Hawaiian Electric Industries, Inc. (HE): Business Model Canvas [Dec-2025 Updated]

You're looking at a utility that's fundamentally changed after a crisis, and frankly, understanding Hawaiian Electric Industries, Inc. (HE)'s business model right now is critical for any serious investor or strategist. Honestly, the core tension is balancing the essential, regulated electric service to Hawaii's population against the massive capital needs for resilience, like the $500 million in safety improvements being financed through new legislative tools. This canvas strips away the headlines to show you the nuts and bolts: how they generate revenue from regulated sales, the key partnerships needed with the PUC and legislature, and the sharp increase in costs driven by wildfire mitigation and debt service. See below for the clear, actionable snapshot of how Hawaiian Electric Industries, Inc. (HE) is operating in this high-stakes, post-wildfire reality.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Key Partnerships

You're looking at the critical relationships Hawaiian Electric Industries, Inc. (HEI) relies on to manage risk, secure capital, and meet its energy transition mandates. These aren't just vendor relationships; they are legislative, regulatory, and development anchors for the entire operation.

State of Hawaii Legislature for Liability Cap and Securitization Funding

The relationship with the State of Hawaii Legislature is paramount following the 2023 wildfires. Legislation passed in 2025, specifically Senate Bill 897, was a major development, authorizing the use of securitization to finance infrastructure resilience investments and establishing an aggregate liability cap for economic damages from future wildfires. This authorization was contingent on approval from the Hawaii Public Utilities Commission (PUC) regarding HEI's Wildfire Mitigation Plan. The authorized securitization is intended to allow the utility to borrow money at a lower interest rate, theoretically saving ratepayers hundreds of millions of dollars compared to what HEI would pay at its current credit rating status. Furthermore, House Bill 1001, signed into law in May 2025, appropriated approximately $807.5 million from the state's general fund to cover the State of Hawaii's share of the $4 billion global tort litigation settlement. This legislative action limits HEI's liability exposure related to the 2023 Maui wildfires to $1.99 billion. That's a concrete number that helps define the risk perimeter.

Hawaii Public Utilities Commission (PUC) for Rate Case Approval and Regulation

The Hawaii Public Utilities Commission (PUC) acts as the primary regulator, controlling how Hawaiian Electric Industries, Inc. recovers costs and earns a return. A key ongoing process is the consolidated HECO-MECO-HELCO rate case, which the PUC opened in February 2025 via a docket focused on moving from the first to the second five-year Performance-Based Regulation (PBR) control period. This proceeding is essential for re-basing Hawaiian Electric's Target Revenues. Under the PBR Framework, which began for the HECO Companies on June 1, 2021, the utility's allowed rate of return fluctuates based on meeting state policy goals, with financial incentives and penalties (Performance Incentive Mechanisms) in play. For example, during the first PBR period (2021-2026), HECO earned between 0.68% to 1.49% less than its authorized return on equity. All effective rates, which include Rate Schedule rates plus applicable adjustments, must be approved by the PUC, as seen in the monthly Effective Rate Summary filings. The PUC also reviews and approves major contracts, including those with Independent Power Producers (IPPs).

The PUC's regulatory oversight involves several critical areas:

• Review and acceptance of the 2025-2027 expanded Wildfire Safety Strategy, estimated to cost about $450 million over three years, with $137 million budgeted for 2025.
• Approval of capital expenditure recovery through rate cases, subject to the 'used and useful' principle.
• Oversight of the Integrated Grid Planning Request for Proposals (IGP RFP) process, such as the updated draft filed in 2025 under Docket No. 2024-0258.

Independent Power Producers (IPPs) for Renewable Energy Development

Securing capacity from Independent Power Producers (IPPs) is central to meeting Hawaii's 100% renewable energy goal by 2045. Hawaiian Electric Industries, Inc. uses a competitive bidding process, governed by the PUC, to procure this power. As of February 2025, the company announced contracts for two significant solar + storage projects with developer AES, both subject to PUC review:

Project Name	Island	Capacity (Solar)	Capacity (Storage)	Contract Term	Expected In-Service
Kuihelani Solar Phase 2	Maui	40 MW	160 MWh	25 years	2027
Keamuku Solar	Hawaii Island	86 MW	344 MWh	25 years	2030

This builds on prior procurement; Hawaiian Electric selected 16 renewable energy projects in late 2023/early 2024 from Stage 3 RFPs, aiming for approximately 517 MW of variable generation, 694 MW of firm generation, and 2.1 GWh of storage. The utility achieved a 36% consolidated Renewable Portfolio Standard (RPS) in 2024, accelerating toward the 2030 milestone of 40%.

