Hawaii’s largest electric utility plans to spend $300 million over the next three years, on top of $120 million this year, to reduce the risk of wildfires.
Hawaiian Electric estimates that the investment this year will reduce the risk of its equipment causing such a fire by 60% and that the additional investments through 2027 will bring the company closer to a long-term goal of reducing this risk by 80% reduce at an estimated cost of approximately $1 billion.
The company, which serves the islands of Oahu, Maui, Molokai, Lanai and Hawaii, presented its plans and projections to a panel of senators on Friday.
Much of the information presented will be part of a wildfire risk mitigation plan that Hawaiian Electric must submit to the state Public Utilities Commission by Jan. 10 as part of an order the PUC issued Sept. 13, approximately 13 months after the disaster of August 8. 2023, Maui wildfire that killed 102 people and destroyed most of Lahaina.
An independent analysis found that a power line in Lahaina, which was damaged by high winds and restored to power after a visual inspection, was a major contributing factor to the disaster. by the utility, the state and Kamehameha schools.
Three Senate committees asked Hawaiian Electric for a briefing on the company’s plan being prepared for the PUC.
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“Our No. 1 priority over the past 15 months has been to reduce the risk of another catastrophic wildfire in Hawaii,” Jason Benn, Hawaiian Electric’s chief transformation and administrative officer, told the Senate panel in a Capitol conference room. “We have made significant progress in reducing the risk of wildfires from our equipment. We have engaged experts and collaborated with other utilities to leverage best practices and take actions that will have the greatest impact, but also take cost-effectiveness into account.”
The biggest improvement this year, from a cost perspective, is replacing about 2,000 wooden utility poles with stronger wood or steel poles at a cost of $61.9 million, according to the company’s presentation.
Other parts of the $120 million spent this year include $12.5 million to replace single-strand copper power lines with stronger multi-strand aluminum lines, $10.3 million for distribution system inspections, $8.6 million for safer fuses and 6 $.3 million for vegetation management.
Over the next three years, at least one-third of Hawaiian Electric’s planned expenditures are earmarked to replace at least 2,100 poles for $58.9 million and replace approximately 9,200 fuses along power lines with “fireproof” fuses in high-risk areas. high to medium fire risk. at a cost of $43.7 million.
Most existing utility company fuses, which stop the transmission of electricity in the event of an overvoltage, can emit molten embers or sparks when they blow to prevent further system damage.
“We believe this is an important part of reducing fire risk,” Colton Ching, senior vice president of planning and technology at Hawaiian Electric, told the Senate panel. “We want to get as much done as possible. … We are looking to complete this in our high and medium risk areas by 2026.”
Other planned equipment upgrades over the next three years include improved energy absorbers for lightning strikes, fault indicators, better devices for tripping and reopening circuits, weather stations, cameras that can identify smoke and stronger power lines.
Ching said Hawaiian Electric has 53 weather stations, which have been an integral part of a public safety power shutoff program the company initiated in July.
The program is designed to shut off power in areas at high risk of wildfires when wind gusts exceed 70 km/h and relative humidity drops below 45%. Since July, Hawaiian Electric twice warned customers of a possible safety shutdown, including once on Maui on Oct. 16, although no shutdowns occurred because the trigger conditions were ultimately not met.
Under the company’s plan, an additional 250 weather stations are planned over the next three years at a cost of $9 million.
Installing 27 miles of stronger power lines, estimated to cost $15.3 million, is also part of the plan and would follow 16 miles of line upgrades this year.
The company also plans to replace 800 miles of older bare wire lines with insulated lines, although this is a longer-term and more expensive proposal that may also require pole upgrades due to the added weight.
Ching told the Senate panel that the company expects to install about 50 miles of insulated lines annually starting in 2026 at a cost of about $100 million.
Another, but more uncertain, longer-term renovation is the undergrounding of overhead power lines. Ching said 51% of the utility’s distribution lines are now underground, and the company knows Lahaina residents especially want the historic city’s restoration to include underground lines.
However, Ching also said much depends on Maui County’s reconstruction plans and permits, which could take many years. Feasibility, including costs of $11 million per mile for underground lines, compared to $1 million per mile for overhead lines, should also be assessed.
“It becomes quite invasive when you think about going underground in a place that has already been built, a place where there are already houses, already streets, already sidewalks, already water, wastewater, telecom lines on the road,” he told the panel. “If you go from above ground to underground in an existing community, it’s a lot more expensive and a lot more challenging than building it in a brand new community that is now essentially a field.”
In some areas, insulating overhead lines can be as effective at reducing wildfire risk as laying lines underground, Ching added.
To reduce costs to taxpayers for improvements, Ching explained that the company applied for $659 million in federal grants, but grant applications totaling approximately $550 million were not approved.
Applications for grants totaling approximately $13 million are still pending, and the company was awarded one $95 million federal grant in 2023 following the Maui wildfire to pay for half of a $190 million climate adaptation and distribution resilience plan that had presented the company to the PUC in June. 2022.
Earlier this year, Hawaiian Electric wanted lawmakers to pass a bill that would help reduce the cost of financing wildfire risk mitigation work, which would be passed on to ratepayers. But the bill, which would allow the utility to sell bonds backed by tax revenues, was defeated, in part because of questions about plans to reduce wildfire risk.
Senator Jarrett Keohokalole, chairman of the Senate Commerce and Consumer Protection Committee, was instrumental in killing the bill. As lead chair of Friday’s panel, Keohokalole (D, Kaneohe-Kailua) said Hawaiian Electric’s presentation was helpful.
Senator Glenn Wakai, chairman of the Senate Committee on Public Safety and Intergovernmental and Military Affairs, questioned whether Hawaiian Electric will put its upcoming plan into action.
“Why should the public have any confidence in you and HECO to do the things you just mentioned today,” Wakai said, “when your track record proves that you’re just sitting on the plans and really not putting all the things into practice . which you say you intend to do?”
Wakai (D, Kalihi-Salt Lake-Pearl Harbor) cited a 2019 working group report recommending some of the improvements now being made.
Ching noted that the report, prepared by stakeholders including utility representatives and representatives from state and federal agencies, led to significant investments in vegetation management, pole replacements and the $95 million federal grant application before the Lahaina fire, including even though the report was listed as a wildfire. as a lesser threat than hurricanes, floods, tsunamis, earthquakes and cyber attacks.
Wakai also criticized Hawaiian Electric for not spending more on wildfire mitigation in recent years before the Lahaina disaster, while paying out about $450 million in dividends to shareholders of parent company Hawaiian Electric Industries Inc.
HEI suspended dividends after the Lahaina fire and has agreed to pay $2 billion toward the $4 billion settlement, pending state court approval.
Benn said Hawaiian Electric ratepayers will in no way cover the settlement costs.
“Customers will not pay a dime for the settlement,” he told the panel. “There is no impact of the bill. If the settlement is approved, it will be entirely at the expense of our shareholders and our company.”
Hawaiian Electric expects to pay its outstanding obligation of $1.92 billion, after a previous contribution of $75 million, in four equal annual installments of approximately $479 million. The first payment, expected in late 2025, will be covered by $558 million from HEI raised in September through the sale of new shares.
On Friday, HEI reported a financial loss of $104 million for the three months ended September 30, including $151 million after taxes for wildfire claims. HEI recorded the bulk of the settlement costs in the previous quarter as part of a $1.3 billion financial loss.
