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Electric utility segment | 6 Months Ended
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Jun. 30, 2018
Electric utility subsidiary [Abstract] |
Electric utility segment | Electric utility segment Revenue taxes. The Utilities’ revenues include amounts for recovery of various Hawaii state revenue taxes. Revenue taxes are generally recorded as an expense in the period the related revenues are recognized. For the second quarters of 2018 and 2017 and the six months ended June 30, 2018 and 2017, the Utilities’ revenues include recovery of revenue taxes of approximately $54 million, $50 million, $105 million and $96 million, respectively, which amounts are included in “Taxes, other than income taxes” expense, in the unaudited condensed consolidated statements of income. However, the Utilities pay revenue taxes to the taxing authorities in the period based on (1) the prior year’s billed revenues (in the case of public service company taxes and PUC fees) in the current year or (2) the current year’s cash collections from electric sales (in the case of franchise taxes) after year-end. Unconsolidated variable interest entities. HECO Capital Trust III. Trust III has at all times been an unconsolidated subsidiary of Hawaiian Electric. Since Hawaiian Electric, as the holder of 100% of the trust common securities, does not have the power to direct the activities that most significantly impact the economic performance of Trust III nor the obligation to absorb its expected losses, if any, that could potentially be significant to Trust III, Hawaiian Electric is not the primary beneficiary and does not consolidate Trust III in accordance with accounting rules on the consolidation of VIEs. Trust III’s balance sheets as of June 30, 2018 and December 31, 2017 each consisted of $51.5 million of 2004 Debentures; $50.0 million of 2004 Trust Preferred Securities; and $1.5 million of trust common securities. Trust III’s income statements for the six months ended June 30, 2018 and 2017 consisted of $1.7 million of interest income received from the 2004 Debentures; $1.6 million of distributions to holders of the Trust Preferred Securities; and $50,000 of common dividends on the trust common securities to Hawaiian Electric. Power purchase agreements. As of June 30, 2018, the Utilities had five PPAs for firm capacity and other PPAs with independent power producers (IPPs) and Schedule Q providers (i.e., customers with cogeneration and/or power production facilities who buy power from or sell power to the Utilities), none of which is currently required to be consolidated as VIEs. Pursuant to the current accounting standards for VIEs, the Utilities are deemed to have a variable interest in Kalaeloa Partners, L.P. (Kalaeloa), AES Hawaii, Inc. (AES Hawaii) and the predecessor of Hamakua Energy by reason of the provisions of the PPA that the Utilities have with the three IPPs. However, management has concluded that the Utilities are not the primary beneficiary of Kalaeloa, AES Hawaii and the predecessor of Hamakua Energy because the Utilities do not have the power to direct the activities that most significantly impact the three IPPs’ economic performance nor the obligation to absorb their expected losses, if any, that could potentially be significant to the IPPs. Thus, the Utilities have not consolidated Kalaeloa, AES Hawaii and the predecessor of Hamakua Energy in its unaudited condensed consolidated financial statements. In November 2017, HEI acquired the Hamakua project through Hamakua Energy, an indirect subsidiary of Pacific Current, and has consolidated it in HEI’s unaudited condensed consolidated financial statements since the acquisition. For the other PPAs with IPPs, the Utilities have concluded that the consolidation of the IPPs was not required because either the Utilities do not have variable interests in the IPPs due to the absence of an obligation in the PPAs for the Utilities to absorb any variability of the IPPs, or the IPPs were considered a “governmental organization,” and thus excluded from the scope of accounting standards for VIEs. Two IPPs of as-available energy declined to provide the information necessary for Utilities to determine the applicability of accounting standards for VIEs. If information is ultimately received from the IPPs, a possible outcome of future analyses of such information is the consolidation of one or both of such IPPs in the unaudited condensed consolidated financial statements. The consolidation of any significant IPP could have a material effect on the unaudited condensed consolidated financial statements, including the recognition of a significant amount of assets and liabilities and, if such a consolidated IPP were operating at a loss and had insufficient equity, the potential recognition of such losses. If the Utilities determine they are required to consolidate the financial statements of such an IPP and the consolidation has a material effect, the Utilities would retrospectively apply accounting standards for VIEs to the IPP. Commitments and contingencies. Contingencies. The Utilities are subject in the normal course of business to pending and threatened legal proceedings. Management does not anticipate that the aggregate ultimate liability arising out of these pending or threatened legal proceedings will be material to its financial position. However, the Utilities cannot rule out the possibility that such outcomes could have a material effect on the results of operations or liquidity for a particular reporting period in the future. Power purchase agreements. Purchases from all IPPs were as follows:
|  | Three months ended June 30 |  | Six months ended June 30
(in millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017
Kalaeloa |  | $ | 52 |  |  | $ | 48 |  |  | $ | 92 |  |  | $ | 88 |
AES Hawaii |  | 32 |  |  | 35 |  |  | 69 |  |  | 64 |
HPOWER |  | 17 |  |  | 16 |  |  | 32 |  |  | 33 |
Puna Geothermal Venture |  | 4 |  |  | 10 |  |  | 15 |  |  | 18 |
Hamakua Energy |  | 15 |  |  | 10 |  |  | 22 |  |  | 17 |
Other IPPs 1 |  | 41 |  |  | 34 |  |  | 71 |  |  | 60 |
Total IPPs |  | $ | 161 |  |  | $ | 153 |  |  | $ | 301 |  |  | $ | 280 |
1 | Includes wind power, solar power, feed-in tariff projects and other PPAs.
Kalaeloa Partners, L.P. Under a 1988 PPA, as amended, Hawaiian Electric is committed to purchase 208 MW of firm capacity from Kalaeloa. Hawaiian Electric and Kalaeloa are currently in negotiations to address the PPA term that ended on May 23, 2016. The PPA automatically extends on a month-to-month basis as long as the parties are still negotiating in good faith, but would end 60 days after either party notifies the other in writing that negotiations have terminated. Hawaiian Electric and Kalaeloa have agreed that neither party will terminate the PPA prior to October 31, 2018. This agreement contemplates continued negotiations between the parties and accounts for time needed for PUC approval of a negotiated resolution. AES Hawaii, Inc. Under a PPA entered into in March 1988, as amended (through Amendment No. 2) for a period of 30 years beginning September 1992, Hawaiian Electric agreed to purchase 180 MW of firm capacity from AES Hawaii. In August 2012, Hawaiian Electric filed an application with the PUC seeking an exemption from the PUC’s Competitive Bidding Framework to negotiate an amendment to the PPA to purchase 186 MW of firm capacity, and amend the energy pricing formula in the PPA. The PUC approved the exemption in April 2013, but Hawaiian Electric and AES Hawaii were not able to reach agreement on the amendment. In June 2015, AES Hawaii filed an arbitration demand regarding a dispute about whether Hawaiian Electric was obligated to buy up to 9 MW of additional capacity based on a 1992 letter. Hawaiian Electric responded to the arbitration demand and in October 2015, AES Hawaii and Hawaiian Electric entered into a settlement agreement to stay the arbitration proceeding. The settlement agreement included certain conditions precedent which, if satisfied, would have released the parties from the claims under the arbitration proceeding. Among the conditions precedent was the successful negotiation and PUC approval of an amendment to the existing PPA. In November 2015, Hawaiian Electric entered into Amendment No. 3 for which PUC approval was requested and subsequently denied in January 2017. Approval of Amendment No. 3 would have satisfied the final condition for effectiveness of the settlement agreement and resolved AES Hawaii's claims. Following the PUC's decision, the parties agreed to extend the stay of the arbitration proceeding, while settlement discussions continued. In February 2018, Hawaiian Electric reached agreement with AES Hawaii on Amendment No. 4, which was submitted to the PUC for approval in April 2018. Amendment No. 4, among other things, provides (1) that AES Hawaii will make certain operational commitments to improve reliability, (2) for inclusion of AES Hawaii in the Utilities’ greenhouse gas partnership, (3) provisions to allow AES Hawaii to reduce coal combustion by modifying its fuel consumption to include biomass upon approval by Hawaiian Electric, and (4) for release of an option agreement by Hawaiian Electric for land owned by AES Hawaii. Amendment No. 4 includes a stay of the arbitration proceeding pending review by the PUC. If approved by the PUC, Amendment No. 4 will resolve AES Hawaii’s claims. In June 2018, the PUC issued an order suspending the Amendment No. 4 docket pending a DOH decision on AES’ request for approval of its Emission Reduction Plan and partnership with Hawaiian Electric. Hu Honua Bioenergy, LLC. In May 2012, Hawaii Electric Light signed a PPA, which the PUC approved in December 2013, with Hu Honua Bioenergy, LLC (Hu Honua) for 21.5 MW of renewable, dispatchable firm capacity fueled by locally grown biomass from a facility on the island of Hawaii. Under the terms of the PPA, the Hu Honua plant was scheduled to be in service in 2016. However, Hu Honua encountered construction delays, failed to meet its obligations under the PPA and failed to provide adequate assurances that it could perform or had the financial means to perform. Hawaii Electric Light terminated the PPA on March 1, 2016. On November 30, 2016, Hu Honua filed a civil complaint in the United States District Court for the District of Hawaii that included claims purportedly arising out of the termination of Hu Honua’s PPA. On May 26, 2017, Hawaii Electric Light and Hu Honua entered into a settlement agreement that will settle all claims related to the termination of the original PPA. The settlement agreement was contingent on the PUC’s approval of an amended and restated PPA between Hawaii Electric Light and Hu Honua dated May 5, 2017. In July 2017, the PUC approved the amended and restated PPA. On August 25, 2017, the PUC’s approval was appealed by a third party. The appeal is still pending. Hu Honua is expected to be on-line by the end of 2018. Utility projects. Many public utility projects require PUC approval and various permits from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits can result in significantly increased project costs or even cancellation of projects. In the event a project does not proceed, or if it becomes probable the PUC will disallow cost recovery for all or part of a project, or if PUC-imposed caps on project costs are expected to be exceeded, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income. Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) implementation project. On August 11, 2016, the PUC approved the Utilities’ request to commence the ERP/EAM implementation project, subject to certain conditions, including a $77.6 million cap on cost recovery as well as a requirement that the Utilities pass onto customers a minimum of $244 million in benefits associated with the system over its 12-year service life. The D&O approved the deferral of certain project costs and allowed the accrual of allowance for funds used during construction (AFUDC), but limited the AFUDC rate to 1.75%. Pursuant to the D&O and subsequent orders, in September 2017, the Utilities filed a bottom-up, low-level analysis of the project’s benefits and performance metrics and tracking mechanism for passing the project’s benefits on to customers. On November 30, 2017, the PUC issued an order, which, among other things, directed the Utilities to file a position statement regarding the reasonableness of the project, a reworked low-level benefits analysis and initial details of the metrics that will be used to demonstrate the achievement of benefits. On December 18, 2017, the Utilities filed their response to the order, re-affirming the need for the project and guaranteed minimum level of $244 million in benefits to customers. The response further noted that in Hawaiian Electric’s 2017 test year rate case, Hawaiian Electric and the Consumer Advocate have agreed in principle to a “rate case-centric” approach for a benefits delivery mechanism pending PUC approval. On January 4, 2018, the Consumer Advocate filed a statement of position (SOP) on the Utilities’ response, stating that it does not recommend revocation of the PUC’s prior conditional approval of the project or reductions to the previously ordered cost caps, and continues to recommend the use of a rate case-centric approach to facilitate pass through of the system’s benefits to customers. The Utilities filed a response to the Consumer Advocate’s SOP on January 11, 2018, noting among other things that the Consumer Advocate’s SOP is in general alignment with the Utilities’ position on the project. Monthly reports on the status and costs of the project continue to be filed. The parties have reached substantive agreement regarding the approach for delivering system benefits to customers, but are still in the process of developing an annual enterprise systems benefits report. The ERP/EAM Implementation Project is expected to go live in October 2018. As of June 30, 2018, the Project incurred costs of $61.2 million of which $10.6 million were charged to other operation and maintenance (O&M) expense, $2.6 million relate to capital costs and $48.0 million are deferred costs. Schofield Generating Station Project. In August 2012, the PUC approved a waiver from the competitive bidding framework to allow Hawaiian Electric to negotiate with the U.S. Army for the construction of a 50 MW utility owned and operated firm, renewable and dispatchable generation facility at Schofield Barracks. In September 2015, the PUC approved Hawaiian Electric’s application to expend $167 million for the project. In approving the project, the PUC placed a cost cap of $167 million for the project, stated 90% of the cap is allowed for cost recovery through cost recovery mechanisms other than base rates, and stated the $167 million cap will be adjusted downward due to any reduction in the cost of the engine contract due to a reduction in the foreign exchange rate. Hawaiian Electric was required to take all necessary steps to lock in the lowest possible exchange rate. On January 5, 2016, Hawaiian Electric executed window forward contracts, which lowered the cost of the engine contract by $9.7 million, resulting in a revised project cost cap of $157.3 million. Hawaiian Electric received all of the major permits for the project, including a 35-year site lease from the U.S. Army. Construction of the facility began in October 2016, and the facility was placed in service on June 7, 2018. A request to recover the capital costs of the project through the newly-established Major Project Interim Recovery (MPIR) adjustment mechanism was approved by the PUC on June 27, 2018. (See “Decoupling” section below for MPIR guidelines and capital cost recovery discussion.) A decision on recovery of related operation and maintenance expense (approximately $1.8 million annualized) during the interim period (i.e., between the in-service date and the next rate case) is pending. Project costs incurred as of June 30, 2018 amounted to $141.5 million. West Loch PV Project. In July 2016, Hawaiian Electric announced plans to build, own and operate a utility-owned, grid-tied 20-MW (ac) solar facility on property owned by the Department of the Navy. In June 2017, the PUC approved the expenditure of funds for the project, including Hawaiian Electric’s proposed project cost cap of $67 million and a performance guarantee to provide energy at 9.56 cents/KWH or less to the system. In approving the project, the PUC agreed that the project is eligible for recovery of costs offset by related net benefits under the newly-established MPIR adjustment mechanism. (See “Decoupling” section below for MPIR guidelines and capital cost recovery discussion.) Hawaiian Electric provided supplemental materials in August 2017, as requested by the PUC, to support meeting the MPIR guidelines, accompanied by system performance guarantee and cost savings sharing mechanisms. A decision on these matters is pending. Hawaiian Electric executed a fixed-price Engineering, Procurement, and Construction (EPC) contract for the project on December 6, 2017. The EPC contract includes the cost of the solar panels for the project, which is not subject to modification due to any tariffs that may be imposed under the current photovoltaic (PV) cell and module import tariffs. Construction of the facility began in the second quarter of 2018, and the facility is expected to be placed in service in the second quarter of 2019. Project costs incurred as of June 30, 2018 amounted to $9.1 million. Hawaiian Telcom. The Utilities each have separate agreements for the joint ownership and maintenance of utility poles with Hawaiian Telcom, Inc. (Hawaiian Telcom), the respective county or counties in which each utility operates and other third parties, such as the State of Hawaii. The agreements set forth various circumstances requiring pole removal/installation/replacement and the sharing of costs among the joint pole owners. The agreements allow for the cost of work done by one joint pole owner to be shared by the other joint pole owners based on the apportionment of costs in the agreements. The Utilities have maintained, replaced and installed the majority of the jointly-owned poles in each of the respective service territories, and have billed the other joint pole owners for their respective share of the costs. The counties and the State have been reimbursing the Utilities for their share of the costs. However, Hawaiian Telcom has been delinquent in reimbursing the Utilities for its share of the costs. Hawaiian Electric initiated a dispute resolution process to collect the unpaid amounts from Hawaiian Telcom as specified by the joint pole agreement. This dispute resolution process is stayed pending PUC approval of a settlement agreement further described below. For Hawaii Electric Light, the agreement does not specify an alternative dispute resolution process, and thus a complaint for payment was filed with the Circuit Court in June 2016. This complaint is stayed pending PUC approval of a settlement agreement further described below. Maui Electric has not yet commenced any legal action to recover the delinquent amounts. On April 4, 2018, the Utilities and Hawaiian Telcom entered into several agreements, subject to PUC approval, for the purchase by the Utilities of Hawaiian Telcom’s interest in all the joint poles, and licensing and operating agreement between the Utilities and Hawaiian Telcom subsequent to the transfer of the joint pole interest to the Utilities. Consideration of approximately $48 million to be paid for Hawaiian Telcom’s interest in the poles will be offset in part by the receivables owed by Hawaiian Telcom to the Utilities. As of June 30, 2018, receivables under the joint pole agreement, net of a reserve for a portion of the interest, from Hawaiian Telcom are $17.4 million ($11.6 million at Hawaiian Electric, $4.7 million at Hawaii Electric Light, and $1.1 million at Maui Electric). Although PUC approval has not yet been received, management expects the net receivable amounts will be realized. The remaining consideration for acquiring Hawaiian Telcom’s interest in the joint poles is to be settled through the set-off of current and future license fees due from Hawaiian Telcom, after which Hawaiian Telcom would make cash payments for license fees under the agreement. Environmental regulation. The Utilities are subject to environmental laws and regulations that regulate the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous waste and toxic substances. Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, periodically encounter petroleum or other chemical releases associated with current or previous operations. The Utilities report and take action on these releases when and as required by applicable law and regulations. The Utilities believe the costs of responding to such releases identified to date will not have a material effect, individually or in the aggregate, on Hawaiian Electric’s consolidated results of operations, financial condition or liquidity. Former Molokai Electric Company generation site. In 1989, Maui Electric acquired by merger Molokai Electric Company. Molokai Electric Company had sold its former generation site (Site) in 1983, but continued to operate at the Site under a lease until 1985. The Environmental Protection Agency (EPA) has since identified environmental impacts in the subsurface soil at the Site. Although Maui Electric never operated at the Site or owned the Site property, after discussions with the EPA and the Hawaii Department of Health (DOH), Maui Electric agreed to undertake additional investigations at the Site and an adjacent parcel that Molokai Electric Company had used for equipment storage (the Adjacent Parcel) to determine the extent of environmental contamination. A 2011 assessment by a Maui Electric contractor of the Adjacent Parcel identified environmental impacts, including elevated polychlorinated biphenyls (PCBs) in the subsurface soils. In cooperation with the DOH and EPA, Maui Electric is further investigating the Site and the Adjacent Parcel to determine the extent of impacts of PCBs, residual fuel oils and other subsurface contaminants. Maui Electric has a reserve balance of $2.7 million as of June 30, 2018, representing the probable and reasonably estimated cost to complete the additional investigation and estimated cleanup costs at the Site and the Adjacent Parcel; however, final costs of remediation will depend on the results of continued investigation. Pearl Harbor sediment study. In July 2014, the U.S. Navy notified Hawaiian Electric of the Navy’s determination that Hawaiian Electric is a Potentially Responsible Party responsible for cleanup of PCB contamination in sediment in the area offshore of the Waiau Power Plant as part of the Pearl Harbor Superfund Site. The Navy has also requested that Hawaiian Electric reimburse the costs incurred by the Navy to investigate the area. The Navy has completed a remedial investigation and a feasibility study (FS) for the remediation of contaminated sediment at several locations in Pearl Harbor and issued its Final FS Report on June 29, 2015. On February 2, 2016, the Navy released the Proposed Plan for Pearl Harbor Sediment Remediation and Hawaiian Electric submitted comments. The extent of the contamination, the appropriate remedial measures to address it and Hawaiian Electric’s potential responsibility for any associated costs have not been determined. On March 23, 2015, Hawaiian Electric received a letter from the EPA requesting that Hawaiian Electric submit a work plan to assess potential sources and extent of PCB contamination onshore at the Waiau Power Plant. Hawaiian Electric submitted a sampling and analysis (SAP) work plan to the EPA and the DOH. Onshore sampling at the Waiau Power Plant was completed in two phases in December 2015 and June 2016. Appropriate remedial measures are being developed to address the extent of the onshore contamination, and any associated costs have not yet been determined. As of June 30, 2018, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $4.7 million. The reserve represents the probable and reasonably estimable cost to complete the onshore and offshore investigations and the remediation of PCB contamination in the offshore sediment. The final remediation costs will depend on the assessment of potential source control requirements, as well as the further investigation of contaminated sediment offshore from the Waiau Power Plant by the Navy. Regulatory proceedings Decoupling. Decoupling is a regulatory model that is intended to facilitate meeting the State of Hawaii’s goals to transition to a clean energy economy and achieve an aggressive renewable portfolio standard. The decoupling model, implemented in Hawaii in 2011, delinks revenues from sales and includes annual rate adjustments. The decoupling mechanism has the following major components: (1) a sales decoupling component via a revenue balancing account (RBA), (2) a revenue escalation component via a rate adjustment mechanism (RAM), (3) major project interim recovery component (MPIR), (4) performance incentive mechanisms (PIMs), and (5) an earnings sharing mechanism, which would provide for a reduction of revenues between rate cases in the event the utility exceeds the return on average common equity (ROACE) allowed in its most recent rate case. Under the decoupling mechanism, triennial general rate cases are required. Rate adjustment mechanism. On March 31, 2015, the PUC issued an Order (the 2015 Decoupling Order) that modified the RAM portion of the decoupling mechanism to be capped at the lesser of the RAM revenue adjustment as then determined (based on an inflationary adjustment for certain O&M expenses and return on investment for certain rate base changes) and a RAM revenue adjustment calculated based on the cumulative annual compounded increase in Gross Domestic Product Price Index applied to annualized target revenues (the RAM Cap). The 2015 Decoupling Order provided a specific basis for calculating the target revenues until the next rate case, at which time the target revenues will reset upon the issuance of an interim or final D&O in a rate case. The RAM Cap impacted the Utilities' recovery of capital investments as follows:
• | Hawaiian Electric's RAM revenues were limited to the RAM Cap in 2017 and 2018.