Hawaii Wildfire Management Organization (HWMO) for Community Outreach and Firewise Programs

Hawaiian Electric Industries, Inc. partners directly with the Hawaii Wildfire Management Organization (HWMO) to bolster community-level mitigation efforts. As of March 2025, Hawaiian Electric paid the first installment of a total commitment of $260,000 to HWMO, with the initial payment being $50,000. This funding supports HWMO's Firewise coordinator positions. HWMO, based on Hawaii Island, was overseeing 31 nationally recognized Firewise communities across three counties at that time, with another 13 in the application process. This partnership is a component of the utility's broader stakeholder and community engagement strategy for wildfire safety.

Financial Institutions for Debt Financing (e.g., $500 million Senior Notes)

Access to capital markets via financial institutions is a key partnership for funding capital expenditures and managing liabilities. In September 2025, Hawaiian Electric Company, a subsidiary of HEI, priced a significant debt offering: $500 million aggregate principal amount of 6.000% Senior Notes due in 2033, with an expected closing date of September 18, 2025. The net proceeds are designated to finance capital expenditures and repay debt, including its revolving credit facility and term loan. This issuance followed an expansion of the credit facility capacity to $600 million from $375 million in September 2025. At the time of the notes pricing, the utility reported total debt of $2.57 billion and a current ratio of 1.07. The notes were sold exclusively to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Key Activities

You're looking at the core actions Hawaiian Electric Industries, Inc. (HEI) is taking right now to manage its utility business and recover from major events. It's a lot of heavy lifting across the islands, balancing regulation, safety, and asset sales.

Regulated electricity generation, transmission, and distribution across five islands

The utility segment is the engine, and its performance is key to the holding company's stability. For the third quarter of 2025, Hawaiian Electric Industries reported net income of $31 million, which translates to $0.18 per share. When you strip out the wildfire-related noise, the Core income from continuing operations for Q3 2025 was $33 million, or $0.19 per share. This is compared to Q1 2025 Core income of $39.8 million, or $0.23 per share. The utility segment itself showed a Q2 2025 Core EPS of $0.25 per share, up from $0.40 per share in the same quarter last year, though this is a bit complex due to the accounting changes. The company maintains a long-term goal of achieving a 100% renewable portfolio standard and net zero emissions by 2045.

The company is actively managing its liquidity to support these operations. In September 2025, Hawaiian Electric Industries expanded its credit facility capacity to $600 million from $375 million and completed a significant debt issuance of approximately $500 million. The utility also declared a $10 million cash dividend to HEI for the second quarter of 2025.

Implementing the four-pillar wildfire safety strategy (grid hardening, situational awareness)

Safety investment is a massive, ongoing activity. Hawaiian Electric plans to invest nearly $400 million in capital for wildfire safety between 2025 and 2027, with $120 million specifically allocated for 2025. Over three-quarters, or 76%, of this capital is targeted for grid hardening. The expanded 3-year safety blueprint filed with the Public Utilities Commission (PUC) is projected to cost $350 million in total, with $137 million budgeted for work in 2025 alone. About $180 million of this safety spending is focused on Maui County. The strategy includes deploying 5G-enabled monitoring systems for enhanced situational awareness. Wildfire mitigation program expenses impacted Q2 2025 results, with $7 million in higher after-tax expenses noted in O&M costs.

Modernizing the grid to integrate more distributed renewable energy

Grid modernization is tied directly to the wildfire safety capital plan. The overall $400 million investment from 2025 to 2027 includes funds for grid modernization alongside grid hardening. This effort supports the long-term goal of reaching a 100% renewable portfolio standard.

