Hawaii lawmakers have recently passed a controversial bill aimed at improving Hawaiian Electric Co.’s credit rating. This decision comes despite strong pushback from key committee chairs in both the House and Senate. The bill introduces a new fee for HECO customers, which is intended to fund necessary investments for wildfire prevention.
The main point of contention is an amendment that limits HECO’s liability for property damage caused by future wildfires. While this liability cap has been part of the bill from the beginning, a last-minute change gives the Public Utilities Commission (PUC) the authority to determine the cap’s amount and its application. This shift has raised concerns among lawmakers like Senator Jarrett Keohokalole and Representative Scott Matayoshi, who argue that it could unfairly favor certain victims of wildfires over others.
Keohokalole criticized the amendment, stating it was added without sufficient transparency at the end of the legislative session. He pointed out that the PUC’s ability to decide whether the cap applies to individual wildfires or multiple fires over time could leave some victims without compensation. He described the bill as a "blatant corporate handout."
Matayoshi echoed these sentiments, emphasizing that the PUC’s discretion in implementing the cap could lead to inequities among fire victims. Both lawmakers voted against the bill, joined by several other representatives and senators who shared similar concerns.
On the other side, House Energy and Environmental Protection Committee chair Nicole Lowen defended the bill. She believes that allowing the PUC to set the cap through a public rulemaking process is a sensible approach, even if it isn’t perfect. Lowen acknowledged the concerns about the timing aspect of the cap but argued that the complexities of the situation warranted a thorough rule-making process.
The bill also allows HECO to borrow against the new customer fees to fund wildfire prevention initiatives. This securitization method is common among utilities and can help them secure loans at lower interest rates. HECO’s financial situation has become urgent following a downgrade in its bond rating after the devastating 2023 Maui wildfires, which means higher interest rates that would ultimately be passed on to customers.
While the new fee has not been a major point of contention, the overall implications of the bill are significant for both consumers and the utility company. As the situation develops, the focus will likely remain on how the PUC implements the new rules and the potential impact on wildfire victims.