XML 41 R21.htm IDEA: XBRL DOCUMENT v3.20.4
Segment financial information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment financial information
Note 2 · Segment financial information
The electric utility and bank segments are strategic business units of the Company that offer different products and services and operate in different regulatory environments. The accounting policies of the segments are the same as those described for the Company in the summary of significant accounting policies, except as otherwise indicated and except that federal and state income taxes for each segment are calculated on a “stand-alone” basis. HEI evaluates segment performance based on net income. Each segment accounts for intersegment sales and transfers as if the sales and transfers were to third parties (i.e., at current market prices). Intersegment revenues consist primarily of Hamakua Energy revenues, interest, rent and preferred stock dividends.
Electric utility
Hawaiian Electric and its wholly owned operating subsidiaries, Hawaii Electric Light and Maui Electric, are public electric utilities in the business of generating, purchasing, transmitting, distributing and selling electric energy on all major islands in Hawaii other than Kauai, and are regulated by the PUC. The utility subsidiaries are aggregated within the electric utility segment because they: (1) are involved in the business of supplying electric energy in the same geographical location (i.e., the State of Hawaii), (2) have similar production processes that comprise electric generation, (3) serve similar customers within their franchise territories (e.g., residential, commercial and industrial customers), (4) use similar electric grids to distribute the energy to their customers, (5) are regulated by the PUC and undergo similar rate-making processes, (6) have similar economic characteristics and (7) perform financial reporting oversight and management of the business at the consolidated level.
Bank
ASB is a federally chartered savings bank that provides a full range of banking services to individual and business customers through its branch system in Hawaii. ASB is subject to examination and comprehensive regulation by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), and is subject to reserve requirements established by the Board of Governors of the Federal Reserve System.
Other
“Other” includes amounts for the holding companies (HEI and ASB Hawaii), Pacific Current, and other subsidiaries not qualifying as reportable segments, and intercompany eliminations.
Pacific Current. Pacific Current was formed in September 2017 to focus on investing in non-regulated renewable energy and sustainable infrastructure in the State of Hawaii to help achieve the state’s sustainability goals. Significant investments of Pacific Current made through its subsidiaries, Hamakua Energy, LLC and Mauo, include:
Hamakua power plant. On November 24, 2017, Hamakua Energy, LLC acquired Hamakua Energy Partners, L.P.’s 60-MW combined cycle power plant and other assets from affiliates of ArcLight Capital Partners, a private equity firm. The plant sells all the power it produces to Hawaii Electric Light under an existing power purchase agreement (PPA) that expires in 2030.
Solar-plus-storage power purchase agreement. On February 2, 2018, Mauo executed definitive agreements to acquire a solar-plus-storage PPA for a multi-site, commercial-scale project that will provide 8.6 MW of solar capacity and 42.3 megawatthour (MWh) of storage capacity on the islands of Maui and Oahu. The PPA has a 15-year term with a customer option to extend for an additional five years. The system is being constructed by a third party contractor under an Engineering, Procurement and Construction (EPC) contract that was contemporaneously negotiated and executed by Mauo. The EPC contract provides a fixed price for the purchase of the completed system, a project completion schedule and performance obligations designed to match the requirements of the solar-plus-storage PPA. Mauo is funding the construction of the project with a construction facility that will be repaid at the commercial operation date (ultimately with cash from investment tax credits, state renewable tax credits, non-recourse project debt, and equity).
Segment financial information was as follows:
(in thousands)Electric utilityBankOtherTotal
2020   
Revenues from external customers$2,265,281 $313,511 $983 $2,579,775 
Intersegment revenues (eliminations)39 — (39)— 
Revenues2,265,320 313,511 944 2,579,775 
Depreciation and amortization256,479 29,349 4,950 290,778 
Interest expense, net67,794 11,114 20,900 99,808 
Income (loss) before income taxes211,753 69,271 (40,400)240,624 
Income taxes (benefit)40,418 11,688 (11,196)40,910 
Net income (loss)171,335 57,583 (29,204)199,714 
Preferred stock dividends of subsidiaries1,995 — (105)1,890 
Net income (loss) for common stock169,340 57,583 (29,099)197,824 
Capital expenditures1
350,864 12,203 20,828 383,895 
Assets (at December 31, 2020)6,457,373 8,396,533 150,101 15,004,007 
2019    
Revenues from external customers$2,545,865 $327,917 $166 $2,873,948 
Intersegment revenues (eliminations)77 — (77)— 
Revenues2,545,942 327,917 89 2,873,948 
Depreciation and amortization245,362 28,675 4,076 278,113 
Interest expense, net70,842 18,440 20,057 109,339 
Income (loss) before income taxes197,140 112,034 (37,765)271,409 
Income taxes (benefit)38,305 23,061 (9,729)51,637 
Net income (loss)158,835 88,973 (28,036)219,772 
Preferred stock dividends of subsidiaries1,995 — (105)1,890 
Net income (loss) for common stock156,840 88,973 (27,931)217,882 
Capital expenditures1
419,898 24,175 13,447 457,520 
Assets (at December 31, 2019)6,388,682 7,233,017 123,552 13,745,251 
2018    
Revenues from external customers$2,546,472 $314,275 $102 $2,860,849 
Intersegment revenues (eliminations)53 — (53)— 
Revenues2,546,525 314,275 49 2,860,849 
Depreciation and amortization230,228 21,443 3,958 255,629 
Interest expense, net73,348 15,539 15,329 104,216 
Income (loss) before income taxes180,426 106,578 (32,543)254,461 
Income taxes (benefit)34,778 24,069 (8,050)50,797 
Net income (loss)145,648 82,509 (24,493)203,664 
Preferred stock dividends of subsidiaries1,995 — (105)1,890 
Net income (loss) for common stock143,653 82,509 (24,388)201,774 
Capital expenditures1
415,264 72,666 18,840 537,369 
Assets (at December 31, 2018)5,967,503 7,027,894 108,654 13,104,051 
1    Contributions in aid of construction balances are included in capital expenditures.
Intercompany electricity sales of the Utilities to ASB and “other” segments are not eliminated because those segments would need to purchase electricity from another source if it were not provided by the Utilities and the profit on such sales is nominal.
Bank fees that ASB charges the Utilities and “other” segments are not eliminated because those segments would pay fees to another financial institution if they were to bank with another institution and the profit on such fees is nominal.
Hamakua Energy, LLC’s (Hamakua Energy’s) sales to Hawaii Electric Light (a regulated affiliate) are eliminated in consolidation.