A controversial measure to keep Hawaiian Electric in good financial standing after the Maui wildfires has died in the state Senate.
Senate Bill 2922 would have allowed HECO to issue ratepayer-backed bonds — a process called securitization — to fund wildfire mitigation efforts.
If it had passed, it could have resulted in a rate increase for HECO customers.
State Sen. Jarrett Keohokalole originally introduced the Senate version of the bill on behalf of HECO. He was also the one to announce that lawmakers would be tabling the measure.
"This decision was not made lightly," Keohokalole said before the bill's conference committee, one of the last hurdles it needed to pass before going to the governor's desk to become law.
Keohokalole said he was aware that the Senate's move may come as a "disappointment" to some, but added that he felt it was "premature to commit potentially decades of consumer payments toward the facilitation of a wildfire mitigation plan that does not yet exist."
He said lawmakers would work to refine the measure before the next legislative session — which starts in January 2025.
At a previous hearing, HECO Chief Information Officer Jason Benn said securitization was "literally the cheapest way" for the utility to finance wildfire recovery efforts and future mitigation.
In a statement to Hawaiʻi Public Radio, HECO said it was very disappointed with the outcome in the conference committee.
"Ultimately, moving forward without the right solutions in place will result in higher costs for customers and constrain our ability to move quickly to mitigate wildfire risk and advance important safety work," HECO spokesperson Darren Pai said.
Shares for Hawaiian Electric Industries Inc., HECO's parent company, dropped 7.1% after SB 2922 stalled, according to a report from MarketWatch.
Capstone, a consulting firm that studies utilities under stress for its investor clients, called the development a "significant blow" to Hawaiian Electric Industries.
Capstone said that SB 2922's deferment, as well as the lack of movement on the wildfire fund measure, may increase Hawaiian Electric's risk of filing for bankruptcy later this year.
Bloomberg News reported on Thursday that HEI is considering a partial or full sale of its American Savings Bank subsidiary, according to "people familiar with the matter."
Gov. Josh Green weighed in on the matter on Thursday as well, sending a letter to Keohokalole urging him to reconsider his decision to kill the securitization measure.
Green said he would support lawmakers extending the conference committee deadline through Monday in order to reach an agreement on SB2922.
Keohokalole's office has not responded to requests for comment.
HPR's Maddie Bender contributed to this story.
