Hawaii to help reach the state’s sustainability goals, and HEI’s corporate-level operating, general and administrative expenses.
On March 25, 2019, the PUC approved a plan for the Utilities to implement Phase 1 of their Grid Modernization Strategy, which is the proportional deployment of advanced metering infrastructure (AMI). On February 28, 2022, the PUC expanded the scope of Phase 1 to the full service territory with a completion date set for the third quarter of 2024.
On March 25, 2019, the PUC approved a plan for the Utilities to implement GMS Phase 1, which is the proportional deployment of advanced metering infrastructure (AMI). On February 28, 2022, the PUC expanded the scope of Phase 1 to the full service territory with a completion date set for the third quarter of 2024.
On October 2, 2023 the Utilities filed a letter requesting the docket be reopened and seeking approval of the First and Second Amendments to the PGV ARPPA by the end of 2023. On December 29, 2023, the PUC issued a decision and order conditionally approving the First and Second Amendments to the PGV ARPPA.
On October 2, 2023 the Utilities filed a letter requesting the docket be reopened and seeking approval of the First and Second Amendments to the PGV ARPPA by the end of 2023. On December 29, 2023, the PUC issued a D&O conditionally approving the First and Second Amendments to the PGV ARPPA.
Forecasted HEI consolidated “net cash used in investing activities” (excluding “investing” cash flows from ASB) consists primarily of the net capital expenditures of the Utilities principally related to maintaining and modernizing the grid to allow for the integration of more renewable energy, improved customer reliability, greater system efficiency and enhanced resilience.
Forecasted HEI consolidated “net cash used in investing activities” consists primarily of the net capital expenditures of the Utilities principally related to maintaining and modernizing the grid to allow for the integration of more renewable energy, improved customer reliability, greater system efficiency and enhanced resilience.
For additional discussion of the Company’s accounting policies, see Note 1 of the Consolidated Financial Statements and for additional discussion of material estimates and critical accounting policies, see the electric utility and bank segment discussions below under the same heading. Pension and other postretirement benefits obligations .
For additional discussion of the Company’s accounting policies, see Note 1 of the Consolidated Financial Statements and for additional discussion of material estimates and critical accounting policies, see the electric utility discussion below under the same heading. 42 Pension and other postretirement benefits obligations .
Other than capital contributions from their parent company, intercompany services (and related intercompany payables and receivables), Hawaiian Electric’s periodic short-term borrowings from HEI (and related interest) and the payment of dividends to HEI, the electric utility and bank segments are largely autonomous in their operating, investing and financing activities.
Other than capital contributions from their parent company, intercompany services (and related intercompany payables and receivables), Hawaiian Electric’s periodic short-term borrowings from HEI (and related interest) and the payment of dividends to HEI, the electric utility is largely autonomous in its operating, investing and financing activities.
The cash requirements for capital expenditures are generally funded through retained earnings, the issuance of debt, and contributions of equity from HEI and generally recovered through the Utilities’ revenue requirement or other capital recovery mechanisms over time.
The cash requirements for capital expenditures are generally funded through operating cash flows, the issuance of debt, and contributions of equity from HEI and generally recovered through the Utilities’ revenue requirement or other capital recovery mechanisms over time.
In 2022, net cash provided by financing activities included net increases in other short-term borrowings and proceeds from issuance of short-term and long-term debt and net increases in short-term borrowings, partly offset by repayment of long-term debt and payment of common and preferred stock dividends.
In 2022, net cash provided by financing activities from continuing operations included proceeds from long-term debt and short-term debt and net increases in short-term borrowings, partly offset by repayment of long-term debt and payment of common and preferred stock dividends.
The inflation factor percentage is the consensus projection of annual percentage change in GDPPI for the following calendar year published by Blue Chip Economic Indicators each October. For the 2023 calendar year, the forecasted 2023 GDPPI was 3.68% (net of the 0.22% customer dividend), measured in October 2022, and became effective in rates on January 1, 2023.
The inflation factor percentage is the consensus projection of annual percentage change in GDPPI for the following calendar year published by Blue Chip Economic Indicators each October. For the 2024 calendar year, the forecasted 2024 GDPPI was 2.18% (net of the 0.22% customer dividend), measured in October 2023, and became effective in rates on January 1, 2024.
