XML 45 R21.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Electric utility segment | 12 Months Ended
--- | ---
Dec. 31, 2018
Electric utility subsidiary |
Electric utility segment |
Note 3 · Electric utility segment
Regulatory assets and liabilities. Regulatory assets represent deferred costs and accrued decoupling revenues which are expected to be recovered through rates over PUC-authorized periods. Generally, the Utilities do not earn a return on their regulatory assets; however, they have been allowed to recover interest on certain regulatory assets and to include certain regulatory assets in rate base. Regulatory liabilities represent amounts included in rates and collected from ratepayers for costs expected to be incurred in the future, or amounts collected in excess of costs incurred that are refundable to customers. For example, the regulatory liability for cost of removal in excess of salvage value represents amounts that have been collected from ratepayers for costs that are expected to be incurred in the future to retire utility plant. Generally, the Utilities include regulatory liabilities in rate base or are required to apply interest to certain regulatory liabilities. In the table below, noted in parentheses are the original PUC authorized amortization or recovery periods and, if different, the remaining amortization or recovery periods as of December 31, 2018 are noted. Regulatory assets were as follows:
December 31 | 2018 |  |  | 2017 |
(in thousands) |  |  |  |  |
Retirement benefit plans (balance primarily varies with plans’ funded statuses) | $ | 624,126 |  |  | $ | 637,204 |
Income taxes (1-55 years) | 114,076 |  |  | 118,201 |
Decoupling revenue balancing account and RAM regulatory asset (1-2 years) | 49,560 |  |  | 64,087 |
Unamortized expense and premiums on retired debt and equity issuances (19-30 years; 6-18 years remaining) | 10,065 |  |  | 11,993 |
Vacation earned, but not yet taken (1 year) | 10,820 |  |  | 11,224 |
Other (1-50 years; 1-46 years remaining) | 24,779 |  |  | 26,588 |
| $ | 833,426 |  |  | $ | 869,297 |
Included in: |  |  |  |  |
Current assets | $ | 71,016 |  |  | $ | 88,390 |
Long-term assets | 762,410 |  |  | 780,907 |
| $ | 833,426 |  |  | $ | 869,297 |
Regulatory liabilities were as follows:
December 31 | 2018 |  |  | 2017 |
(in thousands) |  |  |  |  |
Cost of removal in excess of salvage value (1-60 years) | $ | 491,006 |  |  | $ | 453,986 |
Income taxes (1-55 years) | 413,339 |  |  | 406,324 |
Retirement benefit plans (5 years beginning with respective utility’s next rate case) | 9,546 |  |  | 9,961 |
Other (5 years; 1-2 years remaining) | 36,345 |  |  | 10,499 |
| $ | 950,236 |  |  | $ | 880,770 |
Included in: |  |  |
Current liabilities | $ | 17,977 |  |  | $ | 3,401 |
Long-term liabilities | 932,259 |  |  | 877,369 |
| $ | 950,236 |  |  | $ | 880,770 |
The regulatory asset and liability relating to retirement benefit plans was recorded as a result of pension and OPEB tracking mechanisms adopted by the PUC in rate case decisions for the Utilities in 2007 (see Note 9). Major customers. The Utilities received 11% ($273 million), 11% ($239 million) and 11% ($226 million) of their operating revenues from the sale of electricity to various federal government agencies in 2018, 2017 and 2016, respectively. Cumulative preferred stock. The following series of cumulative preferred stock are redeemable only at the option of the respective company at the following prices in the event of voluntary liquidation or redemption:
December 31, 2018 | Voluntary liquidation price |  | Redemption price
Series |  |  |  |  |
C, D, E, H, J and K (Hawaiian Electric) | $ | 20 |  |  | $ | 21 |
I (Hawaiian Electric) | 20 |  |  | 20 |
G (Hawaii Electric Light) | 100 |  |  | 100 |
H (Maui Electric) | 100 |  |  | 100 |
Hawaiian Electric is obligated to make dividend, redemption and liquidation payments on the preferred stock of each of its subsidiaries if the respective subsidiary is unable to make such payments, but this obligation is subordinated to Hawaiian Electric’s obligation to make payments on its own preferred stock. Related-party transactions. HEI charged the Utilities $5.9 million, $6.2 million and $6.5 million for general management and administrative services in 2018, 2017 and 2016, respectively. The amounts charged by HEI to its subsidiaries for services provided by HEI employees are allocated primarily on the basis of time expended in providing such services. For the year ended December 31, 2018 and from the period November 24, 2017 to December 31, 2017, Hamakua Energy, LLC (an indirect subsidiary of HEI) sold energy and capacity to Hawaii Electric Light (subsidiary of Hawaiian Electric and indirect subsidiary of HEI) under a PPA in the amount of $56 million and $3 million, respectively. Hawaiian Electric’s short-term borrowings from HEI totaled nil at December 31, 2018 and 2017. The interest charged on short-term borrowings from HEI is based on the lower of HEI’s or Hawaiian Electric’s effective weighted average short-term external borrowing rate. If both HEI and Hawaiian Electric do not have short-term external borrowings, the interest is based on the average of the effective rate for 30-day dealer-placed commercial paper quoted by the Wall Street Journal plus 0.15%. Borrowings among the Utilities are eliminated in consolidation. Interest charged by HEI to Hawaiian Electric was not material for the years ended December 31, 2018 and 2017. HECO Capital Trust III. Trust III, a wholly-owned unconsolidated subsidiary of Hawaiian Electric, was created and exists for the exclusive purposes of (i) issuing in March 2004 2,000,000 6.50% Cumulative Quarterly Income Preferred Securities, Series 2004 (2004 Trust Preferred Securities) ($50 million aggregate liquidation preference) to the public and trust common securities ($1.5 million aggregate liquidation preference) to Hawaiian Electric, (ii) investing the proceeds of these trust securities in 2004 Debentures issued by Hawaiian Electric in the principal amount of $31.5 million and issued by Hawaii Electric Light and Maui Electric each in the principal amount of $10 million, (iii) making distributions on these trust securities and (iv) engaging in only those other activities necessary or incidental thereto. The 2004 Trust Preferred Securities are mandatorily redeemable at the maturity of the underlying debt on March 18, 2034, which maturity may be extended to no later than March 18, 2053; and are currently redeemable at the issuer’s option without premium. The 2004 Debentures, together with the obligations of the Utilities under an expense agreement and Hawaiian Electric’s obligations under its trust guarantee and its guarantee of the obligations of Hawaii Electric Light and Maui Electric under their respective debentures, are the sole assets of Trust III. Taken together, Hawaiian Electric’s obligations under the Hawaiian Electric debentures, the Hawaiian Electric indenture, the subsidiary guarantees, the trust agreement, the expense agreement and trust guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of amounts due on the Trust Preferred Securities. Trust III’s balance sheet as of December 31, 2018 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 statement for 2018 consisted of $3.4 million of interest income received from the 2004 Debentures; $3.3 million of distributions to holders of the Trust Preferred Securities; and $0.1 million of common dividends on the trust common securities to Hawaiian Electric. As long as the 2004 Trust Preferred Securities are outstanding, Hawaiian Electric is not entitled to receive any funds from Trust III other than pro-rata distributions, subject to certain subordination provisions, on the trust common securities. In the event of a default by Hawaiian Electric in the performance of its obligations under the 2004 Debentures or under its Guarantees, or in the event any of the Utilities elect to defer payment of interest on any of their respective 2004 Debentures, then Hawaiian Electric will be subject to a number of restrictions, including a prohibition on the payment of dividends on its common stock. Unconsolidated variable interest entities. Power purchase agreements. As of December 31, 2018, the Utilities had four PPAs for firm capacity (as PGV has been offline since May 2018 due to lava flow on Hawaii Island) and other PPAs with 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 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 consolidated financial statements since the date of 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 IPP was 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 Consolidated Financial Statements. The consolidation of any significant IPP could have a material effect on the 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. Fuel contracts. The Utilities have fuel supply contracts with Island Energy Services, LLC (IES), for low sulfur fuel oil (LSFO), diesel, industrial fuel oil (IFO), and ultra-low sulfur diesel (ULSD), through December 31, 2019. On January 21, 2019, the Utilities and PAR Hawaii Refining, LLC, a Hawaii corporation (PAR), entered into a fuel supply contract for the Utilities' LSFO, high sulfur fuel oil (HSFO), No. 2 diesel (Diesel), and ULSD requirements (Contract), which is effective upon approval by the PUC and terminates on December 31, 2022. This Contract will supply all LSFO, HSFO, Diesel and ULSD for the islands of Oahu, Maui, Molokai and Hawaii. If PAR is unable to provide LSFO, HSFO, Diesel and/or ULSD the Contract allows the Utilities to purchase LSFO, HSFO, Diesel and/or ULSD from another supplier. The Contract will automatically renew upon the conclusion of the original term for successive terms of 1 year beginning on January 1, 2023 unless a party gives written termination notice at least 120 days before the beginning of an extension. The Contract is subject to approval of the PUC, and can be terminated by either party if approval is not received by January 22, 2020 or if the Utilities’ request for PUC approval is denied. If PUC approves the Contract prior to December 31, 2019, the existing fuel contracts with IES will terminate as agreed with IES under a mutual termination and release agreement entered into on November 28, 2018. All of the costs incurred under the fuel supply contracts with IES are included in the Utilities’ respective ECAC/ECRCs to the extent such costs are not recovered through the base rates, and the costs incurred under the contract with PAR are requested to be recovered in the Utilities’ respective ECAC/ECRCs to the extent such costs are not recovered through base rates. Based on the purchase price per barrel as of December 31, 2018, the estimated cost of minimum purchases under the fuel supply contracts is $140 million in 2019. The actual cost of purchases in 2019 could vary substantially from this estimate of minimum purchases as a result of changes in market prices, quantities actually purchased, entry into new supply contracts and/or other factors. The Utilities purchased $0.7 billion, $0.6 billion and $0.4 billion of fuel under contractual agreements in 2018, 2017 and 2016, respectively. 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. Interim increases. For the year ended December 31, 2018, the Utilities recognized $10 million of revenues with respect to the Maui Electric 2018 rate case interim order. Such amounts recorded are subject to refund, with interest, if they exceed amounts in a final order. Power purchase agreements. Purchases from all IPPs were as follows:
Years ended December 31 |  | 2018 |  |  | 2017 |  |  | 2016 |
(in millions) |  |  |  |  |  |
Kalaeloa |  | $ | 216 |  |  | $ | 180 |  |  | $ | 152 |
AES Hawaii |  | 140 |  |  | 140 |  |  | 149 |
HPOWER |  | 69 |  |  | 67 |  |  | 71 |
Puna Geothermal Venture |  | 15 |  |  | 38 |  |  | 28 |
Hamakua Energy |  | 56 |  |  | 35 |  |  | 29 |
Hawaiian Commercial & Sugar |  | — |  |  | — |  |  | 1 |
Wind IPPs |  | 107 |  |  | 97 |  |  | 113 |
Solar IPPs |  | 29 |  |  | 27 |  |  | 15 |
Other IPPs 1 |  | 7 |  |  | 3 |  |  | 5 |
Total IPPs |  | $ | 639 |  |  | $ | 587 |  |  | $ | 563 |
1 Includes hydro power and other PPAs As of December 31, 2018, the Utilities had four firm capacity PPAs for a total of 516.5 megawatts (MW) of firm capacity. Since May 2018, PGV facility with 34.6 MW of firm capacity has been offline due to lava flow on Hawaii Island. The PUC allows rate recovery for energy and firm capacity payments to IPPs under these agreements. Assuming that each of the agreements remains in place for its current term (and as amended) and the minimum availability criteria in the PPAs are met, aggregate minimum fixed capacity charges are expected to be approximately $0.1 billion per year for 2019 through 2023 and a total of $0.3 billion in the period from 2024 through 2048. In general, the Utilities base their payments under the PPAs upon available capacity and actual energy supplied and they are generally not required to make payments for capacity if the contracted capacity is not available, and payments are reduced, under certain conditions, if available capacity drops below contracted levels. In general, the payment rates for capacity have been predetermined for the terms of the agreements. Energy payments will vary over the terms of the agreements. The Utilities pass on changes in the fuel component of the energy charges to customers through the ECAC/ECRC in their rate schedules. The Utilities do not operate, or participate in the operation of, any of the facilities that provide power under the agreements. Title to the facilities does not pass to Hawaiian Electric or its subsidiaries upon expiration of the agreements, and the agreements do not contain bargain purchase options for the facilities. Purchase power adjustment clause. The PUC has approved purchased power adjustment clauses (PPACs) for the Utilities. Purchased power capacity, O&M and other non-energy costs previously recovered through base rates are now recovered in the PPACs and, subject to approval by the PUC, such costs resulting from new purchased power agreements can be added to the PPACs outside of a rate case. Purchased energy costs continue to be recovered through the ECAC/ECRC to the extent they are not recovered through base rates. AES Hawaii, Inc. Under a PPA entered into in March 1988, as amended (through Amendment No. 2) for a period of 30 years ending September 2022, 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 February 2018, Hawaiian Electric reached agreement with AES Hawaii on Amendment No. 4. However, 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. If approved by the PUC, Amendment No. 4 will resolve AES Hawaii’s claims. Hu Honua Bioenergy, LLC (Hu Honua). 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, which becomes effective once the PUC’s order is final and non-appealable. On August 25, 2017, the PUC’s approval was appealed by a third party. The appeal is still pending. Hu Honua expects to be ready to be on-line by the end of March 2019. 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 achieve future cost savings consistent with a minimum of $244 million in ERP/EAM project-related benefits to be delivered to customers over the system’s 12-year service life. The decision and order (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%. The ERP/EAM Implementation Project went live in October 2018. As of December 31, 2018, the Utilities considered the project implementation completed with incurred costs of $77.5 million of which $16.7 million were charged to O&M expenses, $2.6 million relate to capital costs and $58.2 million are deferred costs. In the Hawaiian Electric 2017 rate case, a settlement agreement approved by the PUC included authorization for the deferred project costs to accrue a return at 1.75% after the project went into service and until the deferred project costs are included in rate base, and for amortization of the deferred costs to not begin until the amortization expense is incorporated in rates and the unamortized deferred project costs are included in rate base. As of December 31, 2018, the accrued carrying costs after the project went into service amounted to $0.2 million. In February 2019, the PUC approved a methodology for passing the benefits of the new ERP/EAM system to customers developed by the Utilities in collaboration with the Consumer Advocate. The minimum of $244 million in customer benefits to be delivered over the 12-year service life is comprised of $141 million in future net O&M expense reductions and $103 million in future cost avoidance related to capital cost and tax cost. The O&M expense reduction commitments will be recognized as regulatory liabilities between rate cases and passed through to customers as reductions in rates in rate cases. The Utilities will file semi-annual reports detailing the O&M expense reduction benefits, capital cost avoidance benefits, and tax avoidance benefits. Schofield Generating Station Project. In June 2018, Hawaiian Electric placed into service an approximately 50 MW utility-owned and operated firm, renewable and dispatchable generation facility at Schofield Barracks. The project is located on land leased from the U.S. Army under a 35-year lease. PUC orders resulted in a project cost cap of $157.3 million of which capital costs up to $141.6 million (90% of the cost cap) are recoverable through the Major Project Interim Recovery (MPIR) adjustment mechanism. (See “Decoupling” section below for MPIR guidelines and cost recovery discussion.) Project costs incurred as of December 31, 2018 amounted to $144.9 million. Cost recovery of capital costs in excess of $141.6 million is to be addressed in the next general rate case. West Loch PV Project. In June 2017, the PUC approved the expenditure of funds for Hawaiian Electric to build, own and operate a utility-owned, grid-tied 20-MW (ac) solar facility on property owned by the Department of the Navy, including a 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 cost recovery discussion.) Hawaiian Electric has provided supplemental materials, 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 December 31, 2018 amounted to $38.6 million. Hawaiian Telcom. The Utilities each had 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 allowed 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 maintained, replaced and installed the majority of the jointly-owned poles in each of the respective service territories, and billed the other joint pole owners for their respective share of the costs. The counties and the State had been reimbursing the Utilities for their share of the costs. However, Hawaiian Telcom had been delinquent in reimbursing the Utilities for its share of the costs. Hawaiian Telcom’s delinquency was resolved by new agreements with Hawaiian Telcom approved by the PUC in October 2018. These new agreements provide for the purchase by the Utilities of Hawaiian Telcom’s interest in all the joint poles, and licensing and operating agreements between the Utilities and Hawaiian Telcom subsequent to the transfer of the joint pole interest to the Utilities, and a settlement on the amount Hawaiian Telcom owed the Utilities under the joint ownership and maintenance agreements. The Utilities’ consideration of approximately $48 million for Hawaiian Telcom’s interest in the poles was offset in part by the settlement of the outstanding receivables owed by Hawaiian Telcom to the Utilities of $19.1 million ($12.3 million at Hawaiian Electric, $5.5 million at Hawaii Electric Light, and $1.3 million at Maui Electric). The remaining consideration for acquiring Hawaiian Telcom’s interest in the joint poles will be settled through the set-off of fees for unbilled poles (since the delinquency and dispute were raised) and for attachment fees and license fees for 2018, and future license fees due from Hawaiian Telcom, after which Hawaiian Telcom will 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 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 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 December 31, 2018, representing the probable and reasonably estimable 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 the costs of investigation and 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 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. The Navy released the Proposed Plan on February 2, 2016 and the Record of Decision on September 26, 2018 for the Pearl Harbor Sediment Remediation. In the Record of Decision the Navy refined its estimate for the costs of remediation for the site to be $3.4 million. 