• | Maui Electric's RAM revenues in 2017 and 2018 were below the RAM Cap.
• | Hawaii Electric Light’s RAM revenues in 2017 and 2018 were below the RAM Cap.
For the RAM years 2014 - 2016, Hawaiian Electric was allowed to record RAM revenue beginning on January 1 and to bill such amounts from June 1 of the applicable year through May 31 of the following year. Subsequent to 2016, Hawaiian Electric reverted to the RAM provisions initially approved in March 2011—i.e., RAM is both accrued and billed from June 1 of each year through May 31 of the following year. Major project interim recovery. On April 27, 2017, the PUC issued an Order that provided guidelines for interim recovery of revenues to support major projects placed in service between general rate cases. Projects eligible for recovery through the MPIR adjustment mechanism are major projects (i.e., projects with capital expenditures net of customer contributions in excess of $2.5 million), including, but not restricted to, renewable energy, energy efficiency, utility scale generation, grid modernization and smaller qualifying projects grouped into programs for review. The MPIR adjustment mechanism provides the opportunity to recover revenues for approved costs of eligible projects placed in service between general rate cases wherein cost recovery is limited by a revenue cap and is not provided by other effective recovery mechanisms. The request for PUC approval must include a business case and all costs that are allowed to be recovered through the MPIR adjustment mechanism must be offset by any related benefits. The guidelines provide for accrual of revenues approved for recovery upon in-service date to be collected from customers through the annual RBA tariff. Capital projects that are not recovered through the MPIR would be included in the RAM and be subject to the RAM Cap, until the next rate case when the Utilities would request recovery in base rates. The PUC has approved recovery of a capped portion of the Schofield generating station through the MPIR mechanism. Hawaiian Electric has filed an MPIR for Schofield of $6.6 million in annual revenues, which would adjust revenues in July through December 2018 and be collected in customer bills beginning in June 2019. Performance incentive mechanisms. The PUC has ordered the following performance incentive mechanisms (PIM), which will be reflected in the annual decoupling filing beginning in 2019. The PIM tariff requires the performance targets, deadbands and the amount of maximum financial incentives used to determine the PIM financial incentive levels for each of the PIMs to be re-determined upon issuance of an interim or final order in a general rate case for each utility.
• | Service Quality performance incentives are measured on a calendar-year basis beginning in 2018.
• | Service Reliability Performance measured by System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical 10-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 20 basis points applied to the common equity share of each respective utility’s rate base (or maximum penalties of approximately $6.2 million - pending adjustment to $6.7 million as a result of the final orders for the Hawaiian Electric and Hawaii Electric Light rate cases - for both indices in total for the three utilities).
• | Call Center Performance measured by the percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent 8 quarters with a deadband of 3% above and below the target. The maximum penalty or incentive is 8 basis points applied to the common equity share of each respective utility’s rate base (or maximum penalties or incentives of approximately $1.2 million - pending adjustment to $1.3 million as a result of the final orders for the Hawaiian Electric and Hawaii Electric Light rate cases - in total for the three utilities).
• | Demand Response measured by the demand response resources acquired in 2018. The award is equal to 5% of the total of the annual maintenance cost for cost-effective demand response capability contracted with aggregators by December 31, 2018. The maximum award is $0.5 million for the three utilities in total and there are no penalties. This incentive applies to one-time performance in 2018 only.
• | Procurement of low-cost variable renewable resources through the request for proposal process in 2018 measured by comparison of the procurement price to target prices. The incentive is 20% of savings determined by comparing procured price to a target of 11.5 cents per kilowatt-hour for renewable projects with storage capability and 9.5 cents per kilowatt-hour for energy-only renewable projects. This incentive has a cap of $3.5 million for the three utilities in total and has no penalty.
Annual decoupling filings. The net annual incremental amounts to be collected (refunded) from June 1, 2018 through May 31, 2019 are as follows:
(in millions) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric
2018 Annual incremental RAM adjusted revenues |  | $ | 13.8 |  |  | $ | 3.4 |  |  | $ | 2.0 |
Annual change in accrued RBA balance as of December 31, 2017 (and associated revenue taxes) |  | $ | 6.6 |  |  | $ | 0.7 |  |  | $ | 3.2 |
2017 Tax Act Adjustment |  | $ | — |  |  | $ | — |  |  | $ | (2.8 | )
Net annual incremental amount to be collected under the tariffs |  | $ | 20.4 |  |  | $ | 4.1 |  |  | $ | 2.4 |
* Maui Electric incorporated a $2.8 million adjustment into its 2018 annual decoupling filing to incorporate the impact of the lower corporate income tax rate and the exclusion of the domestic production activities deduction, as a result of the 2017 Tax Cuts and Jobs Act (the Tax Act). Tax adjustments for Hawaiian Electric and Hawaii Electric Light are described in the discussion below of their respective on-going rate cases. Performance-based regulation proceeding. On April 18, 2018, the PUC issued an order, instituting a proceeding to investigate performance-based regulation (PBR). The PUC intends to provide a forum to collaboratively develop modifications or new components to better align utility and customer interests. The PUC stated that PBR seeks to utilize both revenue adjustment mechanisms and performance mechanisms to more strongly align utilities’ incentives with customer interests. The order stated that, in general, the PUC is interested in ratemaking elements and/or mechanisms that result in:
• | Greater cost control and reduced rate volatility;
• | Efficient investment and allocation of resources regardless of classification as capital or operating expense;
• | Fair distribution of risks between utilities and customers; and
• | Fulfillment of State policy goals.
