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Electric utility segment
 3 Months Ended
Mar. 31, 2022
Electric Utility Subsidiary [Abstract]  
Electric utility segment Electric utility segment
Unconsolidated variable interest entities.
Power purchase agreements.  As of March 31, 2022, the Utilities had five PPAs for firm capacity (including the Puna Geothermal Venture (PGV) PPA that went offline in May 2018 due to lava flow on Hawaii Island, but returned to service with firm capacity of 13.0 MW in the first quarter of 2021, ramped up to 23.9 MW in the second quarter of 2021, and continued to provide capacity at the same level to date) and other PPAs with independent power producers (IPPs) and Schedule Q providers (i.e., customers with cogeneration and/or power production facilities who buy power from or sell power to the Utilities), none of which are currently required to be consolidated as VIEs.
Pursuant to the current accounting standards for VIEs, the Utilities are deemed to have a variable interest in Kalaeloa Partners, L.P. (Kalaeloa), AES Hawaii, Inc. (AES Hawaii) and Hamakua Energy by reason of the provisions of the PPA that the Utilities have with the three IPPs. However, management has concluded that the Utilities are not the primary beneficiary of Kalaeloa, AES Hawaii and Hamakua Energy because the Utilities do not have the power to direct the activities that most significantly impact the three IPPs’ economic performance nor the obligation to absorb their expected losses, if any, that could potentially be significant to the IPPs. Thus, the Utilities have not consolidated Kalaeloa, AES Hawaii and Hamakua Energy in its condensed consolidated financial statements. However, Hamakua Energy is an indirect subsidiary of Pacific Current and is consolidated in HEI’s condensed consolidated financial statements.
For the other PPAs with IPPs, the Utilities have concluded that the consolidation of the IPPs was not required because either the Utilities do not have variable interests in the IPPs due to the absence of an obligation in the PPAs for the Utilities to absorb any variability of the IPPs, or the IPP was considered a “governmental organization,” and thus excluded from the scope of accounting standards for VIEs. The consolidation of any significant IPP could have a material effect on the unaudited condensed consolidated financial statements, including the recognition of a significant amount of assets and liabilities and, if such a consolidated IPP were operating at a loss and had insufficient equity, the potential recognition of such losses. If the Utilities determine they are required to consolidate the financial statements of such an IPP and the consolidation has a material effect, the Utilities would retrospectively apply accounting standards for VIEs to the IPP.
Commitments and contingencies.
Contingencies. The Utilities are subject in the normal course of business to pending and threatened legal proceedings. Management does not anticipate that the aggregate ultimate liability arising out of these pending or threatened legal proceedings will be material to its financial position. However, the Utilities cannot rule out the possibility that such outcomes could have a material effect on the results of operations or liquidity for a particular reporting period in the future.
Power purchase agreements.  Purchases from all IPPs were as follows:
 Three months ended March 31
(in millions)20222021
Kalaeloa$60 $37 
AES Hawaii27 30 
HPOWER19 17 
Hamakua Energy16 11 
Puna Geothermal Venture10 4 
Wind IPPs18 29 
Solar IPPs13 12 
Other IPPs 1
1 2 
Total IPPs$164 $142 
1Includes hydro power and other PPAs
Kalaeloa Partners, L.P.  Under a 1988 PPA, as amended, Hawaiian Electric is committed to purchase 208 MW of firm capacity from Kalaeloa. In October 2021, Hawaiian Electric and Kalaeloa signed the Amended and Restated Power Purchase Agreement for Firm Dispatchable Capacity and Energy (Amended and Restated PPA) to extend the PPA for an additional term of 10 years. In November 2021, Hawaiian Electric submitted an application for approval of the Amended and Restated PPA to the PUC, which is pending approval before the PUC. The price of purchases from Kalaeloa in the first quarter of 2022 have increased 62% over the first quarter of 2021, primarily due to increased fuel oil cost.
AES Hawaii, Inc. Under a PPA entered into in March 1988, as amended (through Amended and Restated Amendment No. 4) for a period of 30 years ending September 2022, Hawaiian Electric agreed to purchase 180 MW of firm capacity from AES Hawaii. Hawaiian Electric does not intend to extend the term of the PPA which will expire on September 1, 2022.
Hu Honua Bioenergy, LLC (Hu Honua). In May 2012, Hawaii Electric Light signed a PPA, which the PUC approved in December 2013, with Hu Honua for 21.5 MW of renewable, dispatchable firm capacity fueled by locally grown biomass from a facility on the island of Hawaii. Under the terms of the PPA, the Hu Honua plant was scheduled to be in service in 2016. However, Hu Honua encountered construction and litigation delays, which resulted in an amended and restated PPA between Hawaii Electric Light and Hu Honua dated May 9, 2017. In July 2017, the PUC approved the amended and restated PPA, which becomes effective once the PUC’s order is final and non-appealable. In August 2017, the PUC’s approval was appealed by a third party. On May 10, 2019, the Hawaii Supreme Court issued a decision remanding the matter to the PUC for further proceedings consistent with the court’s decision, which must include express consideration of greenhouse gas (GHG) emissions that would result from approving the PPA, whether the cost of energy under the PPA is reasonable in light of the potential for GHG emissions, and whether the terms of the PPA are prudent and in the public interest, in light of its potential hidden and long-term consequences. As a result, the PUC reopened the docket for further proceedings, including re-examining all of the issues in the proceedings. On July 9, 2020, the PUC issued an order denying Hawaii Electric Light’s request to waive the amended and restated PPA from the PUC’s competitive bidding requirements and therefore, dismissed the request for approval of the amended and restated PPA without prejudice to possible participation in any future competitive bidding process. On September 9, 2020, the PUC denied Hu Honua’s motion for reconsideration of the PUC’s order. Hu Honua filed its notice of appeal to the Hawaii Supreme Court of the PUC’s order denying Hu Honua’s motion for reconsideration. On May 24, 2021, the Hawaii Supreme Court vacated the PUC’s decision and remanded the matter back to the PUC for further proceedings. On June 30, 2021, the PUC issued an order reopening the docket consistent with the Hawaii Supreme Court’s order. A contested case hearing was held in March 2022. The matter is currently with the PUC for decision making.
