Hawaii’s largest electric utility plans to spend $300 million over the next three years, on top of $120 million this year, to reduce wildfire risks.

Hawaiian Electric estimates that its investment this year reduces the risk of its equipment starting such a fire by 60% and that the additional investment through 2027 will bring the company closer to its long-term goal of reducing that risk by 80%. at some point. cost estimated at around $1 billion.

The company, which serves Oahu, Maui, Molokai, Lanai and the island of Hawaii, presented its plans and projections to a panel of state senators on Friday.

Much of the information presented will be part of a wildfire risk mitigation plan that Hawaiian Electric must submit to the state Public Utilities Commission by Jan. 10 as part of an order issued by the PUC on September 13, approximately 13 months after August 8. 2023, Maui wildfire that killed 102 people and destroyed most of Lahaina.

A power line in Lahaina that was damaged by high winds and re-energized after a visual inspection was found by independent analysis to be a major contributing factor to the disaster, leading to a pending $4 billion settlement dollars for fire victims, to be paid primarily by the utility, the state and Kamehameha schools.

Three Senate committees have asked Hawaiian Electric for a briefing on the company’s plan in preparation for the PUC.

“Our number one priority over the last 15 months has been to reduce the risk of another catastrophic wildfire in Hawaii,” Jason Benn, chief transformation officer and chief administrative officer of Hawaiian Electric, told the Senate panel in a conference room at the state Capitol. “We have made significant progress in reducing the risk of wildfires from our equipment. We brought in experts and collaborated with other utilities to leverage best practices and take actions that will have the greatest impact, while considering cost effectiveness.

The biggest improvement this year, from a cost perspective, was the replacement of about 2,000 wooden utility poles with sturdier poles made of wood or steel, at a cost of $61.9 million, according to the presentation of the company.

Other elements of the $120 million spent this year include $12.5 million to replace single-strand copper power lines with stronger aluminum stranded lines, $10.3 million for inspection of the distribution system, $8.6 million for safer fuses and $6.3 million for vegetation management.

Over the next three years, at least one-third of Hawaiian Electric’s planned spending is expected to go toward replacing at least 2,100 poles at a cost of $58.9 million and replacing approximately 9,200 fuses along the power lines with “fire” fuses in high and medium fire risk areas. at a cost of $43.7 million.

Most of the utility’s existing fuses, which stop the transmission of electricity in the event of a power surge, can emit molten embers or sparks when they explode to prevent further damage to the system.

“We think this is an important piece of fire risk mitigation,” Colton Ching, senior vice president of planning and technology at Hawaiian Electric, told the Senate panel. “We want to do as much as possible. … We’re trying to wrap this up in 2026 in our high and medium risk areas.

Other equipment improvements planned over the next three years include improved energy absorbers for lightning strikes, fault indicators, better circuit shutdown and reopening devices, weather stations, cameras able to identify smoke and stronger power lines.

Ching said Hawaiian Electric has 53 weather stations, which are part of a public safety power shutoff program the company implemented in July.

The program is designed to cut off power to high wildfire risk areas if wind gusts exceed 45 mph and relative humidity falls below 45 percent. Since July, Hawaiian Electric has warned customers of a possible safety outage twice, including once on Maui on Oct. 16, although no outage occurred because the trip conditions were ultimately not met.

According to the company’s plan, another 250 weather stations are planned over the next three years, at a cost of $9 million.

Installing 27 miles of stronger power lines, estimated at $15.3 million, is also part of the plan and would follow 16 miles of line upgrades this year.

The company also plans to replace 800 miles of older bare-wire lines with insulated lines, although this is a longer-term and more expensive proposition that may also require pole upgrades due to extra weight.

Ching told the Senate committee the company plans to install about 50 miles of insulated lines per year for about $100 million starting in 2026.

Another longer-term, but more uncertain, renovation involves putting overhead power lines underground. Ching said 51 percent of the utility’s distribution lines are now underground, and the company knows Lahaina residents are particularly interested in seeing the historic city’s restoration include underground lines.

However, Ching also said much depends on Maui County’s rebuilding plans and obtaining permits, which could take many years. Feasibility, including a cost of $11 million per mile for underground lines versus $1 million per mile for overhead lines, must also be evaluated.

“It becomes quite intrusive when you think about installing the basement in a place that is already built, a place where there are already houses, already streets, already sidewalks, already water, wastewater, telecommunications lines on the road,” he told the panel. “If you’re looking at moving from an overhead system to an underground system in an existing community, it’s going to be a lot more expensive and a lot more difficult than building it in a completely new community that’s basically a field right now.”

In some areas, insulating overhead lines can be just as effective in reducing wildfire risks as installing lines underground, Ching added.

To reduce improvement costs for taxpayers, Ching said the company applied for $659 million in federal grants, but grant requests totaling about $550 million were not approved.

Grant applications totaling about $13 million are still pending, and the company received a $95 million federal grant in 2023 after the Maui fire to fund half of a transmission resiliency plan and $190 million climate adaptation distribution plan the company proposed to the PUC in June. 2022.

Earlier this year, Hawaiian Electric wanted lawmakers to pass a bill that would help reduce the cost of funding wildfire hazard mitigation work, which is passed on to ratepayers. But the bill, which would allow the utility to sell bonds backed by taxpayer revenues, was defeated, in part due to questions about wildfire risk mitigation plans.

Sen. Jarrett Keohokalole, chairman of the Senate Commerce and Consumer Protection Committee, was instrumental in the bill’s failure. As lead chair of Friday’s panel, Keohokalole (D, Kaneohe-Kailua) said Hawaiian Electric’s presentation was helpful.

Sen. Glenn Wakai, chairman of the Senate Public Safety and Intergovernmental and Military Affairs Committee, questioned whether Hawaiian Electric would implement its next plan.

“Why should the public have confidence in you and HECO to do the things you just mentioned today,” Wakai said, “when your track record proves that you just make plans and really don’t put into action do all the things you say you plan to do?

Wakai (D, Kalihi-Salt Lake-Pearl Harbor) cited a 2019 task force report that recommended some of the improvements currently being made.

Ching noted that the report, produced by stakeholders including the utility as well as representatives from state and federal agencies, led to significant investments in vegetation management, pole replacement and demand for $95 million federal grant before the Lahaina fire, even though the report classified the wildfires. as a lesser threat than hurricanes, floods, tsunamis, earthquakes and cyberattacks.

Wakai also criticized Hawaiian Electric for not spending more on wildfire risk mitigation in recent years, before the Lahaina disaster, when about $450 million was paid out in dividends to shareholders of the utility’s parent company, Hawaiian Electric Industries Inc.

HEI suspended its dividends after the Lahaina fire and agreed to pay $2 billion toward the $4 billion settlement pending state court approval.

Benn said Hawaiian Electric ratepayers will not cover settlement costs under any circumstances.

“Customers won’t pay a cent for the settlement,” he told the panel. “There is no impact on the bill. If the settlement is approved, it will be entirely borne by our shareholders and our company.

Hawaiian Electric plans to pay off its outstanding $1.92 billion bond, after an earlier contribution of $75 million, in four equal annual installments of approximately $479 million. The first payment, expected at the end of 2025, is covered by the $558 million raised by HEI in September through the sale of new shares.

On Friday, HEI reported a financial loss of $104 million for the quarter ended September 30, which included an after-tax cost of $151 million for wildfire claims. HEI recognized most of the settlement costs in the previous quarter as part of a $1.3 billion financial loss.