The PUC envisions that the PBR components through this investigation are those that: (a) target areas of current utility performance that may benefit from improvement; and (b) reward the utility for achieving specific outcomes that are in the public interest and/or penalize the utility for not achieving said outcomes. To that end, through this investigation, the PUC intends to: (1) identify specific areas of utility performance that should be improved; (2) determine appropriate metrics for measuring successful outcomes in those areas; and (3) establish reasonable financial rewards and/or penalties that are sufficient to incent the utility to achieve those outcomes. The order indicated that the proceeding would have two phases. Phase 1 would examine the current regulatory framework and identify those areas of utility performance that are deserving of further focus for PBR framework development and/or PIMs in Phase 2. A subsequent order established a procedural process and schedule for Phase I, which the PUC anticipated would take approximately nine months. On July 10, 2018, the PUC submitted a Staff Report to provide the Parties with an initial set of proposed regulatory goals and outcomes to respond to, or expand upon, and to offer alternatives. Specifically, the Staff Report: (a) provides an overview of Phase 1 of the proceeding; (b) discusses the terms and concepts that form the PBR process framework; and (c) proposes three overarching goals (enhance customer experience, improve utility performance, advance societal outcomes) along with a preliminary set of associated outcomes to help guide PBR evaluation and development. On July 23 and 24, 2018, the PUC held a technical workshop on goals and outcomes, attended by the parties in the proceeding. Performance-based ratemaking legislation. On April 24, 2018, Senate Bill No. 2939 SD2 was signed into law, which establishes performance metrics that the PUC shall consider while establishing performance incentives and penalty mechanisms under a performance-based ratemaking model. The law requires that the PUC establish these performance-based ratemaking mechanisms on or before January 1, 2020. The PUC opened a proceeding on April 18, 2018. See “Performance-based regulation proceeding” above. Most recent rate proceedings. Hawaiian Electric consolidated 2014 and 2017 test year rate cases. In June 2014, Hawaiian Electric submitted its 2014 test year rate case filing, stating that it intended to forgo the opportunity to seek a general rate increase in base rates. In December 2016, Hawaiian Electric filed an application with the PUC for a general rate increase, and the PUC issued an order consolidating the Hawaiian Electric filings for the 2014 and 2017 test year rate cases. On February 16, 2018, Hawaiian Electric implemented an interim increase of $36.0 million. On April 13, 2018, Hawaiian Electric implemented an additional interim rate adjustment to adjust rates for the impact of the Tax Act. On June 22, 2018, the PUC issued its Final D&O, approving final rate relief of a $37.7 million increase before the Tax Act impact reduction of $38.3 million, based on an ROACE of 9.5% and an overall rate of return of 7.57%. The PUC indicated that the ECRC mechanism shall reflect a 98/2% risk-sharing split between ratepayers and Hawaiian Electric, with an annual maximum exposure cap of $2.5 million. Maui Electric consolidated 2015 and 2018 test year rate cases. In December 2014, Maui Electric submitted its 2015 test year rate case filing, proposing no change to its base rates. In August 2017, the PUC issued an order consolidating the Maui Electric filings for the 2015 and 2018 test year rate cases. In October 2017, Maui Electric filed its 2018 test year rate case application with the PUC for a general rate increase of $30.1 million over revenues at current effective rates (for a 9.3% increase in revenues) based on a 2018 test year and an 8.05% rate of return (which incorporates a ROACE of 10.6% and a capital structure that includes a 56.9% common equity capitalization) on a $473 million rate base. Subsequently, in accordance with a PUC order, on February 26, 2018, Maui Electric filed revised schedules to reflect the following adjustments resulting from the Tax Act in its 2018 test year revenue requirement: (1) $8.1 million income tax expense reduction; (2) $0.5 million annual amortization credit for excess accumulated deferred income tax balances (ADIT); and (3) $7.1 million increase in rate base resulting from the decrease in ADIT for bonus depreciation loss and CIAC taxability. Maui Electric and the Consumer Advocate filed a stipulated settlement letter and the Parties’ joint statement of probable entitlement on June 15, 2018 and July 6, 2018, respectively. The stipulated settlement resolved all issues between the parties, except for the narrow issue of whether the ROACE should be reduced from 9.75% by up to 25 basis points based solely on the impact of decoupling, considering current circumstances and relevant precedents. The parties agreed that the ROACE issue shall be addressed based on the information contained in the record without the need for an evidentiary hearing, and further agreed to the use of a 9.50% ROACE for the limited purpose of determining the revenue requirement for the interim order. The joint statement of probable entitlement reflects a general rate increase of $6.4 million over revenues at current effective rates (for a 1.95% increase in revenues) based on 7.43% rate of return (which incorporates a ROACE of 9.5% and a capital structure that includes a 57% common equity capitalization) on a $465 million rate base. The general rate increase would be $12.5 million over revenues at current effective rates with the depreciation rates approved in the depreciation proceeding. In the decision and order issued on July 30, 2018 in the depreciation proceeding, the PUC ordered that the effective date of the approved depreciation rates shall coincide with the effective date of interim or final rates in each of the Utilities’ subsequent general rate case proceedings, beginning with Maui Electric’s 2018 test year rate case. The PUC may consider the Parties’ joint statement of probable entitlement in issuing its interim order. The interim D&O is scheduled for August 13, 2018. Hawaii Electric Light 2016 test year rate case. In September 2016, Hawaii Electric Light filed an application with the PUC for a general rate increase. In August 2017, the PUC issued an order granting an interim rate increase of $9.9 million based on the Stipulated Settlement Letter of Hawaii Electric Light and the Consumer Advocate filed on July 11, 2017 and an ROACE of 9.5% and subject to refund with interest, if it exceeds amounts allowed in a final order. The interim rate increase was implemented on August 31, 2017. On May 1, 2018, Hawaii Electric Light implemented an interim rate reduction of $9.9 million which was primarily to incorporate the effects of the Tax Act. On June 29, 2018, the PUC issued its Final D&O, approving the rates implemented in the interim rate reduction. Tax Cuts and Jobs Act impact on utility rates. The Utilities began tracking the impact of the Tax Cuts and Jobs Act of 2017 (Tax Act) as of January 1, 2018. Each Utility accrued regulatory liabilities for estimated tax savings from January 1 to the date incorporated in rates. Hawaiian Electric’s rates for the 2017 test year reflected the Tax Act reductions effective April 13, 2018. Hawaii Electric Light’s rates for the 2016 test year reflect the Tax Act reductions effective May 1, 2018. Adjustments to Maui Electric’s current rates for the Tax Act are incorporated in the annual Revenue Balancing Account adjustment which became effective on June 1, 2018. See discussion in “Decoupling” section above. Condensed consolidating financial information. Hawaiian Electric is not required to provide separate financial statements or other disclosures concerning Hawaii Electric Light and Maui Electric to holders of the 2004 Debentures issued by Hawaii Electric Light and Maui Electric to Trust III since all of their voting capital stock is owned, and their obligations with respect to these securities have been fully and unconditionally guaranteed, on a subordinated basis, by Hawaiian Electric. Consolidating information is provided below for Hawaiian Electric and each of its subsidiaries for the periods ended and as of the dates indicated. Hawaiian Electric also unconditionally guarantees Hawaii Electric Light’s and Maui Electric’s obligations (a) to the State of Hawaii for the repayment of principal and interest on Special Purpose Revenue Bonds issued for the benefit of Hawaii Electric Light and Maui Electric, (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder and (c) relating to the trust preferred securities of Trust III. Hawaiian Electric is also obligated, after the satisfaction of its obligations on its own preferred stock, to make dividend, redemption and liquidation payments on Hawaii Electric Light’s and Maui Electric’s preferred stock if the respective subsidiary is unable to make such payments. Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Income Three months ended June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Revenues |  | $ | 431,699 |  |  | 89,548 |  |  | 86,938 |  |  | — |  |  | (59 | ) |  | $ | 608,126 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil |  | 120,007 |  |  | 19,432 |  |  | 32,278 |  |  | — |  |  | — |  |  | 171,717 |
