Hawaiian Electric Industries (NYSE:HE) reported higher third-quarter net income, but its underlying earnings declined as hurricane-related costs weighed on its utility business. Executives also outlined plans to reduce an upcoming Maui wildfire settlement payment and await regulatory decisions on rates and storm-cost recovery.
The company reported net income of $35.5 million, or $0.20 per share, for the third quarter of 2026, up from $30.7 million, or $0.18 per share, a year earlier. Excluding investment gains, an asset impairment and Maui wildfire-related items, core net income fell to $23 million, or $0.13 per share, from $32.8 million, or $0.19 per share.
Senior Vice President and Chief Financial Officer Paul Ito said the decline in core earnings primarily reflected storm-related expenses at the utility. Utility core net income fell to $27.6 million from $39.6 million a year earlier, while utility GAAP net income declined to $13.5 million from $37 million.
Storm Costs and Rate Request
The utility recorded an estimated $13.7 million in incremental pretax costs from hurricanes in August and September. It also recorded approximately $5.6 million of expenses previously carried at the holding company as functions and employees were integrated into the utility. Ito said the transfer did not increase consolidated expenses.
Hawaiian Electric requested regulatory approval in October to defer storm-related expenses, with a decision sought by Dec. 15. If approved and accounting criteria are met, qualifying expenses would be reversed in fourth-quarter results. The utility plans to seek recovery separately in 2027; approval to defer the costs would not itself authorize recovery.
CEO Scott Seu said Hurricane Lala caused outages affecting more than 40% of customer accounts across the company’s service territories at their peak in August. Crews restored power to more than 95% of affected customers within three days of the storm’s passing, he said.
The company is awaiting a final procedural schedule for its rate rebasing request, which proposes a 5.3% base-rate increase phased in over two years. Ito said a tentative schedule contemplates a decision in mid to late April 2027, potentially allowing new rates to take effect in early May.
If the full request were granted on that timeline, the company estimates it would receive $83 million in additional revenue in 2027, representing eight months of a $125 million annual increase. Ito said that scenario would put the utility’s core return on equity at approximately 7.3% to 7.8% for the partial year. He cautioned that the timing and outcome remain uncertain.
Settlement Funding and Liquidity
The company ended the quarter with approximately $1.3 billion in consolidated liquidity, including $224 million in unrestricted cash. The balance included available capacity under its at-the-market equity program, credit facilities and the utility’s accounts receivable facility.
Hawaiian Electric has prepaid $80 million toward its second wildfire settlement payment. With the early-payment discount, that reduced the $479 million amount due by $82 million. The company expects to prepay at least another $100 million before the April 2027 due date, using proceeds from a potential sale of its remaining American Savings Bank shares and expected insurance proceeds.
If those prepayments occur as expected, the amount due in April would fall below $300 million. Ito said the company expects to finance the remainder with straight debt or convertible debt and is evaluating both options. He added that, based on the stock price, the company currently has no plans to use its at-the-market equity program.
Seu said a Public Utilities Commission rulemaking process concerning a liability cap remains underway, with draft rules potentially issued sometime in 2027.
Bank Gains and Biomass Impairment
Results included approximately $64 million in combined pretax realized and unrealized gains related to American Savings Bank. The bank completed an initial public offering in September, when Hawaiian Electric sold 35% of its 9.9% stake for approximately $33.9 million in net proceeds.
The company also recorded a $50.7 million noncash pretax impairment at Pacific Current’s Mahipapa Biomass Generating Facility on Kauaʻi. Ito said a proposed sale was terminated in September, the facility went offline following Hurricane Lowell damage, and its power purchase agreement ended Oct. 1. Mahipapa filed for Chapter 7 liquidation on Nov. 3; once the proceeding is completed, Pacific Current will have no remaining operations, he said.
Ito said the board may revisit the company’s dividend policy as its financial position strengthens, with a longer-term objective of reaching a payout ratio consistent with peer utilities. The company currently does not pay a dividend.
About Hawaiian Electric Industries (NYSE:HE)
Hawaiian Electric Industries, Inc (NYSE: HE) is a Hawaii-based holding company whose principal business is providing electric utility service across the state. Through its regulated utility subsidiaries—Hawaiian Electric Company, Maui Electric Company and Hawaii Electric Light—the company generates, purchases, transmits, distributes and sells electricity to residential, commercial and industrial customers on the islands of Oahu, Maui, Molokai, Lanai and Hawaii.
The utility uses a combination of renewable and conventional energy resources and supports Hawaii’s transition toward a cleaner electric system.
