Hawaiian Electric could get liability protection under 11th-hour proposal

HONOLULU (HawaiiNewsNow) — A last-minute, and controversial, proposal aims to protect the Hawaiian Electric Company from bankruptcy if it’s blamed for another catastrophic wildfire.

Attorneys for victims say the 11th-hour proposal could leave future fire victims empty-handed while supporters say they wanted to protect all electric customers and hold HECO accountable.

For months, lawmakers considered a plan that would have rate payers pay more for electricity into a special fund to pay for damage from a future wildfire.

That dramatically changed Friday in a move that angered some lawmakers and attorneys for fire victims.

Elizabeth Nardi is an attorney for Maui fire victims who also lost her home, and was surprised when she learned about the final version of Senate Bill 897.

“I was shocked, and you know, frankly, I don’t think enough people know what has actually gone on,” Nardi said. “I think that people would be very upset if they knew that.”

Damage claims from the Lahaina fire could have bankrupted Hawaiian Electric, whose lines sparked it, but paying half of the $4 billion settlement was affordable.

Considering the impact of another fire, the company wanted to authority to charge all customers to build up a wildfire fund to protect the company against future damages. That was controversial, but still moving against a lot of opposition.

On Friday, minutes before a 6 p.m. deadline to finalize legislation, House and Senate negotiators came up with a new plan. HECO could still set aside some ratepayer money to build more disaster prevention into its grids, and the bill would also have the Public Utilities Commission set a cap on how much HECO would have to pay victims in another catastrophic fire.

Both House and Senate consumer protection chairs Scot Matayoshi and Jarrett Keohokalole opposed the last-minute changes.

“We wanted to take a breath and look at this extremely complicated bill,” Keohokalole said. “This is a giveaway to HECO. This allows potentially the PUC to inoculate or immunize HECO from paying wildfire damages for fires that they cause into the future above a predetermined cap.

“This is a bill with tremendous consequences to the public and to consumers, and we’re really abdicating our legislative responsibility if we’re going to delegate that policy-making decision to an unelected commission. This is not what they do,” he added.

Nardi said she believes a cap will mean far less available for rebuilding lives and property in another fire.

“To see that Hawaiian Electric is essentially getting away with all of the award and nothing is being done to protect the consumers, it is deeply concerning,” she said.

“In Lahaina, it’s going to happen again and with the way the bill is currently set, it is not going to provide any meaningful compensation to the victims to help them rebuild their lives,” she said.

But Sen. Troy Hashimoto, who ended up chairing the Senate side of the conference committee, says HECO needed the protection to stay financially viable.

“Fully understand that we need to help Hawaiian Electric get out of this very, very rocky time and for the sake of having something that’s locally managed,” Hashimoto said.

Rep. Nicole Lowen added conditions HECO must meet to earn PUC approval for limiting liability, including better management, reasonable rates and a safer grid.

“The condition that the wildfire mitigation plan be approved and that it is being implemented on appropriate timeline is actually the one of the few things we put concretely in the bill,” Lowen said. “So that’s not up to the PUC to consider that is in law already if the liability cap is adopted.”

Gov. Josh Green, in an interview Monday, said he’s aware of the late proposal.

“We’ll be combing over this bill, every last word, to make sure it’s okay,” he said.

If he signs the bill, the governor said he’ll give the same scrutiny to the PUCs plan.

“What I did do is I insisted that the governor, in this case me, will have the opportunity to make the final decision a couple years out,” he said.

HECO didn’t comment except to say they did not draft the legislation.

It will be debated in both houses Wednesday, along with a couple hundred other bills.

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