Hawaiian Electric Knew of Wildfire Threat, but Waited Years to Act - Four years ago, the utility said it needed to do more to prevent its power lines from emitting sparks. It made little progress, focusing on a shift to clean energy.

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During the 2019 wildfire season, one of the worst Maui had ever seen,
Hawaiian Electric concluded that it needed to do far more to prevent
its power lines from emitting sparks.

The utility examined California’s plans to reduce fires ignited by
power lines, started flying drones over its territory and vowed to take
steps to protect its equipment and its customers from the threat of
fire.

Nearly four years later, the company has completed little such work.
Between 2019 and 2022, it invested less than $245,000 on wildfire-
specific projects on the island, regulatory filings show. It didn’t
seek state approval to raise rates to pay for broad wildfire-safety
improvements until 2022, and has yet to receive it.

Now, the company is facing scrutiny, litigation and a financial crisis
over indications that its power lines might have played a role in
igniting the deadliest U.S. wildfire in more than a century. The blaze
has caused at least 110 deaths, destroyed the historic town of Lahaina
and resulted in an estimated billions of dollars in damage.

The fire’s cause hasn’t been determined, but mounting evidence suggests
the utility’s equipment was involved. One video taken by a resident
shows a downed power line igniting dry grass along a road near Lahaina.
A firm that monitors grid sensors reported dozens of electrical
disruptions in the hours before the fire began, including one that
coincided in time with video footage of a flash of light from power
lines.

Hawaiian Electric said it would investigate any role its infrastructure
may have played and cooperate with a separate probe into the fire
launched last week by the Hawaii attorney general.

“We all believe it’s important to understand what happened. And I think
we all believe it’s important to make sure it doesn’t happen again,”
said Shelee Kimura, Hawaiian Electric’s chief executive.
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In response to questions about its wildfire-mitigation spending, a
spokesman for Hawaiian Electric said the company reduces wildfire risk
through its routine utility work, including trimming or removing trees
and upgrading, replacing and inspecting equipment. It said it has spent
about $84 million on maintenance and tree work in Maui County since
2018.
Electrical workers repair power lines leading into Lahaina on Tuesday.
Photo: MIKE BLAKE/REUTERS

The utility has long been a force in Hawaii politics and business. In
the wake of the fire, its finances are reeling. Its stock has plunged
49% this week, and its credit rating was downgraded to junk by S&P.

Hawaiian Electric is the latest utility in the Western U.S. to struggle
following large wildfires, many of which have been sparked by utility
equipment in recent years. PG&E, the Northern California utility giant,
sought bankruptcy protection in 2019 after its power lines ignited a
series of major fires, including the 2018 Camp Fire that killed 84
people and destroyed the town of Paradise, Calif. That had been the
deadliest wildfire in modern U.S. history until the Maui fire.

In recent days, Hawaiian Electric officials have conferred with their
counterparts at PG&E, seeking legal guidance on how to weather a
crisis, people familiar with the matter said. The company is speaking
with restructuring-advisory firms, exploring options to address its
financial and legal challenge, said people familiar with the matter.

Since PG&E’s bankruptcy, Hawaiian Electric has made reference in
regulatory filings to the risks of power-line fires, but it waited
years to take significant action, documents and interviews show. During
that period, the company was undertaking a state-mandated shift to
renewable energy.

The growing risk of wildfire on Maui had been known for years. The
number of acres burned on the island soared to 39,000 in 2019, from 150
in 1999, according to data compiled by the Hawaii Wildfire Management
Organization, a nonprofit that works with government agencies and the
public.

Several reports released by the group and others in recent years have
said the danger is increasing, in part, because of invasive plants that
have overtaken former sugar and pineapple plantations. Roughly one-
quarter of state land in Hawaii is now covered by invasive grasses and
shrubs, according to a study by the University of Hawaii and think tank
East-West Center.
Wildfires in Maui since 2000

Invasive-dominant

grassland or shrubland

Wildfires

In a wildfire area

Not in a wildfire area

Kahului

MAUI

Lahaina

Detail

Note: Grasslands as of 2017
Sources: NASA (wildfires); U.S. Geological Survey (grasslands)
Jake Steinberg/THE WALL STREET JOURNAL

In 2018, winds from Hurricane Lane passing to the south helped fuel
fires that burned more than 2,000 acres on Maui. The next year was far
worse, with the most acres blackened in decades, data from the wildfire
management group show.

That July, a 9,000-acre blaze blew out of control in Central Maui,
burning 25 acres a minute, according to the Maui News. The blaze
prompted hundreds of evacuations and came within 150 feet of Hawaiian
Electric’s power plant on Maui, according to the paper. The plant
accounts for as much as 80% of the island’s power supplies.
A brush fire on Maui in 2019. Fires burned 39,000 acres on Maui that
year. Photo: Chris Sugidono/County of Maui/Associated Press

At the end of 2019, Hawaiian Electric issued a press release about
wildfire risk. It said it would install heavier, insulated conductors
on Maui and Oahu to minimize the risk of sparks when winds picked up,
as well as technology to detect disruptions when the conductors came
into contact with vegetation or each other. It said it would apply fire
retardant on poles in risky areas and consider installing cameras and
other devices to monitor weather conditions during fire season.

