Hawaiian Electric on the Brink

The Lahaina fires began on Tuesday, Aug. 8.; HE stock took over a 50% hit this Monday and Tuesday.

Whether justified or not, Hawaiian Electric Industries is now accused of bearing major responsibility for the Lahaina fire:

The selloff continues in shares of troubled utility Hawaiian Electric Industries.

The stock fell another 24% on Tuesday after Monday’s plunge, on fears the utility could be held liable for the wildfires that have devastated Maui.

The stock recently traded around $16.

Wells Fargo analysts cut their price target to $25 per share on Monday. “While it remains unclear if any of HE’s equipment directly caused any of the wildfires, we believe it prudent to account for the risk,” they wrote.

All told, the stock has dropped about 50% so far this week, according to FactSet; that’s the stock's worst two-day selloff on record dating back to 1983, according to Dow Jones Market Data.

Honolulu: as power needs grow, the tangles get worse.

In 2017, as California wildfire liabilities drove PG&E into bankruptcy, I wrote:

Telephone poles and overhead power lines have been a ubiquitous part of the Honolulu landscape ever since I can remember. They're still in every neighborhood a half-century later despite the danger and poor esthetics. The cost of burying infrastructure (electricity, trains) is enormously expensive, so little has been done.

In Napa and Sonoma counties Pacific Gas and Electric faces similar costs to Hawaiian Electric and did not bury most of its power lines.

At today's close, HE had a $1.6 billion market cap, and there's not much flesh to scavenge from its bones. Any substantial recompense will have to come from Hawaii ratepayers.