In the Wall Street Journal, Founder and former president of RAM Management Group R.A. Moss explores how Hawaiian Electric’s behavior as a monopoly has on multiple fronts incentivized behavior that increased risks for its creditors and shareholders. Moss specifically highlights the Hu Honua lawsuit as part of this broader narrative, detailing how Hawaiian Electric’s unchecked market position led to wildfire risks, electric grid reliability challenges, and high electricity prices. A notable passage reads:

  • Hawaiian Electric’s monopoly status has put shareholders and creditors at risk. With potential damages far exceeding its self-reported $165 million annual liability insurance policy and $500 million in property-damage insurance, Hawaiian Electric is at financial risk. According to estimates from research firm Capstone, the utility faces more than $5 billion in potential damage claims. If these estimates are correct, the utility wouldn’t be able to cover 20% of the damages sought.
  • Further, Hawaiian Electric didn’t disclose its insurance information to the Securities and Exchange Commission in advance of the tragedy, only disclosing it to state regulators after the fire took place. This oversight has put Hawaiian Electric’s shareholders at risk, leading to a December 2023 class-action lawsuit filed by Hawaiian Electric shareholder Patrick Kallaus. The suit accuses Hawaiian Electric of misleading shareholders and breaching fiduciary duties.
  • For creditors, the problem is deeper. Hawaiian Electric’s latest 10-K filing discloses $88 million in short-term debt and nearly $1.7 billion in long-term debt, of which more than $350 million is due to be paid out over the next five years. Many of the holders of these long-term bonds are teachers’ pensions and life-insurance companies. Their beneficiaries may also be affected by the utility’s alleged mismanagement. 
  • Ultimately, the long-term solution for the financial health of Hawaii and the customers served by Hawaiian Electric is for management to welcome greater competition. Hawaiian Electric’s mismanaged monopoly has failed. The utility’s management and board of directors must chart a healthier financial course. 

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