Molokai New Energy Partners (MNEP). In July 2018, the PUC approved Maui Electric’s PPA with MNEP to purchase solar energy from a photovoltaic (PV) plus battery storage project. The 4.88 MW PV and 3 MW Battery Energy Storage System project was to deliver no more than 2.64 MW at any time to the Molokai system. On March 25, 2020, MNEP filed a complaint in the United Stated District Court for the District of Hawaii against Maui Electric claiming breach of contract. On June 3, 2020, Maui Electric provided Notice of Default and Termination of the PPA to MNEP terminating the PPA with an effective date of July 10, 2020. Thereafter, MNEP filed an amended Complaint to include claims relating to the termination and Hawaiian Electric filed its Answer to the Amended Complaint on September 11, 2020, disputing the facts presented by MNEP and all claims within the original and amended complaint. Currently, the discovery phase is ongoing.
Fuels barging contract. On August 23, 2021, the Utilities entered into a five-year inter-island fuel transportation contract with Sause Bros., Inc. On December 23, 2021, the PUC issued an interim D&O approving the inter-island fuels transportation contract and recovery of associated costs on an interim basis. The interim decision is effective until the PUC issues its final D&O in the proceeding. The Utility recorded a lease liability of $32 million in connection with the contract, which commenced in January 2022 with an estimated annual base rent of $6.2 million.
Utility projects.  Many public utility projects require PUC approval and various permits from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits or community support can result in significantly increased project costs or even cancellation of projects. In the event a project does not proceed, or if it becomes probable the PUC will disallow cost recovery for all or part of a project, or if PUC-imposed caps on project costs are expected to be exceeded, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income.
Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) implementation project. The ERP/EAM Implementation Project went live in October 2018. Hawaii Electric Light and Hawaiian Electric began to incorporate their portion of the deferred project costs in rate base and started the amortization over a 12-year period in January 2020 and November 2020, respectively. The PUC required a minimum of $246 million ERP/EAM project-related benefit to be delivered to customers over the system’s 12-year service life.
In February 2019, the PUC approved a methodology for passing the future cost saving benefits of the new ERP/EAM system to customers developed by the Utilities in collaboration with the Consumer Advocate. The Utilities filed a benefits clarification document on June 10, 2019, reflecting $150 million in future net O&M expense reductions and cost avoidance, and $96 million in capital cost reductions and tax savings over the 12-year service life. To the extent the reduction in O&M expense relates to amounts reflected in electric rates, the Utilities would reduce future rates for such amounts. In October 2019, the PUC approved the Utilities and the Consumer Advocate’s Stipulated Performance Metrics and Tracking Mechanism. As of March 31, 2022, the Utilities’ regulatory liability was $9.1 million ($5.1 million for Hawaiian Electric, $1.6 million for Hawaii
Electric Light and $2.4 million for Maui Electric) for the O&M expense savings that are being amortized or to be included in future rates. As part of the settlement agreement approved in the Hawaiian Electric 2020 test year rate case, the regulatory liability for Hawaiian Electric will be amortized over five years, beginning in November 2020, and the O&M benefits for Hawaiian Electric was considered flowed through to customers.
On July 7, 2021, the PUC issued an order modifying the reporting frequency of the Semi-Annual Enterprise System Benefits (SAESB) reports to an Annual Enterprise System Benefits (AESB) report on the achieved benefits savings. The most recent SAESB report was filed on February 14, 2022 for the period January 1 through December 31, 2021.
Environmental regulation.  The Utilities are subject to environmental laws and regulations that regulate the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous waste and toxic substances.
Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, periodically encounter petroleum or other chemical releases associated with current or previous operations. The Utilities report and take action on these releases when and as required by applicable law and regulations. The Utilities believe the costs of responding to such releases identified to date will not have a material effect, individually or in the aggregate, on Hawaiian Electric’s consolidated results of operations, financial condition or liquidity.
Former Molokai Electric Company generation site.  In 1989, Maui Electric acquired Molokai Electric Company. Molokai Electric Company had sold its former generation site (Site) in 1983, but continued to operate at the Site under a lease until 1985 and left the property in 1987. The federal Environmental Protection Agency (EPA) has since identified environmental impacts in the subsurface soil at the Site. In cooperation with the Department of Health of State of Hawaii (DOH) and EPA, Maui Electric further investigated the Site and the adjacent parcel to determine the extent of impacts of polychlorinated biphenyls (PCBs), residual fuel oils and other subsurface contaminants. Maui Electric has a reserve balance of $2.7 million as of March 31, 2022, representing the probable and reasonably estimable undiscounted cost for remediation of the Site and the adjacent parcel based on presently available information; however, final costs of remediation will depend on the cleanup approach implemented.
