Hawaiian Electric Industries, Inc. (HE): Analyse de Pestle [Jan-2025 mise à jour]

Au cœur du Pacifique, Hawaiian Electric Industries, Inc. (il) se tient au carrefour d'une révolution de l'énergie transformatrice, naviguant dans un paysage complexe de mandats politiques, de défis économiques et d'impératifs environnementaux. Alors qu'Hawaï se dirige vers un 100% futur énergétique propre par 2045, ce géant des services publics remodèle l'écosystème énergétique des îles grâce à des technologies innovantes, des investissements stratégiques et un engagement profond envers la durabilité. Plongez dans notre analyse complète du pilon pour découvrir la dynamique complexe de la dynamique, les décisions stratégiques et son rôle pivot dans la transformation de l'énergie verte d'Hawaï.

Hawaiian Electric Industries, Inc. (HE) - Analyse du pilon: facteurs politiques

Mandat d'énergie renouvelable d'Hawaï

La loi de l'État d'Hawaï (loi 97) oblige une production d'énergie 100% propre d'ici 2045. En 2023, l'État a atteint 34,5% de pénétration d'énergie renouvelable.

Année cible des énergies renouvelables	Pourcentage d'objectif
2030	70%
2045	100%

Incitations fiscales du gouvernement de l'État

Hawaï offre des crédits d'impôt importants pour les infrastructures d'énergie renouvelable:

• Crédit d'impôt sur le revenu des technologies renouvelables: jusqu'à $5,000 par système d'énergie renouvelable
• Exonération de la taxe foncière de l'énergie solaire: 100% d'exonération de l'impôt foncier pour les installations solaires

Environnement réglementaire

La Hawaii Public Utilities Commission (PUC) réglemente les opérations des services publics avec des directives strictes:

Aspect réglementaire	Exigences spécifiques
Modernisation de la grille	Mises à niveau obligatoire des infrastructures
Intégration renouvelable	Normes d'interconnexion strictes

Soutien politique de décarbonisation

Le paysage politique d'Hawaï démontre un fort engagement envers la transition de l'énergie propre:

• Priorité énergétique propre du gouverneur: 330 millions de dollars alloué aux initiatives d'énergie propre en 2024 budget budgétaire
• Le plan d'action climatique à l'échelle de l'État cible 45% de réduction des gaz à effet de serre d'ici 2030

Hawaiian Electric Industries, Inc. (HE) - Analyse du pilon: facteurs économiques

Coûts d'électricité élevés à Hawaï

En 2024, Hawaï a les taux d'électricité les plus élevés aux États-Unis, ce qui est en moyenne de 0,34 $ par kilowatt-heure, soit environ 231% plus élevé que la moyenne nationale de 0,15 $ par kilowattheure.

Année	Taux d'électricité moyen	Comparaison avec la moyenne nationale
2024	0,34 $ / kWh	231% plus élevé

Investissement dans des projets d'énergie solaire et éolienne

Hawaiian Electric Industries a engagé 1,2 milliard de dollars dans les infrastructures d'énergie renouvelable entre 2022-2025, avec des allocations spécifiques:

Type d'énergie renouvelable	Montant d'investissement	Capacité projetée
Projets solaires	720 millions de dollars	450 MW
Énergie éolienne	480 millions de dollars	250 MW

Vulnérabilité des prix d'importation de carburant

En 2023, Hawaï a importé 93% de ses ressources énergétiques, les coûts de combustibles fossiles fluctuant entre 65 $ et 95 $ le baril, ce qui concerne directement les dépenses de production d'électricité.

Dépendance à l'importation d'énergie	Fourchette de prix du combustible fossile	Impact économique
93%	65 $ - 95 $ / baril	Coût élevés de production d'électricité

Modernisation de la grille et intégration renouvelable

Hawaiian Electric Industries a alloué 350 millions de dollars à la modernisation du réseau en 2024, en se concentrant sur:

• Implémentation de la technologie de la grille intelligente
• Systèmes de stockage d'énergie
• Infrastructure d'intégration d'énergie renouvelable

Catégorie d'investissement	2024 Budget	Objectif principal
Modernisation de la grille	350 millions de dollars	Amélioration des infrastructures d'énergie renouvelable

Hawaiian Electric Industries, Inc. (HE) - Analyse du pilon: facteurs sociaux

Demande publique croissante de solutions énergétiques durables et respectueuses de l'environnement

Depuis 2024, Hawaï a un 41,7% de pénétration d'énergie renouvelable dans sa grille d'électricité. Les industries électriques hawaïennes ont indiqué que 33,4% de sa production totale d'électricité provenant de sources renouvelables Au cours de l'exercice précédent.

Type d'énergie renouvelable	Pourcentage de génération
Solaire	18.2%
Vent	10.5%
Géothermique	4.7%

Une forte sensibilisation à la communauté des impacts du changement climatique dans l'écosystème de l'île

Une enquête en 2023 a révélé que 78,6% des résidents d'Hawaï sont préoccupés par les impacts du changement climatique. L'État a connu un Augmentation de la température annuelle de 0,3 ° F au cours de la dernière décennie.

Imphase culturelle sur la préservation de l'environnement naturel et des ressources autochtones

Hawaiian Electric Industries a investi 42,3 millions de dollars en programmes de préservation environnementale et de protection des ressources autochtones Au cours de l'exercice 2023.

Programme de conservation	Montant d'investissement
Restauration d'écosystème indigène	18,7 millions de dollars
Protection des ressources culturelles	12,5 millions de dollars
Éducation environnementale communautaire	11,1 millions de dollars

Augmentation de la préférence des consommateurs pour l'énergie distribuée et l'énergie solaire sur le toit

En 2024, 27,6% des clients résidentiels de Hawaiian Electric Industries ont installé des systèmes solaires sur le toit. La société a signalé 3 845 nouvelles connexions énergétiques distribuées au cours de la dernière année.

Adoption solaire sur le toit	Nombre d'installations
Clients résidentiels	98,632
Clients commerciaux	4,521
Systèmes énergétiques distribués totaux	103,153

Hawaiian Electric Industries, Inc. (HE) - Analyse du pilon: facteurs technologiques

Technologies avancées du réseau intelligent pour la gestion des énergies renouvelables

Hawaiian Electric Industries a investi 189,3 millions de dollars dans les technologies de modernisation du réseau en 2023. L'intégration des énergies renouvelables de la société a atteint 34,2% de la capacité totale d'un réseau, avec une augmentation prévue à 40,7% d'ici 2025.

Catégorie de technologie	Montant d'investissement	Chronologie de la mise en œuvre
Infrastructure de grille intelligente	78,5 millions de dollars	2023-2024
Systèmes de gestion des énergies renouvelables	62,7 millions de dollars	2024-2025
Réseaux de communication de grille	48,1 millions de dollars	2023-2024

Investissements importants dans les systèmes de stockage de batteries et de résilience au réseau

Hawaiian Electric a engagé 245,6 millions de dollars dans des projets de stockage de batteries en 2023. La capacité de stockage de la batterie actuelle s'élève à 135 MWh, avec des plans pour s'étendre à 250 MWh d'ici 2026.

Projet de stockage de batteries	Capacité	Investissement	Année d'achèvement
Stockage de grille oahu	75 MWH	112,3 millions de dollars	2024
Système de résilience Maui	45 MWH	78,5 millions de dollars	2025
Storage de l'île d'Hawaï	15 MWH	54,8 millions de dollars	2024

Mise en œuvre des infrastructures de mesure avancées à travers les îles hawaïennes

Déploiement de l'infrastructure de mesure avancée (AMI): 178 500 compteurs intelligents installés en décembre 2023, couvrant 62,3% de la clientèle totale. Investissement total de 93,4 millions de dollars en technologie AMI.

