Hawaiian Electric Stock Plunges 40% After Lawsuit Alleges it Failed to Shut Power Off Ahead of the Maui Wildfires
Hawaiian Electric, a prominent utility provider supplying power to 95% of Hawaii’s residents, experienced a significant blow to its stock value, sinking to a 13-year low with a nearly 40% plummet on Monday morning. The steep decline follows the emergence of a class action lawsuit that asserts the utility’s energized power lines, toppled by strong winds, were responsible for Maui’s devastating wildfires.
The lawsuit, filed over the weekend, contends that Hawaiian Electric Industries failed to take necessary precautions in the face of high wind conditions, which posed an elevated risk of fires caused by fallen power lines. The suit accuses the utility of negligence in its decision not to de-energize the power lines during High Wind Watch and Red Flag Warning conditions. It also alleges that even after some power poles and lines had fallen, the company refrained from de-energizing the lines that were in contact with vegetation or the ground.
However, the exact ignition source of the wildfire remains undetermined.
In response to the lawsuit, Hawaiian Electric’s vice president, Jim Kelly, communicated via email to CNN on Sunday that the utility refrains from commenting on pending litigation. Kelly emphasized the company’s immediate focus on assisting emergency response efforts and restoring power to affected customers.
Kelly acknowledged that Hawaiian Electric does not maintain a formal shut-off program and that precautionary shut-offs necessitate coordination with first responders, as electricity powers the essential water pumps used in firefighting efforts.
The wildfire, which erupted on August 8, resulted in the tragic loss of at least 96 lives, making it the deadliest fire in the United States in over a century and ranking as the nation’s fifth deadliest blaze overall. Preliminary assessments by research firm CoreLogic estimated residential property damages at $1.3 billion, but Hawaii’s Governor Josh Green estimates the losses could approach $6 billion.
In light of the catastrophe, Hawaii’s attorney general’s office initiated an official review of the state’s emergency response and the decision-making processes leading up to the catastrophic wildfires. Amid growing finger-pointing, some officials and residents are directing scrutiny towards the utility for perceived lapses in implementing crucial safety measures.
The National Weather Service in Honolulu had issued multiple warnings about heightened fire risks due to dry conditions and strong winds in the lead-up to the fires. While such conditions have led to numerous wildfires, the lawsuit’s accusations and ensuing stock decline spotlight the gravity of the situation.
Unlike some utility companies in California that implement public safety power shutoffs as a preventive measure against wildfires, Hawaiian Electric has not implemented such protocols. These shutoffs are activated based on weather conditions and can temporarily halt service to areas facing increased fire hazards.
Utility providers in California have utilized this strategy for years to mitigate fire risks. Failures to execute these shutoffs have resulted in billions of dollars in damages. In 2019, Pacific Gas and Electric (PG&E) entered into several settlements after it was determined that their electrical equipment caused the 2018 Camp Fire, which claimed 85 lives. These settlements included an $11 billion insurance settlement and $1 billion allocated to affected local governments.
