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Electric utility segment

9 Months Ended

Sep. 30, 2024

Electric Utility Subsidiary [Abstract]

Electric utility segment

Electric utility segment

Consolidated variable interest entities. The HE AR INTER LLC and its direct subsidiary, HE AR BRWR LLC, (collectively, the SPEs) are bankruptcy remote, direct and indirect wholly owned subsidiaries of the Utilities. Pursuant to the Asset-backed lending facility (ABL facility) credit agreement, the Utilities sells certain accounts receivable to the SPEs as collateral, which in turn, obtain financing from financial institutions. As of September 30, 2024, the ABL facility remains undrawn and the SPEs have $325.1 million of net accounts receivable, included in customer accounts receivable, net, and accrued unbilled revenue, net, on the Utilities’ Condensed Consolidated Balance Sheet and accounts receivable and unbilled revenues, net, on the Company’s Condensed Consolidated Balance Sheet.

The SPEs are considered VIEs due to insufficient equity investment at risk. The most significant activities that impact the economic performance of the SPEs are cash and financing management. The Utilities are considered the primary beneficiary as the Utilities direct the activities related to cash and financing management and therefore, are required to consolidate the SPEs. Although the SPEs are direct and indirect wholly owned consolidated subsidiaries of the Utilities, the SPEs are legally separate from the Utilities. The assets of the SPEs (which are primarily accounts receivables) are not available to creditors of the Utilities.

Unconsolidated variable interest entities.

Power purchase agreements.  As of September 30, 2024, the Utilities had four power purchase agreements (PPAs) for firm capacity and other PPAs with independent power producers (IPPs) and Schedule Q providers (i.e., customers with cogeneration and/or power production facilities who buy power from or sell power to the Utilities), none of which are 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) and Hamakua Energy by reason of the provisions of the PPA that the Utilities have with the two IPPs. However, management has concluded that the Utilities are not the primary beneficiary of Kalaeloa and Hamakua Energy because the Utilities do not have the power to direct the activities that most significantly impact the two 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 and Hamakua Energy in its condensed consolidated financial statements. However, Hamakua Energy is an indirect subsidiary of Pacific Current and is consolidated in HEI’s condensed consolidated financial statements.

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. The consolidation of any significant IPP could have a material effect on the unaudited condensed consolidated financial statements, including the recognition of a significant amount of assets and liabilities and, if such a consolidated IPP were operating at a loss and had insufficient equity, the potential recognition of such losses. If the Utilities determine they are required to consolidate the financial statements of such an IPP and the consolidation has a material effect, the Utilities would retrospectively apply accounting standards for VIEs to the IPP.

Commitments and contingencies.

Contingencies. The Utilities are subject in the normal course of business to legal, regulatory and environmental proceedings. Excluding the potential liabilities from the Maui windstorm and wildfires, 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. The Utilities record loss contingencies when the outcome of such proceedings is probable and when the amount of the loss is reasonably estimable. The Utilities also evaluate, on a continuous basis, whether developments in such proceedings could cause these assessments or estimates to change. Assessment regarding future events is required when evaluating whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable. Management is often unable to estimate a reasonably possible loss, or a range of loss, particularly in cases in which: (i) the damages sought are indeterminate or the basis for the damages claimed is not clear; (ii) proceedings are in early stages; (iii) discovery is not complete; (iv) the matters involve novel or unsettled legal theories; (v) significant facts are in dispute; (vi) a large number of parties are represented (including circumstances in which it is uncertain how liability, if any, would be shared among multiple defendants); (vii) a lower court or administrative agency’s decision or ruling has been appealed; and/or (viii) a wide range of potential outcomes exist. In such cases, there may be considerable uncertainty regarding the timing or ultimate resolution, including any possible loss, fine, penalty, or business impact.

August 2023 Maui windstorm and wildfires. See Note 2.

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 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 and litigation delays, which resulted in the termination of the original PPA. Following the termination, Hu Honua filed a lawsuit in the U.S. District Court for the District of Hawaii. The parties reached a settlement that was conditioned on the PUC’s timely, non-appealable final approval of an amended and restated PPA dated May 9, 2017. On May 23, 2022, following a contested case hearing, the PUC issued a decision and order denying the amended and restated PPA, based on, among other things, findings that: (1) the project will result in significant greenhouse gas (GHG) emissions, (2) Hu Honua’s proposed carbon commitment to sequester more GHG emissions than produced by the project are speculative and unsupported, (3) the amended and restated PPA is likely to result in high costs to customers through its relatively high cost of electricity and through potential displacement of other, lower cost, renewable resources, and (4) based on the foregoing, approving the amended and restated PPA is not prudent or in the public interest. On June 2, 2022, Hawaii Electric Light and Hu Honua filed their separate motions for reconsideration, which were denied by the PUC on June 24, 2022. On June 29, 2022, Hu Honua filed its notice of appeal to the Hawaii Supreme Court of the PUC’s May 23, 2022 decision and order denying the amended and restated PPA. On March 13, 2023, the Hawaii Supreme Court affirmed the PUC’s decision denying the amended and restated PPA between Hu Honua and Hawaii Electric Light and entered its judgment on appeal on April 12, 2023. On June 7, 2023, Hu Honua filed a status report with the U.S. District Court for the District of Hawaii, stating, among other things, that because settlement of the underlying federal lawsuit was contingent on timely, non-appealable, final approval of the amended and restated PPA by the PUC, that the Hawaii Supreme Court’s opinion made fulfillment of the condition impossible, and therefore the settlement agreement between the Hawaiian Electric defendants (HEI, Hawaiian Electric, and Hawaii Electric Light) and Hu Honua is null and void and of no further effect. On November 16, 2023, Hu Honua filed its Motion for Leave to File Third Amended and Supplemental Complaint and for Permissive Joinder with the U.S. District Court for the District of Hawaii, asking the court to grant it leave to file a Third Amended and Supplemental Complaint, which would amend its claims and add three new proposed defendants. The hearing on this motion took place on February 14, 2024. The court issued a decision and order on the motion on April 2, 2024, which was consistent with Hawaii Electric Light's position, only allowing amendments that were agreed to and not allowing Hu Honua to add new claims or parties, effectively leaving Hu Honua with its previously-pled breach of contract and antitrust claims. Hu Honua filed its objection to the order on April 16, 2024 and the Hawaiian Electric defendants filed their response to the objection on April 30, 2024. A hearing on Hu Honua’s objection took place on July 30, 2024. On September 12, 2024, the court issued its decision affirming the April 2, 2024 order. Hu Honua filed its Third Amended and Supplemental Complaint on October 25, 2024.

Molokai New Energy Partners (MNEP). In July 2018, the PUC approved Maui Electric’s PPA with MNEP to purchase solar energy from a photovoltaic (PV) plus battery storage project. The 4.88 MW PV and 3 MW Battery Energy Storage System (BESS) project was to deliver no more than 2.64 MW at any time to the Molokai system. On March 25, 2020, MNEP filed a complaint in the United Stated District Court for the District of Hawaii against Maui Electric claiming breach of contract. On June 3, 2020, Maui Electric provided a Notice of Default and Termination of the PPA to MNEP terminating the PPA with an effective date of July 10, 2020. Thereafter, MNEP filed an amended complaint to include claims relating to the termination and Hawaiian Electric filed its answer to the amended complaint on September 11, 2020, disputing the facts presented by MNEP and all claims within the original and amended complaint. Currently, the discovery phase is ongoing.

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 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 and left the property in 1987. The Environmental Protection Agency (EPA) has since identified environmental impacts in the subsurface soil at the Site. In cooperation with the State of Hawaii Department of Health and EPA, Maui Electric further investigated the Site and the adjacent parcel to determine the extent of impacts of polychlorinated biphenyls (PCBs), residual fuel oils and other subsurface contaminants. Maui Electric has a reserve balance of $2.5 million as of September 30, 2024, representing the probable and reasonably estimable undiscounted cost for remediation of the Site and the adjacent parcel

based on presently available information; however, final costs of remediation will depend on the cleanup approach implemented.

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 under CERCLA 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. Hawaiian Electric was also required by the EPA to assess potential sources and extent of PCB contamination onshore at Waiau Power Plant.

As of September 30, 2024, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $9.5 million. The reserve balance represents the probable and reasonably estimable undiscounted cost for the onshore and offshore investigation and remediation. The final remediation costs will depend on the actual onshore and offshore cleanup costs.

Kapolei pipeline. James Campbell Company (JCC) through its wholly owned subsidiary, Aina Nui Corporation discovered petroleum contamination in ground water during construction of a project in Kapolei in late 2022 and allegedly incurred approximately $1.4 million in remediation costs. JCC made a joint demand for these costs in June 2023 and a supplemental demand in April of 2024 to two companies, including Hawaiian Electric, that have pipelines in the area of the contamination. On September 11, 2024, a settlement was reached in an amount not considered to be material.

Endangered Species Act (ESA). The Utilities received a 60-day Notice under the federal Endangered Species Act, from Earthjustice on behalf of the American Bird Conservancy and Conservation Council for Hawaii (Conservation Groups) in January 2024. The 60-day Notice (Notice) is the pre-cursor to a citizen’s suit under the Endangered Species Act. The Notice alleges that the Utilities are out of compliance with the Act due to alleged impacts on endangered seabirds caused by the Utilities’ powerlines, street lights and facility lights on Maui and Lanai. At the time the Notice was served, the Utilities were already in the process of drafting a Habitat Conservation Plan (HCP) with respect to the powerlines and will be applying for associated state and federal take/license permits. Notwithstanding, the Notice asserts that the scope of the HCP should be broader and additional interim measures are necessary while the HCP and related permits are pending. On October 30, 2024, the Utilities and the Conservation Groups entered into a settlement agreement, conditioned upon court approval, whereby the Utilities will continue the HCP process and take specific actions to minimize and mitigate the potential impact of the Utilities’ powerlines while the document is being prepared. The agreement also contains additional requirements that include coordination with the Conservation Groups with various aspects of the HCP and powerline operations, and continuing the Utilities’ commitment to a species mitigation project with University of Hawaii Foundation to monitor, protect and increase the population of Hawaiian Petrels. The settlement agreement will not become final until approved by the federal district court after a complaint is filed to obtain the court’s jurisdiction over the agreement. After court approval, the case will be dismissed and the court will maintain jurisdiction for the purpose of enforcement of the agreement. The street and facility lights aspect of the Notice has not yet been resolved and it is expected that a second complaint will be filed in that regard that will include the County of Maui as a party.

Commitments.

Purchase commitments. In the ordinary course of business, the Utilities enter into various agreements to purchase power and lease fuel barge. As of December 31, 2023, the Utilities estimated future purchase obligations of $1.7 billion. See Note 4 of the Notes to the Consolidated Financial Statements in Item 8 of the 2023 Form 10-K.

On March 28, 2024, AES West Oahu Solar project reached commercial operations, which has a capacity of 12.5 MW with 50 MWh batteries and total annual payment of $3.2 million. On May 31, 2024, AES Kuihelani Solar project on Maui reached commercial operations, which has a capacity of 60 MW with 240 MWh batteries and total annual payment of $13.2 million. On June 7, 2024, the Kupono Solar project on Oahu reached commercial operations, which has a capacity of 42 MW with 168 MWh batteries and total annual payment of $11.5 million. For the nine months ended September 30, 2024, $107.4 million of finance lease liabilities with corresponding right-of-use assets was recorded for the battery portion of the PPAs and a total of three Stage 1 and Stage 2 renewable projects provide the Utilities of 114.5 MW, with 458 MWh batteries.

Purchases from all IPPs were as follows:

						Three months ended September 30																		Nine months ended September 30
(in millions)						2024						2023																		2024						2023
Kalaeloa						$	74					$	77																	$	219					$	211
HPOWER						20						17																		53						51
Puna Geothermal Venture						15						7																		42						24
Hamakua Energy						9						13																		25						52
Kapolei Energy Storage						6						—																		18						—
Wind IPPs						37						42																		104						99
Solar IPPs						26						21																		62						57
Other IPPs 1						2						1																		7						5
Total IPPs						$	189					$	178																	$	530					$	499

1 Includes hydro power and other PPAs.

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 or community support 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.

Waena Switchyard/Synchronous Condenser Project. In October 2020, to support efforts to increase renewable energy generation and reduce fossil fuel consumption by deactivating current generating units, Maui Electric filed a PUC application to construct a switchyard, which includes the extension of two 69 kV transmission lines and the relocation of another 69 kV transmission line; and the conversion of two generating units to synchronous condensers at Kahului Power Plant in central Maui. In November 2021, the PUC approved Maui Electric’s request to commit funds estimated at $38.8 million for the project, and to recover capital expenditures for the project under Exceptional Project Recovery Mechanism (EPRM) not to exceed $38.8 million, which shall be further reduced to reflect the total project cost exclusive of overhead costs not directly attributable to the project. The Waena Switchyard was placed in service on October 25, 2023. Maui Electric petitioned and received from the State of Hawaii Department of Health a one-year extension to the mandatory retirement of Kahului Power Plant and there is now flexibility to operate the units until the end of 2028. The conversion of the two generating units will be performed after the retirement of Kahului Power Plant Units 3 and 4.

In approving the project, the PUC recognized that the project will facilitate the ability to accommodate increased renewable energy, as contemplated under the EPRM guidelines. As of September 30, 2024, $25.5 million has been incurred for the project.

Waena Battery Energy Storage System Project. In September 2020, Maui Electric filed a PUC application to purchase and install a 40 MW BESS at its Waena Site in Central Maui. In December 2023, the PUC approved Maui Electric’s request to commit funds estimated at $82.1 million, for the purchase and installation of the project, and to recover costs for the project under EPRM. Project costs incurred as of September 30, 2024 amount to $0.7 million.

Climate Adaptation Transmission and Distribution Resilience Program. The Utilities maintain that improving resiliency of the electric grid is an urgent matter and recognizes that climate change is making Hawaii increasingly vulnerable to sever weather events. On January 31, 2024, the PUC approved the Utilities’ request to commit an estimated $189.7 million in funds for the Climate Adaptation Transmission and Distribution Resilience Program, over a project period of five years. The project is to focus on, among other things, system hardening in wildfire risk areas to prevent ignition and to enable quicker response, video camera and weather monitors in wildfire risk areas and to add situational awareness, and strengthening transmission lines.

The project costs to be recovered through EPRM is subject to a cap of $95 million and any amount in excess will be subject to the PUC’s further review. On August 7, 2024, the Utilities received a notification from the U.S. Department of Energy that its application for $95 million in federal funds under the Infrastructure Investment and Jobs Act (IIJA) has been awarded. On August 20, 2024, the Utilities submitted a copy of their executed agreement with the Department of Energy to the PUC. Project costs incurred as of September 30, 2024 amount to $3.7 million.

Regulatory proceedings.

Decoupling. Decoupling is a regulatory model that is intended to provide the Utilities with 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. Decoupling delinks the utility’s revenues from the utility’s sales, removing the disincentive to promote energy efficiency and accept more renewable energy. Decoupling continues under the PBR Framework.

Performance-based regulation framework. On December 23, 2020, the PUC issued a decision and order (PBR D&O) establishing the PBR Framework to govern the Utilities. The PBR Framework incorporates an annual revenue adjustment (ARA) and a suite of new regulatory mechanisms in addition to previously established regulatory mechanisms. Under the PBR Framework, the decoupling mechanism (i.e., the Revenue Balancing Account (RBA)) established by the previous regulatory framework will continue. The existing cost recovery mechanisms continued as previously implemented (e.g., the Energy Cost Recovery Clause, Purchased Power Adjustment Clause (PPAC), Demand-Side Management surcharge, Renewable Energy Infrastructure Program, Demand Response Adjustment Clause, Pension and Other Post-Employment Benefits (OPEB) tracking mechanisms). In addition to annual revenues provided by the ARA, the Utilities may seek relief for extraordinary projects or programs through the Exceptional Project Recovery Mechanism (EPRM) (formerly known as the Major Project Interim Recovery adjustment mechanism) and earn financial rewards for exemplary performance as provided through a portfolio of Performance Incentive Mechanisms (PIMs) and Shared Savings Mechanisms (SSMs). The PBR Framework incorporates a variety of additional performance mechanisms, including Scorecards, Reported Metrics, and an expedited Pilot Process. The PBR Framework also contains a number of safeguards, including a symmetric Earnings Sharing Mechanism (ESM) which protects the Utilities and customers from excessive earnings or losses, as measured by the Utilities’ achieved rate-making ROACE and a Re-Opener mechanism, under which the PUC will open an examination, at its discretion, to determine if adjustments or modifications to specific PBR mechanisms are appropriate. The PBR Framework became fully effective on June 1, 2021.