Additionally, on November 24, 2021, the current landowners of the Site, Misaki’s, Inc., filed a lawsuit against Hawaiian Electric (as alleged successor in interest to Molokai Electric, the prior owner of the Site) in the Circuit Court of the Second Circuit of the State of Hawaii (removed to the U.S. District Court for the District of Hawaii). The complaint which was subsequently amended to include Maui Electric, alleges that Hawaiian Electric is responsible for remediation of the Site based on the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), and the Hawaii Environmental Response Law under Hawaii Revised Statutes Chapter 128D, as well as being liable on contractual claims related to a short leaseback period during the transition of ownership from Molokai Electric. At this time, the Utilities are unable to determine the ultimate outcome of the lawsuit or the amount of any possible loss. The Utilities intend to vigorously defend the action.
Pearl Harbor sediment study. In July 2014, the U.S. Navy notified Hawaiian Electric of the Navy’s determination that Hawaiian Electric is a Potentially Responsible Party under CERCLA responsible for the costs of investigation and cleanup of PCB contamination in sediment in the area offshore of the Waiau Power Plant as part of the Pearl Harbor Superfund Site. Hawaiian Electric was also required by the EPA to assess potential sources and extent of PCB contamination onshore at Waiau Power Plant.
As of March 31, 2022, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $10.1 million. The reserve balance represents the probable and reasonably estimable undiscounted cost for the onshore and offshore investigation and remediation. The final remediation costs will depend on the actual onshore and offshore cleanup costs.
Regulatory proceedings
Decoupling. Decoupling is a regulatory model that is intended to provide the Utilities with financial stability and facilitate meeting the State of Hawaii’s goals to transition to a clean energy economy and achieve an aggressive renewable portfolio standard. Decoupling delinks the utility’s revenues from the utility’s sales, removing the disincentive to promote energy efficiency and accept more renewable energy. Decoupling continues under the PBR Framework.
Performance-based regulation framework. On December 23, 2020, the PUC issued a D&O (PBR D&O) establishing a new PBR Framework to govern the Utilities. The PBR Framework incorporates an annual revenue adjustment (ARA) and a suite of new regulatory mechanisms in addition to previously established regulatory mechanisms. Under the PBR Framework, the decoupling mechanism (i.e., the Revenue Balancing Account (RBA)) established by the previous regulatory framework will
continue. The existing cost recovery mechanisms will continue as currently implemented (i.e., the Energy Cost Recovery Clause (ECRC), Purchased Power Adjustment Clause (PPAC), Demand Side Management surcharge (DSM), Renewable Energy Infrastructure Program (REIP), Demand Response Adjustment Clause (DRAC), Pension and Other Post-Employment Benefits (OPEB) tracking mechanisms). In addition to annual revenues provided by the ARA, the Utilities may seek relief for extraordinary projects or programs through the Exceptional Project Recovery Mechanism (EPRM) (formerly known as the Major Project Interim Recovery adjustment mechanism) and earn financial rewards for exemplary performance as provided through a portfolio of Performance Incentive Mechanisms (PIMs) and Shared Savings Mechanisms (SSMs). The PBR Framework incorporates a variety of additional performance mechanisms, including Scorecards, Reported Metrics, and an expedited Pilot Process. The PBR Framework also contains a number of safeguards, including a symmetric Earnings Sharing Mechanism (ESM) which protects the Utilities and customers from excessive earnings or losses, as measured by the Utilities’ achieved rate-making ROACE and a Re-Opener mechanism, under which the PUC will open an examination, at its discretion, to determine if adjustments or modifications to specific PBR mechanisms are appropriate. The new PBR Framework became fully effective on June 1, 2021.
On September 17, 2021, the PUC issued an order introducing the PUC staff’s proposal for the development of new PIMs to address the following areas of concern:
•Grid reliability,
•Timely retirement of fossil fuel generation units,
•Interconnection of large-scale renewable energy projects,
•Cost control for fossil fuel, purchased power, and other non-ARA costs, and
•Expedient utilization of grid services from demand-side resources
The order also established a procedural schedule, including technical conferences, statements of position, and a PUC hearing, to govern the PBR Working Group’s review and development of the new PIMs. On March 10, 2022, the PUC issued an order modifying the procedural schedule. In accordance with the modified procedural schedule, the PBR Parties filed final statements of position on April 8, 2022. The PUC hearing was held on April 26 to 27, 2022.
Revenue adjustment mechanism. Prior to the implementation of the PBR Framework, the RAM was a major component of the previously established regulatory framework. The RAM was based on the lesser of: a) an inflationary adjustment for certain O&M expenses and return on investment for certain rate base changes, or b) cumulative annual compounded increase in Gross Domestic Product Price Index applied to annualized target revenues (the RAM Cap). All Utilities were limited to the RAM Cap in 2020. Under the PBR Framework, the ARA mechanism replaced the RAM, and became effective on June 1, 2021. RAM revenue adjustments approved by the PUC in 2020 will continue to be included in the RBA provision’s target revenue and RBA rate adjustment unless modified with PUC approval.
Annual revenue adjustment mechanism. The PBR Framework established a five-year multi-year rate period during which there will be no general rate cases. Target revenues will be adjusted according to an index-driven ARA based on (i) an inflation factor, (ii) a predetermined X-factor to encompass productivity, which is set at zero, (iii) a Z-factor to account for exceptional circumstances not in the Utilities’ control and (iv) a customer dividend consisting of a negative adjustment of 0.22% of adjusted revenue requirements compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in a prior docket at a rate of $6.6 million per year from 2021 to 2025. The implementation of the ARA occurred on June 1, 2021.
