An update on HECO

Catching up on what’s going on with HECO. Previously:

65 different lawsuits!

We know that the litigation process is top of mind for many of you. And I can tell you that as of November 7, Hawaiian Electric has been named as a defendant in 64 lawsuits by plaintiffs claiming losses related to the August 8 windstorm and wildfires. HEI has been named in 65. Many of those lawsuits also name other defendants, including the County of Maui, the State of Hawaii, private landowners and developers and telecommunications companies. We will vigorously defend the litigation and we intend to contest both causation and negligence.

Capital market access is cut off, creating a death spiral:

With the downgrades to utility in HEI credit ratings from all three rating agencies, our capital markets access is constrained. We ended the previous quarter with a higher cash position as we had prefunded the November $100 million utility maturity earlier this year and as a result had considerable cash on the balance sheet as of June 30th. The drawdown of the HEI and utility revolvers following the wildfires provided $370 million of immediately available cash.

HECO claims that they’ve got insurance of around 165 million, but the liabilities could be worth billions:

Yes. So we have $165 million of liability insurance. So if you just simply take the $75 million and subtract it, from the $165 million that would leave $90 million of additional coverage.

The Q&A list from congress is long: https://www.khon2.com/always-investigating/congress-pushes-heco-puc-for-more-answers-on-maui-fire/

The full insurance docket filing is here: https://drive.google.com/file/d/1sGF5ozi8Lktx_v215R047ji-S3un9ccV/view

In general, HECO claims that securing insurance is relatively very expensive for T&D infrastructure, and as such, they went with all-in-property insurance.

I still think the equity will be wiped out. The mitigation is too small. We’ll find out in 2-years probably.