In filings over the next two years with the Hawaii Public Utilities
Commission, which is tasked with approving utility projects and
spending, the company made only passing reference to wildfire
mitigation.
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Residents were able to enter Lahaina on Wednesday for the first time
since wildfires devastated the historic town last week. WSJ joined
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damage. Photo: Yuki Iwamura/AFP
Renewables push

Former regulators and energy company officials said the utility was
focused at that time on procuring renewable energy. Hawaii has been on
a push to convert to renewables since 2008, when a run-up in oil prices
sent electrical rates at Hawaiian Electric—which relied on petroleum
imports for 80% of its energy supply—through the roof. In 2015,
lawmakers passed legislation mandating that the state derive 100% of
its electricity from renewable sources by 2045, the first such
requirement in the U.S.

The company dove into reaching the goals, stating in 2017 that it would
reach the benchmark five years ahead of schedule.
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In 2019, under pressure to replace the output of two conventional power
plants set to retire, the company sought to contract for 900 megawatts
of renewable energy, the most it had pursued at any one time.

“You have to look at the scope and scale of the transformation within
[Hawaiian Electric] that was occurring throughout the system,” said
Mina Morita, who chaired the state utilities commission from 2011 to
2015. “While there was concern for wildfire risk, politically the focus
was on electricity generation.”

The drive to reach the renewable goals also preoccupied private energy
companies working with Hawaiian Electric and state energy officials,
said Doug McLeod, a consultant who served for several years as the Maui
county energy commissioner.

“Looking back with hindsight, the business opportunities were on the
generation side, and the utility was going out for bid with all these
big renewable-energy projects,” he said. “But in retrospect, it seems
clear, we weren’t as focused on these fire risks as we should have
been.”
Burned cars in front of homes destroyed by the wildfire in Lahaina
Photo: Justin Sullivan/Getty Images

A 2020 management audit of the company found that its enterprise risk
analysis was largely focused on financial risk, with limited
consideration of operational and business risk. And the division within
the company that oversaw power line operations had significant
management problems, the audit found.

Henry Curtis, who leads an environmental and community group that
regularly weighs in on utility projects, said Hawaiian Electric
officials told him privately that they didn’t believe Hawaii was prone
to the type of devastating wildfires roaring through California. The
utility officials thought the state’s parched grasslands were less of
an urgent threat than California’s vast and dry timberlands, he said.

Shirley Daniel, a former Hawaiian Electric board member, said the
utility hadn’t seen Hawaiian fires as a major threat. She likened the
Maui disaster to the devastation Hurricane Sandy brought in 2012 to a
New York City area that hadn’t before experienced so much damage from a
tropical storm.
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“I think the world is going to have to be realistic about these
things,” she said about the changing nature of natural disasters.

Prompted by the increase in wildfires, a Maui county government
commission in July 2021 examined the local prevention and response
system and warned county and state officials of the growing fire
threat.

“The investigation found that the number of incidents from a
combination of wild/brush/forest fires appears to be increasing, and
that this increase poses an increased threat to citizens, properties,
and sacred sites,” the commission’s report concluded.

The report said not enough was being done to address the concerns. It
recommended a number of solutions, including better management of
vegetation around power lines and creating fuel buffers around the
lines.

County and state officials didn’t return calls seeking comment.
Sweeping Wildfire
Fires started on Tuesday devastated Lahaina.

Destroyed building

6:37 a.m., Tuesday First reported fire. By 9:00 a.m., the fire is
declared 100% contained

4:46 p.m. Fire moves west.

2

5

Sometime Tuesday video shows downed power line igniting dry grass

Lahaina

3

4

3:30 p.m. Flare-up reported.

1

Front Street

Historic district

11:38 p.m., Monday Sensor detects problem in power grid east of Lahaina

Pacific Ocean

Area of

detail

HAWAII

0.5 mile

0.5 km

Sources: Whisker Labs; Maxar Technologies, Planet Labs (satellite
images); OpenStreetMap (building footprints)

The month the county report was released, Hawaiian Electric broached
wildfire risk with the utilities commission. In a proceeding focused on
modernizing the power grid, it proposed some wildfire-mitigation work
on Maui, including upgrading power lines and installing weather cameras
and smart technology—some of the initiatives mentioned in its 2019
announcement.

The regulatory proceeding stalled, and only recently resumed.

Jennifer Potter, who served as a state utilities commissioner from 2018
until November 2022, said the utility should have been more aggressive
in presenting its plans on wildfire risk. “With the increase in
wildfires that did occur, in particular on Maui, it wouldn’t have been
unreasonable for [Hawaiian Electric] to have a more robust wildfire
plan,” she said.
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Potter also said the commission itself could have been more assertive
in demanding that the utility give priority to wildfire mitigation.
“Because it wasn’t an emergency, it didn’t receive the attention that
it needed,” she said. She called it a “missed opportunity.”

In June 2022, Hawaiian Electric sought regulatory permission to raise
rates to fund a more comprehensive plan to prepare the grid for new
climate change-related stresses, including elevated risk of wildfire.
It said it planned to spend about $190 million across Hawaii on
removing potentially hazardous trees, replacing and upgrading power
lines, and other protective measures, many of which have been
undertaken by other utilities throughout the West.

As in many regulatory proceedings, the proposal has taken months to
advance. The state utilities commission and other stakeholders asked
dozens of questions of the company. In responses filed before the Maui
fire occurred, Hawaiian Electric said it believed there was an urgent
need to complete the upgrades, but that it wouldn’t start on the work
until it has state approval to recoup costs from customers—a common
occurrence when utilities seek to make large investments.

In a filing in June, the commission said: “In light of the asserted
urgency of these transmission and distribution resiliency upgrades, why
did Hawaiian Electric not begin to initiate some of these projects
sooner?”

In a response earlier this summer, Hawaiian Electric said it hired a
consultant in 2019 to help it, and that it took until the summer of
2022 to craft a plan.

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