Earnings sharing mechanism. A symmetrical ESM for achieved rate-making ROACE outside of a 300 basis points dead band above or below the current authorized ROACE of 9.5% for each of the Utilities. There is a 50/50 sharing between customers and Utilities for the achieved rate-making ROACE falling within 150 basis points outside of the dead band in either direction, and a 90/10 sharing for any further difference. A reopening or review of the PBR terms will be triggered if the Utilities credit rating outlook indicates a potential credit downgrade below investment grade status, or if its achieved rate-making ROACE enters the outer most tier of the ESM.
Exceptional project recovery mechanism. Prior to the implementation of the PBR Framework, the PUC established the Major Project Interim Recovery (MPIR) adjustment mechanism and MPIR Guidelines. The MPIR mechanism provides the opportunity to recover revenues for net costs of approved eligible projects placed in service between general rate cases. In establishing the PBR Framework, the MPIR Guidelines were terminated and replaced with the EPRM Guidelines. Although the MPIR Guidelines were terminated and replaced by the EPRM Guidelines, the MPIR mechanism will continue within the PBR Framework to provide recovery of project costs previously approved for recovery under the MPIR. The newly established EPRM Guidelines permit the Utilities to include the full amount of approved costs in the EPRM for recovery in the first year the project goes into service, pro-rated for the portion of the year the project is in service. Deferred and O&M expense projects
are also eligible for EPRM recovery under the EPRM Guidelines. EPRM recoverable costs will be limited to the lesser of actual incurred project costs or PUC‑approved amounts, net of savings.
As of March 31, 2022, the Utilities submitted 2022 MPIR amounts totaling $25.9 million, including revenue taxes, for the Schofield Generating Station ($16.5 million), West Loch PV Project ($3.3 million), and Grid Modernization Strategy (GMS) Phase 1 project ($6.1 million for all three utilities) for the accrual of revenues effective January 1, 2022, that included the 2022 return on project amount (based on approved amounts) in rate base, depreciation and incremental O&M expenses. Subject to PUC approval, the Utilities will begin recovery of the annualized 2022 MPIR amounts effective June 1, 2022 through the RBA rate adjustment.
As of March 31, 2022, the PUC approved two EPRM projects totaling $41 million to the extent that the project costs are not included in rates. Currently, the Utilities are seeking EPRM recovery of five projects with total project costs of $264 million, subject to PUC approval.
Pilot process. The PBR D&O approved a Pilot Process to foster innovation by establishing an expedited implementation process for pilots that test new technologies, programs, business models, and other arrangements. This is intended to support initiatives by the Utilities to test new programs and ideas quickly and elevate any successful pilots for consideration of full-scale implementation. The proposed pilots would be subject to PUC approval with a total annual cap of $10 million. The Pilot Process will feature the two primary activities: an initial “Workplan Development” phase, during which the Utilities identify and scope areas of interests, so as to inform the subsequent “Implementation” phase, during which the Utilities submit specific pilot proposals for expedited review by the PUC and implement the pilot upon approval. The PUC will issue an order, approving, denying, or modifying a proposed Pilot within 45 days of receiving notice of a specific pilot project.
On July 9, 2021, the PUC issued an order approving the Utilities’ proposed Pilot Process submitted in April 2021 with modifications, including a cost recovery process that generally allows the Utilities to defer and recover total annual expenditures of approved pilot projects in full over twelve months beginning June 1 of the year following implementation through the RBA rate adjustment, although the Utilities may determine on a case-by-case basis that a particular project’s deferred costs should be amortized over a period greater than twelve months. On July 28, 2021, the Utilities submitted the finalized Pilot Process to govern the review of the pilot project proposals in accordance with the July 9, 2021 order.
On November 12, 2021, the Utilities requested PUC approval of their proposed Pilot Process Workplan to guide the development of pilot projects over the next three years. A PUC order on the Workplan is pending.
On February 28, 2022, the Utilities filed their first annual Pilot Update report covering pilot projects approved through the Pilot Process framework. The Pilot Update reported on approximately $0.1 million of 2021 deferred costs to be reviewed by the PUC in their review of the Utilities’ proposed adjustments to target revenue in the 2022 spring revenue report.
Performance incentive mechanisms. The PUC has established the following PIMs: (1) Service Quality performance incentives, (2) Phase 1 Request for proposal (RFP) PIM for procurement of low-cost renewable energy, (3) Phase 2 RFP PIMs for generation and generation plus storage project, and Grid Services and standalone storage, (4) new PIMs established in the PBR D&O.
•Service Quality performance incentives (ongoing). Service Quality performance incentives are measured on a calendar-year basis. The PIM tariff requires the performance targets, deadbands and the amount of maximum financial incentives used to determine the PIM financial incentive levels for each of the PIMs to remain constant in interim periods, unless otherwise amended by order of the PUC.
•Service Reliability Performance measured by System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical 10-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 20 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties of approximately $6.8 million - for both indices in total for the three utilities). For the 2021 evaluation period, the Utilities earned $0.2 million in penalties.
•Call Center Performance measured by the percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent 8 quarters with a deadband of 3% above and below the target. The maximum penalty or reward is 8 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties or rewards of approximately $1.4 million - in total for the three utilities).
•Phase 1 RFP PIM. Procurement of low-cost variable renewable resources through the RFP process in 2018 is measured by comparison of the procurement price to target prices. Half of the incentive was earned upon PUC
approval of the PPAs. Based on the seven PPAs approved in 2019, the Utilities recognized $1.7 million in 2019 with the remaining award to be recognized in the year following the in-service date of the projects, which is estimated to occur from 2023 to 2024.
