Hawaiian Electric Industries, Inc. Reports Financial Results for 2023

Hawaiian Electric Industries, Inc. recently released its financial results for the year 2023, showcasing a successful year for the company. The Q4 Earnings Conference Call, held on February 13, 2024, included key participants such as Scott Seu, the President and CEO of HE, and other high-ranking officials. During the call, updates were provided on the Maui wildfires and the company’s efforts to support recovery and mitigate future wildfire risks. The One ‘Ohana Initiative, launched by Governor Josh Green, was also highlighted, aiming to protect against extreme weather events, attract capital for wildfire mitigation, and support Maui’s recovery. Legislative solutions are being explored to address recovery and wildfire risk mitigation planning, while Hawaiian Electric received regulatory approvals for various projects. Furthermore, the company achieved significant financial milestones, reporting a net income of $199.2 million and an EPS of $1.81 for 2023. These results are indicative of Hawaiian Electric Industries, Inc.’s strong performance and commitment to its stakeholders.

Q4 2023 Earnings Conference Call

Hawaiian Electric Industries, Inc. (HE) held its Q4 2023 Earnings Conference Call on February 13, 2024. The call included key participants such as Scott Seu, President and CEO of HE, Scott Deghetto, EVP, CFO, and Treasurer of HE, Shelee Kimura, President and CEO of Hawaiian Electric Company, Inc., Paul Ito, SVP, CFO, and Treasurer of Hawaiian Electric Company, Inc., and Ann Teranishi, American Savings Bank President and CEO.

Updates on Maui Wildfires

During the conference call, updates were provided on the Maui wildfires and the efforts being made to support recovery and mitigate future wildfire risks. The wildfires in Maui had caused significant damage and loss, and it was crucial to address these challenges promptly.

Efforts to Support Recovery

Efforts to support the recovery from the Maui wildfires were discussed during the conference call. It was highlighted that a collaborative approach involving various stakeholders was critical in ensuring a successful recovery. The community, local government, and utility companies like Hawaiian Electric were working together to provide the necessary support to affected areas.

Mitigating Future Wildfire Risks

Mitigating future wildfire risks was another important focus area during the conference call. It was observed that climate change and extreme weather events were contributing to the increased frequency and intensity of wildfires. Therefore, proactive measures were being taken to assess and mitigate these risks. This included investing in infrastructure improvements, implementing advanced technologies, and enhancing wildfire prevention strategies.

One ‘Ohana Initiative

The One ‘Ohana Initiative, launched by Governor Josh Green, was discussed during the conference call. The initiative aimed to support Maui’s recovery, protect against future extreme weather events, and attract capital for wildfire mitigation. Through this initiative, various stakeholders were coming together to coordinate efforts and leverage resources, ensuring a sustainable and resilient future for Maui.

Aims and Objectives

The conference call provided insight into the aims and objectives of the One ‘Ohana Initiative. The primary goal was to provide immediate assistance and support to the affected communities. This involved providing essential resources, such as food, shelter, and medical aid. Additionally, the initiative aimed to develop long-term strategies for resilient infrastructure, emergency preparedness, and community engagement.

Supporting Maui’s Recovery

Supporting Maui’s recovery was a key component of the One ‘Ohana Initiative. The conference call highlighted the importance of community engagement and collaboration in the recovery process. Hawaiian Electric and other stakeholders were actively involved in providing financial and logistical support to help rebuild affected areas and restore essential services.

Protecting Against Future Extreme Weather Events

Given the increased frequency of extreme weather events, protecting against future disasters was a crucial aspect of the One ‘Ohana Initiative. The conference call showcased the efforts being made to enhance infrastructure resilience, implement advanced forecasting and monitoring systems, and promote sustainable practices. These measures aimed to minimize the impact of future extreme weather events and protect the communities from potential disasters.

Attracting Capital for Wildfire Mitigation

Another objective of the One ‘Ohana Initiative was to attract capital for wildfire mitigation efforts. The conference call emphasized the importance of securing adequate funding to support ongoing wildfire prevention and mitigation initiatives. This involved engaging with investors, government agencies, and philanthropic organizations to raise funds for long-term wildfire risk reduction strategies.

Establishing the Maui Recovery Fund

The conference call provided updates on the establishment of the Maui Recovery Fund. It was announced that $175 million had been committed to the fund, with a targeted launch date of March 1. The Maui Recovery Fund aimed to provide financial support to affected individuals, businesses, and communities to aid in their recovery and rebuilding efforts.

Commitment and Launch Target

The commitment of $175 million to the Maui Recovery Fund showcased the dedication of various stakeholders towards supporting Maui’s recovery. The targeted launch date of March 1 indicated the urgency with which the fund was being established to ensure timely assistance and support to those in need.

Exploring Legislative Solutions

During the conference call, the exploration of legislative solutions to address recovery challenges and mitigate wildfire risks was discussed. It was recognized that legislative support was crucial in facilitating the recovery process and implementing long-term strategies. This involved identifying and addressing any legal and regulatory barriers that may hinder the recovery efforts.

Addressing Recovery Challenges

The conference call highlighted the importance of addressing recovery challenges through legislative interventions. This involved streamlining the process of accessing financial assistance, expediting building permits, and developing incentive programs to encourage sustainable rebuilding practices. By addressing these challenges, the recovery process could be accelerated, and affected individuals and businesses could receive the necessary support.

Mitigating Wildfire Risks

Mitigating wildfire risks through legislation was another focus area discussed during the conference call. The legislative solutions aimed to improve wildfire prevention strategies, enhance emergency response capabilities, and strengthen building codes and regulations. By implementing these measures, the risks associated with future wildfires could be significantly reduced.

Cost Recovery and Financing Options

The conference call addressed the importance of cost recovery and financing options in supporting the recovery efforts. It was acknowledged that the recovery process required significant financial resources, and exploring various funding mechanisms was crucial. This included assessing potential insurance claims, federal aid programs, and public-private partnerships to ensure sustainable financing for the recovery initiatives.

Regulatory Approvals

The conference call provided updates on regulatory approvals for various projects. These approvals were essential in facilitating the implementation of key initiatives aimed at enhancing infrastructure resilience and supporting the recovery efforts.

Grid Resilience Plan

Regulatory approval was granted for a grid resilience plan. This plan involved strengthening the electric grid’s capacity to withstand extreme weather events, including wildfires. By investing in grid infrastructure upgrades and implementing advanced technologies, the reliability and resilience of the electrical system could be significantly improved.

Deferment of Maui Wildfire Costs

Regulatory approval was also obtained for the deferment of Maui wildfire costs. This decision aimed to provide financial relief to Hawaiian Electric and its customers by deferring the costs associated with the wildfire response and recovery efforts. This allowed the utility to focus on supporting the recovery without immediate financial strain.

Waena Battery Energy Storage Project

The conference call announced the regulatory approval of the Waena Battery Energy Storage Project on Maui. This project aimed to enhance the utility’s renewable energy storage capabilities, enabling better integration of renewable energy sources into the grid. By investing in energy storage technologies, the utility could enhance grid stability and reliability, reducing the impact of future wildfires and other extreme events on the electrical system.

Progress of Renewable Energy Projects

The progress of renewable energy projects was discussed during the conference call. These projects played a crucial role in the transition to a clean and sustainable energy future. Updates were provided on the Stage 3 Request for Proposals (RFP) for renewable energy projects and the pursuit of federal funding to support grid resilience initiatives.

Stage 3 RFP Updates

The conference call highlighted the progress made in the Stage 3 RFP for renewable energy projects. This process aimed to solicit proposals from developers for the construction of new renewable energy facilities. The updates provided information on the evaluation process and the expected timeline for selecting the winning proposals. These projects would contribute to the utility’s renewable energy portfolio and reduce reliance on fossil fuels.

Pursuit of Federal Funding

In addition to the Stage 3 RFP, the conference call mentioned the pursuit of federal funding for grid resilience initiatives. By leveraging federal resources, Hawaiian Electric aimed to accelerate the implementation of infrastructure improvements and enhance the grid’s ability to withstand extreme weather events, including wildfires. This would further support the recovery efforts and contribute to a more resilient energy system in the future.

Agreement with IBEW 1260

During the conference call, it was announced that an agreement had been reached with the union IBEW 1260 on a new three-year contract. This agreement marked a significant milestone in ensuring a harmonious working relationship between the utility and its employees. By establishing fair terms and conditions, the agreement fostered a positive work environment and supported the utility’s mission to provide reliable and sustainable energy services.

Financial Results for 2023

The conference call provided an overview of the financial results for 2023. This included net income, earnings per share (EPS), and core net income figures for Hawaiian Electric Industries, Inc.

Net Income

The net income for 2023 was reported to be $199.2 million. This figure represented the overall profitability of the company during the fiscal year and highlighted its financial strength and stability.

EPS

The conference call announced the earnings per share (EPS) for 2023, which was reported to be $1.81. EPS is a key measure of a company’s profitability and is calculated by dividing the net income by the number of outstanding shares. A higher EPS indicates stronger financial performance.

Core Net Income

The core net income for 2023 was also disclosed during the conference call. This figure represented the net income excluding wildfire expenses and securities loss, providing a more accurate assessment of the company’s operational performance. The core net income for 2023 was reported to be $224 million.

Holding Company Net Loss

While the financial results for Hawaiian Electric Industries, Inc. were positive, it was mentioned during the conference call that the holding company had experienced a net loss of $48.1 million. This loss was attributed to specific factors unique to the holding company’s operations and did not reflect the overall financial health of the utility and its subsidiaries.

Financial Outcome

In conclusion, the Q4 2023 Earnings Conference Call provided comprehensive updates on various aspects of Hawaiian Electric Industries, Inc., including the status of the Maui wildfires recovery efforts, the progress of the One ‘Ohana Initiative, regulatory approvals, renewable energy projects, the agreement with IBEW 1260, and the financial results for 2023. The call demonstrated the company’s commitment to supporting the communities it serves, promoting sustainability and resilience, and achieving financial success.