Hawaiian Electric flags concern over wildfire settlement financing uncertainty

Utility company Hawaiian Electric raised concerns on Friday after it revealed that it had not arranged financing for the $1.99 billion Maui wildfire settlement it reached this month.

The company, along with parent Hawaiian Electric Industries (HEI), said it had retained financial advisers to develop a financing plan for its share of the proposed settlement and could finance it through debt, common equity, equity-linked securities, or other available alternatives.

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

However, the company does not feel it needs to increase electricity rates to fund the settlement, HEI CEO Scott Seu said on a post-earnings conference call.

Hawaii's biggest utility had agreed to pay a lion's share of more than $4 billion in legal settlement to compensate victims of last year's deadly Maui wildfires that killed over 100 people.

However, the statement said that the company and other defendants did not admit to any legal liability under settlement terms, adding that an agreement had been reached after four months of mediation.

The company had said that the proposed payments would be made from mid-2025, subject to judicial review and approval.

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

The company also said it's exploring strategic options for its American Savings Bank unit and incurred a goodwill impairment charge of $82.2 million in connection with the effort during the second quarter.