On June 17, 2022, the PUC issued a decision and order (June 2022 D&O) establishing additional PIMs under the PBR Framework for the Utilities. The June 2022 D&O approved two PIMs, a SSM, and extended the timeframe for an existing PIM. Specifically, the PUC approved (1) a (penalty-only) generation-caused interruption reliability PIM, (2) a (penalty/reward) interconnection requirements study PIM, (3) a (reward-only) Collective Shared Savings Mechanism (CSSM), and (4) a modification and extension of the existing Interim Grid Services PIM (reward-only). On November 23, 2022, the PUC approved the Utilities’ proposed tariffs to implement the aforementioned PIMs with an effective date of January 1, 2023.

In addition, the June 2022 D&O instructed the Utilities to prepare and submit: a detailed fossil fuel retirement report (FF Retirement Report) outlining necessary steps to safely and reliably retire certain existing fossil fuel power plants during the first multi-year rate period (MRP); and a functional integration plan (FIP) for distributed energy resources (DER) to increase transparency into the Utilities’ plans and progress for utilizing cost-effective grid services from DERs and ensure that the necessary functionalities and requisite technologies are in place to do so. The PUC also instructed the PBR Working Group to continue its ongoing collaborative efforts to consider other potential new incentive mechanisms and to address other issues raised during the proceeding. On March 30, 2023, the PUC held a PBR Working Group coordination meeting to initiate subgroups on the Long-Term Grid Services PIM, modification/evaluation of existing PIMs, and comprehensive PBR Framework review priority topics.

In accordance with the June 2022 D&O, the Utilities filed their FIP on September 30, 2022, Long-Term Grid Services PIM proposal on July 3, 2023, and FF Retirement Report on October 11, 2024.

On October 16, 2023, the Utilities filed a request for limited suspension of the Transmission and Distribution (T&D) System Average Interruption Duration Index (SAIDI) PIM, the T&D System Average Interruption Frequency Index (SAIFI) PIM, and the target heat rate provision of Maui Electric Maui Division’s Energy Cost Recovery Clause (ECRC) tariff starting from August 8, 2023. On December 28, 2023, the PUC issued an order granting a temporary suspension of Maui Electric’s T&D SAIDI and SAIFI PIMs and Maui Electric Maui Division’s target heat rate provision from August 8, 2023 through June 30, 2024, which the tariffs became effective on January 1, 2024.

On November 3, 2023, the Utilities, Ulupono Initiative LLC, and the County of Hawaii filed a stipulation on proposed modifications to the RPS-A, Call Center, AMI Utilization, and interconnection requirements study PIMs. On June 24, 2024, the PUC issued an order (1) approving modifications to the interconnection requirements study PIM to expand its application to firm generation projects effective August 1, 2024, (2) approving a consolidated target for the Call Center PIM and modifying the target performance based on the average of the Utilities’ performance, weighted by the number of calls for the last eight quarters as of December 31, 2023, to be effective August 1, 2024, (3) denying the proposed modifications to the RPS-A PIM and clarifying that it will continue to operate according to its existing tariff language; and (4) denying the proposed

modifications to the AMI Utilization PIM and declining to extend the PIM beyond its scheduled sunset date of December 31, 2023.

On December 26, 2023, the PUC issued an order (1) confirming that the Interim Grid Services PIM will sunset on December 31, 2023, (2) extending the Interconnection Approval PIM through December 31, 2024, and (3) determining that it will continue examination of the Long-Term Grid Services PIM into 2024 as part of a broader examination that addresses barriers to the utilization of DERs to meet grid needs.

On April 1, 2024, the Utilities filed a request for partial temporary suspension and modification of the T&D SAIDI and T&D SAIFI PIMs to specifically suspend the T&D SAIDI and T&D SAIFI PIMs for wildfire risk circuits from January 1, 2024 to December 31, 2025. The Utilities also proposed that circuits not identified as wildfire risk circuits would continue to be subject to the existing PIMs on a prorated basis. On April 26, 2024, the PUC issued a procedural schedule to govern review of the request. The Utilities are requesting a D&O by December 16, 2024.

On June 19, 2024, the PUC issued an order (June 2024 order) providing preliminary guidance regarding the comprehensive evaluation of the PBR Framework that will commence in the fourth year of the PBR Framework’s first MRP (PBR Framework Review). The PUC has developed a high-level review structure and timeline for the PBR Framework Review and divided the remainder of the first MRP into three phases: (i) the evaluation of the current PBR Framework, (ii) the examination of proposal for modifications to the PBR Framework, and (iii) the implementation of modifications prior to commencing the second MRP. At the PBR Working Group meeting held on June 26, 2024, the PUC staff solicited the parties’ feedback on the scope of the PBR Framework Review and discussed other considerations, including rebasing target revenues. On July 19, 2024, as requested by the PUC staff, the parties filed written feedback to materials presented and discussed at the June Working Group meeting and in the June 2024 order.

On July 30, 2024, the PUC issued an order providing further guidance on the first of the three phases of the PBR Framework Review established by the June 2024 order. The first phase will focus on the evaluation of the individual PBR mechanisms using an informal, collaborative process. Parties will submit briefing on their evaluation of the individual PBR mechanisms near the end of the first phase, followed by a decision and order summarizing the findings of the evaluation, including which PBR mechanisms will be subject to additional examination and potential modification in the second phase of the PBR Framework Review. At the PBR Working Group meetings held on August 30, 2024 and October 25, 2024, the Working Group discussed issues and considerations regarding re-basing target revenues for the next MRP. Series of PBR Working Group meetings are expected to be held with the parties.

Annual revenue adjustment mechanism. The PBR Framework established a five-year MRP during which there will be no general rate cases. Target revenues will be adjusted according to an index-driven ARA based on (i) an inflation factor, (ii) a predetermined X-factor to encompass productivity, which is set at zero, (iii) a Z-factor to account for exceptional circumstances not in the Utilities’ control and (iv) a customer dividend consisting of a negative adjustment of 0.22% of adjusted revenue requirements compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in a prior docket at a rate of $6.6 million per year from 2021 to 2025. The ARA mechanism replaced the previous revenue adjustment mechanism (RAM). RAM revenue adjustments approved by the PUC in 2020 will continue to be included in the RBA provision’s target revenue and RBA rate adjustment to the extent such adjustments are not included in base rate unless modified with PUC approval. The implementation of the ARA occurred on June 1, 2021.

Earnings sharing mechanism. The PBR Framework established a symmetrical ESM for achieved rate-making ROACE outside of a 300 basis points deadband above or below the current authorized ROACE of 9.5% for each of the Utilities. There is a 50/50 sharing between customers and Utilities for the achieved rate-making ROACE falling within 150 basis points outside of the deadband in either direction, and a 90/10 sharing for any further difference. A reopening or review of the PBR terms may be triggered if the Utilities credit rating outlook indicates a potential credit downgrade below investment grade status, or if its achieved rate-making ROACE enters the outer most tier of the ESM.

On August 31, 2023, the PUC issued an order temporarily suspending the ESM until further notice. The intent of the order is to address the unintended consequence of customers potentially bearing the costs associated with the Maui windstorm and wildfires through the operation of the ESM without prior PUC review.

Exceptional project recovery mechanism. Prior to the implementation of the PBR Framework, the PUC established the Major Project Interim Recovery (MPIR) adjustment mechanism and MPIR Guidelines. The MPIR mechanism provides the opportunity to recover revenues for net costs of approved eligible projects placed in service between general rate cases. In establishing the PBR Framework, the MPIR Guidelines were terminated and replaced with the EPRM Guidelines. Although the MPIR Guidelines were terminated and replaced by the EPRM Guidelines, the MPIR mechanism will continue within the PBR Framework to provide recovery of project costs previously approved for recovery under the MPIR. The established EPRM

Guidelines permit the Utilities to include the full amount of approved costs in the EPRM for recovery in the first year the project goes into service, pro-rated for the portion of the year the project is in service. Deferred and O&M expense projects are also eligible for EPRM recovery under the EPRM Guidelines. EPRM recoverable costs will be limited to the lesser of actual incurred project costs or PUC‑approved amounts, net of savings.

As of September 30, 2024, the Utilities annualized MPIR and EPRM revenue amounts totaled $38.0 million, including revenue taxes, for the Schofield Generating Station ($16.1 million), West Loch PV project ($3.2 million), Grid Modernization Strategy (GMS) Phase 1 project ($16.1 million for all three utilities), Waiawa UFLS project ($0.1 million) and Waena Switchyard/Synchronous project ($2.5 million) that included the 2024 return on project amount (based on approved amounts) in rate base, depreciation and incremental O&M expenses. The PUC approved the Utilities’ recovery of the annualized 2024 MPIR and EPRM amounts for the Schofield Generating Station, West Loch PV, GMS Phase 1, Waiawa UFLS and Waena Switchyard projects effective June 1, 2024 through the RBA rate adjustment.

As of September 30, 2024, the PUC approved four EPRM applications for projects totaling $218.5 million to the extent the project costs are not included in rates. Currently, the Utilities are seeking EPRM recovery for two additional projects with total project costs up to $294.2 million, subject to PUC approval.

Pilot process. As part of the PBR Framework, the PUC approved a pilot process to foster innovation by establishing an expedited implementation process for pilots that tests new technologies, programs, business models, and other arrangements (Pilot Process). Under the Pilot Process, the Utilities submit specific pilot proposals (Pilot Notices) that are within the scope of the approved Workplan to the PUC for their expedited review. The PUC will strive to issue an order addressing a proposed pilot within 45 days of the filing date of a Pilot Notice. If the PUC does not take affirmative action on a Pilot Notice by the end of the 45-day period, the Pilot Notice will be considered approved as submitted. The PUC may modify the pilot as originally proposed, and the Utilities will have 15 days to notify the PUC whether the Utilities accept the modification, propose further modification, or withdraw the Pilot Notice. The PUC may also, where necessary, suspend the Pilot Notice for further investigation.

The approved Pilot Process includes a cost recovery process that generally allows the Utilities to defer and recover total annual expenditures of approved pilot projects net of revenues, subject to an annual cap of $10 million, over 12 months beginning June 1 of the year following pilot implementation through the RBA rate adjustment, although the PUC may determine on a case-by-case basis that a particular project’s deferred costs should be amortized over a period greater than 12 months.

On March 11, 2024, the Utilities filed their annual Pilot Update report covering pilot projects that were active during 2023, including reporting on pilot projects that were initiated prior to the commencement of the Pilot Process. The Pilot Update reported on approximately $3.0 million of 2023 recorded pilot project costs including revenue taxes for the Utilities. The 2023 recorded pilot project costs were included in the Utilities’ proposed adjustments to target revenue in the 2024 spring revenue report filed on March 28, 2024.

Performance incentive mechanisms. The following PIMs and SSMs were approved by the PUC and are applicable for the 2023 evaluation period and through September 30, 2024.

•Service Quality performance incentives (ongoing). Service Quality performance incentives are measured on a calendar-year basis. 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 remain constant in interim periods, unless otherwise amended by order of the PUC.

•Service Reliability Performance measured by Transmission and Distribution-caused SAIDI and SAIFI (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 $6.4 million for calendar year 2023 - for both indices in total for the three utilities). On December 28, 2023, the PUC issued an order granting a temporary suspension of Maui Electric’s T&D SAIDI and SAIFI PIMs from August 8, 2023 through June 30, 2024. On April 1, 2024, the Utilities filed a request for partial temporary suspension and modification of the T&D SAIDI and SAIFI PIMs, specifically requesting to suspend the T&D SAIDI and SAIFI PIMs for wildfire risk circuits from January 1, 2024 to December 31, 2025 and proposed that circuits not identified as wildfire risk circuits continue to be subject to the existing PIMs on a prorated basis and measured effective January 1, 2024. The Utilities are requesting a D&O by December 16, 2024. For the 2023 evaluation period, the Utilities incurred $3.7 million in penalties.

•Call Center Performance measured by the percentage of calls answered within 30 seconds. The previous target performance was based on the annual average performance for each utility for the most recent eight quarters with a deadband of 3% above and below the target. On June 24, 2024, the PUC issued an order approving a consolidated target for the Call Center PIM and modifying the target performance based on the average of the Utilities’ performance, weighted by the number of calls for the last eight quarters as of December 31, 2023, to be effective August 1, 2024. The maximum penalty or reward is 8 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties or rewards of approximately $1.4 million - in total for the three utilities).

•Phase 1 RFP PIM. Procurement of low-cost variable renewable resources through the RFP process in 2018 is measured by comparison of the procurement price to target prices. The first portion of the incentive was earned upon PUC approval of the PPAs. Based on the seven PPAs approved in 2019, the Utilities recognized $1.7 million in 2019 with the remaining award to be recognized in the year following the in-service date of the projects prorated in proportion to the actual amount of energy utilized, which is estimated to occur from 2023 to 2025. Based on the in-service date of two projects, the Utilities earned the second portion of the incentive of approximately $0.1 million (for Hawaiian Electric) in rewards in both 2023 and the first quarter of 2024. In the second quarter of 2024, the Utilities accrued the second portion of the incentive of approximately $0.1 million (for Hawaii Electric Light).

•Renewable portfolio standard (RPS) - A PIM that provides a financial reward for accelerating the achievement of RPS goals. The Utilities may earn a reward for the amount of system generation above the interpolated statutory RPS goal at $20/MWh in 2021 and 2022, $15/MWh in 2023, and $10/MWh for the remainder of the MRP. Penalties are already prescribed in the RPS as $20/MWh for failing to meet RPS targets in 2030, 2040 and 2045. The evaluation period commenced on January 1, 2021. In 2023, the Utilities earned $0.4 million in rewards.

•Interim Grid Services - An interim PIM that provided financial rewards on a $/kW basis for the acquisition of eligible grid services through procurement or programs acquired between January 1, 2021 to December 31, 2023. Eligible grid services included fast frequency response, load build, and/or load reduction services intended to be utilized in system operation. In 2023, the Utilities earned $1.1 million in rewards. The PUC intends to replace the Interim Grid Services PIM with a Long-Term PIM that incents DER grid service utilization with review and development of the Long-Term DER Utilization PIM to continue through the PBR Framework review process.

•Interconnection Approval PIM that provides financial rewards and penalties for interconnection times for DER systems <100 kW in size. The Interconnection Approval PIM extends through December 31, 2024. The Utilities can earn a total annual maximum reward of $3.0 million or a total annual maximum penalty of $0.9 million. In 2023, the Utilities earned $3.0 million in rewards.

•Low-to-Moderate Income (LMI) Energy Efficiency PIM that provided financial rewards for collaboration between the Utilities and the third-party Public Benefits Fee Administrator to deliver energy savings for low- and moderate-income customers. The Utilities could earn a total annual maximum reward of $2.0 million. The evaluation period was based on Hawaii Energy’s program year with the initial evaluation year being the period of July 1, 2021 through June 30, 2022 and ended the period ending June 30, 2024. The Utilities earned $0.01 million in rewards for the program period ending June 30, 2023.

•Advanced Metering Infrastructure Utilization PIM that provided financial rewards for leveraging grid modernization investments and engaging customers beyond what is already planned in the Phase 1 Grid Modernization program. The Utilities could earn a total annual maximum reward of $2.0 million. The evaluation period commenced on January 1, 2021 and ended on December 31, 2023.

•Generation-caused System Average Interruption Duration and Frequency Indexes PIMs to incentivize achievement of generation-based reliability targets, measured by Generation 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 3 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties of approximately $1 million - for both indices in total for the three utilities).

•An interconnection requirements study PIM to incentivize the timely completion of the IRS process for large-scale renewable energy projects (rewards and penalties) measured by the number of months between final model checkout and delivery of IRS results to the developer. Target performance is ten months with an asymmetrical deadband of two-months for penalties and no deadband for rewards. The maximum penalty and reward will depend on the specifics of the upcoming procurement.