Purchased power |  | 121,812 |  |  | 24,664 |  |  | 14,262 |  |  | — |  |  | — |  |  | 160,738 |
Other operation and maintenance |  | 76,845 |  |  | 19,015 |  |  | 16,782 |  |  | — |  |  | — |  |  | 112,642 |
Depreciation |  | 34,391 |  |  | 10,038 |  |  | 5,932 |  |  | — |  |  | — |  |  | 50,361 |
Taxes, other than income taxes |  | 40,951 |  |  | 8,408 |  |  | 8,165 |  |  | — |  |  | — |  |  | 57,524 |
Total expenses |  | 394,006 |  |  | 81,557 |  |  | 77,419 |  |  | — |  |  | — |  |  | 552,982 |
Operating income |  | 37,693 |  |  | 7,991 |  |  | 9,519 |  |  | — |  |  | (59 | ) |  | 55,144 |
Allowance for equity funds used during construction |  | 2,588 |  |  | 124 |  |  | 271 |  |  | — |  |  | — |  |  | 2,983 |
Equity in earnings of subsidiaries |  | 9,080 |  |  | — |  |  | — |  |  | — |  |  | (9,080 | ) |  | — |
Retirement defined benefits expense—other than service costs |  | (554 | ) |  | (105 | ) |  | (329 | ) |  | — |  |  | — |  |  | (988 | )
Interest expense and other charges, net |  | (12,930 | ) |  | (2,922 | ) |  | (2,367 | ) |  | — |  |  | 59 |  |  | (18,160 | )
Allowance for borrowed funds used during construction |  | 1,150 |  |  | 77 |  |  | 138 |  |  | — |  |  | — |  |  | 1,365 |
Income before income taxes |  | 37,027 |  |  | 5,165 |  |  | 7,232 |  |  | — |  |  | (9,080 | ) |  | 40,344 |
Income taxes |  | 5,588 |  |  | 1,269 |  |  | 1,819 |  |  | — |  |  | — |  |  | 8,676 |
Net income |  | 31,439 |  |  | 3,896 |  |  | 5,413 |  |  | — |  |  | (9,080 | ) |  | 31,668 |
Preferred stock dividends of subsidiaries |  | — |  |  | 133 |  |  | 96 |  |  | — |  |  | — |  |  | 229 |
Net income attributable to Hawaiian Electric |  | 31,439 |  |  | 3,763 |  |  | 5,317 |  |  | — |  |  | (9,080 | ) |  | 31,439 |
Preferred stock dividends of Hawaiian Electric |  | 270 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 270 |
Net income for common stock |  | $ | 31,169 |  |  | 3,763 |  |  | 5,317 |  |  | — |  |  | (9,080 | ) |  | $ | 31,169 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Comprehensive Income Three months ended June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Net income for common stock |  | $ | 31,169 |  |  | 3,763 |  |  | 5,317 |  |  | — |  |  | (9,080 | ) |  | $ | 31,169 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits |  | 4,853 |  |  | 734 |  |  | 649 |  |  | — |  |  | (1,383 | ) |  | 4,853 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes |  | (4,827 | ) |  | (733 | ) |  | (649 | ) |  | — |  |  | 1,382 |  |  | (4,827 | )
Other comprehensive income, net of taxes |  | 26 |  |  | 1 |  |  | — |  |  | — |  |  | (1 | ) |  | 26 |
Comprehensive income attributable to common shareholder |  | $ | 31,195 |  |  | 3,764 |  |  | 5,317 |  |  | — |  |  | (9,081 | ) |  | $ | 31,195 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Income Three months ended June 30, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Revenues |  | $ | 394,414 |  |  | 81,710 |  |  | 80,765 |  |  | — |  |  | (14 | ) |  | $ | 556,875 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil |  | 99,814 |  |  | 14,475 |  |  | 26,970 |  |  | — |  |  | — |  |  | 141,259 |
Purchased power |  | 116,458 |  |  | 23,482 |  |  | 13,127 |  |  | — |  |  | — |  |  | 153,067 |
Other operation and maintenance |  | 69,659 |  |  | 17,643 |  |  | 17,637 |  |  | — |  |  | — |  |  | 104,939 |
Depreciation |  | 32,723 |  |  | 9,686 |  |  | 5,747 |  |  | — |  |  | — |  |  | 48,156 |
Taxes, other than income taxes |  | 37,619 |  |  | 7,702 |  |  | 7,651 |  |  | — |  |  | — |  |  | 52,972 |
Total expenses |  | 356,273 |  |  | 72,988 |  |  | 71,132 |  |  | — |  |  | — |  |  | 500,393 |
Operating income |  | 38,141 |  |  | 8,722 |  |  | 9,633 |  |  | — |  |  | (14 | ) |  | 56,482 |
Allowance for equity funds used during construction |  | 2,659 |  |  | 134 |  |  | 234 |  |  | — |  |  | — |  |  | 3,027 |
Equity in earnings of subsidiaries |  | 7,936 |  |  | — |  |  | — |  |  | — |  |  | (7,936 | ) |  | — |
Retirement defined benefits expense—other than service costs |  | (1,302 | ) |  | 85 |  |  | (218 | ) |  | — |  |  | — |  |  | (1,435 | )
Interest expense and other charges, net |  | (12,562 | ) |  | (2,996 | ) |  | (2,670 | ) |  | — |  |  | 14 |  |  | (18,214 | )
Allowance for borrowed funds used during construction |  | 988 |  |  | 55 |  |  | 100 |  |  | — |  |  | — |  |  | 1,143 |
Income before income taxes |  | 35,860 |  |  | 6,000 |  |  | 7,079 |  |  | — |  |  | (7,936 | ) |  | 41,003 |
Income taxes |  | 9,946 |  |  | 2,235 |  |  | 2,679 |  |  | — |  |  | — |  |  | 14,860 |
Net income |  | 25,914 |  |  | 3,765 |  |  | 4,400 |  |  | — |  |  | (7,936 | ) |  | 26,143 |
Preferred stock dividends of subsidiaries |  | — |  |  | 133 |  |  | 96 |  |  | — |  |  | — |  |  | 229 |
Net income attributable to Hawaiian Electric |  | 25,914 |  |  | 3,632 |  |  | 4,304 |  |  | — |  |  | (7,936 | ) |  | 25,914 |
Preferred stock dividends of Hawaiian Electric |  | 270 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 270 |
Net income for common stock |  | $ | 25,644 |  |  | 3,632 |  |  | 4,304 |  |  | — |  |  | (7,936 | ) |  | $ | 25,644 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Comprehensive Income Three months ended June 30, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Net income for common stock |  | $ | 25,644 |  |  | 3,632 |  |  | 4,304 |  |  | — |  |  | (7,936 | ) |  | $ | 25,644 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits |  | 3,621 |  |  | 449 |  |  | 344 |  |  | — |  |  | (793 | ) |  | 3,621 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes |  | (3,581 | ) |  | (448 | ) |  | (343 | ) |  | — |  |  | 791 |  |  | (3,581 | )
Other comprehensive income, net of taxes |  | 40 |  |  | 1 |  |  | 1 |  |  | — |  |  | (2 | ) |  | 40 |
Comprehensive income attributable to common shareholder |  | $ | 25,684 |  |  | 3,633 |  |  | 4,305 |  |  | — |  |  | (7,938 | ) |  | $ | 25,684 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Income Six months ended June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Revenues |  | $ | 832,879 |  |  | 177,481 |  |  | 168,294 |  |  | — |  |  | (101 | ) |  | $ | 1,178,553 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil |  | 234,505 |  |  | 37,919 |  |  | 66,261 |  |  | — |  |  | — |  |  | 338,685 |
Purchased power |  | 229,182 |  |  | 48,498 |  |  | 22,968 |  |  | — |  |  | — |  |  | 300,648 |
Other operation and maintenance |  | 149,785 |  |  | 35,113 |  |  | 35,354 |  |  | — |  |  | — |  |  | 220,252 |
Depreciation |  | 68,830 |  |  | 20,093 |  |  | 11,904 |  |  | — |  |  | — |  |  | 100,827 |
Taxes, other than income taxes |  | 79,118 |  |  | 16,620 |  |  | 15,890 |  |  | — |  |  | — |  |  | 111,628 |
Total expenses |  | 761,420 |  |  | 158,243 |  |  | 152,377 |  |  | — |  |  | — |  |  | 1,072,040 |
Operating income |  | 71,459 |  |  | 19,238 |  |  | 15,917 |  |  | — |  |  | (101 | ) |  | 106,513 |
Allowance for equity funds used during construction |  | 5,475 |  |  | 235 |  |  | 567 |  |  | — |  |  | — |  |  | 6,277 |
Equity in earnings of subsidiaries |  | 18,405 |  |  | — |  |  | — |  |  | — |  |  | (18,405 | ) |  | — |
Retirement defined benefits expense—other than service costs |  | (1,616 | ) |  | (208 | ) |  | (428 | ) |  | — |  |  | — |  |  | (2,252 | )
Interest expense and other charges, net |  | (25,425 | ) |  | (5,829 | ) |  | (4,701 | ) |  | — |  |  | 101 |  |  | (35,854 | )
Allowance for borrowed funds used during construction |  | 2,388 |  |  | 141 |  |  | 280 |  |  | — |  |  | — |  |  | 2,809 |
Income before income taxes |  | 70,686 |  |  | 13,577 |  |  | 11,635 |  |  | — |  |  | (18,405 | ) |  | 77,493 |
Income taxes |  | 11,502 |  |  | 3,446 |  |  | 2,903 |  |  | — |  |  | — |  |  | 17,851 |
Net income |  | 59,184 |  |  | 10,131 |  |  | 8,732 |  |  | — |  |  | (18,405 | ) |  | 59,642 |