•Phase 2 RFP PIMs. The PUC order issued on October 9, 2019 establishes pricing thresholds, timelines to complete contracting, and other performance criteria for the performance incentive eligibility. The PIMs provide incentives only without penalties. On July 9, 2020, the Utilities filed two Grid Services Purchase Agreements (GSPA) for the Grid Service RFP that potentially qualify for a demand response PIM; however, details of the incentive metrics will be determined by the PUC. On September 15, 2020, the Utilities filed a PPA that qualified for a PIM incentive and on February 16, 2021, the Utilities filed one additional PPA that qualified for a declining PIM incentive. The PUC approved two PPAs in September 2021 and November 2021 and two GSPAs on December 31, 2020. For the 2021 evaluation period, the Utilities earned $0.1 million in rewards related to the two PPAs.
•The PUC established the following two new PIMs in its PBR D&O, which were approved in an order issued on March 23, 2021 and became effective on June 1, 2021.
•Renewable portfolio standard (RPS)-A PIM that provides a financial reward for accelerating the achievement of RPS goals. The Utilities may earn a reward for the amount of system generation above the interpolated statutory RPS goal at $20/MWh in 2021 and 2022, $15/MWh in 2023, and $10/MWh for the remainder of the multi-year rate period (MRP). Penalties are already prescribed in the RPS as $20/MWh for failing to meet RPS targets in 2030, 2040 and 2045. The evaluation period commenced on January 1, 2021. For the 2021 evaluation period, the Utilities earned $1.0 million in rewards.
•Grid Services Procurement PIM that provides financial rewards for grid services acquired in 2021 and 2022. The Utilities can earn a total maximum reward of $1.5 million over 2021 and 2022. The evaluation period commenced on January 1, 2021.
•The PUC also established the following three new PIMs in its PBR D&O, which were approved by the PUC on May 17, 2021 and became effective on June 1, 2021.
•Interconnection Approval PIM that provides financial rewards and penalties for interconnection times for distributed energy resources systems <100 kW in size. The Utilities can earn a total annual maximum reward of $3.0 million or a total annual maximum penalty of $0.9 million. For the 2021 evaluation period, the Utilities earned $2.8 million in rewards.
•Low-to-Moderate Income (LMI) Energy Efficiency PIM that provides financial reward for collaboration between the Utilities and the third-party Public Benefits Fee Administrator to deliver energy savings for low- and moderate-income customers. The Utilities can earn a total annual maximum reward of $2.0 million. The PIM will initially have a duration of three years and be subject to an annual review. The evaluation period is based on Hawaii Energy’s program year with the initial evaluation year being the period of July 1, 2021 through June 30, 2022.
•Advanced Metering Infrastructure Utilization PIM that provides financial rewards for leveraging grid modernization investments and engaging customers beyond what is already planned in the Phase 1 Grid Modernization program. The Utilities can earn a total annual maximum reward of $2.0 million. The PIM will initially have a duration of three years after which it will be re-evaluated. The evaluation period commenced on January 1, 2021.
For the 2021 evaluation period, the Utilities accrued $3.7 million ($2.8 million for Hawaiian Electric, $0.4 million for Hawaii Electric Light and $0.5 million for Maui Electric) in rewards net of penalties. The net rewards related to 2021 were reflected in the 2021 fall revenue report and 2022 spring revenue report filings.
Annual review cycle. PBR D&O established an annual review cycle for revenue adjustments under the PBR Framework, including the biannual submission of the revenue reports. The Utilities filed the spring revenue report on March 31, 2022, which is subject to PUC approval.

The net incremental amounts between the 2021 fall and 2022 spring revenue reports are proposed to be collected (refunded) from June 1, 2022 through May 31, 2023 as follows:
(in millions)Hawaiian ElectricHawaii Electric LightMaui ElectricTotal
Incremental accrued RBA balance through September 30, 2021 (and associated revenue taxes)$(5.7)$2.1 $(4.7)$(8.3)
Incremental Performance Incentive Mechanisms (net)
1.9 0.4 0.4 2.7 
Incremental MPIR/EPRM Revenue Adjustment1.3 0.8 0.7 2.8
Other(0.1)— — $(0.1)
Net incremental amount to be collected under the RBA rate tariffs$(2.6)$3.3 $(3.6)$(2.9)

Regulatory assets for COVID-19 related costs. On May 4, 2020, the PUC issued an order, authorizing all utilities, including the Utilities, to establish regulatory assets to record costs resulting from the suspension of disconnections of service during the pendency of the Governor’s Emergency Proclamation and until otherwise ordered by the PUC. In future proceedings, the PUC will consider the reasonableness of the costs, the appropriate period of recovery, any amount of carrying costs thereon, and any savings directly attributable to suspension of disconnects, and other related matters. As part of the order, the PUC prohibits the Utilities from charging late payment fees on past due payments. As the moratorium on customer disconnections ended on May 31, 2021, the Utilities have resumed charging late payment fees in July 2021. Pursuant to PUC orders, the deferral of COVID-19 related costs by the Utilities ended on December 31, 2020. On October 1, 2021, the PUC approved the Utilities’ request to extend the deferral period to December 31, 2021. In December 2021, to keep customers connected and provide some relief to customers experiencing financial difficulty during the pandemic, the Utilities committed to issuing $2 million in bill credits to qualified customers. The Utilities will not seek recovery for the issued bill credits, resulting in a reduction to the cumulative deferred costs. As of March 31, 2022, the Utilities had recorded a total of $27.8 million in regulatory assets pursuant to the orders.
