Hawaiian Electric Suggests It’s Not To Blame For Lahaina Devastation
The company now says its power lines were de-energized prior to the destructive afternoon fire that tore through town.
By Marcel Honore Stewart Yerton / August 27, 2023
Hawaiian Electric Co. late Sunday said Maui County officials bear at least some of the responsibility for the wildfire that destroyed most of Lahaina nearly three weeks ago, leaving at least 115 people dead.
In a statement that laid out HECO’s view of the events that unfolded Aug. 8, the beleaguered utility company — facing growing anger, plunging stocks and mounting lawsuits — pointed squarely at the county’s decision to leave the scene of an earlier fire after fire officials had declared it “extinguished.”
Hours later, fire spread rapidly through Lahaina.
But by then, HECO said, its West Maui power lines had been de-engergized for more than six hours.
The company’s statement stops short of disavowing any responsibility for the Lahaina fire. Company officials declined to answer questions about the statement Sunday night.
HECO crews install utility poles and lines on Honoapiilani Highway on Aug. 16 in Lahaina. A wildfire destroyed the historic town of Lahaina on Aug. 8. (Kevin Fujii/Civil Beat/2023)
The earlier fire in Lahaina’s upper reaches that morning did appear to be caused by the company’s damaged power lines, HECO acknowledged. But Maui County fire crews had deemed that earlier fire not only 100% contained but also extinguished, and crews subsequently left the site, HECO said.
The cause of the afternoon fire has not been determined. Agents with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives continue to investigate.
HECO also called Maui County “irresponsible” for filing suit against the utility last week — and the utility company suggested that it might countersue.
“The county’s lawsuit may leave us no choice in the legal system but to show its responsibility for what happened that day,” HECO stated.
It’s the first time the utility has directly addressed its role in the disaster, and it follows a chorus of criticism for its refusal to shut off the power ahead of the fierce, hurricane-driven winds forecast to hit Maui on the day of the fire. HECO has said that it did not have a plan for such a widespread shutdown.
The company did not specify in its statement Sunday whether its lines had been intentionally de-energized ahead of the fire or were out because of downed lines.
Videos taken by residents showed that power lines had fallen to the ground in high winds near the intersection of Lahainaluna Road and Ho’okahua Street at approximately 6:30 a.m., the statement said.
“A small fire that can be seen by the downed lines spread into the field across the street from the Intermediate School,” HECO said.
Hawaiian Electric says on the morning of Aug. 8, power lines had fallen to the ground in high winds near the intersection of Lahainaluna Road and Ho‘okahua Street near the intermediate school. (Courtesy: Google Maps/2023)
The Maui County Fire Department responded and reported the fire contained by 9 a.m. and extinguished before the department left the scene by 2 p.m., the statement said.
Hawaiian Electric crews showed up to make repairs and saw no fire, smoke or embers near Lahainaluna Road. But, according to the statement, “Shortly before 3 p.m., while the power remained off, our crew members saw a small fire about 75 yards away from Lahainaluna Road in the field near the Intermediate School. They immediately called 911 and reported that fire.”
“By the time the Maui County Fire Department arrived back on the scene, it was not able
to contain the Afternoon Fire and it spread out of control toward Lahaina,” HECO said.
Records “conclusively establish” that “There was no electricity flowing through the wires in the area or anywhere else on the West Maui coast,” the statement said.
HECO defended its actions even as its parent company, Hawaiian Electric Industries, has sustained a massive financial hit as many predict it could eventually be held liable for billions of dollars in damages.
HEI has seen its stock price plunge by some 75% and its credit rating reduced to junk as more than a dozen lawsuits have already piled up against the company.
Some analysts say the local utility is headed for bankruptcy. HEI has said in official filings that it aims to endure as a “financially strong utility” for the islands.
Maui County, meanwhile, has been named as a co-defendant in at least one other suit brought against HEI on behalf of Lahaina fire victims.
The county swiftly filed its own suit against HEI on Thursday, saying that Lahaina’s destruction could have been avoided if HECO and its affiliate under HEI, Maui Electric, had de-energized their lines.
Usually the Maui County Council must approve such lawsuits in advance. However, the county was able to file against HECO without that approval last week via the executive powers in the latest emergency proclamation issued by Maui Mayor Richard Bissen.
They moved fast because “so many attorneys are just being conflicted out,” Maui Corporation Counsel Victoria Takayesu said Friday. “They’re being retained by the plaintiffs. They’re being retained by other defendants. We needed to act quickly.”
HECO crews are repairing the downed electricity poles following the disastrous fire last week. (David Croxford/Civil Beat/2023)
However, Bissen did not approve the suit against HEI due to a conflict involving a family member, Takayesu said. Instead, Maui County Managing Director Kekuhaupio Akana approved it, she said.
Maui’s fire chief, Bradford Ventura, was off island on Aug. 8 as the wildfires spread and didn’t return to Maui until the next morning, according to Maui County Communications Director Mahina Martin.
Martin would not say where Ventura had been bu
t he has said in news interviews he was taking his daughter to college in Colorado.
A Longtime Institution In Freefall
Shares of the HECO parent company have dropped approximately 74% to about $9.60 a share from just over $37 on Aug. 7, the day before the fires. Rating agencies, meanwhile, have steeply downgraded their outlook on the company’s debt, meaning it will cost Hawaiian Electric more to borrow money at a time the company needs big bucks to rebuild its Maui systems.
Fitch, for example, downgraded HEI and HECO to a “B” rating reserved for “highly speculative” investments. The rating means Fitch has determined “that material default risk is present, but a limited margin of safety remains.”
The company told shareholders last week that since the fire it has borrowed $370 million on its revolving credit lines, and that it will suspend its quarterly dividend later this year for the first time in more than 120 years — announcements that only further drove down the stock.
The Hawaiian Electric power station mauka of the Lahaina Bypass sits directly above the charred remains of another wildfire Sunday. (Kevin Fujii/Civil Beat/2023)
HEI also re-positioned three of its board members last week, Richard Dahl, Michael Kennedy and Yoko Otani, so that they’ll only serve as board members of American Savings Bank, which HEI owns
.
ASB is one of Hawaii’s largest financial institutions. In a message to shareholders, HEI President and CEO Scott Seu said that customer deposits to ASB are safe, and that “there is no risk to customer deposits as a result of any potential legal claims related to the recent Hawaii fires.”
Founded in 1891, HEI has long been a pillar of Hawaii’s business establishment and a seemingly foolproof bet for investors. The firm’s position as the state’s regulated power monopoly meant there would never be meaningful competition for its roughly 470,000 customers — even though the company charged customers rates that were by far the nation’s highest.
The company’s revenue in 2022 topped $3.7 billion, including revenue from its American Savings Bank subsidiary, with net income of $241 million. Investors wanting a piece of the action could — until last week — count on a dividend that the company boasted that it had paid without interruption since 1901.
Of course Hawaiian Electric faced risks, including from wildfires. In its 2022 annual report to shareholders, the company discussed the risk of losses or liabilities due to wildfires specifically. Those included the risk of Hawaiian Electric’s power lines or other “assets causing or contributing to wildfires.”
“The effects of climate change on the weather (for example, floods, hurricanes, heat waves or drought conditions, the latter of which could increase wildfire risk), sea levels, and water availability and quality, all have the potential to materially adversely affect the results of operations, financial condition and liquidity of the Utilities,” the company said.
New ‘Temporary’ Poles Already Going Up
Meanwhile, HECO separately reported on Friday that it had finished nearly all of the work required to restore power to parts of Lahaina that had been spared by the massive fire by installing new power poles.
The sight of new, overhead power poles erected so quickly in town — when many people still blame such utility poles for sparking the fire — has irked some Maui residents.
Nonetheless, a HECO spokesman on Friday called those poles “temporary” while members of the community decide whether to ultimately bury those power lines underground instead.
“We’ve (been) putting up temporary poles and lines because we know there’s a lot of discussion that needs to happen with the community about how the energy delivery system will look in the future,” said Jim Kelly, vice president of government, corporate and community relations, in an email.
According to lawyers involved in one of the lawsuits, HECO is allowing ATF and private investigators from various law firms to inspect its equipment that was involved in the Aug. 8 wildfires starting Monday.
On Tuesday, investigators are expected to tour the site where the fire is presumed to have started.
Civil Beat reporter Nick Grube contributed to this story.
Read more about the history of Hawaiian Electric, one of Hawaii’s oldest and largest companies, in our special series, “Electric Dreams.”
Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation.
Read HECO’s statement responding to the Lahaina fire here: