2 weeks Ago By Andrew Gomes
Hawaii’s largest electrical utility plans to spend $300 million over the next three years on top of $120 million this year to reduce wildfire risk. Hawaiian Electric estimates that its investment this year is cutting the risk of its equipment starting such a fire by 60% and that the additional investment through 2027 will get the company closer to achieving a long-term goal of lowering such risk by 80% at an estimated cost of around $1 billion. The company, which serves Oahu, Maui, Molokai, Lanai and Hawaii island, presented its plans and projections Friday to a panel of state senators.
Much of the information presented will be part of a wildfire risk mitigation plan that Hawaiian Electric must deliver to the state Public Utilities Commission by Jan. 10 as part of an order the PUC issued Sept. 13, about 13 months after the Aug.
8, 2023, Maui wildfire that killed 102 people and destroyed most of Lahaina. A power line in Lahaina that was damaged by high wind and reenergized after a visual inspection was found by an independent analysis to be a major contributing factor to the disaster, which has led to a pending $4 billion settlement for fire victims to be paid for mainly by the utility, the state and Kamehameha Schools. Three Senate committees asked Hawaiian Electric for a briefing on the company’s plan being prepared for the PUC.
“Our No. 1 priority for the past 15 months has been reducing the risk of another catastrophic wildfire in Hawaii,” Jason Benn, Hawaiian Electric chief transformation and administrative officer, told the Senate panel in a state Capitol conference room. “We’ve made significant progress in reducing the risk of wildfire ignitions from our equipment.
We brought in experts and partnered with other utilities to leverage best practices and take actions that have the biggest impact but also consider cost-effectiveness.” The biggest improvement this year, from a cost standpoint, has been replacing about 2,000 wooden power poles with stronger poles made of wood or steel, at a cost of $61.9 million, according to the company’s presentation.
Other pieces of the $120 million being spent this year include $12.5 million to replace single-strand copper power lines with stronger multistrand aluminum lines, $10.3 million for distribution system inspections, $8.
6 million for safer fuses and $6.3 million for vegetation management. Over the next three years, at least one-third of Hawaiian Electric’s planned spending is slated for replacing at least 2,100 poles for $58.
9 million and replacing about 9,200 fuses along power lines with “fire-safe” fuses in areas with high and medium fire risks at a cost of $43.7 million. Most of the utility’s existing fuses, which stop transmission of electricity in the event of a surge, can emit molten embers or sparks when they blow out to prevent more system damage.
“We believe this is an important fire risk mitigation component,” Colton Ching, senior vice president of planning and technology for Hawaiian Electric, told the Senate panel. “We want to get as much done as we can. .
.. We’re trying to wrap this up in 2026 in our high- and medium-risk areas.
” Other planned equipment upgrades over the next three years include improved energy absorbers for lightning strikes, fault indicators, better circuit shutdown and reopening devices, weather stations, cameras that can identify smoke, and stronger power lines. Ching said Hawaiian Electric has 53 weather stations, which have been integral to a public-safety power shutoff program the company established in July. The program is designed to turn off power in areas with high wildfire risk if wind gusts exceed 45 mph and relative humidity falls below 45%.
Since July, Hawaiian Electric warned customers of a possible safety shutoff twice, including once on Maui on Oct. 16, though no shutoffs happened because the trigger conditions were not ultimately met. Another 250 weather stations are planned over the next three years at a cost of $9 million under the company’s plan.
Installing 27 miles of stronger power lines estimated to cost $15.3 million is also part of the plan and would follow 16 miles of line upgrades this year. The company also envisions replacing 800 miles of older bare-wire lines with insulated lines, though this is a longer-term and more expensive proposition that also can require pole upgrades because of the extra weight.
Ching told the Senate panel that the company anticipates installing about 50 miles of insulated line annually for about $100 million starting in 2026. Another longer-term but more uncertain retrofit is putting overhead power lines underground. Ching said 51% of the utility’s distribution lines are underground now, and the company knows that Lahaina residents especially want the restoration of the historic town to include underground lines.
However, Ching also said that much depends on Maui County rebuilding plans and on permitting that could take many years. The feasibility, including an $11 million-per-mile cost of underground lines, compared with $1 million per mile for overhead lines, also needs to be assessed. “It gets pretty invasive when you think about putting undergrounding in a place that’s already built, a place where there’s already homes, already streets, already sidewalks, already water, wastewater, telecom lines on the road,” he told the panel.
“If you’re going to convert from overhead to underground in an existing community, it’s a lot more expensive and a lot more challenging than building it in a brand-new community that is basically a field right now.” In some areas insulating overhead lines can be just as effective in reducing wildfire risk as putting lines underground, Ching added. To reduce costs to ratepayers for improvements, Ching explained that the company sought $659 million in federal grants but that grant applications totaling about $550 million were not approved.
Applications for grants totaling about $13 million are still pending, and the company was awarded one $95 million federal grant in 2023 after the Maui wildfire to pay for half of a $190 million climate adaptation transmission and distribution resiliency plan the company proposed to the PUC in June 2022. Earlier this year Hawaiian Electric wanted lawmakers to pass a bill that would help reduce the cost to finance wildfire risk mitigation work, which gets passed on to ratepayers. But the bill, which would allow the utility to sell bonds backed by ratepayer revenue, was rejected, in part due to questions over wildfire risk mitigation plans.
Sen. Jarrett Keohokalole, chair of the Senate Committee on Commerce and Consumer Protection, was instrumental in killing the bill. As lead chair of Friday’s panel, Keohokalole (D, Kaneohe-Kailua) said Hawaiian Electric’s presentation was helpful.
Sen. Glenn Wakai, chair of the Senate Committee on Public Safety and Intergovernmental and Military Affairs, questioned whether Hawaiian Electric will put its forthcoming plan into action. “Why should the public have any confidence in you and HECO to do any of the things you just mentioned today,” said Wakai, “when your track record proves that you just sit on plans and really don’t put into action all the things that you say you plan to do?” Wakai (D, Kalihi-Salt Lake-Pearl Harbor) cited a 2019 working group report that recommended some of the improvements now being made.
Ching noted that the report, produced by stakeholders that included the utility as well as state and federal agency representatives, did lead to significant investments in vegetation management, pole replacements and the $95 million federal grant application before the Lahaina fire even though the report ranked wildfire as a lesser threat than hurricanes, floods, tsunamis, earthquakes and cyberattacks. Wakai also criticized Hawaiian Electric for not spending more on wildfire risk mitigation in recent years before the Lahaina disaster while about $450 million was paid out as dividends to shareholders in the utility’s parent Hawaiian Electric Industries Inc. HEI suspended dividends after the Lahaina fire, and has agreed to pay $2 billion toward the $4 billion settlement pending state court approval.
Benn said Hawaiian Electric ratepayers will in no way cover the settlement expense. “Customers will not pay a penny for the settlement,” he told the panel. “There is no bill impact.
If the settlement is approved, that’s going to be completely borne by our shareholders and our company.” Hawaiian Electric expects to pay its outstanding $1.92 billion obligation, after an earlier $75 million contribution, in four equal annual installments of about $479 million.
The first payment, expected in late 2025, is covered by $558 million HEI raised in September by selling new shares of stock. On Friday, HEI reported a $104 million financial loss for the three months ended Sept. 30, which included a $151 million after-tax cost for wildfire litigation claims.
HEI booked most of the settlement expense in the prior quarter as part of a $1.3 billion financial loss..