On June 8, 2021, the PUC approved the new program, Emergency Demand Response Program (EDRP), a battery storage incentive program to dispatch electricity between 6 p.m. to 8 p.m. daily from participating residential and commercial customers, to address the potential reserve shortfalls following the AES coal plant retirement.
On June 8, 2021, the PUC approved the Emergency Demand Response Program (EDRP), a battery storage incentive program to dispatch electricity between 6 p.m. to 8 p.m. daily from participating residential and commercial customers, to address the potential reserve shortfalls following the AES coal plant retirement. The battery bonus on Oahu is officially closed to new applications.
The goal is to create a safe, modern, resilient, flexible, and dynamic electric grid that protects Hawaii from impacts of climate change and enables an optimal mix of distributed energy resources, such as private rooftop solar, demand response, and grid-scale resources to enable the creation of smart, sustainable, resilient communities and achieve its decarbonization goals that are aligned with the statutory goal of 100% renewable energy by 2045.
The goal is to create a safe, modern, resilient, flexible, and dynamic electric grid that protects Hawaii from impacts of climate change and enables an optimal mix of distributed energy resources, such as private rooftop solar, demand response, and grid-scale resources to enable the creation of smart, sustainable, resilient communities and achieve their decarbonization goals that are aligned with the statutory goal to achieve a 100% renewable portfolio standard and net-negative carbon emissions by 2045.
The Company has since further developed its sustainability reporting to include SASB disclosures for Hawaiian Electric and ASB and disclosures regarding risks and opportunities related to climate change, as well as associated risk management and governance processes, based on recommendations from the Task Force on Climate-related Financial Disclosures.
The Company has since further developed its sustainability reporting to include disclosures regarding risks and opportunities related to climate change, as well as associated risk management and governance processes, based on recommendations from the Task Force on Climate-related Financial Disclosures.
The table above does not include other categories of obligations and commitments, such as deferred taxes, certain trade payables, amounts that will become payable in future periods under collective bargaining and other employment agreements and employee benefit plans, and potential refunds of amounts collected from ratepayers (e.g., under the earnings sharing 45 mechanism).
The table above does not include other categories of obligations and commitments, such as deferred taxes, certain trade payables, amounts that will become payable in future periods under collective bargaining and other employment agreements and employee benefit plans, potential settlements of securities class action and shareholder lawsuits, and potential refunds of amounts collected from ratepayers (e.g., under the earnings sharing mechanism).
With one PPA mutually terminated on November 17, 2023, a summary of the remaining seven PPAs is as follows: Utilities Number of contracts Total photovoltaic size (MW) BESS Size (MW/MWh) Guaranteed commercial operation dates Contract term (years) Total projected annual payment (in millions) Hawaiian Electric 4 139.5 139.5/558 7/31/22, 1/11/23, 1/20/23* & 10/31/24 20 & 25 $ 34.0 Hawaii Electric Light 2 60 60/240 10/11/24 & 4/21/23 25 19.2 Maui Electric 1 60 60/240 5/31/24 25 13.2 Total 7 259.5 259.5/1038 $ 66.4 * Project delays have resulted in Guaranteed Commercial Operations Date being missed.
A summary of the remaining seven PPAs is as follows: Utilities Number of contracts Total photovoltaic size (MW) BESS Size (MW/MWh) Guaranteed commercial operation dates Contract term (years) Total projected annual payment (in millions) Hawaiian Electric 4 139.5 139.5/558 7/31/22, 1/11/23, 3/28/24 & 10/31/24* 20 & 25 $ 34.0 Hawaii Electric Light 2 60 60/240 4/21/23 & 10/11/24* 25 19.2 Maui Electric 1 60 60/240 5/31/24 25 13.2 Total 7 259.5 259.5/1038 $ 66.4 * Project delays have resulted in Guaranteed Commercial Operations Date being missed.
Material estimates that are particularly susceptible to significant change include the amounts reported for pension and other postretirement benefit obligations; contingencies and litigation; income taxes; regulatory assets and liabilities; allowance for credit losses; fair value; and asset retirement obligations (AROs).
Material estimates that are particularly susceptible to significant change include the amounts reported for pension and other postretirement benefit obligations; contingencies and litigation; income taxes; regulatory assets and liabilities; and asset retirement obligations (AROs).
As of December 31, 2023, an estimated 40% of single-family homes on the islands of Oahu, Hawaii and Maui have installed private rooftop solar systems, and approximately 23% of the Utilities’ total customers have solar systems. • The Utilities began accepting energy from feed-in tariff projects in 2011.