Île	Les compteurs intelligents installés	Pourcentage de couverture
Oahu	112,300	72.5%
Maudi	38,600	51.2%
Île d'Hawaï	27,600	43.8%

Développer des solutions de microrésexes pour les communautés éloignées et vulnérables

Hawaiian Electric a alloué 67,2 millions de dollars pour le développement des microréseaux en 2023. La couverture des microréseaux actuelle comprend 12 sites communautaires éloignés, avec des plans pour s'étendre à 22 sites d'ici 2026.

Emplacement du microréseau	Capacité	Intégration d'énergie renouvelable	Investissement
Communauté Molokai	2,5 MW	85% solaire	15,6 millions de dollars
Grille distante de Lanai	1,8 MW	90% renouvelable	12,4 millions de dollars
Sites îles rurales d'Hawaï	3,7 MW	75% d'énergies renouvelables mixtes	39,2 millions de dollars

Hawaiian Electric Industries, Inc. (HE) - Analyse du pilon: facteurs juridiques

Règlement sur la Commission des services publics de la Commission des services publics d'Hawaï

Coûts de conformité réglementaire: 12,7 millions de dollars dépensés pour la conformité réglementaire en 2023

Catégorie de réglementation	Dépenses de conformité	Impact réglementaire
Frais de classement PUC	$487,000	Soumission annuelle obligatoire
Conformité de la modernisation de la grille	3,2 millions de dollars	Mises à niveau des infrastructures requises
Mise en œuvre de la réglementation de la sécurité	2,1 millions de dollars	Protocoles de sécurité complets

Navigation de cadres de politique d'énergie renouvelable complexes

Mandat d'énergie renouvelable: Objectif à 100% des énergies renouvelables d'ici 2045 par loi de l'État d'Hawaï

Politique d'énergie renouvelable	Pourcentage de conformité	Investissement
Norme de portefeuille renouvelable	34% en 2023	215 millions de dollars
Règlement sur l'intégration solaire	22% de pénétration de la grille	87,5 millions de dollars

Gestion des exigences légales de l'environnement et de l'utilisation des terres

Dépenses de conformité environnementale: 9,3 millions de dollars en 2023

• Conformité de la Clean Air Act: 2,6 millions de dollars
• Permis de conservation de l'habitat: 1,4 million de dollars
• Règlement sur la gestion des zones côtières: 1,9 million de dollars

Aborder des réglementations potentielles antitrust et de concurrence sur le marché

Budget de défense juridique: 3,5 millions de dollars alloués au litige antitrust potentiel

Zone de réglementation	Risque juridique potentiel	Budget d'atténuation
Revue de la domination du marché	Haut	1,7 million de dollars
Audit des pratiques compétitives	Moyen	1,2 million de dollars
Conformité à la fusion	Faible	$600,000

Hawaiian Electric Industries, Inc. (HE) - Analyse du pilon: facteurs environnementaux

Engagement à 100% Génération d'énergies renouvelables d'ici 2045

Hawaiian Electric Industries vise à atteindre 100% de production d'énergies renouvelables d'ici 2045, comme le mandaté par Hawaii State Law Act 97. Répartition actuelle du portefeuille des énergies renouvelables:

Source d'énergie renouvelable	Pourcentage
Solaire	34.2%
Vent	21.7%
Géothermique	17.5%
Biomasse	6.3%
Hydro-électrique	4.3%

Réduire les émissions de carbone grâce à des infrastructures énergétiques durables

Cibles de réduction des émissions de carbone:

• 2024 Objectif de réduction du CO2: 35% par rapport à la ligne de base 2005
• Investissement annuel dans les infrastructures renouvelables: 187 millions de dollars
• Extension de capacité d'énergie renouvelable planifiée: 500 MW d'ici 2030

Protéger les écosystèmes de l'île vulnérable pendant le développement des infrastructures énergétiques

Métrique de protection des écosystèmes	État actuel
Zones de conservation des terres	1 243 acres
Zones de protection des espèces indigènes	672 acres
Évaluations d'impact environnemental par projet	3-5 études complètes

Atténuer les risques de changement climatique par le biais de systèmes d'énergie résilients

Investissement de résilience climatique:

• Budget annuel d'adaptation climatique: 45,6 millions de dollars
• Projets de durcissement de la grille: 7 mises à niveau d'infrastructure majeures
• Intégration des ressources énergétiques distribuées: 215 MW

Capacité de stockage d'énergie pour la résilience climatique: 325 MWh d'ici 2025.

