Hawaiian Electric raises concerns over uncertainties in wildfire regulation funding

By Sourasis Bose

(Reuters) – Utility firm Hawaiian Electric raised doubts about its going concern on Friday after it disclosed it does not have a financing plan in place for the $1.99 billion Maui deal it reached earlier this month .

The company and parent company Hawaiian Electric Industries (HEI) said they are working closely with financial advisers to develop a financing plan for their part of the settlement and may finance it through a combination of debt, equity, equity actions or other possible options.

HEI had about $124 million in cash on hand after the end of the second quarter.

However, the company does not plan to raise electricity rates to pay for the settlement, HEI CEO Scott Seu said in a conference call after the earnings.

Hawaii’s largest utility company has agreed to pay a large portion of more than $4 billion in legal settlements to compensate victims of last year’s deadly Maui wildfires that killed more than 100 people.

However, the company and the other defendants did not admit any liability under the settlement terms, which were agreed to after four months of mediation.

The proposed payments are expected to start from mid-2025 after judicial review and approval, the company said earlier.

Hawaiian said Friday it suffered a net loss of $1.30 billion, or $11.74 per share, for the second quarter, largely due to wildfire-related charges of $1.71 billion during the quarter .

The company is also pursuing strategic options for its American Savings Bank unit and took an $82.2 million goodwill impairment charge related to that effort in the second quarter.

The company will also suspend dividend payments to the parent company due to the going concern assessment.

(Reporting by Sourasis Bose in Bengaluru; Editing by Anil D’Silva)