As of December 31, 2024, an estimated 43% of single-family homes on the islands of Oahu, Hawaii and Maui have installed private rooftop solar systems, and approximately 24% of the Utilities’ total customers have solar systems. • The Utilities began accepting energy from feed-in tariff projects in 2011.
For Maui, the Utilities are procuring at least 40 MW of renewable firm capacity, and at least 425 GWh of renewable dispatchable energy annually.
For Maui, the Utilities sought at least 40 MW of renewable firm capacity, and at least 425 GWh of renewable dispatchable energy annually.
Based on various assumptions in Note 11 of the Consolidated Financial Statements, sensitivities of the projected benefit obligation (PBO) and accumulated postretirement benefit obligation (APBO) as of December 31, 2023, associated with a change in the discount rate, were as follows and constitute “forward-looking statements”: Actuarial assumption Change in assumption in basis points Impact on HEI Consolidated PBO or APBO Impact on Consolidated Hawaiian Electric PBO or APBO (dollars in millions) Pension benefits Discount rate +/-50 $(129)/$145 $(122)/$137 Other benefits Discount rate +/-50 $(7)/$8 $(7)/$8 Also, see Notes 1 and 11 of the Consolidated Financial Statements.
Based on various assumptions in Note 11 of the Consolidated Financial Statements, sensitivities of the projected benefit obligation (PBO) and accumulated postretirement benefit obligation (APBO) as of December 31, 2024, associated with a change in the discount rate, were as follows and constitute “forward-looking statements”: Actuarial assumption Change in assumption in basis points Impact on HEI Consolidated PBO or APBO Impact on Consolidated Hawaiian Electric PBO or APBO (dollars in millions) Pension benefits Discount rate +/-50 $(116)/$129 $(113)/$126 Other benefits Discount rate +/-50 $(7)/$7 $(6)/$7 Also, see Notes 1 and 11 of the Consolidated Financial Statements.
Tariffed renewable resources . • As of December 31, 2023, there were approximately 611 MW, 135 MW and 146 MW of installed distributed renewable energy technologies (mainly PV) at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively, for tariff-based private customer generation programs, namely Standard Interconnection Agreement, Net Energy Metering, Net Energy Metering Plus, Customer Grid Supply, Customer Self Supply, Customer Grid Supply Plus and Interim Smart Export.
Tariffed renewable resources . • As of December 31, 2024, there were approximately 648 MW, 147 MW and 154 MW of installed distributed renewable energy technologies (mainly PV) at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively, for tariff-based private customer generation programs, namely Standard Interconnection Agreement, Net Energy Metering, Net Energy Metering Plus, Customer Grid Supply, Customer Self Supply, Customer Grid Supply Plus and Interim Smart Export.
Management continually assesses whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory environment. The Utilities record regulatory assets and liabilities when they are deemed probable of recovery from or refund to customers.
Regulatory liabilities and regulatory assets are itemized in Note 4 of the Consolidated Financial Statements. Management continually assesses whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory environment. The Utilities record regulatory assets and liabilities when they are deemed probable of recovery from or refund to customers.
The Company is committed to transparency and providing information to allow customers, community leaders, investors and other stakeholders to understand how the Company’s strategies and operations advance sustainability objectives and contribute to long-term stakeholder value creation. The Company issued its first consolidated sustainability report in September 2020.
The Company is committed to transparency and providing information to allow customers, community leaders, investors and other stakeholders to understand how the Company’s strategies and operations advance sustainability objectives and contribute to long-term stakeholder value creation. The Company issued its first consolidated sustainability report in September 2020. The report was aligned with Sustainability Accounting Standards Board guidance.
In 2023, net cash provided by financing activities included proceeds from other bank borrowings, revolving credit facilities and long-term debt, partly offset by repayment of other bank borrowings and long-term debt, net decreases in deposit liabilities, other bank borrowings and short-term borrowings and payment of common and preferred stock dividends.
In 2023, net cash provided by financing activities from continuing operations included proceeds from revolving credit facilities, long-term debt and short-term debt, partly offset by repayment of long-term and short-term debt, net decreases in short-term borrowings and payment of common and preferred stock dividends.
Several of the recently procured projects have experienced delays as a result of supply chain disruptions caused by impacts from the COVID-19 pandemic, solar product detentions at U.S. ports of entry ordered by the U.S.