Hawaiian Electric Industries, Inc. (HE) - PESTLE Analysis: Social factors

Extremely poor public sentiment and trust following the 2023 Maui wildfires

The August 2023 Maui wildfires created a public trust crisis for Hawaiian Electric Industries, Inc. (HE), a deep-seated issue that continues to impact operations and financial stability through 2025. The company faced a significant legal and financial fallout, which directly eroded public confidence in its safety protocols and infrastructure resilience.

The financial impact alone is a clear indicator of the severity. In its Q2 2024 results, the company reported a net loss of $1.3 billion, largely driven by a $1.71 billion accrual for estimated wildfire liabilities related to tort claims. This massive liability led the company to warn about a potential 'going concern' risk. While a legislative settlement was signed in July 2025, the damage to public trust is long-term, especially after a January 2025 wildfire safety strategy filed with the Public Utilities Commission (PUC) was later assessed in August 2025 as having 'critical deficiencies' and not meeting a sufficient level of safety standard. Honestly, the company is still in the trust-rebuilding phase, and it will take years of flawless execution to recover.

Strong community resistance to high electricity rates, already among the nation's highest

Hawaiian Electric operates in a state where the cost of power is a major social and economic pain point. Hawaii consistently holds the title for the nation's highest residential electricity rates. As of October 2025, the average residential rate was approximately 40.96¢ per kWh, which is more than double the U.S. national average. This high cost is primarily due to the islands' geographic isolation and reliance on imported petroleum for a substantial portion of power generation.

For a typical residential customer consuming 500 kWh, the monthly bill on Hawaii Island was $228.54 in January 2025. Community resistance is amplified by the perception of poor service quality, with some lawmakers noting that power outages have increased dramatically since 2020. The upcoming rebasing of rates under the Performance-Based Regulation (PBR) plan, which is set to conclude its current five-year term, is a major flashpoint, with concerns that it could lead to one of the largest consumer cost increases in the state's history.

Here's a quick look at the high cost of power in Hawaii versus the national average:

Metric	Hawaii (October 2025)	U.S. National Average (Approx. 2025)
Residential Rate (¢/kWh)	40.96¢	~17.6¢ (Based on 2025-11-21 data)
Typical 500 kWh Residential Bill (Hawaii Island, Jan 2025)	$228.54	~$88.00 (Based on 17.6¢/kWh)

Growing demand for energy independence and decentralized power generation (rooftop solar)

The high cost of electricity and a strong environmental ethos have fueled an aggressive social trend toward energy independence, primarily through customer-sited rooftop solar (distributed energy resources or DER). Hawaii has the highest rate of rooftop solar adoption in the US. This trend represents both a social opportunity and a technical challenge for Hawaiian Electric.

As of March 2025, the total number of private rooftop solar systems connected to Hawaiian Electric's grids reached nearly 114,000 across the five islands it serves. On Oahu, the state's most populated island, rooftop solar penetration hit 44% among single-family homes by October 2025. This push for decentralized power means the utility must rapidly evolve its grid management to handle a massive, two-way flow of electricity, plus, it cuts into the utility's traditional revenue model.

• Total grid-connected solar capacity (all types) was 1,410 MW as of March 2025.
• The number of grid-connected solar systems grew by 7.5% in 2024.
• The cumulative installed solar power capacity surpassed 1 gigawatt (GW) by October 2025.