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. 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 December 31, 2018, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $4.8 million. The reserve balance represents the estimable cost for the onshore investigation and the remediation of PCB contamination in the offshore sediment. The final remediation costs will depend on the assessment of potential source control requirements for onshore sediment and actual offshore cleanup costs. Asset retirement obligations. AROs represent legal obligations associated with the retirement of certain tangible long-lived assets, are measured as the present value of the projected costs for the future retirement of specific assets and are recognized in the period in which the liability is incurred if a reasonable estimate of fair value can be made. The Utilities’ recognition of AROs have no impact on their earnings. The cost of the AROs is recovered over the life of the asset through depreciation. AROs recognized by the Utilities relate to legal obligations associated with the retirement of plant and equipment, including removal of asbestos and other hazardous materials. The Utilities recorded AROs related to the removal of retired generating units at Hawaiian Electric’s Honolulu and Waiau power plants, certain types of transformers and underground storage tanks, and the abandonment of fuel pipelines, underground injection and supply wells. In 2017, for the retired generating unit removal projects, the AROs were reassessed (resulting in a downward revision in estimated cash flows), the removal projects were completed and the AROs were reduced to nil. Changes to the ARO liability included in “Other liabilities” on Hawaiian Electric’s balance sheet were as follows:
(in thousands) | 2018 |  |  | 2017 |
Balance, January 1 | $ | 6,035 |  |  | $ | 25,589 |
Accretion expense | 282 |  |  | 10 |
Liabilities incurred | 1,058 |  |  | 5,370 |
Liabilities settled | (74 | ) |  | (527 | )
Revisions in estimated cash flows | 1,125 |  |  | (24,407 | )
Balance, December 31 | $ | 8,426 |  |  | $ | 6,035 |
The Utilities have not recorded AROs for assets that are expected to operate indefinitely or where the Utilities cannot estimate a settlement date (or range of potential settlement dates). As such, ARO liabilities are not recorded for certain asset retirement activities, including various Utilities-owned generating facilities and certain electric transmission, distribution and telecommunications assets resulting from easements over property not owned by the Utilities. Regulatory proceedings. Decoupling. Decoupling is a regulatory model that is intended to provide utility financial stability and 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, allows the utilities to recover from customers through annual rate adjustments, target test year revenues, independent of the level of kWh sales, which have declined as privately-owned distributed energy resources have been added to the grid and energy efficiency measures have been put into place. The decoupling mechanism has the following major components: (1) monthly revenue balancing account (RBA) revenues or refunds for the difference between PUC-approved target revenues and recorded adjusted revenues, which delinks revenues from kilowatthour sales, (2) rate adjustment mechanism (RAM) revenues for escalation in certain operation and maintenance (O&M) expenses and rate base changes, (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 ROACE allowed in its most recent rate case. Under the decoupling tariff approved in 2011, the prior year accrued RBA revenues (regulatory asset) and the annual RAM amount are billed from June 1 of each year through May 31 of the following year, which is within 24 months following the end of the year in which they are recorded as required by the accounting standard for alternative revenue programs. Under the decoupling mechanism, triennial general rate cases are required. Rate adjustment mechanism. The RAM is based on the lesser of: a) an inflationary adjustment for certain O&M expenses and return on investment for certain rate base changes, or b) cumulative annual compounded increase in Gross Domestic Product Price Index applied to annualized target revenues (the RAM Cap). Annualized target revenues 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 approved recovery of capital costs under the MPIR for Schofield Generating Station, which increased revenues in July through December 2018 by $3.4 million and will be collected in customer bills beginning in June 2019. On December 14, 2018, the PUC approved recovery of net operation and maintenance costs for the Schofield Generating Station through the MPIR adjustment mechanism, with accrual commencing as of October 1, 2018, which totaled $0.5 million for 2018. In February 2019, Hawaiian Electric submitted an MPIR filing for 2019 (which accrued effective January 1, 2019) that included the 2019 return on project amount (up to the capped amount) in rate base, depreciation and incremental O&M expenses, for collection from June 2020 through May 2021. Performance incentive mechanisms. The PUC has ordered the following performance incentive mechanisms (PIM).
• | Service Quality performance incentives are measured on a calendar-year basis beginning in 2018. 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 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 approved rate base (or maximum penalties of approximately $6.7 million - 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 approved rate base (or maximum penalties or incentives of approximately $1.3 million - in total for the three utilities).
• | The Utilities accrued $2.1 million in estimated net service quality penalties for 2018, which will be reflected in the 2019 annual decoupling filing and will reduce customer rates in the period June 1, 2019 through May 31, 2020.
• | Demand Response measured by the demand response resources acquired in 2018. The award is up to 5% of the aggregate annual contract value 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 applied to one-time performance in 2018 only. No reward is expected for 2018 performance.
• | 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 a percentage of the 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. There are two phases to this incentive. Phase 1 has an incentive of 20% of the savings for purchased power agreements filed by December 31, 2018 and subsequently approved by the PUC, with a cap of $3.5 million for the three utilities in total. Phase 2 has scaled incentives of 15%, 10% and 5% of the savings for purchased power agreements filed in January, February and March 2019, respectively, and subsequently approved by the PUC, with a cap of $3 million for the three utilities in total. There are no penalties. The Utilities submitted seven agreements for PUC approval in December 2018 which may qualify for rewards. Rewards, if qualified, will be accrued when the contract is approved by the PUC.
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 |
* | The 2018 annual RAM adjusted revenues for Maui Electric terminated on August 23, 2018, the effective date of interim increase tariff rates that were implemented pursuant to the Interim D&O issued in the Maui Electric consolidated 2015 and 2018 rate case.
** | 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.
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 proceeding has two phases. Phase 1 examines the current regulatory framework and identifies those areas of utility performance that are deserving of further focus in Phase 2. The PUC provided staff reports to the parties, held technical workshops and the parties filed briefs on: 1) goals and outcomes and 2) assessment of the existing regulatory framework and 3) metrics. PUC staff issued a Phase 1 proposal, and parties scheduled to file statements of position in March 2019 and reply statements of position in April 2019. PUC order related to Phase 1 will be issued after reply statements of position. Phase 2 will address design and implementation of performance incentive mechanisms, revenue adjustment mechanisms and other regulatory reforms. Performance-based ratemaking legislation. On April 24, 2018, Act 005, Session Laws 2018 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. On February 16, 2018, Hawaiian Electric implemented an interim increase of $36 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 a revised energy cost recovery clause (ECRC) mechanism shall reflect a 98%/2% fossil fuel generation cost risk-sharing split between ratepayers and Hawaiian Electric, with an annual maximum upside/downside capped at $2.5 million for the utility. On December 7, 2018, the PUC approved the ECRC tariff, consistent with the rate case order, with an effective date of January 1, 2019. Maui Electric consolidated 2015 and 2018 test year rate cases. On August 9, 2018, the PUC approved an interim rate increase based on a stipulated settlement between Maui Electric and the Consumer Advocate of $12.5 million over revenues at current effective rates 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 $462 million rate base, with the depreciation rates approved in July 2018. Interim rates went into effect on August 23, 2018. Hawaii Electric Light 2016 and 2019 test year rate cases. 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. On December 14, 2018, Hawaii Electric Light filed an application for a general rate increase for its 2019 test year rate case, requesting an increase of $13.4 million over revenues at current effective rates (for a 3.4% increase in revenues), based on an 8.3% rate of return (which incorporates a ROACE of 10.5%). 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. The Tax Act reductions were incorporated in rates as follows:
• | Hawaiian Electric (based on the 2017 test year rate case) - effective April 13, 2018.