Managing the Maui wildfire tort litigation settlement process

Resolving the tort litigation is a critical financial activity. Hawaiian Electric Industries and Hawaiian Electric's total pre-tax contribution to the proposed settlement is $1.99 billion, which includes the $75 million already contributed to the One 'Ohana Initiative. The overall class action settlement fund totals $4.037 billion, with $135,000,000 allocated for class members not represented by private counsel. The company has been preparing for payments; as of Q1 2025, $479 million was set aside for the first settlement payment. The first payment of $479 million is expected in early 2026. The claim deadline for class members was December 22, 2025, with a final approval hearing scheduled for January 8, 2026. Wildfire-related expenses continue to hit quarterly results, with Q3 2025 seeing $10 million in pre-tax expenses and Q2 2025 seeing $11 million in pre-tax expenses.

Executing the divestiture of non-core assets like the remaining American Savings Bank stake

Simplifying the business model involves shedding non-core holdings. Hawaiian Electric Industries completed the sale of 90.1% of its common stock in American Savings Bank (ASB) to independent investors, a transaction that valued the bank at $450 million. This generated $405 million in cash proceeds for HEI. The company retained a 9.9% non-controlling interest. The proceeds were immediately put to work, reducing holding company debt by $384 million in April 2025. As of Q2 2025, the company expected to divest its remaining stake in American Savings Bank sometime over the next year.

Here's a quick look at the ASB divestiture numbers:

Metric	Amount/Percentage
Percentage of ASB Sold	90.1%
Total ASB Valuation	$450 million
Cash Proceeds to HEI	$405 million
HEI Remaining Stake	9.9%
Holding Company Debt Reduction from Proceeds	$384 million

The company is also continuing its review of strategic options for its Pacific Current subsidiary.

You should check the Q4 2025 earnings release for the final numbers on the 2025 wildfire safety capital deployment. Finance: draft 13-week cash view by Friday.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Key Resources

Hawaiian Electric Industries, Inc. (HE) relies on significant, hard-to-replicate physical and regulatory assets to maintain its market position.

Regulated utility infrastructure serving 95% of Hawaii's population

• The electric utilities of Hawaiian Electric Industries, Inc. (HE) supply power to approximately 95% of Hawaii's population across Oahu, The Big Island, Maui, Lanai, and Molokai.
• The island of Kauai is the sole Hawaiian island not supplied by HEI.

Exclusive service territory and franchise agreements (a defintely valuable asset)

The operational footprint is secured by exclusive service rights across multiple major Hawaiian islands, which acts as a significant barrier to entry.

Access to capital markets for debt and equity to fund resilience investments

Despite a credit rating downgrade to sub-investment grade following the Maui wildfires, Hawaiian Electric Industries, Inc. (HE) has demonstrated recent success in accessing debt markets to fund capital needs.

Here's the quick math on recent capital market activity as of late 2025:

Metric	Amount	Date/Period
Credit Facility Capacity Expansion	From $375 million to $600 million	Q3 2025
New Debt Issuance Proceeds	Approximately $500 million	Q3 2025
Potential Senior Notes Aim	$500 million	September 2025
Total Debt	$2,994,077 thousand	TTM as of Sep 30, 2025

Skilled workforce for complex grid operations and wildfire mitigation

The workforce manages complex utility operations and is actively engaged in wildfire mitigation strategy execution.

• Total employees reported as of December 31, 2024, was 2,602.
• Trailing Twelve-Month Revenue as of September 30, 2025, was $3.08B.
• Total Assets as of September 30, 2025, were $8,813,636 thousand.
• Q2 2025 Earnings Per Share (EPS) was $0.20.

Legislative support for securitization to finance $500 million in safety improvements

Legislation was enacted to provide a mechanism for financing critical infrastructure upgrades.

• Legislation authorized securitization to finance $500 million in wildfire safety improvements.
• This authorization was part of legislation signed by Governor Josh Green in mid-2025.
• The new law also directs the Public Utilities Commission to establish an aggregate liability cap for future wildfires.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Value Propositions

You're looking at the core promises Hawaiian Electric Industries, Inc. (HEI) makes to its customers and stakeholders. It's all about essential service delivery in a unique, isolated environment, plus a massive pivot toward sustainability and safety.