Workforce retention challenges due to high-stress, high-scrutiny operating environment

The operating environment for Hawaiian Electric Industries, Inc. employees is incredibly high-stress and subject to intense public and regulatory scrutiny, especially post-wildfires. While specific, recent turnover data for the utility itself is not public, the overall labor market in Hawaii is tight, which exacerbates any internal retention issues.

The state's overall turnover rate was 15.4% in 2024, and new-hire retention is a major issue, with a first-year turnover rate of 26.7% reported by organizations tracking this metric in a May 2025 survey. Talent retention was cited as a critical short- and long-term challenge by 45.5% of Hawaii executives in a January 2025 survey. The utility's staff is under pressure to execute a complex wildfire mitigation strategy that was criticized in an August 2025 expert report for being deficient. This kind of external pressure, coupled with the need to implement significant grid hardening and safety measures, creates a defintely challenging environment for retaining skilled, experienced employees.

To be fair, the company is taking steps, like partnering with UH Maui College to launch a new workforce training program to prepare Maui residents for potential jobs within power generating stations. But still, the high-scrutiny environment, which includes public complaints about service and even whistleblower reports about a toxic environment at the Public Utilities Commission, creates a difficult backdrop for employee morale and retention in the utility sector.

Next step: The HR department should commission a confidential, third-party employee sentiment and retention study for critical operations roles by the end of Q1 2026.

Hawaiian Electric Industries, Inc. (HE) - PESTLE Analysis: Technological factors

Mandatory accelerated deployment of advanced grid hardening and sectionalizing technology.

The imperative to modernize and secure the grid, particularly against wildfire risk, is driving a massive technological push. Hawaiian Electric Industries, Inc. (HE) has an expanded 2025-2027 Wildfire Safety Strategy with a projected total cost of $350 million, with approximately $137 million budgeted for work in the 2025 fiscal year alone.

This capital is directed toward physical grid hardening and advanced sectionalizing technology. The goal is to limit the geographic scope of an outage or fault. For instance, the company is deploying covered conductors-power lines with heavy-duty insulating material-in the highest-risk areas to prevent sparking if lines touch or fall.

You can see the immediate, concrete actions in the table below, which shows the core hardening technologies being prioritized.

Technology/Initiative	2025-2027 Deployment Focus	Purpose
Covered Conductors	Highest wildfire risk areas	Prevents bare wires from sparking upon contact.
Smart Reclosers	Circuits under Public Safety Power Shutoff (PSPS) program	Automatically and quickly shuts off power upon fault detection.
Fast-Acting Fuses & Lightning Arresters	System-wide upgrades	Reduces ignition risk and protects equipment from power surges.
Strategic Undergrounding	Pilot project in Lahaina (approx. two miles)	Long-term resilience and fire risk mitigation in critical safety areas.

The entire multi-year grid resilience plan, which addresses more than just fire risk, is valued at $190 million, and half of that is being pursued through federal funding to reduce customer costs. That's a defintely necessary investment to secure the network.

Need to integrate massive amounts of intermittent solar and wind power onto the grid.

The technical challenge of integrating massive amounts of variable, intermittent renewable energy-like solar and wind-is a core technological driver for Hawaiian Electric. The state's 100% renewable energy goal by 2045 means the grid must handle significant two-way power flow.

In 2024, the company achieved a consolidated Renewable Portfolio Standard (RPS) of 36%, a three-percentage-point increase from 2023. This progress is impressive, but it creates a complex engineering problem, especially with high levels of customer-sited resources (Distributed Energy Resources or DER).

Here's the quick math: the combined capacity of customer-sited rooftop solar and battery storage has already surpassed 1 gigawatt (GW). This means approximately 44% of single-family homes served by Hawaiian Electric now have rooftop solar, a national high.

To manage this high penetration, the company must rely on advanced grid technologies:

• Deploying advanced inverter technology to enable greater rooftop solar adoption and manage power quality.
• Expanding the use of voltage management tools on circuits with heavy solar saturation.
• Utilizing the recently completed full rollout of Advanced Meter Infrastructure (AMI), or smart meters, to better monitor and control DER.

