Devastating Maui wildfires could force Hawaiian Electric into bankruptcy

Hawaiian Electric Company is being sued along with Maui county. And like utilities in other fire areas, the damages could be more than the company is worth.
Published: Aug. 16, 2023 at 5:11 PM HST|Updated: Aug. 16, 2023 at 6:07 PM HST
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HONOLULU (HawaiiNewsNow) - One of Hawaii’s oldest and most revered companies could be forced into bankruptcy by the damage from the devastating Maui wildfires.

Hawaiian Electric Company is being sued along with Maui County.

And like utilities in other fire areas, the damages could be more than the company is worth.

Already, video has surfaced that adds to speculation HECO bears responsibility.

On Lahainaluna Road on Tuesday morning, Shane Treu documented what could have been the downed lines that sparked the fire that would destroy Lahaina.

New footage fuels speculation that downed power lines sparked Lahaina wildfires

“Frickin’ power line just came down,” Treu said on the video. “Just have my little hose.”

While that fire — sparked about 6 a.m. — was pronounced 100% contained later, it’s believed it rekindled about 3:30 pm and immediately began burning structures downwind.

A little later in the morning, farmer Eddie Garcia watched the impact of 80 mphr winds on wooden utility poles, which were beginning to snap and lay wires on the parched ground.

In an interview a week later, Garcia said it was clear to him power should be shut off.

“I was on the phone on redial, redial, redial with the electric company trying to get them to turn the electricity off, telling them we thought they were going to break.”

The videos will be important evidence in multiple lawsuits against HECO and Maui County.

Honolulu attorney Richard Wilson is part of one of the lawsuits and has seen the videos.

“It seems as the days go on, it looks more and more that this has started by downed transformers or downed power lines,” Wilson said.

Despite studies after previous fires that concluded HECO should have set up a system to be able to de-power selected lines, HECO did not develop such a system.

“The company has protocols that may be used when high winds are expected, including not enabling the automatic reclosure of circuits that may open during a weather event,” the company wrote in a statement.

“This was done before the onset of high winds on Aug. 8. At this early stage, no cause for the fire has been determined.”

The statement continued:

“Specific to a formal power shutoff program, we, like most utilities, do not have one. Preemptive, short-notice power shutoffs have to be coordinated with first responders and in Lahaina, electricity powers the pumps that provide the water needed for firefighting. Notifications also need to be made to customers with special medical needs who use specialized equipment.”

But attorneys say that formal shut off program might have saved lives.

“The common sense approach would have been de-energize the lines, inform people as a precaution, because if it starts, it’s going to be a firestorm,” Wilson said

HECO has not commented directly on the lawsuit.

But since the complaints were filed Monday, the stock in parent company Hawaiian Electric Industries fell nearly 60% and its credit rating plummeted — to what Bloomberg called “junk.”

In California, a similar legal and financial cascade forced the state’s main electric utility, Pacific Gas and Electric, into bankruptcy reorganization.

“They did a Chapter 11 bankruptcy proceeding,” Wilson said. “And there was other monies that were involved and other state and federal involvement also. So, I could foresee something like that.”

Wilson said the lawsuits were filed quickly, even though no official cause of the fire has been determined, to speed up the process to get victims and businesses compensation if the parties are found negligent and liable.