• | Hawaii Electric Light (based on the 2016 test year rate case) - effective May 1, 2018.
• | Maui Electric’s rates were adjusted for the Tax Act as follows:
• | adjustments for the period January 1, 2018 through May 31, 2018 are in the annual Revenue Balancing Account adjustment, which became effective on June 1, 2018,
• | adjustments for the period June 1, 2018 through August 22, 2018 are embedded in the Revenue Balancing Account, which will be incorporated in rates on June 1, 2019, and
• | adjustments from August 23, 2018 and thereafter are incorporated in interim rates as a result of the 2018 test year rate case.
See discussion in “Decoupling” section above. 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, which was issued by Hawaii Electric Light and Maui Electric to HECO Capital Trust III (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 (see Hawaiian Electric and Subsidiaries’ Consolidated Statements of Capitalization) and (c) relating to the trust preferred securities of Trust III (see above under unconsolidated variable interest entities). 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. Consolidating statement of income Year ended December 31, 2018
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Revenues | $ | 1,802,550 |  |  | 375,493 |  |  | 368,700 |  |  | — |  |  | (218 | ) | [1] |  | $ | 2,546,525 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil | 523,706 |  |  | 90,792 |  |  | 146,030 |  |  | — |  |  | — |  |  |  | 760,528 |
Purchased power | 494,450 |  |  | 95,838 |  |  | 49,019 |  |  | — |  |  | — |  |  |  | 639,307 |
Other operation and maintenance | 313,346 |  |  | 70,396 |  |  | 77,749 |  |  | — |  |  | — |  |  |  | 461,491 |
Depreciation | 137,410 |  |  | 40,235 |  |  | 25,981 |  |  | — |  |  | — |  |  |  | 203,626 |
Taxes, other than income taxes | 170,363 |  |  | 34,850 |  |  | 34,699 |  |  | — |  |  | — |  |  |  | 239,912 |
Total expenses | 1,639,275 |  |  | 332,111 |  |  | 333,478 |  |  | — |  |  | — |  |  |  | 2,304,864 |
Operating income | 163,275 |  |  | 43,382 |  |  | 35,222 |  |  | — |  |  | (218 | ) |  |  | 241,661 |
Allowance for equity funds used during construction | 9,208 |  |  | 478 |  |  | 1,191 |  |  | — |  |  | — |  |  |  | 10,877 |
Equity in earnings of subsidiaries | 45,393 |  |  | — |  |  | — |  |  | — |  |  | (45,393 | ) | [2] |  | — |
Retirement defined benefits expense—other than service costs | (2,649 | ) |  | (417 | ) |  | (565 | ) |  | — |  |  | — |  |  |  | (3,631 | )
Interest expense and other charges, net | (52,180 | ) |  | (11,836 | ) |  | (9,550 | ) |  | — |  |  | 218 |  | [1] |  | (73,348 | )
Allowance for borrowed funds used during construction | 4,019 |  |  | 276 |  |  | 572 |  |  | — |  |  | — |  |  |  | 4,867 |
Income before income taxes | 167,066 |  |  | 31,883 |  |  | 26,870 |  |  | — |  |  | (45,393 | ) |  |  | 180,426 |
Income taxes | 22,333 |  |  | 6,868 |  |  | 5,577 |  |  | — |  |  | — |  |  |  | 34,778 |
Net income | 144,733 |  |  | 25,015 |  |  | 21,293 |  |  | — |  |  | (45,393 | ) |  |  | 145,648 |
Preferred stock dividends of subsidiaries | — |  |  | 534 |  |  | 381 |  |  | — |  |  | — |  |  |  | 915 |
Net income attributable to Hawaiian Electric | 144,733 |  |  | 24,481 |  |  | 20,912 |  |  | — |  |  | (45,393 | ) |  |  | 144,733 |
Preferred stock dividends of Hawaiian Electric | 1,080 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 1,080 |
Net income for common stock | $ | 143,653 |  |  | 24,481 |  |  | 20,912 |  |  | — |  |  | (45,393 | ) |  |  | $ | 143,653 |
Consolidating statement of comprehensive income Year ended December 31, 2018
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Net income for common stock | $ | 143,653 |  |  | 24,481 |  |  | 20,912 |  |  | — |  |  | (45,393 | ) |  |  | $ | 143,653 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net losses arising during the period, net of tax benefits | (26,019 | ) |  | (6,090 | ) |  | (5,004 | ) |  | — |  |  | 11,094 |  | [1] |  | (26,019 | )
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits | 19,012 |  |  | 2,819 |  |  | 2,423 |  |  | — |  |  | (5,242 | ) | [1] |  | 19,012 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes | 8,325 |  |  | 3,305 |  |  | 2,788 |  |  | — |  |  | (6,093 | ) | [1] |  | 8,325 |
Other comprehensive income, net of taxes | 1,318 |  |  | 34 |  |  | 207 |  |  | — |  |  | (241 | ) |  |  | 1,318 |
Comprehensive income attributable to common shareholder | $ | 144,971 |  |  | 24,515 |  |  | 21,119 |  |  | — |  |  | (45,634 | ) |  |  | $ | 144,971 |
Consolidating statement of income Year ended December 31, 2017
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Revenues | $ | 1,598,504 |  |  | 333,467 |  |  | 325,678 |  |  | — |  |  | (83 | ) | [1] |  | $ | 2,257,566 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil | 408,204 |  |  | 63,894 |  |  | 115,670 |  |  | — |  |  | — |  |  |  | 587,768 |
Purchased power | 454,189 |  |  | 87,772 |  |  | 44,673 |  |  | — |  |  | — |  |  |  | 586,634 |
Other operation and maintenance | 274,391 |  |  | 66,184 |  |  | 71,332 |  |  | — |  |  | — |  |  |  | 411,907 |
Depreciation | 130,889 |  |  | 38,741 |  |  | 23,154 |  |  | — |  |  | — |  |  |  | 192,784 |
Taxes, other than income taxes | 152,933 |  |  | 31,184 |  |  | 30,832 |  |  | — |  |  | — |  |  |  | 214,949 |
Total expenses | 1,420,606 |  |  | 287,775 |  |  | 285,661 |  |  | — |  |  | — |  |  |  | 1,994,042 |
Operating income | 177,898 |  |  | 45,692 |  |  | 40,017 |  |  | — |  |  | (83 | ) |  |  | 263,524 |
Allowance for equity funds used during construction | 10,896 |  |  | 554 |  |  | 1,033 |  |  | — |  |  | — |  |  |  | 12,483 |
Equity in earnings of subsidiaries | 38,057 |  |  | — |  |  | — |  |  | — |  |  | (38,057 | ) | [2] |  | — |
Retirement defined benefits expense—other than service costs | (5,049 | ) |  | (93 | ) |  | (861 | ) |  | — |  |  | — |  |  |  | (6,003 | )
Interest expense and other charges, net | (48,277 | ) |  | (11,799 | ) |  | (9,644 | ) |  |  |  | 83 |  | [1] |  | (69,637 | )
Allowance for borrowed funds used during construction | 4,089 |  |  | 238 |  |  | 451 |  |  | — |  |  | — |  |  |  | 4,778 |
Income before income taxes | 177,614 |  |  | 34,592 |  |  | 30,996 |  |  | — |  |  | (38,057 | ) |  |  | 205,145 |
Income taxes | 56,583 |  |  | 13,912 |  |  | 12,704 |  |  | — |  |  | — |  |  |  | 83,199 |
Net income | 121,031 |  |  | 20,680 |  |  | 18,292 |  |  | — |  |  | (38,057 | ) |  |  | 121,946 |
Preferred stock dividends of subsidiaries | — |  |  | 534 |  |  | 381 |  |  | — |  |  | — |  |  |  | 915 |
Net income attributable to Hawaiian Electric | 121,031 |  |  | 20,146 |  |  | 17,911 |  |  | — |  |  | (38,057 | ) |  |  | 121,031 |
Preferred stock dividends of Hawaiian Electric | 1,080 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 1,080 |