Critical investment in battery Energy Storage Systems (ESS) to stabilize the grid.

Battery Energy Storage Systems (ESS) are the critical technological solution for stabilizing the grid against the variability of solar and wind power. They store excess energy during the day and release it when the sun sets or the wind drops, acting as a buffer. Hawaiian Electric is aggressively procuring and deploying this capacity.

The company is on a strong pace to reach its 2030 RPS milestone of 40%, largely due to new solar and storage projects. In 2025, a key project expected to complete commissioning is the Hoohana Solar I project on Oahu, which pairs 52 MW of solar with a substantial 208 MWh Battery Energy Storage System.

Looking ahead, the commitment to ESS is massive. Competitive procurements are set to bring nearly 3 gigawatt-hours (GWh) of energy storage to the islands, alongside 460 MW of new solar energy. This level of storage is essential to maintain system reliability as fossil-fuel generation is retired.

Adoption of smart grid sensors and AI for predictive maintenance to mitigate fire risk.

Beyond physical hardening, Hawaiian Electric is making a significant technological pivot toward enhanced situational awareness, using sensors and Artificial Intelligence (AI) to shift from reactive to predictive maintenance. This is a direct response to the heightened fire risk.

The company is investing in a $14 million project to install 78 high-resolution video cameras equipped with AI across high-risk areas. These AI-assisted cameras provide 360-degree views and continually monitor for anomalies, sending alerts to both the utility and first responders for early wildfire detection.

Additionally, they are expanding their network of weather stations. After installing 53 stations in 2024, they plan to add more in high and medium-risk areas in the next three years. This network provides real-time data on wind, temperature, and humidity, which is vital for making informed, real-time decisions about activating or deactivating the Public Safety Power Shutoff (PSPS) program. This technological layer is projected to reduce fire risk by a substantial 68% to 72%.

Hawaiian Electric Industries, Inc. (HE) - PESTLE Analysis: Legal factors

You're looking at Hawaiian Electric Industries (HEI) and the legal landscape is defintely the most critical area right now. The company is navigating a true crisis of liability and regulatory scrutiny following the 2023 Maui wildfires. The direct financial impact is massive, but the long-term legal and compliance changes are what will fundamentally reshape the business model for the next decade.

The core legal challenge is transitioning from defending against a catastrophic event to operating under a permanently higher standard of care, all while trying to rebuild financial stability. It's a high-stakes, multi-front war that requires precision in both litigation strategy and regulatory filings.

Facing hundreds of lawsuits related to the 2023 wildfires, with potential liability in the billions.

The most immediate and significant legal factor is the resolution of the tort litigation stemming from the August 2023 Maui wildfires. Hawaiian Electric Industries and its utility subsidiary, Hawaiian Electric, have reached an agreement in principle for a global settlement of all tort claims, which collectively totals over $4 billion. This agreement, which received preliminary court approval on June 19, 2025, aims to resolve claims from thousands of individuals and businesses.

Hawaiian Electric Industries' portion of this liability is substantial, pegged at a total contribution of $1.99 billion (pre-tax), which includes a previous $75 million contribution to the One 'Ohana Initiative. The first settlement payment is anticipated no earlier than mid-2025 or early 2026, and the company is financing this obligation through a mix of debt, equity, and other options. This settlement provides a crucial cap on the company's liability, which is vital considering the estimated capital cost of the disaster was around $5.5 billion. The company was named in approximately 400 lawsuits related to the fires.

Legal Obligation	Amount/Status (2025)	Impact
Global Wildfire Settlement (Total)	Over $4 billion (Tentative)	Resolves all tort claims from 2023 Maui wildfires.
HEI/Hawaiian Electric Contribution	$1.99 billion (Pre-tax)	Defines the company's maximum liability exposure for the settlement.
First Settlement Payment Date	Expected no earlier than mid-2025 / early 2026	Triggers the need for significant near-term financing.
Number of Lawsuits Filed	Approximately 400	Indicates the scale of the legal challenge being consolidated.