Essential, regulated electric service to nearly all of Hawaii's residents and businesses

Hawaiian Electric Industries, Inc. provides the fundamental service of electricity across the major islands. This is a regulated monopoly, meaning they are the sole provider for the vast majority of the state's population, which offers a certain stability, but also means service quality is paramount.

Here's a quick look at the scale of that essential service as of late 2024 data:

Service Area	Customers (as of 12/31/2024)	Firm Generating Capability (MW)
Oahu (Hawaiian Electric)	310,336	1516.50
Hawaii Island (Hawai'i Electric Light)	90,522	Data not consolidated with 2025 figures
Maui County (Maui Electric)	71,678	Data not consolidated with 2025 figures
Total Customers Served	472,536	N/A

The company supplies power to 95% of Hawaii's population, with Kauai being the only major island not served by HEI subsidiaries.

Commitment to a clean energy transition, targeting 40% renewable energy by 2030

The transition away from oil dependency is a major value proposition, backed by legislative goals. The company is actively integrating renewables to meet these targets. You can see the progress made toward the 2030 goal of 40% Renewable Portfolio Standard (RPS).

• Consolidated RPS achieved in 2024: 36%.
• Long-term goal for 100% renewable energy: 2045.
• 2024 RPS by Island: Maui County reached 41.1%; Hawaii Island reached 58.7%; Oahu reached 30.8%.
• The 2024 RPS of 36% was a three percentage point increase from 2023.

This commitment is supported by adding new capacity, such as the Hoohana Solar 1 project on Oahu, which came into service in July 2025.

Enhanced grid resilience and public safety through a $120 million 2025 wildfire investment

Following the 2023 events, significant capital is being deployed to harden the system against future risks. This investment is a direct response to community safety concerns.

The expanded Wildfire Safety Strategy includes a budgeted work amount for the current year:

• Capital investment budgeted for 2025 related to wildfire safety: $120 million.
• The overall 3-year safety blueprint is projected to cost $350 million.
• Approximately 76% of the 2025 capital investment is allocated toward grid hardening.

The utility has also fully deployed all planned weather stations and AI-assisted video cameras ahead of schedule.

Stability and reliability as the sole provider in a high-cost, isolated island environment

Operating in an isolated island chain inherently leads to higher costs, but HEI provides the necessary stability as the sole regulated utility. While costs are high, the utility's average residential rate in 2023 was only slightly above the state average.

Here are the 2023 cost comparisons:

Metric	Hawaiian Electric (HE)	Hawaii State Average	Difference
Avg. Monthly Residential Bill	$201.54	$203.36	1.27% more than state average
Avg. Residential Price (cents/kWh)	42.78 cents	42.49 cents	0.68% above state average

The utility's core Return on Equity (ROE) for Q2 2025 was 7.2%, compared to the allowed ROE of 9.5%. That difference shows the pressure on returns even within the regulated structure. Finance: draft 13-week cash view by Friday.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Customer Relationships

Hawaiian Electric Industries, Inc. (HE) maintains customer relationships through a mandated regulated utility structure, direct service interactions, targeted clean energy program enrollment, and ongoing regulatory management.

Regulated Service Model with Direct Interaction

Hawaiian Electric Industries, Inc. (HE) supplies power to approximately 95% of Hawaii's population. Direct interaction centers on essential services like billing and managing service interruptions. For instance, in a severe weather event on January 30, 2025, approximately 54,000 customers were affected by outages across Oahu, Hawaii Island, and Maui County. You can check outage status via dedicated maps for Oahu, Maui County, and Hawaii Island. Billing is dynamic; for example, the July 2025 Energy Cost Recovery Factor (ECRC) for Hawaiian Electric was 17.440 cents/kWh, resulting in a residential customer consuming 500 kWh paying $191.46. For comparison, Hawai'i Electric Light's February 2025 ECRC resulted in a 500 kWh customer paying $231.92.

The direct service touchpoints include:

• Billing inquiries and payment options.
• Outage reporting via trouble lines or digital maps.
• Service requests for start, stop, or modification of service.

Community Engagement and Public Outreach

Community relationship building is heavily focused on wildfire safety and clean energy adoption, often in response to regulatory mandates. For the 2025-2027 Wildfire Safety Strategy, the total projected cost is $450 million, with $137 million budgeted for work in 2025. If approved, the estimated monthly bill impact for Maui County customers under this strategy is $5. To communicate these efforts, Hawaiian Electric participated in more than 100 in-person and virtual public outreach events in 2024.

Key areas of outreach and engagement include:

• Sharing updates on the $450 million, 3-year Wildfire Safety Strategy.
• Hosting community events related to grid resilience.
• Disseminating information on clean energy project status.

Customer-Facing Programs for Grid Services

Hawaiian Electric Industries, Inc. (HE) manages customer relationships through incentive programs that secure grid services, which is critical for meeting clean energy goals. The Smart Renewable Energy (Smart DER) programs are central to this. As of June 2025, the Smart DER Export (SDE) program experienced a month-over-month net growth of 7.95 MW across all islands. As of March 2025, the cumulative total SDE applications reached 5,056.

The status and incentives for key programs as of 2025 include:

Program Name	Availability/Status	Key Metric/Incentive
Smart DER Export (SDE)	Active, highest growth program	Monthly net growth of 7.95 MW (as of June 2025)
Shift and Save (TOU Pilot)	Closed to new enrollments as of Feb. 1, 2025	Approximately 14,000 residential and commercial customers enrolled to date
Bring Your Own Device Plus (BYOD Plus)	Active	Upfront incentive of $400 per kW committed
Power Partnership Programs	Active on Oahu, Maui County, and Hawaii Island	Customers receive monthly bill credits for demand response

Furthermore, in February 2025 reports, 10 participants identified as Low-to-Moderate Income (LMI) through the H-HEAP were enrolled in a Customer Energy Resources (CER) Program.

Managed Relationship via the PUC

The relationship is heavily managed by the Public Utilities Commission (PUC), which dictates rate structures and oversight mechanisms. The PUC opened a proceeding in February 2025 to re-base Hawaiian Electric's Target Revenues for the second five-year control period. Under the prior Performance-Based Regulation (PBR) framework, which began in 2021, Hawaiian Electric earned between 0.68% to 1.49% less than its authorized Return on Equity (ROE) during the first five-year period. Financially, the utility's Q3 2025 Core net income was $40 million, while pre-tax wildfire-related expenses for the quarter totaled $10 million, with $6 million of those costs being deferred pursuant to a PUC decision.

Key regulatory oversight points include:

• PUC approval for all effective rates, including ECRC adjustments.
• Oversight of the 2025-2027 Wildfire Safety Strategy filing.
• Setting the framework for Performance Incentive Mechanisms (PIMs).

Finance: finalize the Q3 2025 customer service metrics report by next Tuesday.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Channels

You're looking at how Hawaiian Electric Industries, Inc. (HEI) gets its product-electricity-to its customers and how it communicates with all its stakeholders. It's a physical, regulated business, so the channels are pretty concrete.

Physical transmission and distribution network across Oahu, Maui, Hawaii Island, etc.

The primary channel is the physical infrastructure itself. Hawaiian Electric supplies power to approximately 95% of Hawaii's population across the islands it serves. As of the end of 2024, the total customer count stood at 472,536. Oahu accounts for the largest segment of this base.

• Total customers served (as of 12/31/2024): 472,536.
• Oahu customer count: 310,336.
• Service islands include Oahu, Maui, Molokai, Lanai, and Hawaii Island.

The utility is actively modernizing and hardening this grid to ensure resilience. This physical network is the non-negotiable channel for service delivery.

Customer service centers and online portals for billing and service requests

For customer interaction, the channels blend physical locations with digital access for routine tasks like billing and service changes. You can start, stop, or move service through their online portal, which is a key touchpoint for the customer segment.

Here are some direct contact numbers you might need for service issues:

Service Type/Location	Contact Number
PSPS Hotline (Toll-Free)	1-844-483-8666
Maui County Trouble Line	1-855-304-8181
Hilo Customer Service	(808) 969-6999
Kona Customer Service	(808) 329-3584
Waimea Customer Service	(808) 885-4605

The company communicates updates via its mobile app, available on Apple App and Google Play stores.

Public Safety Power Shutoff (PSPS) program communications in high-risk areas

Communication during a Public Safety Power Shutoff (PSPS) is a critical, time-sensitive channel. This is about getting alerts out before or during hazardous weather. For instance, on July 7, 2025, power was restored to about 330 affected customers in Upcountry Maui following a PSPS event.

The initial high-risk areas identified for the PSPS program covered these customer estimates:

• O'ahu high-risk areas: Approximately 2,700 customers.
• Hawai'i Island high-risk areas: Approximately 19,300 customers.
• Maui County high-risk areas: Approximately 26,100 customers.

Notifications are pushed through news media, social media (Twitter/X: @HwnElectric; Facebook: facebook.com/HawaiianElectric), online outage maps, and updates to the main website.

Investor Relations website and SEC filings for financial stakeholders

For financial stakeholders, the channels are strictly formal and digital. Hawaiian Electric Industries, Inc. (HEI) uses its website, www.hei.com, for investor alerts and presentation materials. SEC filings are the definitive source for audited data, though they also furnish selected financial information via a Statistical Supplement.

Here are some key financial figures reported through these channels for 2025:

Financial Metric (Period Ending)	Hawaiian Electric Industries, Inc. (HEI)	Hawaiian Electric (Utility)
Net Income (Q2 2025)	$26 million	Net Income: $39 million (Q2 2025)
Core Income from Continuing Operations (Q2 2025)	$35 million	Core Net Income (Q1 2025): $50 million
Declared Cash Dividend (Q1 2025)	$10 million payable to HEI	Net Income (Q1 2025): $48 million
Corporate Phone Number	(808) 543-5662	Utility Phone Number: (808) 543-7771

The next major scheduled communication channel event was the Third Quarter 2025 Results announcement on November 7. HEI is a holding company, and its corporate phone number is (808) 543-5662.

Finance: draft 13-week cash view by Friday.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Hawaiian Electric Industries, Inc. utility operations as of late 2025. The segments define how the company structures its service delivery and, critically, its revenue recovery mechanisms.

Residential Customers (the largest group, highly sensitive to rate changes)

Residential customers form the largest volume segment, and their sensitivity to price changes is a constant factor in regulatory filings. You can see this sensitivity reflected directly in the Energy Cost Recovery Factor (ECRC) adjustments.

For instance, Hawaiian Electric Company, Inc.'s July 2025 ECRC was set at 17.440 cents per kilowatt-hour (kWh). This resulted in a typical residential customer consuming 500 kWh paying $191.46 for that month, which was an increase of $1.50 compared to the rates effective June 1, 2025. To give another data point, for Hawai'i Electric Light Company, Inc., the January 2025 ECRC was 22.570 cents per kWh, meaning a 500 kWh usage resulted in a bill of $228.54.

The utility is actively managing customer engagement through programs, tracking participation against a target of 30% of the total customer base for Distributed Energy Resource (DER) and Demand Response (DR) programs as of September 30, 2025.

Commercial and Industrial (C&I) customers across all major islands

C&I customers represent a significant portion of the total load across Oahu, Maui County, and Hawaii Island. While specific customer count breakdowns by segment aren't publicly itemized in the latest earnings releases, their consumption drives overall utility performance.

The overall utility segment saw a 3.1% increase in kWh sales volume in the first quarter of 2025, which reflects recovery and usage patterns across all customer classes, including C&I. The utility's core net income reflects the operational efficiency across this base; for example, Q3 2025 utility core net income was $40 million. The allowed Return on Equity (ROE) for the utility was set at 9.5%, though the actual Q2 2025 core ROE came in at 7.2%.

Government and Military installations (critical, high-demand users)

These customers are characterized by high, often non-discretionary, demand profiles, making their service reliability paramount. The utility's focus on grid resilience, driven by legislative action in 2025, directly impacts the service quality for these critical users.

The company is advancing its four-pillar wildfire safety strategy, which includes grid hardening and redesign, essential for maintaining service to all high-demand users, including government and military facilities.

Independent Power Producers (IPPs) who sell power back to the grid

IPPs are a crucial segment, not as direct consumers, but as essential suppliers under contract. Hawaiian Electric Industries, Inc. is actively managing the transition and contracting process with these entities as part of its Integrated Grid Planning (IGP).

The second cycle of IGP is underway from 2025 through 2028. A Request for Proposals (RFP) issued in April 2025 sought proposals for new generation and storage projects, and also for new terms for existing IPP agreements. Previous procurement rounds (Stage 3 RFPs) selected 16 renewable energy projects, targeting approximately 517 MW of variable generation, 694 MW of firm generation, and 2.1 gigawatt-hours (GWh) of storage, with estimated completion dates ranging from 2026 to 2033. Legislation passed in 2025 specifically supported the utility's ability to procure reliable, affordable clean energy, which impacts the IPP landscape.

Here's a quick look at the financial context surrounding the utility operations serving these segments in 2025:

Metric	Value (Q2 2025)	Value (Q3 2025)
Utility Core Net Income	$42 million	$40 million
Allowed ROE	9.5%	Not specified
Actual Core ROE	7.2%	Not specified
Residential Bill Impact (500 kWh)	$191.46 (July 2025 Rate)	Not specified
IPPs Selected (Prior Rounds)	N/A	16 Projects

The utility is focused on a simpler business model, planning to file a consolidated rate case application before the end of 2025, which will directly impact the cost recovery from all customer classes.

• Residential customers are the largest group by count.
• C&I customers span all major islands.
• Government/Military users are critical, high-demand loads.
• IPPs are integral to meeting resource adequacy targets.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Cost Structure

The Cost Structure for Hawaiian Electric Industries, Inc. (HE) is heavily influenced by necessary infrastructure investment, the volatile nature of fuel procurement, and the lingering financial impact of the 2023 Maui wildfires.

High capital expenditure on grid hardening and resilience

Hawaiian Electric Industries is executing a significant, multi-year capital plan focused on safety and resilience. The company plans to invest a total of $400 million in wildfire safety from 2025 through 2027. For the current fiscal year, the expected Capital Expenditure (CapEx) is approximately $400 million. Over three-quarters of the total 2025-2027 wildfire safety capital is earmarked for grid hardening activities like vegetation management and equipment upgrades. Looking forward, CapEx is projected to increase in 2026 to a range of $550 million to $700 million. The total projected CapEx for the three years spanning 2026 through 2028 is between $1.8 billion and $2.4 billion.

Year/Period	Capital Expenditure (CapEx) Amount	Notes
2025 (Guidance)	Approximately $400 million	Includes $120 million allocated specifically in 2025 for wildfire safety.
2026 (Projection)	$550 million to $700 million	Part of the overall multi-year plan.
2026-2028 (Total Projection)	$1.8 billion to $2.4 billion	Total expected CapEx over this three-year period.

Fuel and purchased power costs (a significant operating expense)

Fuel and purchased power remain a major component of operating expenses, recovered through the Energy Cost Recovery Clause. For November 2025, the Energy Cost Recovery Factor is set at 18.446 cents per kWh, which is an increase of 0.465 cents per kWh from the prior month. The composite cost of major energy saw a decrease, settling at 1,526.86 cents per million BTU. Conversely, the composite cost of purchased energy rose to 14.370 cents per kWh. As of the third quarter of 2025, the average fuel oil cost per barrel was $98.20.

You see these costs flow directly into customer bills, though efficiency adjustments can temper the impact. Here's a quick look at the cost components impacting the residential bill for November 2025:

• Energy Cost Recovery Factor: Increase of +$2.32.
• DSM Adjustment: Increase of +$0.50.
• Purchased Power Adjustment Clause rate: Decrease of -$2.26.

Increased wildfire mitigation and insurance costs

The costs associated with managing and recovering from wildfire risks continue to be a material operating expense, even as the utility deploys its safety strategy. These costs are reported pre-tax and are often partially offset by insurance recoveries or deferred by regulatory order.

Quarter	Pre-tax Wildfire-Related Expenses	Key Offsets/Drivers
Q1 2025	$11 million	Offset by $3 million insurance recoveries and $6 million deferred costs.
Q2 2025	$11 million	Offset by $10 million deferred costs. O&M included $7 million in higher wildfire mitigation program expenses.
Q3 2025	$10 million	Offset by approximately $6 million deferred costs.

In the second quarter of 2025, higher operating and maintenance (O&M) expenses were also driven by $2 million in higher property and general liability insurance costs.

Debt service and financing costs for the wildfire settlement and capital projects

Financing obligations are substantial, particularly given the need to fund large capital projects and the massive wildfire settlement. As of September 2025, Hawaiian Electric Industries, Inc.'s total debt on the balance sheet stood at $2.99 Billion USD. To bolster liquidity and fund capital expenditures, the utility completed a significant $500 million unsecured debt offering in September 2025. This issuance was a high-yield bond deal, reflecting the sub-investment grade credit ratings following the Maui wildfires. Earlier in the year, in April 2025, the holding company used proceeds from the American Savings Bank sale to reduce holding company debt by $384 million.

Regulatory and litigation expenses related to the Maui wildfires

The cost structure includes significant, non-recurring litigation expenses tied to the Maui wildfires tort claims. The company is working toward finalizing a global settlement agreement, which requires payments in installments. The first settlement payment is anticipated no sooner than early 2026. Hawaiian Electric Industries has set aside $479 million to cover this initial payment obligation. The total pre-tax contribution from HEI and Hawaiian Electric under the tentative agreement is $1.99 billion. A court hearing for the final approval of the class settlement agreement is scheduled for January 8, 2026.

Litigation and associated professional services also appear in periodic operating expenses; for instance, Q2 2025 saw $4 million in higher legal and consulting costs, which had been previously deferred.

Hawaiian Electric Industries, Inc. (HE) - Canvas Business Model: Revenue Streams

Hawaiian Electric Industries, Inc. (HEI) revenue streams as of late 2025 are heavily weighted toward its core regulated utility operations, following the strategic divestiture of its banking segment.

Regulated utility revenue from electricity sales to customers is represented by the trailing twelve-month (TTM) revenue figures reported in the third quarter of fiscal year 2025:

• TTM Revenue as of September 30, 2025: $3.080B
• TTM Revenue as of June 30, 2025: $3.123B
• TTM Revenue as of March 31, 2025: $3.172B

The utility operations also involve regulatory mechanisms that impact customer billing. For example, in 2024, the utility returned $18 million in bill credits to customers. Furthermore, the typical residential bill decreased by 7% in 2024.

The Annual Revenue Adjustment Mechanism (ARA) revenue stream for stability is part of the regulated structure, though specific ARA revenue amounts for 2025 are not explicitly detailed here; however, the utility achieved a 36% Renewable Portfolio Standard in 2024, indicating ongoing regulatory compliance and investment recovery activities that feed into utility revenue.

Interest income from the remaining minority stake in American Savings Bank (ASB) is now a minor component. Hawaiian Electric Industries retained a 9.9% non-controlling interest in ASB following the majority sale, which closed on December 31, 2024.

Proceeds from the sale of non-core assets, specifically the majority stake in ASB, provided a significant, one-time cash inflow. The transaction valued the bank at $450 million, with investors paying an aggregate cash consideration of $405 million for the 90.1% stake. The net amount received by Hawaiian Electric Industries after transaction costs was approximately $384 million, after deducting $21 million in transaction costs.

Here's a quick look at the key financial events impacting the revenue and cash position:

Financial Metric/Event	Amount/Percentage
ASB Sale Proceeds (Aggregate Cash)	$405 million
ASB Sale Net Proceeds (After Costs)	$384 million
ASB Transaction Costs	$21 million
Retained ASB Ownership Stake	9.9%
2024 Utility Bill Credits Returned	$18 million
2024 Renewable Portfolio Standard	36%

The utility segment's core income from continuing operations for the full year 2024 was $124 million, compared to $152 million in 2023. For the fourth quarter of 2024, core income from continuing operations was $35 million.

The sale of the majority ASB stake was intended to reduce holding company debt, increasing flexibility for funding wildfire settlement contributions. The full year 2024 net loss for Hawaiian Electric Industries was $1,426 million, a stark contrast to the net income of $199 million in 2023.