Several of the Stage 1 and Stage 2 projects have experienced delays as a result of supply chain disruptions caused by impacts from the COVID-19 pandemic, solar product detentions at U.S. ports of entry ordered by the U.S.
The funding will help t he State of Hawaii achieve its sustainability goals, including renewable energy, resilience, and decarbonization, while also prioritizing economic development, equity and affordability. The Utilities are pursuing potential grant funding of projects under various programs as primary applicant as well as in partnership with other organizations. On August 29, 2023, the U.S.
The funding will help t he State of Hawaii achieve its sustainability goals, including renewable energy, resilience, and decarbonization, while also prioritizing economic development, equity and affordability. The Utilities have been pursuing potential grant funding of projects under various programs as primary applicant as well as in partnership with other organizations.
Changes in estimated costs, timing of decommissioning or other assumptions used in the calculation could cause material revision on the recorded liabilities. As of December 31, 2023 and December 31, 2022, the Utilities’ AROs totaled $12.0 million and $11.5 million, respectively. Bank Executive overview and strategy.
Changes in estimated costs, timing of decommissioning or other assumptions used in the calculation could cause material revision on the recorded liabilities. As of December 31, 2024 and December 31, 2023, the Utilities’ AROs totaled $12.5 million and $12.0 million, respectively.
Hawaii real estate activity through December 2023, as indicated by Oahu’s home resale market, resulted in an increase in the median sales price of 1.5% for condominiums and a decrease of 5.1% for single-family homes compared to the same period in 2022, with the December median single-family home price of $996,500, below the record $1,153,500 set in May 2022.
Hawaii real estate activity through December 2024, as indicated by Oahu’s home resale market, resulted in an increase in the median sales price of 1.3% for condominiums and an increase of 4.8% for single-family homes compared to the same period in 2023, with the December median single-family home price of $1,054,500, below the record $1,153,500 set in May 2022.
Management believes that the Company’s provision for tax contingencies is reasonable. However, the ultimate resolution of tax treatments disputed by governmental authorities may adversely affect the Company’s current and deferred income tax amounts. 49 See Note 13 of the Consolidated Financial Statements. Following are discussions of the electric utility and bank segments.
Management believes that the Company’s provision for tax contingencies is reasonable. However, the ultimate resolution of tax treatments disputed by governmental authorities may adversely affect the Company’s current and deferred income tax amounts. See Note 13 of the Consolidated Financial Statements. Following is a discussion of the electric utility segment.
If the Utilities are not successful in meeting the RPS targets as mandated by law, the PUC could assess a penalty of $20 for every megawatt-hour (MWh) that an electric utility is deficient.
(See “Developments in renewable energy efforts” below). 47 If the Utilities are not successful in meeting the RPS targets as mandated by law, the PUC could assess a penalty of $20 for every megawatt-hour (MWh) that an electric utility is deficient.
In addition to the funds required for the Utilities’ construction programs and debt maturities, with respect to HEI, approximately $50 million will be required in 2025 to repay maturing long-term debt.
In addition to the funds required for the Utilities’ construction programs and debt maturities, with respect to HEI, approximately $50 million will be required in the fourth quarter of 2025 to repay maturing long-term debt if not refinanced.
In November 2022, seven projects were selected consisting of one standalone PV project on Oahu, three paired PV with storage projects on Maui, and three paired PV with storage projects on Hawaii Island. The Utilities opened the CBRE Tranche 1 RFPs for Oahu, Maui and Hawaii on April 14, 2022.
The Utilities opened the CBRE Tranche 1 RFPs for Oahu, Maui and Hawaii Island on April 14, 2022. In March 2023, five projects were selected consisting of one paired PV with storage project on Oahu and four standalone PV projects on Hawaii Island.
The higher bad debt expense is expected to continue until the Utilities return to pre-pandemic collection practices, along with a decrease in volume, for delinquent accounts. The Maui windstorm and wildfires have not and are not anticipated to materially impact accounts receivable and higher bad debt expense.
The higher bad debt expense is expected to continue until the Utilities return to pre-pandemic accounts receivable balances, along with a decrease in volume, for delinquent accounts. The Maui windstorm and wildfires have not and are not anticipated to materially impact accounts receivable, however, it has and will continue to lead to higher bad debt expense.
