Hawaiian Electric Industries and a subsidiary, Hawaiian Electric, would pay $1.99 billion under a pending global agreement that would settle all tort claims related to the August 2023 wildfires on Maui, the company said Friday.
HEI said the payments would be made in four installments and include $75 million previously contributed for the One ʻOhana Initiative, which was set up to support people who lost loved ones or experienced severe damage in the wildfires.
If approved in court, payments under the tentative settlement would start in mid-2025 at the earliest, according to the company.
On Aug. 8, 2023, wind- and drought-fueled brush fires on Maui caused 101 confirmed fatalities in Lahaina and up to $6 billion in property damage, HEI said in a May 10 quarterly report with the U.S. Securities and Exchange Commission. HEI and its utilities were named in about 400 lawsuits related to the wildfires, according to the company. The suits contend utility power lines started the wildfires.
The pending $4 billion agreement is between among HEI and Hawaiian Electric, the state of Hawaiʻi, the county of Maui, Kamehameha Schools, West Maui Land Co., Hawaiian Telcom and Spectrum/Charter Communications and lead attorneys for individual and class plaintiffs, according to the company.
“Not only is this good for our community, but we are confident that this settlement represents the best outcome for HEI, as it provides a clear line of sight toward resolution of the wildfire-related tort litigation and increased certainty for our company’s path ahead,” Scott Seu, HEI president and CEO, said. “In the coming months, we will be focused on finalizing the agreement and regaining the strength of our enterprise.”
The proposed agreement will bring greater certainty for Hawaiian Electric, helping it reestablish its financial stability, according to the utility.
The pending settlement “will allow all of us to work together more cohesively and effectively to support the people of Lahaina and Maui to create the future they want to see emerge from this tragedy,” Shelee Kimura, Hawaiian Electric president and CEO, said.
HEI and Hawaiian Electric are working with financial advisors to develop a financing plan for their settlement contribution and intend to finance the payments with a mix of debt, common equity, equity-linked securities or other options, HEI said. “There can be no assurance at this time as to the availability or terms of any such financing,” it said.
“The agreement is conditioned on a resolution of the claims of the insurance companies that have paid claims for property loss and other damages, with no additional payments from defendants,” HEI said.
HEI will discuss the settlement during its quarterly earnings call on Friday, the company said.