Condensed consolidating financial information. Condensed consolidating financial information for Hawaiian Electric and its subsidiaries are presented for the three month periods ended March 31, 2022 and 2021, and as of March 31, 2022 and December 31, 2021.
Hawaiian Electric unconditionally guarantees Hawaii Electric Light’s and Maui Electric’s obligations (a) to the State of Hawaii for the repayment of principal and interest on Special Purpose Revenue Bonds issued for the benefit of Hawaii Electric Light and Maui Electric, and (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder. Hawaiian Electric is also obligated, after the satisfaction of its obligations on its own preferred stock, to make dividend, redemption and liquidation payments on Hawaii Electric Light’s and Maui Electric’s preferred stock if the respective subsidiary is unable to make such payments.
Condensed Consolidating Statement of Income
Three months ended March 31, 2022
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric
Consolidated
Revenues$500,242 108,528 100,028 — (6)$708,792 
Expenses
Fuel oil154,425 25,251 41,610 — — 221,286 
Purchased power124,183 30,712 8,638 — — 163,533 
Other operation and maintenance83,656 20,214 21,387 — — 125,257 
Depreciation39,484 10,351 8,636 — — 58,471 
Taxes, other than income taxes47,274 10,032 9,344 — — 66,650 
   Total expenses449,022 96,560 89,615 — — 635,197 
Operating income51,220 11,968 10,413 — (6)73,595 
Allowance for equity funds used during construction1,990 193 226 — — 2,409 
Equity in earnings of subsidiaries13,661 — — — (13,661)— 
Retirement defined benefits credit (expense)—other than service costs855 167 (32)— — 990 
Interest expense and other charges, net(13,093)(2,609)(2,630)— 6 (18,326)
Allowance for borrowed funds used during construction651 60 67 — — 778 
Income before income taxes55,284 9,779 8,044 — (13,661)59,446 
Income taxes8,605 2,268 1,665 — — 12,538 
Net income46,679 7,511 6,379 — (13,661)46,908 
Preferred stock dividends of subsidiaries— 134 95 — — 229 
Net income attributable to Hawaiian Electric46,679 7,377 6,284 — (13,661)46,679 
Preferred stock dividends of Hawaiian Electric270 — — — — 270 
Net income for common stock$46,409 7,377 6,284 — (13,661)$46,409 


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Three months ended March 31, 2022
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric Consolidated
Net income for common stock$46,409 7,377 6,284 — (13,661)$46,409 
Other comprehensive income, net of taxes:
Retirement benefit plans:
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of taxes4,376 670 603 — (1,273)4,376 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes(4,325)(670)(603)— 1,273 (4,325)
Other comprehensive income, net of taxes51 — — — — 51 
Comprehensive income attributable to common shareholder$46,460 7,377 6,284 — (13,661)$46,460 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Three months ended March 31, 2021

(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric
Consolidated
Revenues$400,554 85,149 79,181 — (20)$564,864 
Expenses
Fuel oil88,728 16,485 22,214 — — 127,427 
Purchased power108,604 21,597 12,095 — — 142,296 
Other operation and maintenance77,335 17,912 19,323 — — 114,570 
Depreciation38,914 10,048 8,393 — — 57,355 
Taxes, other than income taxes38,627 7,993 7,482 — — 54,102 
   Total expenses352,208 74,035 69,507 — — 495,750 
Operating income48,346 11,114 9,674 — (20)69,114 
Allowance for equity funds used during construction1,748 132 311 — — 2,191 
Equity in earnings of subsidiaries12,510 — — — (12,510)— 
Retirement defined benefits credit (expense)—other than service costs886 168 (33)— — 1,021 
Interest expense and other charges, net(12,832)(2,581)(2,590)— 20 (17,983)
Allowance for borrowed funds used during construction591 44 112 — — 747 
Income before income taxes51,249 8,877 7,474 — (12,510)55,090 
Income taxes7,621 2,051 1,561 — — 11,233 
Net income43,628 6,826 5,913 — (12,510)43,857 
Preferred stock dividends of subsidiaries— 134 95 — — 229 
Net income attributable to Hawaiian Electric43,628 6,692 5,818 — (12,510)43,628 
Preferred stock dividends of Hawaiian Electric270 — — — — 270 
Net income for common stock$43,358 6,692 5,818 — (12,510)$43,358 


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Three months ended March 31, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric Consolidated
Net income for common stock$43,358 6,692 5,818 — (12,510)$43,358 
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits5,845 835 761 — (1,596)5,845 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes(5,811)(834)(761)— 1,595 (5,811)
Other comprehensive income, net of taxes34 1 — — (1)34 
Comprehensive income attributable to common shareholder$43,392 6,693 5,818 — (12,511)$43,392 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
March 31, 2022
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsi-
diaries		Consoli-
dating
adjustments		Hawaiian Electric
Consolidated
Assets      
Property, plant and equipment
Utility property, plant and equipment      
Land$42,857 5,606 3,594 — — $52,057 
Plant and equipment5,144,377 1,394,875 1,256,817 — — 7,796,069 