Ongoing investigations by state and federal agencies into operational practices.

Beyond the civil litigation, Hawaiian Electric is under intense scrutiny from state regulatory and ethics bodies. The Hawaii Public Utilities Commission (PUC) is conducting a formal Wildfire Investigation (Case No. 2024-01872) to review the company's actions and practices. This is an operational deep dive, and the findings will inform future regulatory decisions, including rate cases.

Also, the Hawai'i State Ethics Commission resolved an investigation in November 2025 concerning Hawaiian Electric's lobbying activities. The company was found to have failed to register certain employees as lobbyists and report expenditures, resulting in an administrative penalty of $10,000. This investigation, while minor in financial terms, underscores the heightened regulatory oversight the company faces across all aspects of its operations.

Strict compliance requirements for new wildfire mitigation and safety standards.

The regulatory environment has fundamentally changed, creating strict new compliance requirements. New state legislation, effective July 2025, establishes a statutory wildfire-related liability standard, meaning compliance with an approved Wildfire Mitigation Plan (WMP) creates a rebuttable presumption of no negligence in future civil actions. This makes WMP approval and execution a legal necessity, not just an operational goal.

Hawaiian Electric filed its 2025-2027 Wildfire Safety Strategy (WSS) with the PUC on January 10, 2025, which is now under formal review (Docket No. 2025-0156). This plan outlines specific, mandatory actions:

• Deploying covered conductor (insulated power lines) on approximately 15-70 miles of high-risk distribution circuits.
• Implementing a Public Safety Power Shutoff (PSPS) program, which started in July 2024.
• Seeking PUC approval to commit funds for the WSS, including a total projected capital expenditure for 2026-2028 of $1.8 billion to $2.4 billion.

The cost of de-risking is hitting the bottom line now, with higher legal and wildfire mitigation program expenses contributing to a decline in the utility's core net income in Q3 2025.

Regulatory risk of disallowance for certain capital expenditures in future rate cases.

This is the big financial risk you need to track. Hawaiian Electric is projecting a monumental increase in capital expenditure (CapEx) to fund its safety and resilience work: 2025 CapEx is expected to be around $400 million, but this jumps to between $550 million and $700 million in 2026. The company must get PUC approval to recover these costs from ratepayers.

The regulatory risk is that the PUC may disallow (exclude from the rate base) some of these capital investments if they are deemed not 'used and useful' under traditional regulatory principles, or if the spending is deemed imprudent. Hawaiian Electric is pushing for an alternative rate rebasing process under Performance-Based Ratemaking (PBR) to reset revenues before the multi-year rate period begins in 2027, with a proposal due in January 2026. Failure to secure this rate recovery would significantly impair the company's financial health and its ability to fund the massive CapEx plan.

Here's the quick math: The difference between a successful CapEx recovery and a partial disallowance on a multi-billion dollar investment is the difference between solvency and severe financial distress. The PUC decision on rate rebasing is everything.

Next Step: Finance: Model the impact of a 15% CapEx disallowance scenario on the 2026-2028 capital plan and review the PUC's preliminary findings on Docket No. 2025-0156 by the end of the year.

Hawaiian Electric Industries, Inc. (HE) - PESTLE Analysis: Environmental factors

The environmental factors for Hawaiian Electric Industries, Inc. (HE) are not just regulatory hurdles; they are existential threats and massive capital expenditure drivers. The twin pressures of a state-mandated clean energy transition and climate change-driven disaster risk are forcing a fundamental, multi-billion-dollar overhaul of the entire grid. Honstely, this is the company's biggest challenge.

Extreme pressure to meet the 100% renewable energy portfolio standard (RPS) by 2045.