Material cash requirements of HEI Consolidated include: Utility related capital expenditures (including capital expenditures related to wildfires and wildfire mitigations), labor and benefit costs, O&M expenses, legal and consulting costs related to the Maui windstorm and wildfires, fuel and purchase power costs, and debt and interest payments; Bank related investments in loans; HEI related labor and benefits costs, shareholder dividends, debt and interest payments and legal and consulting costs related to the Maui windstorm and wildfires; and HEI equity contributions to support Pacific Current’s sustainable infrastructure investments.
Material cash requirements of HEI Consolidated include: payments related to settlement of tort-related legal claims and cross claims; Utility related capital expenditures (including capital expenditures related to wildfires and wildfire mitigations), labor and benefits costs, O&M expenses, legal and consulting costs related to the Maui windstorm and wildfires, fuel and purchase power costs, and debt and interest payments; HEI related labor and benefits costs, debt and interest payments and legal and consulting costs related to the Maui windstorm and wildfires; and HEI equity contributions to support Pacific Current’s sustainable infrastructure investments.
For the Utilities, while fuel prices have moderated from their highs in 2022, they remain elevated and have increased the cost of carrying fuel inventory and higher customer accounts receivable balances as fuel is consumed and billed to customers.
See further discussion in “Risk Factors” in Item 1A. 38 For the Utilities, while fuel prices have moderated from their highs in 2022, they remain elevated and have increased the cost of carrying fuel inventory and higher customer accounts receivable balances as fuel is consumed and billed to customers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company currently has no direct exposure to market risk from trading activities nor foreign currency exchange rate risk. 81 The Company considers interest rate risk to be a very significant market risk as it could potentially have a significant effect on the Company’s results of operations, financial condition and liquidity, especially as it relates to ASB, but also as it may affect the discount rate used to determine retirement benefit liabilities and minimum contributions, the market value of retirement benefit plans’ assets, borrowing costs and the Utilities’ allowed rates of return.
Biggest changeThe Company considers interest rate risk to be a very significant market risk as it could potentially have a significant effect on the Company’s results of operations, financial condition and liquidity, but also as it may affect the discount rate used to determine retirement benefit liabilities and minimum contributions, the market value of retirement benefit plans’ assets, borrowing costs and the Utilities’ allowed rates of return.
The Utilities’ commodity price risk is substantially mitigated so long as they have their current ECRCs in their rate schedules, but have limited exposure through the fuel cost risk-sharing mechanism, which apportions 2% of the fuel cost risk to the utilities (and 98% to ratepayers) and has a maximum exposure (or benefit) of $3.7 million.
The Utilities’ commodity price risk is substantially mitigated so long as they have their current ECRCs in their rate schedules, but have limited exposure through the fuel cost risk-sharing mechanism, which apportions 2% of the fuel cost risk to the utilities 63 (and 98% to ratepayers) and has a maximum exposure (or benefit) of $3.7 million.
Other than these exposures, management believes its exposure to “other than bank” interest rate risk is not material. However, continued restricted access to capital markets and other sources of debt and equity financings for an extended period of time may adversely impact the Company’s financial condition, liquidity, cash flows and results of operations.
Other than these exposures, management believes its exposure to interest rate risk is not material. However, continued restricted access to capital markets and other sources of debt and equity financings for an extended period of time may adversely impact the Company’s financial condition, liquidity, cash flows and results of operations.
As of December 31, 2023, the Company was exposed to “other than bank” interest rate risk because of its restricted access to capital markets and other sources of debt and equity financings, including the impact of interest rates on the revolving credit facility draws, the impact of interest rates on the discount rate and the market value of plan assets used to determine retirement benefits expenses and obligations (see “Pension and other postretirement benefits obligations” in HEI’s MD&A and “Retirement benefits” in Notes 1 and 11 of the Consolidated Financial Statements) and the possible effect of interest rates on the electric utilities’ allowed rates of return.
As of December 31, 2024, the Company was exposed to interest rate risk because of its restricted access to capital markets and other sources of debt and equity financings, including the impact of interest rates on the revolving credit facility draws, the impact of interest rates on the discount rate and the market value of plan assets used to determine retirement benefits expenses and obligations (see “Pension and other postretirement benefits obligations” in HEI’s MD&A and “Retirement benefits” in Notes 1 and 11 of the Consolidated Financial Statements) and the possible effect of interest rates on the electric utilities’ allowed rates of return.