Preferred stock dividends of subsidiaries |  | — |  |  | 267 |  |  | 191 |  |  | — |  |  | — |  |  | 458 |
Net income attributable to Hawaiian Electric |  | 59,184 |  |  | 9,864 |  |  | 8,541 |  |  | — |  |  | (18,405 | ) |  | 59,184 |
Preferred stock dividends of Hawaiian Electric |  | 540 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 540 |
Net income for common stock |  | $ | 58,644 |  |  | 9,864 |  |  | 8,541 |  |  | — |  |  | (18,405 | ) |  | $ | 58,644 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Comprehensive Income Six months ended June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Net income for common stock |  | $ | 58,644 |  |  | 9,864 |  |  | 8,541 |  |  | — |  |  | (18,405 | ) |  | $ | 58,644 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits |  | 9,506 |  |  | 1,409 |  |  | 1,211 |  |  | — |  |  | (2,620 | ) |  | 9,506 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes |  | (9,449 | ) |  | (1,408 | ) |  | (1,211 | ) |  | — |  |  | 2,619 |  |  | (9,449 | )
Other comprehensive income, net of taxes |  | 57 |  |  | 1 |  |  | — |  |  | — |  |  | (1 | ) |  | 57 |
Comprehensive income attributable to common shareholder |  | $ | 58,701 |  |  | 9,865 |  |  | 8,541 |  |  | — |  |  | (18,406 | ) |  | $ | 58,701 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Income Six months ended June 30, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Revenues |  | $ | 757,257 |  |  | 160,692 |  |  | 157,558 |  |  | — |  |  | (21 | ) |  | $ | 1,075,486 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil |  | 197,815 |  |  | 31,732 |  |  | 55,982 |  |  | — |  |  | — |  |  | 285,529 |
Purchased power |  | 216,605 |  |  | 42,071 |  |  | 21,515 |  |  | — |  |  | — |  |  | 280,191 |
Other operation and maintenance |  | 135,652 |  |  | 33,242 |  |  | 34,862 |  |  | — |  |  | — |  |  | 203,756 |
Depreciation |  | 65,445 |  |  | 19,371 |  |  | 11,556 |  |  | — |  |  | — |  |  | 96,372 |
Taxes, other than income taxes |  | 72,659 |  |  | 15,152 |  |  | 14,984 |  |  | — |  |  | — |  |  | 102,795 |
Total expenses |  | 688,176 |  |  | 141,568 |  |  | 138,899 |  |  | — |  |  | — |  |  | 968,643 |
Operating income |  | 69,081 |  |  | 19,124 |  |  | 18,659 |  |  | — |  |  | (21 | ) |  | 106,843 |
Allowance for equity funds used during construction |  | 4,715 |  |  | 249 |  |  | 462 |  |  | — |  |  | — |  |  | 5,426 |
Equity in earnings of subsidiaries |  | 16,539 |  |  | — |  |  | — |  |  | — |  |  | (16,539 | ) |  | — |
Retirement defined benefits expense—other than service costs |  | (2,587 | ) |  | 168 |  |  | (439 | ) |  | — |  |  | — |  |  | (2,858 | )
Interest expense and other charges, net |  | (24,619 | ) |  | (6,000 | ) |  | (5,120 | ) |  | — |  |  | 21 |  |  | (35,718 | )
Allowance for borrowed funds used during construction |  | 1,737 |  |  | 100 |  |  | 195 |  |  | — |  |  | — |  |  | 2,032 |
Income before income taxes |  | 64,866 |  |  | 13,641 |  |  | 13,757 |  |  | — |  |  | (16,539 | ) |  | 75,725 |
Income taxes |  | 17,217 |  |  | 5,158 |  |  | 5,243 |  |  | — |  |  | — |  |  | 27,618 |
Net income |  | 47,649 |  |  | 8,483 |  |  | 8,514 |  |  | — |  |  | (16,539 | ) |  | 48,107 |
Preferred stock dividends of subsidiaries |  | — |  |  | 267 |  |  | 191 |  |  | — |  |  | — |  |  | 458 |
Net income attributable to Hawaiian Electric |  | 47,649 |  |  | 8,216 |  |  | 8,323 |  |  | — |  |  | (16,539 | ) |  | 47,649 |
Preferred stock dividends of Hawaiian Electric |  | 540 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 540 |
Net income for common stock |  | $ | 47,109 |  |  | 8,216 |  |  | 8,323 |  |  | — |  |  | (16,539 | ) |  | $ | 47,109 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Comprehensive Income Six months ended June 30, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Net income for common stock |  | $ | 47,109 |  |  | 8,216 |  |  | 8,323 |  |  | — |  |  | (16,539 | ) |  | $ | 47,109 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives qualifying as cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Reclassification adjustment to net income, net of taxes |  | 454 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 454 |
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits |  | 7,239 |  |  | 952 |  |  | 810 |  |  | — |  |  | (1,762 | ) |  | 7,239 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes |  | (7,194 | ) |  | (951 | ) |  | (810 | ) |  | — |  |  | 1,761 |  |  | (7,194 | )
Other comprehensive income, net of taxes |  | 499 |  |  | 1 |  |  | — |  |  | — |  |  | (1 | ) |  | 499 |
Comprehensive income attributable to common shareholder |  | $ | 47,608 |  |  | 8,217 |  |  | 8,323 |  |  | — |  |  | (16,540 | ) |  | $ | 47,608 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Balance Sheet June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consoli- dating adjustments |  | Hawaiian Electric Consolidated
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |
Utility property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  | $ | 44,023 |  |  | 5,876 |  |  | 3,015 |  |  | — |  |  | — |  |  | $ | 52,914 |
Plant and equipment |  | 4,363,195 |  |  | 1,217,147 |  |  | 1,072,640 |  |  | — |  |  | — |  |  | 6,652,982 |
Less accumulated depreciation |  | (1,491,505 | ) |  | (536,210 | ) |  | (506,713 | ) |  | — |  |  | — |  |  | (2,534,428 | )
Construction in progress |  | 127,343 |  |  | 10,154 |  |  | 28,111 |  |  | — |  |  | — |  |  | 165,608 |
Utility property, plant and equipment, net |  | 3,043,056 |  |  | 696,967 |  |  | 597,053 |  |  | — |  |  | — |  |  | 4,337,076 |
Nonutility property, plant and equipment, less accumulated depreciation |  | 5,934 |  |  | 115 |  |  | 1,532 |  |  | — |  |  | — |  |  | 7,581 |
Total property, plant and equipment, net |  | 3,048,990 |  |  | 697,082 |  |  | 598,585 |  |  | — |  |  | — |  |  | 4,344,657 |
Investment in wholly owned subsidiaries, at equity |  | 561,764 |  |  | — |  |  | — |  |  | — |  |  | (561,764 | ) |  | — |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 13,922 |  |  | 4,516 |  |  | 2,321 |  |  | 101 |  |  | — |  |  | 20,860 |
Advances to affiliates |  | 5,600 |  |  | 1,000 |  |  | — |  |  | — |  |  | (6,600 | ) |  | — |
Customer accounts receivable, net |  | 109,285 |  |  | 24,005 |  |  | 23,970 |  |  | — |  |  | — |  |  | 157,260 |
Accrued unbilled revenues, net |  | 80,239 |  |  | 15,243 |  |  | 15,357 |  |  | — |  |  | — |  |  | 110,839 |
Other accounts receivable, net |  | 10,657 |  |  | 2,561 |  |  | 1,124 |  |  | — |  |  | (7,446 | ) |  | 6,896 |
Fuel oil stock, at average cost |  | 74,485 |  |  | 12,632 |  |  | 19,899 |  |  | — |  |  | — |  |  | 107,016 |
Materials and supplies, at average cost |  | 31,077 |  |  | 8,600 |  |  | 18,264 |  |  | — |  |  | — |  |  | 57,941 |
Prepayments and other |  | 21,482 |  |  | 6,329 |  |  | 2,943 |  |  | — |  |  | (1,514 | ) |  | 29,240 |
Regulatory assets |  | 88,581 |  |  | 6,353 |  |  | 8,632 |  |  | — |  |  | — |  |  | 103,566 |
Total current assets |  | 435,328 |  |  | 81,239 |  |  | 92,510 |  |  | 101 |  |  | (15,560 | ) |  | 593,618 |
Other long-term assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regulatory assets |  | 538,925 |  |  | 118,000 |  |  | 99,919 |  |  | — |  |  | — |  |  | 756,844 |
Other |  | 71,486 |  |  | 19,378 |  |  | 17,731 |  |  | — |  |  | — |  |  | 108,595 |
Total other long-term assets |  | 610,411 |  |  | 137,378 |  |  | 117,650 |  |  | — |  |  | — |  |  | 865,439 |
Total assets |  | $ | 4,656,493 |  |  | 915,699 |  |  | 808,745 |  |  | 101 |  |  | (577,324 | ) |  | $ | 5,803,714 |
Capitalization and liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capitalization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock equity |  | $ | 1,852,324 |  |  | 288,865 |  |  | 272,798 |  |  | 101 |  |  | (561,764 | ) |  | $ | 1,852,324 |
Cumulative preferred stock—not subject to mandatory redemption |  | 22,293 |  |  | 7,000 |  |  | 5,000 |  |  | — |  |  | — |  |  | 34,293 |
Long-term debt, net |  | 999,915 |  |  | 217,699 |  |  | 200,860 |  |  | — |  |  | — |  |  | 1,418,474 |
Total capitalization |  | 2,874,532 |  |  | 513,564 |  |  | 478,658 |  |  | 101 |  |  | (561,764 | ) |  | 3,305,091 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current portion of long-term debt |  | 29,990 |  |  | 10,996 |  |  | 8,997 |  |  | — |  |  | — |  |  | 49,983 |
Short-term borrowings from non-affiliates |  | 91,880 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 91,880 |
Short-term borrowings from affiliate |  | 1,000 |  |  | — |  |  | 5,600 |  |  | — |  |  | (6,600 | ) |  | — |
Accounts payable |  | 115,806 |  |  | 17,405 |  |  | 20,548 |  |  | — |  |  | — |  |  | 153,759 |
