Hawaii state government officials and Hawaii Electric Co. were both acutely aware of the wildfire threat in Maui. Yet state regulators did not force action to mitigate the threat, and Hawaiian Electric, the largest utility interest in the state and the island’s largest publicly traded company, did little to address the problem.
The two interests are deeply entwined, ethics and business records show.
Every member of the Hawaii Public Utilities Commission, which regulates Hawaiian Electric, has financial or previous professional ties to the company.
Instead of action on wildfire upgrades, Hawaiian Electric splurged on peddling influence with regulators and politicians while singing its own virtues in splashy corporate marketing materials. The company even sponsored a documentary this year on Hawaiian television devoted to mitigating the impact of climate change. The chief regulator from the utility commission appeared as a talking head in the company’s documentary.
After a series of Mauii wildfires in 2019, Hawaiian Electric, state records show, spent only $245,000 on wildfire-specific upgrades and mitigation efforts on the island through 2022. That amount pales in comparison to the tens of millions of dollars paid out in dividends and executive compensation over the last four years.
Put another way, ethics records show Hawaiian Electric spent $437,252 on lobbying state officials, including utility regulators, since 2019, far more than it spent addressing the Maui wildfire threat.
While the cause of the deadly fire last week is still under investigation, mounting evidence suggests that HEC’s equipment was at fault. On the morning of the fires on August 8th, Shane Treu, a Maui resident, was awakened by howling winds, stepped outside and took a livestream video of downed power lines igniting dry grass on a road in Lahaina.
Critics have noted that the burn progression, witness accounts, and other videos point to downed power lines as the most likely cause of the fire. Whisker Labs Inc., which monitors electrical grid activity, reported that power outages from Hawaiian Electric coincide with the first reports of the Maui fire.
Hawaiian Electric also failed to turn off sections of its power grid during the wind storms last week, a precautionary measure adopted by other utilities in states with high fire risks, such as California.
Hawaiian Electric, in response to a request for comment, noted that it spent $84 million on general maintenance and tree work in Maui since 2018. The company spokesperson did not directly address questions about delays in wildfire-specific upgrades and its own wildfire mitigation plan.
The Hawaii PUC did not respond to a request for comment.
In June 2022, in a regulatory filing, Hawaiian Electric noted that the “risk of a utility system causing a wildfire ignition is significant,” and pointed out PG&E’s role in causing California wildfires. In the same filing, which included a plan to address the risk, the company identified West Maui as a critical priority area and sought permission to raise utility rates before beginning work on the necessary upgrades.
Hawaiian Electric estimated that changes to its equipment, clearing fire hazards, and other upgrades in West Maui, including near Lahaina, would cost about $6.2 million.
But regulators did not force the company into action and there has been no follow-up. The proposal languished in a bureaucratic docket maintained by the Hawai Public Utilities Commission. The commission only responded, asking for an update on the plan, in June of this year, to which Hawaiian Electric has not formally responded.
When making the presentation, the company maintained a familiar audience with the regulators. Commissioner Leodoloff Asuncion, the chair of PUC, previously worked directly for Hawaiian Electric, Commissioner Naomi Kuwaye previously worked as an outside attorney for Hawaiian Electric, and Commissioner Colin Yost runs a renewable energy firm, RevoluSun, which partners with Hawaiian Electric.
Ethics disclosures show that in May, a utility industry lobbyist provided an all-expense paid trip for Asuncion and Kuwaye to fly to New York and meet with industry representatives.
That’s not to say the Maui wildfire risk and mitigation report went entirely forgotten. Instead of swiftly acting on the proposal, Hawaiian Electric slightly changed course and applied for a federal grant from the newly enacted Bipartisan Infrastructure Bill signed by President Joe Biden in 2021 to pay for the upgrades.
The 2022 wildfire prevention plan is touted by Hawaiian Electric in multiple ESG reports the company has since produced that showcase the corporation’s commitment to advancing environmental goals and addressing climate change. “Hawaiian Electric continues its work to assess resilience threats and prioritize improvements to enhance resilience,” the latest report states, before listing the wildfire prevention plan as an accomplishment.
ESG, or the Environmental, Social and Governance rating system, is the metric through which publicly traded companies compete to accomplish corporate responsibility goals. The rubric has come under scrutiny for its lack of enforcement mechanisms, self-reported data, and constantly shifting criteria.
A high ESG score can earn a firm better placement in socially responsible index funds or mutual funds, as well as access to so-called “green bonds.” Such measures can provide a company with greater investment capital and financing. Connie Lau, the previous president of the holding company that owns Hawaiian Electric, touted the company’s ESG program in a speech to J.P. Morgan Chase in 2020.
The company, Lau said, “is known as a good ESG investment” because of its focus on renewable energy and its diverse board of directors. ESG, she added, is “in our DNA.”