Hawaiian Electric Industries, Inc. Q1 FY2026 earnings call

• Maui Wildfire Torch Settlement: Reached key terms in August 2024, final conditions satisfied on April 10, 2026, and first $479 million payment made. • Wildfire Risk Reduction: Submitted first update to Wildfire Mitigation Plan to PUC on April 13, covering 2026 - 2027. • Affordability: Offered customers interest-free payment plans and $50 bill credits, working on strategies to address energy burden. • Rate Rebasing: Submitted joint rate rebasing request with Ulupono Initiative in March, proposing ~5.3% increase phased in over two years. • YAL Generating Station: PUC approved repowering project, with $908 million approved for cost recovery, expecting to seek additional $247 million in future rate proceeding.

For the first quarter of 2026, net income was $30.5 million or $0.18 per share compared to $26.7 million or $0.15 per share in the same quarter of 2025. Utility net income decreased due to higher O&M expenses from severe weather, higher insurance costs, and higher interest expense. Holding company core net loss was $4.8 million compared to $9.9 million in 2025. As of the end of the first quarter, holding company and utility had approximately $10 million and $437 million of unrestricted cash on hand respectively. Moody's upgraded the utility to BA1 from BA2 and the holding company to BA2 from BA3 following the Maui wildfire settlement.

• Will make future Maui wildfire settlement payments in April 2027, 2028, and 2029, with financing plans to use debt, convertible debt, and mix of debt/equity. • Updated CAPEX forecast to reflect YAL approval, expecting ~$157 million in 2026 CAPEX for YAL. • Expect higher O&M in 2026 due to factors like higher insurance premiums, storm response expenses, vegetation management, etc.

• Impact of rising fuel costs on working capital, with higher fuel costs reflected in rates with a lag. • Uncertainty around the timing and outcome of the PUC's review of the rate rebasing proposal and wildfire liability cap rulemaking. • Potential for project costs to exceed approved amounts for YAL repowering project, requiring future rate proceeding to seek recovery.

Q: James Ward with Jefferies asked about phasing of rate rebasing proposal and PUC procedural schedule.

A: Scott Hsu said no change to phasing, waiting for PUC guidance.

Q: James Ward asked about repowering gap carrying cost and interaction with current rebasing.

A: Joe Viola said no interaction as project not in service yet.

Q: James Ward asked about PUC timeline for wildfire liability cap rulemaking.

A: Scott Hsu said PUC hasn't issued formal, expected 18 - 24 months.

Q: James Ward asked about rating agencies' remaining gating items.

A: Scott Hsu said focused on rate rebasing, wildfire risk reduction, liability cap.

Q: Michael Logan with Barclays asked about drivers of increased CAPEX.

A: Paul Ito said due to separately recovered projects like YOW.

Q: Michael Logan asked about timing of second settlement payment.

A: Said have flexibility based on market conditions.

Q: Michael Logan asked about liquidity and bridging gap with fuel costs.

A: Said have significant liquidity available.

Q: Michael Logan asked about bad debt expense with elevated fuel prices.

A: Said peak at ~51 basis points historically.

Q: Michael Logan asked about confidence in rate rebasing approval.

A: Scott Hsu said PUC focused on customer impacts, rebasing proposal tries to moderate impacts.

Q: Michael Logan asked about PIMs achievability.

A: Joe Viola said ongoing discussion to design meaningful PIMs.

Q: James Ward with Jefferies followed up on repowering AFUDC and timing.

A: Explained YAL turbines going into service in different years, recovery to be sought when in service