Net income for common stock | $ | 119,951 |  |  | 20,146 |  |  | 17,911 |  |  | — |  |  | (38,057 | ) |  |  | $ | 119,951 |
Consolidating statement of comprehensive income Year ended December 31, 2017
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Net income for common stock | $ | 119,951 |  |  | 20,146 |  |  | 17,911 |  |  | — |  |  | (38,057 | ) |  |  | $ | 119,951 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |
Derivatives qualified as cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Reclassification adjustment to net income, net of tax benefits | 454 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 454 |
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net losses arising during the period, net of tax benefits | 63,105 |  |  | 3,093 |  |  | 7,329 |  |  | — |  |  | (10,422 | ) | [1] |  | 63,105 |
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits | 14,477 |  |  | 1,903 |  |  | 1,619 |  |  | — |  |  | (3,522 | ) | [1] |  | 14,477 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes | (78,724 | ) |  | (4,994 | ) |  | (9,003 | ) |  | — |  |  | 13,997 |  | [1] |  | (78,724 | )
Other comprehensive income (loss), net of taxes | (688 | ) |  | 2 |  |  | (55 | ) |  | — |  |  | 53 |  |  |  | (688 | )
Comprehensive income attributable to common shareholder | $ | 119,263 |  |  | 20,148 |  |  | 17,856 |  |  | — |  |  | (38,004 | ) |  |  | $ | 119,263 |
Consolidating statement of income Year ended December 31, 2016
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Revenues | $ | 1,474,384 |  |  | 311,385 |  |  | 308,705 |  |  | — |  |  | (106 | ) | [1] |  | $ | 2,094,368 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Fuel oil | 305,359 |  |  | 55,094 |  |  | 94,251 |  |  | — |  |  | — |  |  |  | 454,704 |
Purchased power | 431,009 |  |  | 81,018 |  |  | 50,713 |  |  | — |  |  | — |  |  |  | 562,740 |
Other operation and maintenance | 268,118 |  |  | 64,216 |  |  | 67,597 |  |  | — |  |  | — |  |  |  | 399,931 |
Depreciation | 126,086 |  |  | 37,797 |  |  | 23,178 |  |  | — |  |  | — |  |  |  | 187,061 |
Taxes, other than income taxes | 141,615 |  |  | 29,017 |  |  | 29,230 |  |  | — |  |  | — |  |  |  | 199,862 |
Total expenses | 1,272,187 |  |  | 267,142 |  |  | 264,969 |  |  | — |  |  | — |  |  |  | 1,804,298 |
Operating income | 202,197 |  |  | 44,243 |  |  | 43,736 |  |  | — |  |  | (106 | ) |  |  | 290,070 |
Allowance for equity funds used during construction | 6,659 |  |  | 765 |  |  | 901 |  |  | — |  |  | — |  |  |  | 8,325 |
Equity in earnings of subsidiaries | 42,391 |  |  | — |  |  | — |  |  | — |  |  | (42,391 | ) | [2] |  | — |
Retirement defined benefits expense—other than service costs | (5,058 | ) |  | 319 |  |  | (863 | ) |  | — |  |  | — |  |  |  | (5,602 | )
Interest expense and other charges, net | (45,839 | ) |  | (11,555 | ) |  | (9,536 | ) |  | — |  |  | 106 |  | [1] |  | (66,824 | )
Allowance for borrowed funds used during construction | 2,484 |  |  | 294 |  |  | 366 |  |  | — |  |  | — |  |  |  | 3,144 |
Income before income taxes | 202,834 |  |  | 34,066 |  |  | 34,604 |  |  | — |  |  | (42,391 | ) |  |  | 229,113 |
Income taxes | 59,437 |  |  | 12,277 |  |  | 13,087 |  |  | — |  |  | — |  |  |  | 84,801 |
Net income | 143,397 |  |  | 21,789 |  |  | 21,517 |  |  | — |  |  | (42,391 | ) |  |  | 144,312 |
Preferred stock dividends of subsidiaries | — |  |  | 534 |  |  | 381 |  |  | — |  |  | — |  |  |  | 915 |
Net income attributable to Hawaiian Electric | 143,397 |  |  | 21,255 |  |  | 21,136 |  |  | — |  |  | (42,391 | ) |  |  | 143,397 |
Preferred stock dividends of Hawaiian Electric | 1,080 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 1,080 |
Net income for common stock | $ | 142,317 |  |  | 21,255 |  |  | 21,136 |  |  | — |  |  | (42,391 | ) |  |  | $ | 142,317 |
Consolidating statement of comprehensive income Year ended December 31, 2016
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Net income for common stock | $ | 142,317 |  |  | 21,255 |  |  | 21,136 |  |  | — |  |  | (42,391 | ) |  |  | $ | 142,317 |
Other comprehensive income (loss), net of taxes: |  |  |  |  |  |  |  |  |  |  |  |
Derivatives qualified as cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Effective portion of foreign currency hedge net unrealized losses arising during the period, net of tax benefits | (281 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  |  | (281 | )
Less: reclassification adjustment to net income, net of taxes | (173 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  |  | (173 | )
Retirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net losses arising during the period, net of tax benefits | (42,631 | ) |  | (5,141 | ) |  | (5,447 | ) |  | — |  |  | 10,588 |  | [1] |  | (42,631 | )
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits | 13,254 |  |  | 1,718 |  |  | 1,549 |  |  | — |  |  | (3,267 | ) | [1] |  | 13,254 |
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of tax benefits | 28,584 |  |  | 3,269 |  |  | 3,852 |  |  | — |  |  | (7,121 | ) | [1] |  | 28,584 |
Other comprehensive loss, net of tax benefits | (1,247 | ) |  | (154 | ) |  | (46 | ) |  | — |  |  | 200 |  |  |  | (1,247 | )
Comprehensive income attributable to common shareholder | $ | 141,070 |  |  | 21,101 |  |  | 21,090 |  |  | — |  |  | (42,191 | ) |  |  | $ | 141,070 |
Consolidating balance sheet December 31, 2018
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |
Utility property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land | $ | 40,449 |  |  | 5,606 |  |  | 3,612 |  |  | — |  |  | — |  |  |  | $ | 49,667 |
Plant and equipment | 4,456,090 |  |  | 1,259,553 |  |  | 1,094,028 |  |  | — |  |  | — |  |  |  | 6,809,671 |
Less accumulated depreciation | (1,523,861 | ) |  | (547,848 | ) |  | (505,633 | ) |  | — |  |  | — |  |  |  | (2,577,342 | )
Construction in progress | 193,677 |  |  | 8,781 |  |  | 30,687 |  |  | — |  |  | — |  |  |  | 233,145 |
Utility property, plant and equipment, net | 3,166,355 |  |  | 726,092 |  |  | 622,694 |  |  | — |  |  | — |  |  |  | 4,515,141 |
Nonutility property, plant and equipment, less accumulated depreciation | 5,314 |  |  | 115 |  |  | 1,532 |  |  | — |  |  | — |  |  |  | 6,961 |
Total property, plant and equipment, net | 3,171,669 |  |  | 726,207 |  |  | 624,226 |  |  | — |  |  | — |  |  |  | 4,522,102 |
Investment in wholly-owned subsidiaries, at equity | 576,838 |  |  | — |  |  | — |  |  | — |  |  | (576,838 | ) | [2] |  | — |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 16,732 |  |  | 15,623 |  |  | 3,421 |  |  | 101 |  |  | — |  |  |  | 35,877 |
Customer accounts receivable, net | 125,960 |  |  | 26,483 |  |  | 25,453 |  |  | — |  |  | — |  |  |  | 177,896 |
Accrued unbilled revenues, net | 88,060 |  |  | 17,051 |  |  | 16,627 |  |  | — |  |  | — |  |  |  | 121,738 |