Less accumulated depreciation(1,788,280)(627,421)(570,061)— — (2,985,762)
Construction in progress164,073 19,691 28,984 — — 212,748 
Utility property, plant and equipment, net3,563,027 792,751 719,334 — — 5,075,112 
Nonutility property, plant and equipment, less accumulated depreciation
5,301 115 1,532 — — 6,948 
Total property, plant and equipment, net3,568,328 792,866 720,866 — — 5,082,060 
Investment in wholly owned subsidiaries, at equity681,998 — — — (681,998)— 
Current assets      
Cash and cash equivalents19,894 6,017 3,067 77 — 29,055 
Restricted cash2,140 — — — — 2,140 
Advances to affiliates5,000 — 12,800 — (17,800)— 
Customer accounts receivable, net128,263 27,735 25,402 — — 181,400 
Accrued unbilled revenues, net98,511 21,235 20,259 — — 140,005 
Other accounts receivable, net15,846 5,128 4,269 — (18,203)7,040 
Fuel oil stock, at average cost105,780 13,895 19,697 — — 139,372 
Materials and supplies, at average cost42,852 9,673 20,181 — — 72,706 
Prepayments and other29,677 4,602 5,883 — 1,253 41,415 
Regulatory assets69,638 4,877 4,360 — — 78,875 
Total current assets517,601 93,162 115,918 77 (34,750)692,008 
Other long-term assets      
Operating lease right-of-use assets61,826 38,368 14,284 — — 114,478 
Regulatory assets325,063 78,877 76,346 — — 480,286 
Other128,934 18,620 19,607 — (817)166,344 
Total other long-term assets515,823 135,865 110,237 — (817)761,108 
Total assets$5,283,750 1,021,893 947,021 77 (717,565)$6,535,176 
Capitalization and liabilities      
Capitalization      
Common stock equity$2,276,884 336,177 345,744 77 (681,998)$2,276,884 
Cumulative preferred stock—not subject to mandatory redemption
22,293 7,000 5,000 — — 34,293 
Long-term debt, net1,136,739 234,413 253,447 — — 1,624,599 
Total capitalization3,435,916 577,590 604,191 77 (681,998)3,935,776 
Current liabilities      
Current portion of operating lease liabilities31,078 6,370 2,510 — — 39,958 
Current portion of long-term debt39,986 11,996 — — — 51,982 
Short-term borrowings from non-affiliates6,000 — — — — 6,000 
Short-term borrowings from affiliate12,800 5,000 — — (17,800)— 
Accounts payable124,463 22,175 21,551 — — 168,189 
Interest and preferred dividends payable20,057 3,687 4,414 — (4)28,154 
Taxes accrued, including revenue taxes125,425 29,109 25,537 — 1,253 181,324 
Regulatory liabilities19,416 5,495 5,017 — — 29,928 
Other60,491 18,869 19,214 — (18,356)80,218 
Total current liabilities439,716 102,701 78,243 — (34,907)585,753 
Deferred credits and other liabilities      
Operating lease liabilities44,785 32,066 11,838 — — 88,689 
Deferred income taxes289,376 52,859 64,089 — — 406,324 
Regulatory liabilities702,745 178,224 92,547 — — 973,516 
Unamortized tax credits74,821 13,927 13,219 — — 101,967 
Defined benefit pension and other postretirement benefit plans liability
216,181 47,842 52,312 — (660)315,675 
Other80,210 16,684 30,582 — — 127,476 
Total deferred credits and other liabilities1,408,118 341,602 264,587 — (660)2,013,647 
Total capitalization and liabilities$5,283,750 1,021,893 947,021 77 (717,565)$6,535,176 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
December 31, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsi-diaries		Consoli-
dating
adjustments		Hawaiian Electric
Consolidated
Assets      
Property, plant and equipment
Utility property, plant and equipment      
Land$42,737 5,606 3,594 — — $51,937 
Plant and equipment5,097,033 1,390,361 1,248,589 — — 7,735,983 
Less accumulated depreciation(1,757,096)(619,991)(563,430)— — (2,940,517)
Construction in progress159,854 17,129 27,586 — — 204,569 
Utility property, plant and equipment, net3,542,528 793,105 716,339 — — 5,051,972 
Nonutility property, plant and equipment, less accumulated depreciation
5,302 115 1,532 — — 6,949 
Total property, plant and equipment, net3,547,830 793,220 717,871 — — 5,058,921 
Investment in wholly owned subsidiaries, at equity
676,237 — — — (676,237)— 
Current assets      
Cash and cash equivalents23,344 5,326 23,422 77 — 52,169 
Restricted cash3,089 — — — — 3,089 
Advances to affiliates1,000 — — — (1,000)— 
Customer accounts receivable, net135,949 28,469 22,441 — — 186,859 
Accrued unbilled revenues, net92,469 19,529 17,157 — — 129,155 
Other accounts receivable, net18,624 3,347 3,031 — (17,735)7,267 
Fuel oil stock, at average cost71,184 12,814 20,080 — — 104,078 
Materials and supplies, at average cost42,006 9,727 20,144 — — 71,877 
Prepayments and other32,140 6,052 7,114 — 725 46,031 
Regulatory assets58,695 3,051 4,918 — — 66,664 
Total current assets478,500 88,315 118,307 77 (18,010)667,189 
Other long-term assets      
Operating lease right-of-use assets78,710 22,442 318 — — 101,470 
Regulatory assets337,903 81,645 79,331 — — 498,879 
Other130,546 17,124 18,510 — (1,014)165,166 
Total other long-term assets547,159 121,211 98,159 — (1,014)765,515 
Total assets$5,249,726 1,002,746 934,337 77 (695,261)$6,491,625 
Capitalization and liabilities      
Capitalization
Common stock equity$2,261,899 332,900 343,260 77 (676,237)$2,261,899 
Cumulative preferred stock—not subject to mandatory redemption
22,293 7,000 5,000 — — 34,293 