•A CSSM to incentivize cost control over the Utilities’ fuel, purchased power, and EPRM/MPIR costs (collectively, non-ARA costs). This is a reward only incentive where the Utilities retain 20% share of savings when non-ARA costs in a performance year are lower than target year non-ARA costs, which are adjusted for changes in fuel prices, inflation, and system generation from a base year (calendar year 2021). The CSSM does not have a potential penalty and does not have a cap for maximum reward.

For the 2023 evaluation period, the Utilities earned $0.9 million ($1.2 million for Hawaiian Electric, $(0.6) million for Hawaii Electric Light and $0.3 million for Maui Electric) in rewards net of penalties. The net rewards related to 2023 and for the period through March 2024 were reflected in the 2024 PIMs annual report and 2024 spring revenue report filings. In the second quarter of 2024, the Utilities accrued an additional $0.1 million reward for the Phase 1 RFP PIM (for Hawaii Electric Light), which was reflected in the 2024 fall revenue report filing.

Annual review cycle. PBR D&O established an annual review cycle for revenue adjustments under the PBR Framework, including the biannual submission of the revenue reports. The Utilities’ 2024 fall revenue report was filed on October 28, 2024, which is subject to PUC approval. The filing reflected ARA revenues for 2025 to be collected from January 1 through December 31, 2025, as follows:

(in millions)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Total
2025 ARA revenues						$	15.4					$	3.8					$	3.7					$	22.9
Management Audit savings commitment						(4.6)						(1.0)						(1.0)						(6.6)
Net 2025 ARA revenues						$	10.8					$	2.8					$	2.7					$	16.3

The proposed net incremental amounts between the 2024 spring and 2024 fall revenue reports are shown in the following table. The amounts are to be collected (refunded) from January 1, 2025 through December 31, 2025 under the RBA rate tariffs, which were proposed in the 2024 fall revenue report filing and subject to PUC approval.

(in millions)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Total
2025 ARA revenues						$	15.4					$	3.8					$	3.7					$	22.9
Annual change in accrued RBA balance through September 30, 2024 (and associated revenue taxes)						(7.0)						(1.3)						6.4						(1.9)
Incremental PIMs (net)						(0.1)						0.1						—						—
Net incremental amount to be collected under the RBA rate tariffs						$	8.3					$	2.6					$	10.1					$	21.0

Regulatory assets and liabilities.

Regulatory asset related to retirement of Honolulu generating units 8 and 9. On December 22, 2023, the PUC issued a decision and order approving the Utilities’ request to establish a regulatory asset for the remaining net book value of the fossil fuel generating units for both Honolulu units 8 and 9 assets that retired on December 31, 2023, and amortize the regulatory asset over approximately nine years. The PUC also ruled that the Utilities may seek to include the regulatory asset in rate base and seek to recover the amortization expense and a return on the unamortized balance of the regulatory asset in the next rate case or rate re-setting proceeding. As of September 30, 2024, the Utilities have recorded $27.5 million in regulatory assets for the remaining net book value of Honolulu generating units 8 and 9.

Regulatory assets for Maui windstorm and wildfires related costs. On December 27, 2023, the PUC issued an order authorizing deferred accounting treatment for the Utilities’ incremental non-labor expenses under specific cost categories related to the August 2023 Maui windstorm and wildfires. The deferred accounting treatment applies to certain non-labor expenses incurred from August 8, 2023 through December 31, 2024 that are not already a part of base rates. The approval pertains to deferred cost treatment. The requests for cost recovery of deferred costs will be the subject of a separate application at which time the PUC will evaluate whether such costs were prudently incurred and reasonable and determine the extent to which such costs will be eligible for recovery, and the period over which recovery will occur. If the PUC denies recovery of any deferred costs, such costs would be charged to expense in the period that those costs are no longer considered probable of recovery.

As of September 30, 2024, the Utilities have recorded $38.8 million in regulatory assets for the incremental costs incurred related to the Maui windstorm and wildfires event.

Regulatory liabilities for Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM). The ERP/EAM Implementation Project went live in October 2018. Hawaii Electric Light and Hawaiian Electric began to incorporate their

portion of the deferred project costs in rate base and started the amortization over a 12-year period in January 2020 and November 2020, respectively. The PUC required a minimum of $246 million ERP/EAM project-related benefit to be delivered to customers over the system’s 12-year service life.

In February 2019, the PUC approved a methodology for passing the future cost saving benefits of the ERP/EAM system to customers developed by the Utilities in collaboration with the Consumer Advocate. The Utilities filed a benefits clarification document on June 10, 2019, reflecting $150 million in future net other operation and maintenance (O&M) expense reductions and cost avoidance, and $96 million in capital cost reductions and tax savings over the 12-year service life. To the extent the reduction in O&M expense relates to amounts reflected in electric rates, the Utilities would reduce future rates for such amounts. In October 2019, the PUC approved the Utilities and the Consumer Advocate’s Stipulated Performance Metrics and Tracking Mechanism. As part of the settlement agreement approved in the Hawaiian Electric 2020 test year rate case, the regulatory liability for Hawaiian Electric will be amortized over five years, beginning in November 2020, and the O&M benefits for Hawaiian Electric was considered flowed through to customers. On December 29, 2023, the PUC approved the Utilities’ proposal to accelerate flow-through of the ERP benefits savings currently tracked in regulatory liability accounts to Hawaii Electric Light and Maui Electric customers as part of the customer dividend in the ARA, to mitigate the impact of the Utilities’ recovery of the COVID-19 related costs on customers. See “Regulatory assets for COVID-19 related costs” section below.

As of September 30, 2024, the Utilities’ regulatory liability was $12.8 million ($1.5 million for Hawaiian Electric, $4.5 million for Hawaii Electric Light and $6.8 million for Maui Electric) for the O&M expense savings that are being amortized or to be included in future rates. At the PUC’s direction, the Utilities have been filing Annual Enterprise System Benefits (AESB) report on the achieved benefits savings. The most recent AESB report was filed on February 13, 2024 for the period January 1 through December 31, 2023.

Regulatory assets for COVID-19 related costs. On December 29, 2023, the PUC issued a decision and order (December 2023 D&O) approving the Utilities’ request to recover the COVID-19 related deferred costs up to $8.8 million evenly over a three-year recovery period from 2024 through 2026 through the Z-factor in the ARA. Following the Utilities’ motion for clarification or in the alternative partial reconsideration of the December 2023 D&O, on February 27, 2024, the PUC issued an order clarifying the December 2023 D&O and approving, among other things, the Utilities’ requests to base the recovery on the recorded balances as of December 31, 2023 and to modify the recovery period to begin June 1, 2024 and end May 31, 2027. As of September 30, 2024, the Utilities have recorded $7.5 million in regulatory assets for deferral of COVID-19 related costs.

Regulatory assets for suspension of disconnections related costs. Based on circumstances related to the Maui windstorm and wildfires, on August 31, 2023 and subsequently on October 13, 2023, the PUC issued orders directing all regulated utilities located on, or providing utility service on Maui, including the Utilities, among other things, (i) to suspend disconnections of services and associated disconnection fees beginning from August 8, 2023, through the end of the emergency relief period established by the Governor’s Emergency Proclamations related to the Maui windstorm and wildfires, which currently continues through December 7, 2024 (Suspension Period); (ii) to suspend any and all rules and provisions of individual utility tariffs that prevent or condition re-connection of disconnected customers during the Suspension Period; (iii) not to charge customers interest on past due payments or impose any late payment fees through the Suspension Period; (iv) to establish regulatory assets to record costs directly related to the suspension of disconnections, and to record receipt of governmental aid and donation-based aid, loans or grants, and/or all other assistance measures, and any cost savings realized; and (v) to file a notice with the PUC regarding any upcoming application or other request pursuant to HRS Sections 269-16.3, -17, -17.5, -18, -19, or -19.5 and/or regarding any significant financial change to the Maui utility, at least 60 days prior to filing such application or other request with the PUC. The orders also discourage the filing of emergency or general rate increases in response to the emergency situation. In future proceedings, the PUC will assess the utility’s request for recovery of these regulatory assets including whether it is reasonable and necessary, the appropriate period of recovery for the approved amount of regulatory assets, any amount of carrying costs thereon, any savings directly attributable to suspension of disconnects, and other related matters. As of September 30, 2024, the Utilities have recorded $2.3 million in regulatory assets for the incremental costs incurred due to the suspension of disconnections.

Condensed consolidating financial information. Condensed consolidating financial information for Hawaiian Electric and its subsidiaries are presented for the three and nine months ended September 30, 2024 and 2023, and as of September 30, 2024 and December 31, 2023.

On March 21, 2024, Hawaiian Electric formed HE AR INTER LLC and its direct consolidated subsidiary, HE BRWR LLC, which were established to pursue financing through a secured asset-based (accounts receivable) credit facility.

Hawaiian Electric 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, and (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder. Hawaiian Electric is also obligated, after the satisfaction of its obligations on its own preferred stock, to make dividend, redemption and liquidation payments on Hawaii Electric Light’s and Maui Electric’s preferred stock if the respective subsidiary is unable to make such payments.

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Income

Three months ended September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiaries						Consolidating adjustments						Hawaiian Electric Consolidated
Revenues						$	592,784					123,238						113,840						2,402						(2,647)						$	829,617
Expenses
Fuel oil						207,498						31,464						40,076						—						—						279,038
Purchased power						135,645						35,291						18,229						—						—						189,165
Other operation and maintenance						105,977						25,614						32,769						484						(2,647)						162,197
Wildfire tort-related claims (Note 2)						130,400						16,300						16,300						—						—						163,000
Depreciation						42,004						10,964						9,844						—						—						62,812
Taxes, other than income taxes						55,787						11,511						10,671						—						—						77,969
Total expenses						677,311						131,144						127,889						484						(2,647)						934,181
Operating income (loss)						(84,527)						(7,906)						(14,049)						1,918						—						(104,564)
Allowance for equity funds used during construction						2,628						256						416						—						—						3,300
Equity in earnings of subsidiaries						(18,558)						—						—						—						18,558						—
Retirement defined benefits credit (expense)—other than service costs						826						162						(29)						—						—						959
Interest expense and other charges, net						(14,870)						(2,760)						(4,324)						—						1,731						(20,223)
Allowance for borrowed funds used during construction						1,055						75						201						—						—						1,331
Interest Income						2,971						324						107						—						(1,731)						1,671
Income (loss) before income taxes						(110,475)						(9,849)						(17,678)						1,918						18,558						(117,526)
Income tax expense (benefit)						(28,160)						(2,807)						(4,966)						494						—						(35,439)
Net income (loss)						(82,315)						(7,042)						(12,712)						1,424						18,558						(82,087)
Preferred stock dividends of subsidiaries						—						133						95						—						—						228
Net income (loss) attributable to Hawaiian Electric						(82,315)						(7,175)						(12,807)						1,424						18,558						(82,315)
Preferred stock dividends of Hawaiian Electric						270						—						—						—						—						270
Net income (loss) for common stock						$	(82,585)					(7,175)						(12,807)						1,424						18,558						$	(82,585)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

Three months ended September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiaries						Consolidating adjustments						Hawaiian Electric Consolidated
Net income (loss) for common stock						$	(82,585)					(7,175)						(12,807)						1,424						18,558						$	(82,585)
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes						(1,331)						(40)						(71)						—						111						(1,331)
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes						1,333						42						64						—						(106)						1,333
Other comprehensive income (loss), net of taxes						2						2						(7)						—						5						2
Comprehensive income (loss) attributable to common shareholder						$	(82,583)					(7,173)						(12,814)						1,424						18,563						$	(82,583)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Income

Three months ended September 30, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiary						Consolidating adjustments						Hawaiian Electric Consolidated
Revenues						$	570,323					116,192						108,472						—						—						$	794,987
Expenses
Fuel oil						196,223						30,956						40,259						—						—						267,438
Purchased power						132,536						30,265						14,994						—						—						177,795
Other operation and maintenance						83,528						21,351						37,629						—						—						142,508
Depreciation						41,276						10,635						9,254						—						—						61,165
Taxes, other than income taxes						53,511						10,857						10,355						—						—						74,723
Total expenses						507,074						104,064						112,491						—						—						723,629
Operating income (loss)						63,249						12,128						(4,019)						—						—						71,358
Allowance for equity funds used during construction						3,005						366						629						—						—						4,000
Equity in earnings of subsidiaries						3,005						—						—						—						(3,005)						—
Retirement defined benefits credit (expense)—other than service costs						992						163						(23)						—						—						1,132
Interest expense and other charges, net						(16,295)						(2,988)						(3,164)						—						—						(22,447)
Allowance for borrowed funds used during construction						1,047						117						208						—						—						1,372
Income (loss) before income taxes						55,003						9,786						(6,369)						—						(3,005)						55,415
Income tax expense (benefit)						11,272						2,234						(2,050)						—						—						11,456
Net income (loss)						43,731						7,552						(4,319)						—						(3,005)						43,959
Preferred stock dividends of subsidiaries						—						133						95						—						—						228
Net income (loss) attributable to Hawaiian Electric						43,731						7,419						(4,414)						—						(3,005)						43,731
Preferred stock dividends of Hawaiian Electric						270						—						—						—						—						270
Net income (loss) for common stock						$	43,461					7,419						(4,414)						—						(3,005)						$	43,461

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

Three months ended September 30, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiary						Consolidating adjustments						Hawaiian Electric Consolidated
Net income (loss) for common stock						$	43,461					7,419						(4,414)						—						(3,005)						$	43,461
Other comprehensive loss, net of taxes:
Retirement benefit plans:
Adjustment for amortization of prior service credit and net gains recognized during the period in net periodic benefit cost, net of taxes						(547)						(55)						(71)						—						126						(547)
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes						470						54						63						—						(117)						470
Other comprehensive loss, net of taxes						(77)						(1)						(8)						—						9						(77)
Comprehensive income (loss) attributable to common shareholder						$	43,384					7,418						(4,422)						—						(2,996)						$	43,384

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Income

Nine months ended September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiaries						Consolidating adjustments						Hawaiian Electric Consolidated
Revenues						$	1,721,592					358,510						330,669						2,402						(2,647)						$	2,410,526
Expenses
Fuel oil						605,083						91,590						125,313						—						—						821,986
Purchased power						390,302						98,415						41,593						—						—						530,310
Other operation and maintenance						290,578						74,748						90,485						484						(2,647)						453,648
Wildfire tort-related claims (Note 2)						1,500,000						187,500						187,500						—						—						1,875,000
Depreciation						126,011						32,892						29,533						—						—						188,436
Taxes, other than income taxes						162,410						33,411						30,974						—						—						226,795
Total expenses						3,074,384						518,556						505,398						484						(2,647)						4,096,175
Operating income (loss)						(1,352,792)						(160,046)						(174,729)						1,918						—						(1,685,649)
Allowance for equity funds used during construction						8,027						893						1,356						—						—						10,276
Equity in earnings of subsidiaries						(258,633)						—						—						—						258,633						—
Retirement defined benefits credit (expense)—other than service costs						2,681						498						(76)						—						—						3,103
Interest expense and other charges, net						(44,879)						(8,648)						(13,114)						—						5,016						(61,625)
Allowance for borrowed funds used during construction						3,168						267						626						—						—						4,061
Interest Income						8,606						720						245						—						(5,016)						4,555
Income (loss) before income taxes						(1,633,822)						(166,316)						(185,692)						1,918						258,633						(1,725,279)
Income tax expense (benefit)						(361,874)						(43,636)						(49,001)						494						—						(454,017)
Net income (loss)						(1,271,948)						(122,680)						(136,691)						1,424						258,633						(1,271,262)
Preferred stock dividends of subsidiaries						—						400						286						—						—						686
Net income (loss) attributable to Hawaiian Electric						(1,271,948)						(123,080)						(136,977)						1,424						258,633						(1,271,948)
Preferred stock dividends of Hawaiian Electric						810						—						—						—						—						810
Net income (loss) for common stock						$	(1,272,758)					(123,080)						(136,977)						1,424						258,633						$	(1,272,758)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

Nine months ended September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiaries						Consolidating adjustments						Hawaiian Electric Consolidated
Net income (loss) for common stock						$	(1,272,758)					(123,080)						(136,977)						1,424						258,633						$	(1,272,758)
Other comprehensive loss, net of taxes:
Retirement benefit plans:
Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes						(2,344)						(117)						(187)						—						304						(2,344)
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes						2,251						112						163						—						(275)						2,251
Other comprehensive loss, net of taxes						(93)						(5)						(24)						—						29						(93)
Comprehensive income (loss) attributable to common shareholder						$	(1,272,851)					(123,085)						(137,001)						1,424						258,662						$	(1,272,851)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Income

Nine months ended September 30, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiary						Consolidating adjustments						Hawaiian Electric Consolidated
Revenues						$	1,742,542					343,554						333,573						—						(130)						$	2,419,539
Expenses
Fuel oil						663,521						79,187						138,984						—						—						881,692
Purchased power						362,275						101,597						35,118						—						—						498,990
Other operation and maintenance						255,728						64,367						87,089						—						—						407,184
Depreciation						123,114						31,906						27,761						—						—						182,781
Taxes, other than income taxes						164,510						31,983						31,541						—						—						228,034
Total expenses						1,569,148						309,040						320,493						—						—						2,198,681
Operating income						173,394						34,514						13,080						—						(130)						220,858
Allowance for equity funds used during construction						8,604						1,004						1,465						—						—						11,073
Equity in earnings of subsidiaries						25,960						—						—						—						(25,960)						—
Retirement defined benefits credit (expense)—other than service costs						2,801						500						(74)						—						—						3,227
Interest expense and other charges, net						(45,594)						(8,794)						(9,307)						—						130						(63,565)
Allowance for borrowed funds used during construction						2,995						321						482						—						—						3,798
Income before income taxes						168,160						27,545						5,646						—						(25,960)						175,391
Income taxes						31,581						6,261						284						—						—						38,126
Net income						136,579						21,284						5,362						—						(25,960)						137,265
Preferred stock dividends of subsidiaries						—						400						286						—						—						686
Net income attributable to Hawaiian Electric						136,579						20,884						5,076						—						(25,960)						136,579
Preferred stock dividends of Hawaiian Electric						810						—						—						—						—						810
Net income for common stock						$	135,769					20,884						5,076						—						(25,960)						$	135,769

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

Nine months ended September 30, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiary						Consolidating adjustments						Hawaiian Electric Consolidated
Net income for common stock						$	135,769					20,884						5,076						—						(25,960)						$	135,769
Other comprehensive loss, net of taxes:
Retirement benefit plans:
Adjustment for amortization of prior service credit and net gains recognized during the period in net periodic benefit cost, net of taxes						(1,487)						(166)						(200)						—						366						(1,487)
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes						1,321						157						177						—						(334)						1,321
Other comprehensive loss, net of taxes						(166)						(9)						(23)						—						32						(166)
Comprehensive income attributable to common shareholder						$	135,603					20,875						5,053						—						(25,928)						$	135,603

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Balance Sheet

September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsi- diaries						Consoli- dating adjustments						Hawaiian Electric Consolidated
Assets
Property, plant and equipment
Utility property, plant and equipment
Land						$	42,860					5,645						3,514						—						—						$	52,019
Plant and equipment						5,503,512						1,494,982						1,414,657						—						—						8,413,151
Right-of-use assets - finance lease						362,741						36,074						50,757						—						—						449,572
Less accumulated depreciation						(2,028,302)						(685,469)						(609,419)						—						—						(3,323,190)
Construction in progress						276,525						27,878						42,270						—						—						346,673
Utility property, plant and equipment, net						4,157,336						879,110						901,779						—						—						5,938,225
Nonutility property, plant and equipment, less accumulated depreciation						5,292						115						1,532						—						—						6,939
Total property, plant and equipment, net						4,162,628						879,225						903,311						—						—						5,945,164
Investment in wholly owned subsidiaries, at equity						669,450						—						—						—						(669,450)						—
Current assets
Cash and cash equivalents						99,392						25,734						11,833						10,665						—						147,624
Restricted cash						2,000						—						—						—						—						2,000
Advances to affiliates						46,200						—						—						—						(46,200)						—
Customer accounts receivable, net						32,405						7,594						9,774						158,180						—						207,953
Accrued unbilled revenues, net						23,595						5,568						3,560						166,934						—						199,657
Other accounts receivable, net						193,771						61,265						54,397						—						(223,945)						85,488
Fuel oil stock, at average cost						79,736						10,657						18,650						—						—						109,043
Materials and supplies, at average cost						66,289						14,736						33,029						—						—						114,054
Prepayments and other						70,526						7,456						18,559						—						(1,718)						94,823
Regulatory assets						46,579						4,761						8,496						—						—						59,836
Total current assets						660,493						137,771						158,298						335,779						(271,863)						1,020,478
Other long-term assets
Operating lease right-of-use assets						31,134						22,422						7,451						—						—						61,007
Regulatory assets						207,572						16,091						30,748						—						—						254,411
Other						250,162						37,716						34,850						—						(40,584)						282,144
Total other long-term assets						488,868						76,229						73,049						—						(40,584)						597,562
Total assets						$	5,981,439					1,093,225						1,134,658						335,779						(981,897)						$	7,563,204

(continued)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Balance Sheet (continued)

September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsi- diaries						Consoli- dating adjustments						Hawaiian Electric Consolidated
Capitalization and liabilities
Capitalization
Common stock equity						$	1,110,259					237,105						280,629						151,716						(669,450)						$	1,110,259
Cumulative preferred stock—not subject to mandatory redemption						22,293						7,000						5,000						—						—						34,293
Long-term debt, net						1,387,029						244,437						256,537						—						—						1,888,003
Total capitalization						2,519,581						488,542						542,166						151,716						(669,450)						3,032,555
Current liabilities
Current portion of operating lease liabilities						5,183						7,302						2,926						—						—						15,411
Current portion of long-term debt						39,980						4,998						1,999						—						—						46,977
Short-term borrowings from affiliate						—						—						46,200						—						(46,200)						—
Accounts payable						141,147						24,484						36,796						—						—						202,427
Interest and preferred dividends payable						22,194						3,652						4,508						—						(537)						29,817
Taxes accrued, including revenue taxes						187,756						40,137						34,984						494						(1,718)						261,653
Regulatory liabilities						10,887						9,782						5,015						—						—						25,684
Wildfire tort-related claims (Note 2)						383,000						47,875						47,875						—						—						478,750
Other						91,572						28,782						33,180						183,569						(223,408)						113,695
Total current liabilities						881,719						167,012						213,483						184,063						(271,863)						1,174,414
Deferred credits and other liabilities
Operating lease liabilities						30,785						15,480						4,831						—						—						51,096
Finance lease liabilities						346,344						34,543						50,036						—						—						430,923
Deferred income taxes						—						3,024						22,534						—						(25,558)						—
Regulatory liabilities						839,392						208,022						118,001						—						—						1,165,415
Unamortized tax credits						56,219						10,887						11,100						—						—						78,206
Defined benefit pension and other postretirement benefit plans liability						75,907						—						—						—						(15,026)						60,881
Wildfire tort-related claims (Note 2)						1,149,000						143,625						143,625						—						—						1,436,250
Other						82,492						22,090						28,882						—						—						133,464
Total deferred credits and other liabilities						2,580,139						437,671						379,009						—						(40,584)						3,356,235
Total capitalization and liabilities						$	5,981,439					1,093,225						1,134,658						335,779						(981,897)						$	7,563,204

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Balance Sheet

December 31, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsi-diary						Consoli- dating adjustments						Hawaiian Electric Consolidated
Assets
Property, plant and equipment
Utility property, plant and equipment
Land						$	42,859					5,645						3,594						—						—						$	52,098
Plant and equipment						5,398,281						1,459,639						1,374,890						—						—						8,232,810
Finance lease right-of-use assets						306,099						36,075						—						—						—						342,174
Less accumulated depreciation						(1,925,660)						(666,581)						(605,273)						—						—						(3,197,514)
Construction in progress						247,836						33,488						38,899						—						—						320,223
Utility property, plant and equipment, net						4,069,415						868,266						812,110						—						—						5,749,791
Nonutility property, plant and equipment, less accumulated depreciation						5,295						115						1,532						—						—						6,942
Total property, plant and equipment, net						4,074,710						868,381						813,642						—						—						5,756,733
Investment in wholly owned subsidiaries, at equity						722,211						—						—						—						(722,211)						—
Current assets
Cash and cash equivalents						89,755						10,658						5,587						77						—						106,077
Restricted cash						2,000						—						—						—						—						2,000
Advances to affiliates						70,500						—						—						—						(70,500)						—
Customer accounts receivable, net						172,747						38,216						33,346						—						—						244,309
Accrued unbilled revenues, net						136,367						25,102						24,175						—						—						185,644
Other accounts receivable, net						143,160						13,318						32,521						—						(77,480)						111,519
Fuel oil stock, at average cost						108,228						17,968						22,041						—						—						148,237
Materials and supplies, at average cost						64,334						14,397						35,702						—						—						114,433
Prepayments and other						40,767						7,724						11,638						—						(1,638)						58,491
Regulatory assets						58,920						5,771						3,762						—						—						68,453
Total current assets						886,778						133,154						168,772						77						(149,618)						1,039,163
Other long-term assets
Operating lease right-of-use assets						34,856						27,470						9,551						—						—						71,877
Regulatory assets						189,417						13,575						23,359						—						—						226,351
Other						134,033						36,439						33,129						—						(14,171)						189,430
Total other long-term assets						358,306						77,484						66,039						—						(14,171)						487,658
Total assets						$	6,042,005					1,079,019						1,048,453						77						(886,000)						$	7,283,554

(continued)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Balance Sheet (continued)

December 31, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsi-diary						Consoli- dating adjustments						Hawaiian Electric Consolidated
Capitalization and liabilities
Capitalization
Common stock equity						$	2,409,110					359,790						362,344						77						(722,211)						$	2,409,110
Cumulative preferred stock—not subject to mandatory redemption						22,293						7,000						5,000						—						—						34,293
Long-term debt, net						1,426,516						249,339						258,422						—						—						1,934,277
Total capitalization						3,857,919						616,129						625,766						77						(722,211)						4,377,680
Current liabilities
Current portion of operating lease liabilities						6,788						7,025						2,804						—						—						16,617
Short-term borrowings-affiliate						—						—						70,500						—						(70,500)						—
Accounts payable						136,102						29,418						25,520						—						—						191,040
Interest and preferred dividends payable						17,085						3,098						3,074						—						(375)						22,882
Taxes accrued, including revenue taxes						211,840						43,932						37,808						—						(1,638)						291,942
Regulatory liabilities						20,013						8,508						8,038						—						—						36,559
Wildfire tort-related claims						75,000						—						—						—						—						75,000
Other						90,131						33,240						50,170						—						(77,105)						96,436
Total current liabilities						556,959						125,221						197,914						—						(149,618)						730,476
Deferred credits and other liabilities
Operating lease liabilities						34,262						20,792						7,044						—						—						62,098
Finance lease liabilities						295,935						35,043						—						—						—						330,978
Deferred income taxes						280,029						51,661						67,311						—						—						399,001
Regulatory liabilities						803,404						199,173						111,554						—						—						1,114,131
Unamortized tax credits						61,130						11,650						11,532						—						—						84,312
Defined benefit pension and other postretirement benefit plans liability						74,842						—						—						—						(14,171)						60,671
Other						77,525						19,350						27,332												—						124,207
Total deferred credits and other liabilities						1,627,127						337,669						224,773						—						(14,171)						2,175,398
Total capitalization and liabilities						$	6,042,005					1,079,019						1,048,453						77						(886,000)						$	7,283,554

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Changes in Common Stock Equity

Nine months ended September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiaries						Consolidating adjustments						Hawaiian Electric Consolidated
Balance, December 31, 2023						$	2,409,110					359,790						362,344						77						(722,211)						$	2,409,110
Net income (loss) for common stock						(1,272,758)						(123,080)						(136,977)						1,424						258,633						(1,272,758)
Other comprehensive loss, net of taxes						(93)						(5)						(24)						—						29						(93)
Common stock dividends						(26,000)						—						—						—						—						(26,000)
Additional paid-in capital						—						400						286						—						(686)						—
Issuance of common stock, net of expenses						—						—						55,000						150,215						(205,215)						—
Balance, September 30, 2024						$	1,110,259					237,105						280,629						151,716						(669,450)						$	1,110,259

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Changes in Common Stock Equity

Nine months ended September 30, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiary						Consolidating adjustments						Hawaiian Electric Consolidated
Balance, December 31, 2022						$	2,344,170					344,720						357,036						77						(701,833)						$	2,344,170
Net income for common stock						135,769						20,884						5,076						—						(25,960)						135,769
Other comprehensive loss, net of taxes						(166)						(9)						(23)						—						32						(166)
Common stock dividends						(96,750)						(13,425)						(11,025)						—						24,450						(96,750)
Balance, September 30, 2023						$	2,383,023					352,170						351,064						77						(703,311)						$	2,383,023

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Nine months ended September 30, 2024

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiaries						Consolidating adjustments						Hawaiian Electric Consolidated
Net cash provided by (used in) operating activities						$	237,155					54,936						41,851						(9,212)						(2,082)						$	322,648
Cash flows from investing activities
Capital expenditures						(141,000)						(39,405)						(63,895)						—						—						(244,300)
Advances to affiliates						(30,700)						—						—						—						30,700						—
Other						(18,696)						523						(1,012)						—						21,882						2,697
Net cash used in investing activities						(190,396)						(38,882)						(64,907)						—						52,582						(241,603)
Cash flows from financing activities
Common stock dividends						(26,000)						—						—						—						—						(26,000)
Preferred stock dividends of Hawaiian Electric and subsidiaries						(1,496)						—						—						—						—						(1,496)
Proceeds from issuance of common stock						—						—						—						19,800						(19,800)						—
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less						—						—						30,700						—						(30,700)						—
Payments of obligations under finance leases						(5,233)						(470)						(173)						—						—						(5,876)
Other						(4,393)						(508)						(1,225)						—						—						(6,126)
Net cash provided by (used in) financing activities						(37,122)						(978)						29,302						19,800						(50,500)						(39,498)
Net increase in cash, cash equivalents and restricted cash						9,637						15,076						6,246						10,588						—						41,547
Cash, cash equivalents and restricted cash, beginning of period						91,755						10,658						5,587						77						—						108,077
Cash, cash equivalents and restricted cash, end of period						101,392						25,734						11,833						10,665						—						149,624
Less: Restricted cash						(2,000)						—						—						—						—						(2,000)
Cash and cash equivalents, end of period						$	99,392					25,734						11,833						10,665						—						$	147,624

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidating Statement of Cash Flows

Nine months ended September 30, 2023

(in thousands)						Hawaiian Electric						Hawaii Electric Light						Maui Electric						Other subsidiary						Consolidating adjustments						Hawaiian Electric Consolidated
Net cash provided by operating activities						$	336,248					59,029						35,284						—						(24,450)						$	406,111
Cash flows from investing activities
Capital expenditures						(217,276)						(47,609)						(69,612)						—						—						(334,497)
Advances to affiliates						—						4,500						21,700						—						(26,200)						—
Other						3,179						912						1,125						—						—						5,216
Net cash used in investing activities						(214,097)						(42,197)						(46,787)						—						(26,200)						(329,281)
Cash flows from financing activities
Common stock dividends						(96,750)						(13,425)						(11,025)						—						24,450						(96,750)
Preferred stock dividends of Hawaiian Electric and subsidiaries						(810)						(400)						(286)						—						—						(1,496)
Proceeds from issuance of long-term debt						300,000						25,000						25,000						—						—						350,000
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less						(114,167)						—						—						—						26,200						(87,967)
Payments of obligations under finance leases						(1,914)						(248)						—						—						—						(2,162)
Other						(571)						(135)						(137)						—						—						(843)
Net cash provided by financing activities						85,788						10,792						13,552						—						50,650						160,782
Net increase in cash, cash equivalents and restricted cash						207,939						27,624						2,049						—						—						237,612
Cash and cash equivalents, beginning of period						27,579						5,092						6,494						77						—						39,242
Cash, cash equivalents and restricted cash, end of period						235,518						32,716						8,543						77						—						276,854
Less: Restricted cash						(2,000)						—						—						—						—						(2,000)
Cash and cash equivalents, end of period						$	233,518					32,716						8,543						77						—						$	274,854

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- Definition

Electric utility subsidiary [Abstract]

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X

- Definition

Electric Utility Subsidiary

+ References

No definition available.

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