The Company’s long-term debt, in the form of borrowings of proceeds of revenue bonds, privately-placed senior notes and bank term loans, is predominately at fixed rates (see Note 17 of the Consolidated Financial Statements for the fair value of long-term debt, net-other than bank). 83
The Company’s long-term debt, in the form of borrowings of proceeds of revenue bonds, privately-placed senior notes and bank term loans, is predominately at fixed rates (see Note 17 of the Consolidated Financial Statements for the fair value of long-term debt, net). 64
Other than bank interest rate risk The Company’s general policy is to manage “other than bank” interest rate risk through use of a combination of short-term debt, long-term debt and preferred securities.
Interest rate risk can be defined as the exposure of the Company’s earnings to adverse movements in interest rates. Interest rate risk The Company’s general policy is to manage interest rate risk through use of a combination of short-term debt, long-term debt and preferred securities.
The Utilities are exposed to some commodity price risk primarily related to their fuel supply and IPP contracts.
The Company believes the electric utility and the “All Other” segment’s exposures to these two risks were not material as of December 31, 2024. The Utilities are exposed to some commodity price risk primarily related to their fuel supply and IPP contracts.
The Utilities currently have no hedges against its commodity price risk.
The Utilities currently have no hedges against its commodity price risk. The Company currently has no direct exposure to market risk from trading activities nor foreign currency exchange rate risk.
Removed
The Company believes the electric utility and the “other” segment’s exposures to these two risks were not material as of December 31, 2023. Credit risk for ASB is the risk that borrowers or issuers of securities will not be able to repay their obligations to the Bank.
Removed
Credit risk associated with ASB’s lending portfolios is controlled through its underwriting standards, loan rating of commercial and commercial real estate loans, on-going monitoring by loan officers, credit review and quality control functions in these lending areas and adequate allowance for credit losses.
Removed
Credit risk associated with the securities portfolio is mitigated through investment portfolio limits, experienced staff working with analytical tools, monthly fair value analysis and on-going monitoring and reporting such as investment watch reports and loss sensitivity analysis. See “Allowance for credit losses” in Item 7 above and in Note 5 of the Consolidated Financial Statements.
Removed
Liquidity risk for ASB is the risk that the Bank will not meet its obligations when they become due. Liquidity risk is mitigated by ASB’s asset/liability management process, on-going analytical analysis, monitoring and reporting information such as weekly cash-flow analyses and maintenance of liquidity contingency plans.
Removed
Interest rate risk can be defined as the exposure of the Company’s earnings to adverse movements in interest rates. Bank interest rate risk The Company’s success is dependent, in part, upon ASB’s ability to manage interest rate risk. ASB’s interest-rate risk profile is strongly influenced by its primary business of making fixed-rate residential mortgage loans and taking in retail deposits.
Removed
Large mismatches in the amounts or timing between the maturity or repricing of interest sensitive assets or liabilities could adversely affect ASB’s earnings and the market value of its interest-sensitive assets and liabilities in the event of significant changes in the level of interest rates.
Removed
Many other factors also affect ASB’s exposure to changes in interest rates, such as general economic and financial conditions, customer preferences and competition for loans or deposits.
Removed
ASB’s Asset/Liability Management Committee (ALCO), whose voting members are officers and employees of ASB, is responsible for managing interest rate risk and carrying out the overall asset/liability management objectives and activities of ASB as approved by the ASB Board of Directors. ALCO establishes policies under which management monitors and coordinates ASB’s assets and liabilities.
Removed
See Note 5 of the Consolidated Financial Statements for a discussion of the use of rate lock commitments on loans held for sale and forward sale contracts to manage some interest rate risk associated with ASB’s residential loan sale program.
Removed
Management of ASB measures interest-rate risk using simulation analysis with an emphasis on measuring changes in net interest income (NII) and the market value of interest-sensitive assets and liabilities in different interest-rate environments. The simulation analysis is performed using a dedicated asset/liability management software system enhanced with a mortgage prepayment model and a collateralized mortgage obligation database.
Removed
The simulation software is capable of generating scenario-specific cash flows for all instruments using the specified contractual information for each instrument and product specific prepayment assumptions for mortgage loans and mortgage-backed securities. NII sensitivity analysis measures the change in ASB’s twelve-month, pretax NII in alternate interest rate scenarios.