Other accounts receivable, net | 21,962 |  |  | 3,131 |  |  | 3,033 |  |  | — |  |  | (21,911 | ) | [1] |  | 6,215 |
Fuel oil stock, at average cost | 54,262 |  |  | 11,027 |  |  | 14,646 |  |  | — |  |  | — |  |  |  | 79,935 |
Materials and supplies, at average cost | 30,291 |  |  | 7,155 |  |  | 17,758 |  |  | — |  |  | — |  |  |  | 55,204 |
Prepayments and other | 23,214 |  |  | 5,212 |  |  | 3,692 |  |  | — |  |  | — |  |  |  | 32,118 |
Regulatory assets | 60,093 |  |  | 3,177 |  |  | 7,746 |  |  | — |  |  | — |  |  |  | 71,016 |
Total current assets | 420,574 |  |  | 88,859 |  |  | 92,376 |  |  | 101 |  |  | (21,911 | ) |  |  | 579,999 |
Other long-term assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regulatory assets | 537,708 |  |  | 120,658 |  |  | 104,044 |  |  | — |  |  | — |  |  |  | 762,410 |
Other | 69,749 |  |  | 15,944 |  |  | 17,299 |  |  | — |  |  | — |  |  |  | 102,992 |
Total other long-term assets | 607,457 |  |  | 136,602 |  |  | 121,343 |  |  | — |  |  | — |  |  |  | 865,402 |
Total assets | $ | 4,776,538 |  |  | 951,668 |  |  | 837,945 |  |  | 101 |  |  | (598,749 | ) |  |  | $ | 5,967,503 |
Capitalization and liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capitalization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock equity | $ | 1,957,641 |  |  | 295,874 |  |  | 280,863 |  |  | 101 |  |  | (576,838 | ) | [2] |  | $ | 1,957,641 |
Cumulative preferred stock–not subject to mandatory redemption | 22,293 |  |  | 7,000 |  |  | 5,000 |  |  | — |  |  | — |  |  |  | 34,293 |
Long-term debt, net | 1,000,137 |  |  | 217,749 |  |  | 200,916 |  |  | — |  |  | — |  |  |  | 1,418,802 |
Total capitalization | 2,980,071 |  |  | 520,623 |  |  | 486,779 |  |  | 101 |  |  | (576,838 | ) |  |  | 3,410,736 |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term borrowings-non-affiliate | 25,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 25,000 |
Accounts payable | 126,384 |  |  | 20,045 |  |  | 25,362 |  |  | — |  |  | — |  |  |  | 171,791 |
Interest and preferred dividends payable | 16,203 |  |  | 4,203 |  |  | 2,841 |  |  | — |  |  | (32 | ) | [1] |  | 23,215 |
Taxes accrued | 164,747 |  |  | 34,128 |  |  | 34,458 |  |  | — |  |  | — |  |  |  | 233,333 |
Regulatory liabilities | 7,699 |  |  | 4,872 |  |  | 5,406 |  |  | — |  |  | — |  |  |  | 17,977 |
Other | 46,391 |  |  | 15,077 |  |  | 20,414 |  |  | — |  |  | (21,879 | ) | [1] |  | 60,003 |
Total current liabilities | 386,424 |  |  | 78,325 |  |  | 88,481 |  |  | — |  |  | (21,911 | ) |  |  | 531,319 |
Deferred credits and other liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred income taxes | 271,438 |  |  | 54,936 |  |  | 56,823 |  |  | — |  |  | — |  |  |  | 383,197 |
Regulatory liabilities | 657,210 |  |  | 176,101 |  |  | 98,948 |  |  | — |  |  | — |  |  |  | 932,259 |
Unamortized tax credits | 60,271 |  |  | 16,217 |  |  | 15,034 |  |  | — |  |  | — |  |  |  | 91,522 |
Defined benefit pension and other postretirement benefit plans liability | 359,174 |  |  | 73,147 |  |  | 71,338 |  |  | — |  |  | — |  |  |  | 503,659 |
Other | 61,950 |  |  | 32,319 |  |  | 20,542 |  |  | — |  |  | — |  |  |  | 114,811 |
Total deferred credits and other liabilities | 1,410,043 |  |  | 352,720 |  |  | 262,685 |  |  | — |  |  | — |  |  |  | 2,025,448 |
Total capitalization and liabilities | $ | 4,776,538 |  |  | 951,668 |  |  | 837,945 |  |  | 101 |  |  | (598,749 | ) |  |  | $ | 5,967,503 |
Consolidating balance sheet December 31, 2017
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |
Utility property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land | $ | 40,392 |  |  | 5,922 |  |  | 3,016 |  |  | — |  |  | — |  |  |  | $ | 49,330 |
Plant and equipment | 4,144,472 |  |  | 1,207,043 |  |  | 1,053,372 |  |  | — |  |  | — |  |  |  | 6,404,887 |
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 | ) | [2] |  | — |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 2,059 |  |  | 4,025 |  |  | 6,332 |  |  | 101 |  |  | — |  |  |  | 12,517 |
Advances to affiliates | — |  |  | — |  |  | 12,000 |  |  | — |  |  | (12,000 | ) | [1] |  | — |
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 | ) | [1] |  | 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 | ) | [2] |  | $ | 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 | ) | [1] |  | — |
Accounts payable | 121,328 |  |  | 17,855 |  |  | 20,427 |  |  | — |  |  | — |  |  |  | 159,610 |
Interest and preferred dividends payable | 15,677 |  |  | 4,174 |  |  | 2,735 |  |  | — |  |  | (11 | ) | [1] |  | 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 | ) | [1] |  | 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 |
Consolidating statements of changes in common stock equity
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  | Hawaiian Electric Consolidated
Balance, December 31, 2015 | $ | 1,728,325 |  |  | 292,702 |  |  | 263,725 |  |  | 101 |  |  | (556,528 | ) |  | $ | 1,728,325 |
Net income for common stock | 142,317 |  |  | 21,255 |  |  | 21,136 |  |  | — |  |  | (42,391 | ) |  | 142,317 |
Other comprehensive loss, net of tax benefits | (1,247 | ) |  | (154 | ) |  | (46 | ) |  | — |  |  | 200 |  |  | (1,247 | )
Issuance of common stock, net of expenses | 23,991 |  |  | (5 | ) |  | — |  |  | — |  |  | 5 |  |  | 23,991 |
Common stock dividends | (93,599 | ) |  | (22,507 | ) |  | (25,261 | ) |  | — |  |  | 47,768 |  |  | (93,599 | )
Balance, December 31, 2016 | 1,799,787 |  |  | 291,291 |  |  | 259,554 |  |  | 101 |  |  | (550,946 | ) |  | 1,799,787 |
Net income for common stock | 119,951 |  |  | 20,146 |  |  | 17,911 |  |  | — |  |  | (38,057 | ) |  | 119,951 |
Other comprehensive income (loss), net of taxes | (688 | ) |  | 2 |  |  | (55 | ) |  | — |  |  | 53 |  |  | (688 | )
Issuance of common stock, net of expenses | 14,000 |  |  | 4 |  |  | 4,801 |  |  | — |  |  | (4,805 | ) |  | 14,000 |
Common stock dividends | (87,767 | ) |  | (24,796 | ) |  | (11,946 | ) |  | — |  |  | 36,742 |  |  | (87,767 | )
Balance, December 31, 2017 | 1,845,283 |  |  | 286,647 |  |  | 270,265 |  |  | 101 |  |  | (557,013 | ) |  | 1,845,283 |
Net income for common stock | 143,653 |  |  | 24,481 |  |  | 20,912 |  |  | — |  |  | (45,393 | ) |  | 143,653 |
Other comprehensive income, net of taxes | 1,318 |  |  | 34 |  |  | 207 |  |  | — |  |  | (241 | ) |  | 1,318 |
Issuance of common stock, net of expenses | 70,692 |  |  | 1 |  |  | 1,498 |  |  | — |  |  | (1,499 | ) |  | 70,692 |
Common stock dividends | (103,305 | ) |  | (15,289 | ) |  | (12,019 | ) |  | — |  |  | 27,308 |  |  | (103,305 | )
Balance, December 31, 2018 | $ | 1,957,641 |  |  | 295,874 |  |  | 280,863 |  |  | 101 |  |  | (576,838 | ) |  | $ | 1,957,641 |
Consolidating statement of cash flows Year ended December 31, 2018