Interest and preferred dividends payable |  | 15,743 |  |  | 4,203 |  |  | 2,752 |  |  | — |  |  | (14 | ) |  | 22,684 |
Taxes accrued |  | 120,513 |  |  | 27,353 |  |  | 25,711 |  |  | — |  |  | (1,514 | ) |  | 172,063 |
Regulatory liabilities |  | 2,751 |  |  | 2,499 |  |  | 4,537 |  |  | — |  |  | — |  |  | 9,787 |
Other |  | 42,449 |  |  | 10,223 |  |  | 13,963 |  |  | — |  |  | (7,432 | ) |  | 59,203 |
Total current liabilities |  | 420,132 |  |  | 72,679 |  |  | 82,108 |  |  | — |  |  | (15,560 | ) |  | 559,359 |
Deferred credits and other liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred income taxes |  | 277,599 |  |  | 54,505 |  |  | 56,771 |  |  | — |  |  | — |  |  | 388,875 |
Regulatory liabilities |  | 627,369 |  |  | 173,305 |  |  | 94,755 |  |  | — |  |  | — |  |  | 895,429 |
Unamortized tax credits |  | 60,893 |  |  | 16,463 |  |  | 15,442 |  |  | — |  |  | — |  |  | 92,798 |
Defined benefit pension and other postretirement benefit plans liability |  | 330,356 |  |  | 64,175 |  |  | 63,422 |  |  | — |  |  | — |  |  | 457,953 |
Other |  | 65,612 |  |  | 21,008 |  |  | 17,589 |  |  | — |  |  | — |  |  | 104,209 |
Total deferred credits and other liabilities |  | 1,361,829 |  |  | 329,456 |  |  | 247,979 |  |  | — |  |  | — |  |  | 1,939,264 |
Total capitalization and liabilities |  | $ | 4,656,493 |  |  | 915,699 |  |  | 808,745 |  |  | 101 |  |  | (577,324 | ) |  | $ | 5,803,714 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Balance Sheet December 31, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consoli- dating adjustments |  | Hawaiian Electric Consolidated
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |
Utility property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  | $ | 43,972 |  |  | 6,189 |  |  | 3,016 |  |  | — |  |  | — |  |  | $ | 53,177 |
Plant and equipment |  | 4,140,892 |  |  | 1,206,776 |  |  | 1,053,372 |  |  | — |  |  | — |  |  | 6,401,040 |
Less accumulated depreciation |  | (1,451,612 | ) |  | (528,024 | ) |  | (496,716 | ) |  | — |  |  | — |  |  | (2,476,352 | )
Construction in progress |  | 231,571 |  |  | 8,182 |  |  | 23,341 |  |  | — |  |  | — |  |  | 263,094 |
Utility property, plant and equipment, net |  | 2,964,823 |  |  | 693,123 |  |  | 583,013 |  |  | — |  |  | — |  |  | 4,240,959 |
Nonutility property, plant and equipment, less accumulated depreciation |  | 5,933 |  |  | 115 |  |  | 1,532 |  |  | — |  |  | — |  |  | 7,580 |
Total property, plant and equipment, net |  | 2,970,756 |  |  | 693,238 |  |  | 584,545 |  |  | — |  |  | — |  |  | 4,248,539 |
Investment in wholly owned subsidiaries, at equity |  | 557,013 |  |  | — |  |  | — |  |  | — |  |  | (557,013 | ) |  | — |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 2,059 |  |  | 4,025 |  |  | 6,332 |  |  | 101 |  |  | — |  |  | 12,517 |
Advances to affiliates |  | — |  |  | — |  |  | 12,000 |  |  | — |  |  | (12,000 | ) |  | — |
Customer accounts receivable, net |  | 86,987 |  |  | 22,510 |  |  | 18,392 |  |  | — |  |  | — |  |  | 127,889 |
Accrued unbilled revenues, net |  | 77,176 |  |  | 15,940 |  |  | 13,938 |  |  | — |  |  | — |  |  | 107,054 |
Other accounts receivable, net |  | 11,376 |  |  | 2,268 |  |  | 1,210 |  |  | — |  |  | (7,691 | ) |  | 7,163 |
Fuel oil stock, at average cost |  | 64,972 |  |  | 8,698 |  |  | 13,203 |  |  | — |  |  | — |  |  | 86,873 |
Materials and supplies, at average cost |  | 28,325 |  |  | 8,041 |  |  | 18,031 |  |  | — |  |  | — |  |  | 54,397 |
Prepayments and other |  | 17,928 |  |  | 4,514 |  |  | 2,913 |  |  | — |  |  | — |  |  | 25,355 |
Regulatory assets |  | 76,203 |  |  | 5,038 |  |  | 7,149 |  |  | — |  |  | — |  |  | 88,390 |
Total current assets |  | 365,026 |  |  | 71,034 |  |  | 93,168 |  |  | 101 |  |  | (19,691 | ) |  | 509,638 |
Other long-term assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regulatory assets |  | 557,464 |  |  | 122,783 |  |  | 100,660 |  |  | — |  |  | — |  |  | 780,907 |
Other |  | 60,157 |  |  | 16,311 |  |  | 15,061 |  |  | — |  |  | — |  |  | 91,529 |
Total other long-term assets |  | 617,621 |  |  | 139,094 |  |  | 115,721 |  |  | — |  |  | — |  |  | 872,436 |
Total assets |  | $ | 4,510,416 |  |  | 903,366 |  |  | 793,434 |  |  | 101 |  |  | (576,704 | ) |  | $ | 5,630,613 |
Capitalization and liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capitalization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock equity |  | $ | 1,845,283 |  |  | 286,647 |  |  | 270,265 |  |  | 101 |  |  | (557,013 | ) |  | $ | 1,845,283 |
Cumulative preferred stock—not subject to mandatory redemption |  | 22,293 |  |  | 7,000 |  |  | 5,000 |  |  | — |  |  | — |  |  | 34,293 |
Long-term debt, net |  | 924,979 |  |  | 202,701 |  |  | 190,836 |  |  | — |  |  | — |  |  | 1,318,516 |
Total capitalization |  | 2,792,555 |  |  | 496,348 |  |  | 466,101 |  |  | 101 |  |  | (557,013 | ) |  | 3,198,092 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current portion of long-term debt |  | 29,978 |  |  | 10,992 |  |  | 8,993 |  |  | — |  |  | — |  |  | 49,963 |
Short-term borrowings-non-affiliate |  | 4,999 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,999 |
Short-term borrowings-affiliate |  | 12,000 |  |  | — |  |  | — |  |  | — |  |  | (12,000 | ) |  | — |
Accounts payable |  | 121,328 |  |  | 17,855 |  |  | 20,427 |  |  | — |  |  | — |  |  | 159,610 |
Interest and preferred dividends payable |  | 15,677 |  |  | 4,174 |  |  | 2,735 |  |  | — |  |  | (11 | ) |  | 22,575 |
Taxes accrued |  | 133,839 |  |  | 34,950 |  |  | 30,312 |  |  | — |  |  | — |  |  | 199,101 |
Regulatory liabilities |  | 607 |  |  | 1,245 |  |  | 1,549 |  |  | — |  |  | — |  |  | 3,401 |
Other |  | 43,121 |  |  | 9,818 |  |  | 14,197 |  |  | — |  |  | (7,680 | ) |  | 59,456 |
Total current liabilities |  | 361,549 |  |  | 79,034 |  |  | 78,213 |  |  | — |  |  | (19,691 | ) |  | 499,105 |
Deferred credits and other liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred income taxes |  | 281,223 |  |  | 56,955 |  |  | 55,863 |  |  | — |  |  | — |  |  | 394,041 |
Regulatory liabilities |  | 613,329 |  |  | 169,139 |  |  | 94,901 |  |  | — |  |  | — |  |  | 877,369 |
Unamortized tax credits |  | 59,039 |  |  | 16,167 |  |  | 15,163 |  |  | — |  |  | — |  |  | 90,369 |
Defined benefit pension and other postretirement benefit plans liability |  | 340,983 |  |  | 66,447 |  |  | 65,518 |  |  | — |  |  | — |  |  | 472,948 |
Other |  | 61,738 |  |  | 19,276 |  |  | 17,675 |  |  | — |  |  | — |  |  | 98,689 |
Total deferred credits and other liabilities |  | 1,356,312 |  |  | 327,984 |  |  | 249,120 |  |  | — |  |  | — |  |  | 1,933,416 |
Total capitalization and liabilities |  | $ | 4,510,416 |  |  | 903,366 |  |  | 793,434 |  |  | 101 |  |  | (576,704 | ) |  | $ | 5,630,613 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Changes in Common Stock Equity Six months ended June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Balance, December 31, 2017 |  | $ | 1,845,283 |  |  | 286,647 |  |  | 270,265 |  |  | 101 |  |  | (557,013 | ) |  | $ | 1,845,283 |
Net income for common stock |  | 58,644 |  |  | 9,864 |  |  | 8,541 |  |  | — |  |  | (18,405 | ) |  | 58,644 |
Other comprehensive income, net of taxes |  | 57 |  |  | 1 |  |  | — |  |  | — |  |  | (1 | ) |  | 57 |
Common stock dividends |  | (51,652 | ) |  | (7,644 | ) |  | (6,010 | ) |  | — |  |  | 13,654 |  |  | (51,652 | )
Common stock issuance expenses |  | (8 | ) |  | (3 | ) |  | 2 |  |  | — |  |  | 1 |  |  | (8 | )
Balance, June 30, 2018 |  | $ | 1,852,324 |  |  | 288,865 |  |  | 272,798 |  |  | 101 |  |  | (561,764 | ) |  | $ | 1,852,324 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Changes in Common Stock Equity Six months ended June 30, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Balance, December 31, 2016 |  | $ | 1,799,787 |  |  | 291,291 |  |  | 259,554 |  |  | 101 |  |  | (550,946 | ) |  | $ | 1,799,787 |
Net income for common stock |  | 47,109 |  |  | 8,216 |  |  | 8,323 |  |  | — |  |  | (16,539 | ) |  | 47,109 |
Other comprehensive income, net of taxes |  | 499 |  |  | 1 |  |  | — |  |  | — |  |  | (1 | ) |  | 499 |
Common stock dividends |  | (43,884 | ) |  | (7,748 | ) |  | (5,973 | ) |  | — |  |  | 13,721 |  |  | (43,884 | )
Common stock issuance expenses |  | (5 | ) |  | — |  |  | (1 | ) |  | — |  |  | 1 |  |  | (5 | )
Balance, June 30, 2017 |  | $ | 1,803,506 |  |  | 291,760 |  |  | 261,903 |  |  | 101 |  |  | (553,764 | ) |  | $ | 1,803,506 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Cash Flows Six months ended June 30, 2018
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 59,184 |  |  | 10,131 |  |  | 8,732 |  |  | — |  |  | (18,405 | ) |  | $ | 59,642 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries |  | (18,455 | ) |  | — |  |  | — |  |  | — |  |  | 18,405 |  |  | (50 | )