Removed
NII sensitivity is measured as the change in NII in the alternate interest-rate scenarios as a percentage of the base case NII. The base case interest-rate scenario is established using the current yield curve and assumes interest rates remain constant over the next twelve months.
Removed
The alternate scenarios are created by assuming “rate ramps” or gradual interest changes and accomplished by moving the yield curve in a parallel fashion, over the next twelve-month period, in increments of +/- 100 basis points. The simulation model forecasts scenario-specific principal and interest cash flows for the interest-bearing assets and liabilities, and the NII is calculated for each scenario.
Removed
Key balance sheet modeling assumptions used in the NII sensitivity analysis include: the size of the balance sheet remains relatively constant over the simulation horizon and maturing assets or liabilities are reinvested in similar instruments in order to maintain the current mix of the balance sheet.
Removed
In addition, assumptions are made about the prepayment behavior of mortgage-backed assets, future pricing spreads for new assets and liabilities and the speed and magnitude with which deposit rates change in response to changes in the overall level of interest rates.
Removed
Other NII sensitivity analysis may include scenarios such as yield curve twists or non-static balance sheet changes (such as changes to key balance sheet drivers). Consistent with OCC guidelines, the market value or economic capitalization of ASB is measured as economic value of equity (EVE).
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EVE represents the theoretical market value of ASB’s net worth and is defined as the present value of expected net cash flows from existing assets minus the present value of expected cash flows from existing liabilities plus the present value of expected net cash flows from existing off-balance sheet contracts.
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Key assumptions used in the calculation of ASB’s EVE include the prepayment behavior of loans and investments, the possible distribution of future interest rates, pricing spreads for assets and liabilities in the alternate scenarios and the rate and balance behavior of deposit accounts with indeterminate maturities. EVE is calculated in multiple scenarios.
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As with the NII simulation, the base case is represented by the current yield curve. Alternate scenarios are created by assuming immediate parallel shifts in the yield curve in increments of +/- 100 basis points (bp) up to + 300 bp.
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The change in EVE is measured as the change in EVE in a given rate scenario from the base case and expressed as a percentage.
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To gain further insight into the interest rate risk profile, additional analysis is periodically performed in alternate scenarios including rate shifts of greater magnitude and changes in key balance sheet drivers. 82 ASB’s interest-rate risk sensitivity measures as of December 31, 2023 and 2022 constitute “forward-looking statements” and were as follows: Change in NII (gradual change in interest rates) Change in EVE (instantaneous change in interest rates) Change in interest rates (basis points) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 +300 2.1 % (0.1) % 2.7 % 5.1 % +200 1.4 — 2.5 3.8 +100 0.7 — 1.7 2.1 -100 (1.0) (0.3) (2.3) (3.4) -200 (2.2) (0.9) (5.4) (7.8) -300 (3.5) (1.7) (10.3) (13.8) ASB’s NII risk profile was more asset sensitive as of December 31, 2023, compared to December 31, 2022, due to higher cash balances and additional floating-rate commercial loans.
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EVE sensitivity was lower as of December 31, 2023, compared to December 31, 2022, due to a shift in ASB’s liability mix as longer duration core deposits were replaced by rate-sensitive deposits and shorter-term wholesale funding.
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The computation of the prospective effects of hypothetical interest rate changes on the NII sensitivity and the percentage change in EVE is based on numerous assumptions, including relative levels of market interest rates, loan prepayments, balance changes and pricing strategies, and should not be relied upon as indications of actual results.
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To the extent market conditions and other factors vary from the assumptions used in the simulation analysis, actual results may differ materially from the simulation results.
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NII sensitivity analysis measures the change in ASB’s twelve-month, pretax NII in alternate interest rate scenarios, and is intended to help management identify potential exposures in ASB’s current balance sheet and formulate appropriate strategies for managing interest rate risk. The simulation does not contemplate any actions that ASB management might undertake in response to changes in interest rates.
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Further, the changes in NII vary in the twelve-month simulation period and are not necessarily evenly distributed over the period. These analyses are for analytical purposes only and do not represent management’s views of future market movements, the level of future earnings, or the timing of any changes in earnings within the twelve-month analysis horizon.
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The actual impact of changes in interest rates on NII will depend on the magnitude and speed with which rates change, actual changes in ASB’s balance sheet, and management’s responses to the changes in interest rates.

Other HE 10-K year-over-year comparisons