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income | $ | 144,733 |  |  | 25,015 |  |  | 21,293 |  |  | — |  |  | (45,393 | ) | [2] |  | $ | 145,648 |
Adjustments to reconcile net income to net cash provided by operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries | (45,493 | ) |  | — |  |  | — |  |  | — |  |  | 45,393 |  | [2] |  | (100 | )
Common stock dividends received from subsidiaries | 27,408 |  |  | — |  |  | — |  |  | — |  |  | (27,308 | ) | [2] |  | 100 |
Depreciation of property, plant and equipment | 137,410 |  |  | 40,235 |  |  | 25,981 |  |  | — |  |  | — |  |  |  | 203,626 |
Other amortization | 20,956 |  |  | 5,069 |  |  | 577 |  |  | — |  |  | — |  |  |  | 26,602 |
Deferred income taxes | (9,806 | ) |  | (341 | ) |  | 2,165 |  |  | — |  |  | — |  |  |  | (7,982 | )
Allowance for equity funds used during construction | (9,208 | ) |  | (478 | ) |  | (1,191 | ) |  | — |  |  | — |  |  |  | (10,877 | )
Other | (1,033 | ) |  | (213 | ) |  | (324 | ) |  | — |  |  | — |  |  |  | (1,570 | )
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase in accounts receivable | (51,656 | ) |  | (4,867 | ) |  | (8,614 | ) |  | — |  |  | 14,220 |  | [1] |  | (50,917 | )
Increase in accrued unbilled revenues | (10,884 | ) |  | (1,111 | ) |  | (2,689 | ) |  | — |  |  | — |  |  |  | (14,684 | )
Decrease (increase) in fuel oil stock | 10,710 |  |  | (2,329 | ) |  | (1,443 | ) |  | — |  |  | — |  |  |  | 6,938 |
Decrease (increase) in materials and supplies | (1,966 | ) |  | 886 |  |  | 273 |  |  | — |  |  | — |  |  |  | (807 | )
Decrease (increase) in regulatory assets | 12,192 |  |  | 71 |  |  | (3,011 | ) |  | — |  |  | — |  |  |  | 9,252 |
Increase in accounts payable | 14,748 |  |  | 6,104 |  |  | 3,506 |  |  | — |  |  | — |  |  |  | 24,358 |
Change in prepaid and accrued income taxes, tax credits and revenue taxes | 24,438 |  |  | (2,118 | ) |  | 3,047 |  |  | — |  |  | (331 | ) | [1] |  | 25,036 |
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability | 17,178 |  |  | (760 | ) |  | 2,328 |  |  | — |  |  | — |  |  |  | 18,746 |
Change in other assets and liabilities | 18,484 |  |  | 8,186 |  |  | 7,794 |  |  | — |  |  | (14,220 | ) | [1] |  | 20,244 |
Net cash provided by operating activities | 298,211 |  |  | 73,349 |  |  | 49,692 |  |  | — |  |  | (27,639 | ) |  |  | 393,613 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | (330,531 | ) |  | (54,553 | ) |  | (60,779 | ) |  | — |  |  | — |  |  |  | (445,863 | )
Contributions in aid of construction | 24,828 |  |  | 3,499 |  |  | 2,272 |  |  | — |  |  | — |  |  |  | 30,599 |
Advances from (to) affiliates | — |  |  | — |  |  | 12,000 |  |  | — |  |  | (12,000 | ) | [1] |  | — |
Other | 3,226 |  |  | 1,182 |  |  | 3,843 |  |  | — |  |  | 1,831 |  | [1], [2] |  | 10,082 |
Net cash used in investing activities | (302,477 | ) |  | (49,872 | ) |  | (42,664 | ) |  | — |  |  | (10,169 | ) |  |  | (405,182 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock dividends | (103,305 | ) |  | (15,289 | ) |  | (12,019 | ) |  | — |  |  | 27,308 |  | [2] |  | (103,305 | )
Preferred stock dividends of Hawaiian Electric and subsidiaries | (1,080 | ) |  | (534 | ) |  | (381 | ) |  | — |  |  | — |  |  |  | (1,995 | )
Proceeds from issuance of common stock | 70,700 |  |  | — |  |  | 1,500 |  |  | — |  |  | (1,500 | ) | [2] |  | 70,700 |
Proceeds from issuance of long-term debt | 75,000 |  |  | 15,000 |  |  | 10,000 |  |  | — |  |  | — |  |  |  | 100,000 |
Repayment of long-term debt | (30,000 | ) |  | (11,000 | ) |  | (9,000 | ) |  | — |  |  | — |  |  |  | (50,000 | )
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less | (16,999 | ) |  | — |  |  | — |  |  | — |  |  | 12,000 |  | [1] |  | (4,999 | )
Proceeds from other bank borrowings | 25,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 25,000 |
Other | (377 | ) |  | (56 | ) |  | (39 | ) |  | — |  |  | — |  |  |  | (472 | )
Net cash provided by (used in) financing activities | 18,939 |  |  | (11,879 | ) |  | (9,939 | ) |  | — |  |  | 37,808 |  |  |  | 34,929 |
Net increase (decrease) in cash and cash equivalents | 14,673 |  |  | 11,598 |  |  | (2,911 | ) |  | — |  |  | — |  |  |  | 23,360 |
Cash and cash equivalents, January 1 | 2,059 |  |  | 4,025 |  |  | 6,332 |  |  | 101 |  |  | — |  |  |  | 12,517 |
Cash and cash equivalents, December 31 | $ | 16,732 |  |  | 15,623 |  |  | 3,421 |  |  | 101 |  |  | — |  |  |  | $ | 35,877 |
Consolidating statement of cash flows Year ended December 31, 2017
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income | $ | 121,031 |  |  | 20,680 |  |  | 18,292 |  |  | — |  |  | (38,057 | ) | [2] |  | $ | 121,946 |
Adjustments to reconcile net income to net cash provided by operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries | (38,157 | ) |  | — |  |  | — |  |  | — |  |  | 38,057 |  | [2] |  | (100 | )
Common stock dividends received from subsidiaries | 36,867 |  |  | — |  |  | — |  |  | — |  |  | (36,742 | ) | [2] |  | 125 |
Depreciation of property, plant and equipment | 130,889 |  |  | 38,741 |  |  | 23,154 |  |  | — |  |  | — |  |  |  | 192,784 |
Other amortization | 2,398 |  |  | 3,225 |  |  | 2,875 |  |  | — |  |  | — |  |  |  | 8,498 |
Deferred income taxes | 26,342 |  |  | 3,954 |  |  | 8,004 |  |  | — |  |  | (263 | ) | [1] |  | 38,037 |
Allowance for equity funds used during construction | (10,896 | ) |  | (554 | ) |  | (1,033 | ) |  | — |  |  | — |  |  |  | (12,483 | )
Other | (1,154 | ) |  | 430 |  |  | (342 | ) |  | — |  |  | — |  |  |  | (1,066 | )
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Decrease (increase) in accounts receivable | 1,817 |  |  | (359 | ) |  | 45 |  |  | — |  |  | 1,411 |  | [1] |  | 2,914 |
Increase in accrued unbilled revenues | (11,355 | ) |  | (2,376 | ) |  | (1,630 | ) |  | — |  |  | — |  |  |  | (15,361 | )
Increase in fuel oil stock | (17,733 | ) |  | (469 | ) |  | (2,241 | ) |  | — |  |  | — |  |  |  | (20,443 | )
Decrease (increase) in materials and supplies | 1,603 |  |  | (661 | ) |  | (1,660 | ) |  | — |  |  | — |  |  |  | (718 | )
Increase in regulatory assets | (8,395 | ) |  | (4,007 | ) |  | (4,854 | ) |  | — |  |  | — |  |  |  | (17,256 | )
Increase (decrease) in accounts payable | 23,519 |  |  | (3,547 | ) |  | 5,762 |  |  | — |  |  | — |  |  |  | 25,734 |
Change in prepaid and accrued income taxes, tax credits and revenue taxes | 16,716 |  |  | 7,961 |  |  | 5,362 |  |  | — |  |  | (177 | ) | [1] |  | 29,862 |
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability | 709 |  |  | 52 |  |  | (157 | ) |  | — |  |  | — |  |  |  | 604 |
Change in other assets and liabilities | (16,213 | ) |  | (433 | ) |  | 166 |  |  | — |  |  | (1,411 | ) | [1] |  | (17,891 | )
Net cash provided by operating activities | 257,988 |  |  | 62,637 |  |  | 51,743 |  |  | — |  |  | (37,182 | ) |  |  | 335,186 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | (339,279 | ) |  | (52,077 | ) |  | (50,242 | ) |  | — |  |  | — |  |  |  | (441,598 | )
Contributions in aid of construction | 57,527 |  |  | 4,293 |  |  | 2,913 |  |  | — |  |  | — |  |  |  | 64,733 |
Advances from (to) affiliates | — |  |  | 3,500 |  |  | (2,000 | ) |  | — |  |  | (1,500 | ) | [1] |  | — |
Other | (1,711 | ) |  | 649 |  |  | 400 |  |  | — |  |  | 5,240 |  | [1],[2] |  | 4,578 |
Net cash used in investing activities | (283,463 | ) |  | (43,635 | ) |  | (48,929 | ) |  | — |  |  | 3,740 |  |  |  | (372,287 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock dividends | (87,767 | ) |  | (24,796 | ) |  | (11,946 | ) |  | — |  |  | 36,742 |  | [2] |  | (87,767 | )
Preferred stock dividends of Hawaiian Electric and subsidiaries | (1,080 | ) |  | (534 | ) |  | (381 | ) |  | — |  |  | — |  |  |  | (1,995 | )
Proceeds from the issuance of common stock | 14,000 |  |  | — |  |  | 4,800 |  |  | — |  |  | (4,800 | ) | [2] |  | 14,000 |
Proceeds from the issuance of long-term debt | 202,000 |  |  | 28,000 |  |  | 85,000 |  |  | — |  |  | — |  |  |  | 315,000 |
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 | 3,499 |  |  | — |  |  | — |  |  | — |  |  | 1,500 |  | [1] |  | 4,999 |
Other | (2,506 | ) |  | (396 | ) |  | (1,003 | ) |  | — |  |  | — |  |  |  | (3,905 | )
Net cash provided by (used in) financing activities | (33,854 | ) |  | (25,726 | ) |  | 1,470 |  |  | — |  |  | 33,442 |  |  |  | (24,668 | )
Net increase (decrease) in cash and cash equivalents | (59,329 | ) |  | (6,724 | ) |  | 4,284 |  |  | — |  |  | — |  |  |  | (61,769 | )
Cash and cash equivalents, January 1 | 61,388 |  |  | 10,749 |  |  | 2,048 |  |  | 101 |  |  | — |  |  |  | 74,286 |
Cash and cash equivalents, December 31 | $ | 2,059 |  |  | 4,025 |  |  | 6,332 |  |  | 101 |  |  | — |  |  |  | $ | 12,517 |
Consolidating statement of cash flows Year ended December 31, 2016
(in thousands) | Hawaiian Electric |  | Hawaii Electric Light |  | Maui Electric |  | Other subsidiaries |  | Consolidating adjustments |  |  | Hawaiian Electric Consolidated
Cash flows from operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income | $ | 143,397 |  |  | 21,789 |  |  | 21,517 |  |  | — |  |  | (42,391 | ) | [2] |  | $ | 144,312 |
Adjustments to reconcile net income to net cash provided by operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries | (42,491 | ) |  | — |  |  | — |  |  | — |  |  | 42,391 |  | [2] |  | (100 | )
Common stock dividends received from subsidiaries | 47,843 |  |  | — |  |  | — |  |  | — |  |  | (47,768 | ) | [2] |  | 75 |
Depreciation of property, plant and equipment | 126,086 |  |  | 37,797 |  |  | 23,178 |  |  | — |  |  | — |  |  |  | 187,061 |
Other amortization | 2,979 |  |  | 1,817 |  |  | 2,139 |  |  | — |  |  | — |  |  |  | 6,935 |
Deferred income taxes | 54,721 |  |  | 7,027 |  |  | 12,661 |  |  | — |  |  | (23 | ) | [1] |  | 74,386 |
Allowance for equity funds used during construction | (6,659 | ) |  | (765 | ) |  | (901 | ) |  | — |  |  | — |  |  |  | (8,325 | )
Other | (2,517 | ) |  | (750 | ) |  | (433 | ) |  | — |  |  | — |  |  |  | (3,700 | )
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Decrease (increase) in accounts receivable | 10,175 |  |  | (718 | ) |  | 1,776 |  |  | — |  |  | (2,682 | ) | [1] |  | 8,551 |
Increase in accrued unbilled revenues | (5,741 | ) |  | (1,033 | ) |  | (410 | ) |  | — |  |  | — |  |  |  | (7,184 | )
Decrease in fuel oil stock | 2,216 |  |  | 81 |  |  | 2,489 |  |  | — |  |  | — |  |  |  | 4,786 |
Decrease (increase) in materials and supplies | 993 |  |  | (515 | ) |  | 272 |  |  | — |  |  | — |  |  |  | 750 |
Increase in regulatory assets | (16,161 | ) |  | (1,243 | ) |  | (869 | ) |  | — |  |  | — |  |  |  | (18,273 | )
Increase (decrease) in accounts payable | (10,247 | ) |  | 768 |  |  | (1,135 | ) |  | — |  |  | — |  |  |  | (10,614 | )
Change in prepaid and accrued income taxes, tax credits and revenue taxes | 2,933 |  |  | 2,645 |  |  | (3,478 | ) |  | — |  |  | 23 |  | [1] |  | 2,123 |
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability | 599 |  |  | 53 |  |  | (168 | ) |  | — |  |  | — |  |  |  | 484 |
Change in other assets and liabilities | (11,682 | ) |  | (78 | ) |  | (2,272 | ) |  | — |  |  | 2,682 |  | [1] |  | (11,350 | )
Net cash provided by operating activities | 296,444 |  |  | 66,875 |  |  | 54,366 |  |  | — |  |  | (47,768 | ) |  |  | 369,917 |
Cash flows from investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | (236,425 | ) |  | (51,344 | ) |  | (32,668 | ) |  | — |  |  | — |  |  |  | (320,437 | )
Contributions in aid of construction | 23,611 |  |  | 3,412 |  |  | 3,077 |  |  | — |  |  | — |  |  |  | 30,100 |
Advances from (to) affiliates | — |  |  | 12,000 |  |  | (2,500 | ) |  | — |  |  | (9,500 | ) | [1] |  | — |
Other | 1,932 |  |  | 175 |  |  | 31 |  |  | — |  |  | — |  |  |  | 2,138 |
Net cash used in investing activities | (210,882 | ) |  | (35,757 | ) |  | (32,060 | ) |  | — |  |  | (9,500 | ) |  |  | (288,199 | )
Cash flows from financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock dividends | (93,599 | ) |  | (22,507 | ) |  | (25,261 | ) |  | — |  |  | 47,768 |  | [2] |  | (93,599 | )
Preferred stock dividends of Hawaiian Electric and subsidiaries | (1,080 | ) |  | (534 | ) |  | (381 | ) |  | — |  |  | — |  |  |  | (1,995 | )
Proceeds from the issuance of common stock | 24,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 24,000 |
Proceeds from the issuance of long-term debt | 40,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  | 40,000 |
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less | (9,500 | ) |  | — |  |  | — |  |  | — |  |  | 9,500 |  | [1] |  | — |
Other | (276 | ) |  | (10 | ) |  | (1 | ) |  | — |  |  | — |  |  |  | (287 | )
Net cash used in financing activities | (40,455 | ) |  | (23,051 | ) |  | (25,643 | ) |  | — |  |  | 57,268 |  |  |  | (31,881 | )
Net increase (decrease) in cash and cash equivalents | 45,107 |  |  | 8,067 |  |  | (3,337 | ) |  | — |  |  | — |  |  |  | 49,837 |
Cash and cash equivalents, January 1 | 16,281 |  |  | 2,682 |  |  | 5,385 |  |  | 101 |  |  | — |  |  |  | 24,449 |
Cash and cash equivalents, December 31 | $ | 61,388 |  |  | 10,749 |  |  | 2,048 |  |  | 101 |  |  | — |  |  |  | $ | 74,286 |
Explanation of consolidating adjustments on consolidating schedules:
[1] | Eliminations of intercompany receivables and payables and other intercompany transactions.
[2] | Elimination of investment in subsidiaries, carried at equity.

X
- Definition -- None. No documentation exists for this element. -- + References No definition available. + Details
Name: | he_ElectricUtilitySubsidiaryDisclosureAbstract
Namespace Prefix: | he_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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