Common stock dividends received from subsidiaries |  | 13,679 |  |  | — |  |  | — |  |  | — |  |  | (13,654 | ) |  | 25 |
Depreciation of property, plant and equipment |  | 68,830 |  |  | 20,093 |  |  | 11,904 |  |  | — |  |  | — |  |  | 100,827 |
Other amortization |  | 9,200 |  |  | 2,976 |  |  | 845 |  |  | — |  |  | — |  |  | 13,021 |
Deferred income taxes |  | (6,708 | ) |  | (2,429 | ) |  | 794 |  |  | — |  |  | — |  |  | (8,343 | )
Allowance for equity funds used during construction |  | (5,475 | ) |  | (235 | ) |  | (567 | ) |  | — |  |  | — |  |  | (6,277 | )
Other |  | 1,469 |  |  | (322 | ) |  | (169 | ) |  | — |  |  | — |  |  | 978 |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase in accounts receivable |  | (25,673 | ) |  | (2,387 | ) |  | (5,763 | ) |  | — |  |  | (245 | ) |  | (34,068 | )
Decrease (increase) in accrued unbilled revenues |  | (3,063 | ) |  | 697 |  |  | (1,419 | ) |  | — |  |  | — |  |  | (3,785 | )
Increase in fuel oil stock |  | (9,513 | ) |  | (3,934 | ) |  | (6,696 | ) |  | — |  |  | — |  |  | (20,143 | )
Increase in materials and supplies |  | (2,752 | ) |  | (559 | ) |  | (233 | ) |  | — |  |  | — |  |  | (3,544 | )
Increase in regulatory assets |  | (14,728 | ) |  | (1,974 | ) |  | (2,898 | ) |  | — |  |  | — |  |  | (19,600 | )
Increase in accounts payable |  | 13,093 |  |  | 3,096 |  |  | 2,095 |  |  | — |  |  | — |  |  | 18,284 |
Change in prepaid and accrued income taxes, tax credits and revenue taxes |  | (15,343 | ) |  | (9,952 | ) |  | (5,165 | ) |  | — |  |  | (601 | ) |  | (31,061 | )
Decrease in defined benefit pension and other postretirement benefit plans liability |  | (1,117 | ) |  | (380 | ) |  | (464 | ) |  | — |  |  | — |  |  | (1,961 | )
Change in other assets and liabilities |  | 1,116 |  |  | 3,173 |  |  | 1,357 |  |  | — |  |  | 245 |  |  | 5,891 |
Net cash provided by operating activities |  | 63,744 |  |  | 17,994 |  |  | 2,353 |  |  | — |  |  | (14,255 | ) |  | 69,836 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | (156,600 | ) |  | (26,667 | ) |  | (29,953 | ) |  | — |  |  | — |  |  | (213,220 | )
Contributions in aid of construction |  | 9,680 |  |  | 2,243 |  |  | 1,650 |  |  | — |  |  | — |  |  | 13,573 |
Other |  | 2,241 |  |  | 884 |  |  | 575 |  |  | — |  |  | 601 |  |  | 4,301 |
Advances (to) from affiliates |  | (5,600 | ) |  | (1,000 | ) |  | 12,000 |  |  | — |  |  | (5,400 | ) |  | — |
Net cash used in investing activities |  | (150,279 | ) |  | (24,540 | ) |  | (15,728 | ) |  | — |  |  | (4,799 | ) |  | (195,346 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock dividends |  | (51,652 | ) |  | (7,644 | ) |  | (6,010 | ) |  | — |  |  | 13,654 |  |  | (51,652 | )
Preferred stock dividends of Hawaiian Electric and subsidiaries |  | (540 | ) |  | (267 | ) |  | (191 | ) |  | — |  |  | — |  |  | (998 | )
Proceeds from issuance of long-term debt |  | 75,000 |  |  | 15,000 |  |  | 10,000 |  |  | — |  |  | — |  |  | 100,000 |
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less |  | 75,881 |  |  | — |  |  | 5,600 |  |  | — |  |  | 5,400 |  |  | 86,881 |
Other |  | (291 | ) |  | (52 | ) |  | (35 | ) |  | — |  |  | — |  |  | (378 | )
Net cash provided by financing activities |  | 98,398 |  |  | 7,037 |  |  | 9,364 |  |  | — |  |  | 19,054 |  |  | 133,853 |
Net increase (decrease) in cash and cash equivalents |  | 11,863 |  |  | 491 |  |  | (4,011 | ) |  | — |  |  | — |  |  | 8,343 |
Cash and cash equivalents, beginning of period |  | 2,059 |  |  | 4,025 |  |  | 6,332 |  |  | 101 |  |  | — |  |  | 12,517 |
Cash and cash equivalents, end of period |  | $ | 13,922 |  |  | 4,516 |  |  | 2,321 |  |  | 101 |  |  | — |  |  | $ | 20,860 |
Hawaiian Electric Company, Inc. and Subsidiaries Condensed Consolidating Statement of Cash Flows Six months ended June 30, 2017
(in thousands) |  | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 47,649 |  |  | 8,483 |  |  | 8,514 |  |  | — |  |  | (16,539 | ) |  | $ | 48,107 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries |  | (16,589 | ) |  | — |  |  | — |  |  | — |  |  | 16,539 |  |  | (50 | )
Common stock dividends received from subsidiaries |  | 13,771 |  |  | — |  |  | — |  |  | — |  |  | (13,721 | ) |  | 50 |
Depreciation of property, plant and equipment |  | 65,445 |  |  | 19,371 |  |  | 11,556 |  |  | — |  |  | — |  |  | 96,372 |
Other amortization |  | 1,875 |  |  | 905 |  |  | 1,482 |  |  | — |  |  | — |  |  | 4,262 |
Deferred income taxes |  | 15,060 |  |  | 3,590 |  |  | 4,988 |  |  | — |  |  | (39 | ) |  | 23,599 |
Allowance for equity funds used during construction |  | (4,715 | ) |  | (249 | ) |  | (462 | ) |  | — |  |  | — |  |  | (5,426 | )
Other |  | 1,089 |  |  | 699 |  |  | (173 | ) |  | — |  |  | — |  |  | 1,615 |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Decrease (increase) in accounts receivable |  | (5,100 | ) |  | 1,182 |  |  | (1,067 | ) |  | — |  |  | 3,256 |  |  | (1,729 | )
Increase in accrued unbilled revenues |  | (8,819 | ) |  | (602 | ) |  | (2,482 | ) |  | — |  |  | — |  |  | (11,903 | )
Decrease (increase) in fuel oil stock |  | (4,250 | ) |  | 94 |  |  | (1,806 | ) |  | — |  |  | — |  |  | (5,962 | )
Increase in materials and supplies |  | (788 | ) |  | (1,472 | ) |  | (1,160 | ) |  | — |  |  | — |  |  | (3,420 | )
Decrease (increase) in regulatory assets |  | 11,378 |  |  | (1,575 | ) |  | (1,624 | ) |  | — |  |  | — |  |  | 8,179 |
Increase in accounts payable |  | 33,121 |  |  | 970 |  |  | 5,625 |  |  | — |  |  | — |  |  | 39,716 |
Change in prepaid and accrued income taxes, tax credits and revenue taxes |  | (29,430 | ) |  | (6,290 | ) |  | (4,725 | ) |  | — |  |  | (465 | ) |  | (40,910 | )
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability |  | 355 |  |  | 26 |  |  | (79 | ) |  | — |  |  | — |  |  | 302 |
Change in other assets and liabilities |  | (12,727 | ) |  | 129 |  |  | 1,807 |  |  | — |  |  | (3,256 | ) |  | (14,047 | )
Net cash provided by operating activities |  | 107,325 |  |  | 25,261 |  |  | 20,394 |  |  | — |  |  | (14,225 | ) |  | 138,755 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | (146,721 | ) |  | (22,423 | ) |  | (21,015 | ) |  | — |  |  | — |  |  | (190,159 | )
Contributions in aid of construction |  | 14,078 |  |  | 1,870 |  |  | 1,623 |  |  | — |  |  | — |  |  | 17,571 |
Other |  | 4,820 |  |  | 619 |  |  | 307 |  |  | — |  |  | 504 |  |  | 6,250 |
Advances (to) from affiliates |  | — |  |  | (600 | ) |  | 9,000 |  |  | — |  |  | (8,400 | ) |  | — |
Net cash used in investing activities |  | (127,823 | ) |  | (20,534 | ) |  | (10,085 | ) |  | — |  |  | (7,896 | ) |  | (166,338 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock dividends |  | (43,884 | ) |  | (7,748 | ) |  | (5,973 | ) |  | — |  |  | 13,721 |  |  | (43,884 | )
Preferred stock dividends of Hawaiian Electric and subsidiaries |  | (540 | ) |  | (267 | ) |  | (191 | ) |  | — |  |  | — |  |  | (998 | )
Proceeds from issuance of special purpose revenue bonds |  | 162,000 |  |  | 28,000 |  |  | 75,000 |  |  | — |  |  | — |  |  | 265,000 |
Funds transferred for redemption of special purpose revenue bonds |  | (162,000 | ) |  | (28,000 | ) |  | (75,000 | ) |  | — |  |  | — |  |  | (265,000 | )
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less |  | 35,590 |  |  | — |  |  | — |  |  | — |  |  | 8,400 |  |  | 43,990 |
Other |  | (2,068 | ) |  | (357 | ) |  | (804 | ) |  | — |  |  | — |  |  | (3,229 | )
Net cash used in financing activities |  | (10,902 | ) |  | (8,372 | ) |  | (6,968 | ) |  | — |  |  | 22,121 |  |  | (4,121 | )
Net increase (decrease) in cash and cash equivalents |  | (31,400 | ) |  | (3,645 | ) |  | 3,341 |  |  | — |  |  | — |  |  | (31,704 | )
Cash and cash equivalents, beginning of period |  | 61,388 |  |  | 10,749 |  |  | 2,048 |  |  | 101 |  |  | — |  |  | 74,286 |
Cash and cash equivalents, end of period |  | $ | 29,988 |  |  | 7,104 |  |  | 5,389 |  |  | 101 |  |  | — |  |  | $ | 42,582 |

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- Definition This element encapsulates disclosures pertaining to electric utility subsidiary. + References No definition available. + Details
Name: | he_ElectricUtilitySubsidiaryTextBlock
Namespace Prefix: | he_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

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- Definition Electric utility subsidiary [Abstract] + References No definition available. + Details
Name: | he_ElectricutilitysubsidiaryAbstract
Namespace Prefix: | he_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration