In just one day, relentless selling wiped more than a $1 billion from the company’s value as the stock plunged by a third in its biggest loss on record. Investors are dumping shares amid increasing scrutiny over power equipment as the possible source of the deadly Maui wildfire.
Analysts are starting to raise questions over whether Hawaiian Electric, one of the smallest publicly traded US utilities, will be able to withstand the pressure if it does end up being at fault. To be clear: no official cause of the fire, which has become the deadliest in the US in more than a century, has been identified…
Still, lawsuits have already been filed against Hawaiian Electric amid reports of downed power lines that were knocked over by strong winds in the lead up to the blazes. Damages from the tragedy have so far reached more than $5.5 billion, according to federal estimates, an amount that dwarfs Hawaiian Electric’s market capitalization of about $2.4 billion as of Monday’s close.
Just another opportunity for a private equity operator to add his skim rate to what’s left. People are always going to need electricity. Maybe Maui residents will do the arithmetic and incorporate a municipal utility district to save “the skim”?
As the article mentions, Hawaiian Electric could be taken over in a government bailout. I don’t see a role for private equity given the large financial costs coming for the utility.
There are no realistic alternatives to wires on poles in Hawaii. Burying the wires is massively expensive (i.e. MUCH higher permanent electricity rates) due to the surface being mostly volcanic rock.
As we have seen before, in Shiny-land, bankruptcy is no longer failure, it is a business plan to duck accountability. If the Shiny faction was in charge, nationalization would be absolutely off the table, as it was for insolvent TBTF banks in 2008. Most likely would be PE buying a controlling interest, then filing BK to stiff all the other stakeholders.
As the state, and parts of the Federal government, are in the hands of “wokies”, some sort of nationalization and reparations payment schedule may be worked out instead.
Then the alternative would be cutting off power during periods of high wind. A necessary inconvenience? I believe PG&E now warns about blackouts (“public safety” blackouts) because of high winds.
There is another issue as well. Lahaina’s water pressure is maintained by electric pumps. So if HECO would have cut the power the water pressure would have dropped sooner than it did.
Yes, Hawaiians pay the highest electric rates in the US, at $0.438 per kwh, as of May. The national average is $0.159
But, setting up a municipal utility isn’t necessarily going to reduce those rates much. Over 60% of the electricity in the state of Hawaii comes from burning oil, with about 30% from renewables, plus some smaller miscellaneous sources. Each island needs controllable, dispatchable generators to keep their small grids stable, so those oil burners aren’t going away. Burning petroleum is an expensive and dirty way to generate electricity, but Hawaii has limited options.
If they were smart, they would look to installing a few NuScale SMR nuclear reactors on each island to meet their clean energy goals. But, of course, they aren’t going to do that.
The only active volcano(s) is on the Big Island, from what I understand. Future lava flows can be predicted, so not everyone living on the Big Island is constantly in danger of lava destroying their house.
Here is one solution. Park the SMR off-shore on a floating barge, say a half-mile from land. That should provide a good buffer zone.
The Russians have a floating nuclear power plant in the harbor of a town in northern Siberia.
But, to repeat, my idea will never happen. It is a good idea, and would work fine if honestly evaluated, but it is never going to happen.
Hawaiian Electric said power lines appear to have caused the brush fire that started at 6:30 a.m. local time…The Maui County Fire Department responded to the morning fire and declared it had been extinguished…
Hawaiian Electric crews repairing the downed poles later saw a fire around 3 p.m. about 75 yards away in the field near Lahaina Intermediate School and immediately reported it to authorities, according to the company.
Hawaiian Electric said the power had been off for hours when the crew witnessed that second fire in the field. By the time the county fire department responded to the afternoon fire, they were unable to contain the blaze as it spread out of control toward Lahaina, according to the company…
Hawaiian Electric has informed the ATF that it has records to demonstrate that no electricity was flowing through its wires when the second fire broke out, according to the company.
Well, they don’t have deep pockets but there is the government official who decided to not use the emergency sirens and the other official who refused to let water for taro be used for firefighting.
Hawaiian Electric credit risks tied to wildfires and the costs associated with them resulted in Clearway Energy canceling power purchase agreements that the renewable power project developer had with the utility…Clearway expressed concern about the credit of Hawaiian Electric amid wildfire lawsuits and costs in excess of $1 billion…
The utility is trying to build up its creditworthiness, Asuncion said, noting that parent company Hawaiian Electric Industries recently disclosed agreements involving payment of $1.99 billion to settle lawsuits related to the August 2023 wildfires on Maui, one of which destroyed the town of Lahaina and killed at least 102 people…
Clearway and the utility in October “made the difficult decision to end the current round of contract negotiations” for the Makana La Solar, Kaiwiki Solar and Puako Solar projects…