Hawaii's mandate for a 100% Renewable Portfolio Standard (RPS) by 2045 puts HE under extreme pressure. While the company is making good progress, the remaining transition is the hardest part. As of late 2024, the consolidated RPS for Oahu, Hawaii Island, and Maui County reached approximately 36%, a significant increase that puts them on a strong pace to reach the intermediate 2030 milestone of 40% ahead of schedule.

The focus is now shifting to firm, dispatchable renewable capacity-energy that can be called upon when needed, not just when the sun shines or the wind blows. The 2025 commercial operations of projects like Hoohana Solar 1 on Oahu, which adds 52 MW of solar capacity and a 208 MWh battery energy storage system (BESS), illustrate this shift. This integration of utility-scale storage is crucial for grid stability as oil-fired plants are retired.

Increased frequency and intensity of climate-driven events, like droughts and high winds.

Climate change is no longer a theoretical risk; it is a clear operational threat, exemplified by the 2023 Maui wildfires. This has forced HE to fully embrace a proactive, rather than reactive, stance on extreme weather. The company's new Public Safety Power Shutoff (PSPS) program is now a core tool, designed to de-energize lines in high-risk areas when wind gusts exceed 45 mph and relative humidity drops below 45%. This action minimizes ignition risk but creates a new regulatory and customer service challenge: planned outages.

The increasing frequency of these events-droughts, high winds, and tropical cyclones-is the primary driver for a massive increase in capital expenditure (CapEx). Total CapEx for 2025 is expected to be approximately $400 million, with a projected increase to between $550 million and $700 million in 2026, largely to address climate resilience.

Need for substantial investment in vegetation management and wildfire risk reduction.

The company's 2025-2027 expanded Wildfire Safety Strategy is a multi-year, multi-million-dollar commitment to mitigating fire risk. The total cost for this three-year blueprint is projected at $350 million, with a specific budget of $137 million allocated for work in the 2025 fiscal year.

This investment is split between capital projects (two-thirds) and operations/maintenance (one-third). The O&M portion funds critical vegetation management, including the trimming and removal of thousands of hazardous trees, while the CapEx covers physical grid hardening. Over half of the total three-year spend, about $180 million, is focused specifically on Maui County, the area with the highest wildfire risk.

• Deploy covered conductors in high-risk areas.
• Install new weather stations and AI-enabled cameras.
• Replace and strengthen thousands of poles and equipment.

Focus on climate adaptation strategies for critical infrastructure near sea level.

Beyond wildfire, sea level rise and coastal flooding pose a long-term, irreversible risk to HE's low-lying infrastructure, including substations and transmission lines. The Public Utilities Commission (PUC) approved the 5-year, $190 million Climate Adaptation Transmission and Distribution Resilience Program.

This program, which includes $95 million in federal Infrastructure Investment and Jobs Act (IIJA) funding, is a foundational step in fortifying the grid against chronic flooding and storm surge. The initial phase includes the strengthening and replacement of over 2,100 poles on critical circuits. Planning benchmarks for critical infrastructure now consider 6 feet of sea level rise by the end of the century, which defintely requires a complete re-evaluation of asset placement.

Here's the quick math on the near-term environmental financial commitments:

2025 Environmental Financial Commitment	Amount (USD)	Purpose
Wildfire Safety Strategy (WSS) Annual Budget	$137 million	Grid hardening, vegetation management, new technology (AI cameras/weather stations).
Climate Adaptation Resilience Program (5-Year Plan)	$190 million	Grid hardening against severe weather, including $95 million in federal grants.
Total Estimated 2025 Utility CapEx	Approximately $400 million	Includes WSS and other grid modernization/resilience projects.

What this estimate hides is the sheer execution risk in managing both the legal crisis and the energy transition simultaneously. That's a huge lift.

So, your concrete next step is this: Finance/Strategy: Model a worst-case scenario where $500 million in grid hardening costs are disallowed by the PUC, and assess the impact on the 2026 capital budget by the end of the month.