Long-term debt, net1,136,620 234,390 253,417 — — 1,624,427 
Total capitalization3,420,812 574,290 601,677 77 (676,237)3,920,619 
Current liabilities     
Current portion of operating lease liabilities45,955 3,378 35 — — 49,368 
Current portion of long-term debt39,981 11,994 — — — 51,975 
Short-term borrowings-affiliate— 1,000 — — (1,000)— 
Accounts payable111,024 26,139 22,844 — — 160,007 
Interest and preferred dividends payable12,442 2,617 2,269 — (3)17,325 
Taxes accrued, including revenue taxes143,723 33,153 30,679 — 725 208,280 
Regulatory liabilities22,240 3,247 4,273 — — 29,760 
Other56,752 14,158 18,540 — (17,881)71,569 
Total current liabilities432,117 95,686 78,640 — (18,159)588,284 
Deferred credits and other liabilities     
Operating lease liabilities46,426 19,063 291 — — 65,780 
Deferred income taxes291,027 53,298 64,309 — — 408,634 
Regulatory liabilities695,152 179,267 92,589 — — 967,008 
Unamortized tax credits76,201 14,212 13,532 — — 103,945 
Defined benefit pension and other postretirement benefit plans liability
220,480 48,900 53,257 — (857)321,780 
Other67,511 18,030 30,042 — (8)115,575 
Total deferred credits and other liabilities1,396,797 332,770 254,020 — (865)1,982,722 
Total capitalization and liabilities$5,249,726 1,002,746 934,337 77 (695,261)$6,491,625 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Changes in Common Stock Equity
Three months ended March 31, 2022
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries		Consolidating
adjustments		Hawaiian Electric
Consolidated
Balance, December 31, 2021$2,261,899 332,900 343,260 77 (676,237)$2,261,899 
Net income for common stock46,409 7,377 6,284 — (13,661)46,409 
Other comprehensive income, net of taxes51 — — — — 51 
Common stock dividends(31,475)(4,100)(3,800)— 7,900 (31,475)
Balance, March 31, 2022$2,276,884 336,177 345,744 77 (681,998)$2,276,884 
 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Changes in Common Stock Equity
Three months ended March 31, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries		Consolidating
adjustments		Hawaiian Electric
Consolidated
Balance, December 31, 2020$2,141,918 317,451 309,363 77 (626,891)$2,141,918 
Net income for common stock43,358 6,692 5,818 — (12,510)43,358 
Other comprehensive income, net of taxes34 1 — — (1)34 
Common stock dividends(27,925)(3,650)(3,776)— 7,426 (27,925)
Balance, March 31, 2021$2,157,385 320,494 311,405 77 (631,976)$2,157,385 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Three months ended March 31, 2022
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries		Consolidating
adjustments		Hawaiian Electric
Consolidated
Net cash provided by operating activities$55,669 15,778 13,228 — (7,900)$76,775 
Cash flows from investing activities      
Capital expenditures(44,084)(15,133)(17,141)— — (76,358)
Advances to affiliates(4,000)— (12,800)— 16,800 — 
Other961 280 253 — — 1,494 
Net cash used in investing activities(47,123)(14,853)(29,688)— 16,800 (74,864)
Cash flows from financing activities      
Common stock dividends(31,475)(4,100)(3,800)— 7,900 (31,475)
Preferred stock dividends of Hawaiian Electric and subsidiaries(270)(134)(95)— — (499)
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less18,800 4,000 — — (16,800)6,000 
Net cash used in financing activities(12,945)(234)(3,895)— (8,900)(25,974)
Net increase (decrease) in cash and cash equivalents(4,399)691 (20,355)— — (24,063)
Cash, cash equivalents and restricted cash, beginning of period26,433 5,326 23,422 77 — 55,258 
Cash, cash equivalents and restricted cash, end of period22,034 6,017 3,067 77 — 31,195 
Less: Restricted cash(2,140)— — — — (2,140)
Cash and cash equivalents, end of period$19,894 6,017 3,067 77 — $29,055 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Three months ended March 31, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries		Consolidating
adjustments		Hawaiian Electric
Consolidated
Net cash provided by operating activities$18,764 9,635 10,988 — (7,426)$31,961 
Cash flows from investing activities     
Capital expenditures (45,293)(12,728)(12,340)— — (70,361)
Advances from affiliates26,700 — — — (26,700)— 
Other1,182 372 309 — — 1,863 
Net cash used in investing activities(17,411)(12,356)(12,031)— (26,700)(68,498)
Cash flows from financing activities     
Common stock dividends(27,925)(3,650)(3,776)— 7,426 (27,925)
Preferred stock dividends of Hawaiian Electric and subsidiaries(270)(134)(95)— — (499)
Repayment of short-term debt(50,000)— — — — (50,000)
Proceeds from issuance of long-term debt60,000 30,000 25,000 — — 115,000 
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less— (18,800)(7,900)— 26,700 — 
Other(96)(11)(9)— — (116)
Net cash provided by (used in) financing activities(18,291)7,405 13,220 — 34,126 36,460 
Net increase (decrease) in cash and cash equivalents(16,938)4,684 12,177 — — (77)
Cash, cash equivalents and restricted cash, beginning of period58,171 3,046 2,032 77 — 63,326 
Cash, cash equivalents and restricted cash, end of period41,233 7,730 14,209 77 — 63,249 
Less: Restricted cash(11,506)— — — — (11,506)
Cash and cash equivalents, end of period$29,727 7,730 14,209 77 — $51,743