Hawaii lawmakers this week passed a bill intended to help shore up Hawaiian Electric Co.’s credit rating despite strong opposition from House and Senate committee chairs who helped vet the measure.
The bill would impose a new fee on HECO customers to help pay for investments needed to protect the public from wildfires. But that’s not what drew criticism from Sen. Jarrett Keohokalole, chair of the Senate Commerce and Consumer Protection Committee, and Rep. Scott Matayoshi, chair of the House Consumer Protection and Commerce Committee.
They focused on an 11th-hour amendment capping HECO’s liability for property damage in the event of future wildfires. The liability cap has always been a key part of the measure, but a change made on Friday gives the Public Utilities Commission, not the Legislature, the power to set the cap amount and how it will apply.
House Energy and Environmental Protection Committee chair Nicole Lowen said it made sense to have the PUC set the liability cap through a deliberative public rulemaking process.
“It’s not perfect,” Lowen said. But she added, “It’s my firm belief that we’re doing something positive for consumers.”
But Keohokalole said the part of the bill putting the commission in charge was “inserted in the shadows at the very end of the session.” Previous drafts set the cap according to formulas determined by the Legislature.
In addition, Keohokalole said, the PUC would get to decide if the cap applies to a single wildfire or multiple fires taking place over a number of years. That would mean a series of fires at the beginning of the time period could exhaust HECO’s capped amount, leaving victims uncompensated or having to turn to other alleged wrongdoers who don’t have the benefit of a liability cap.
“It’s a blatant corporate handout,” said Keohokalole, who was one of five senators who voted against the bill, joining Sens. Brenton Awa, Brandon Elefante, Mike Gabbard and Les Ihara.
Matayoshi echoed Keohakolole, saying the PUC’s option to implement the cap based on a time period rather than per fire potentially would unduly favor “certain fire victims over others.”
Joining Matayoshi to vote against the bill in the House were Reps. Terez Amato, Diamond Garcia, Andrew Garrett, Gregor Ilagan, Trish La Chica, Elijah Pierick, Mahina Poepoe, Adrian Tam and Shirley Ann Templo.
Lowen acknowledged in her floor speech that basing the cap on a time period versus an event “is a legitimate concern.”
But she said the complicated and unprecedented aspect of the issue merits having the PUC go through the process of creating rules.
The bill allows the governor to reject whatever rules the PUC adopts.
Not at issue was the new fee on customers. Under the bill, HECO could borrow money against the fees to use to pay for wildfire prevention initiatives. Such securitization measures are widely used by utilities and allow them to borrow money at lower interest rates than they normally can.
HECO’s credit problems are especially acute because rating agencies slashed its bond rating after the 2023 Maui wildfires, which means its interest rates would be especially high — and passed on to customers anyway.
“The securitization part of the bill is fantastic,” Matayoshi said.
This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.
Topics Catastrophe Natural Disasters Wildfire Legislation Hawaii