Hawaiian Electric shares plummet 40% after Maui wildfires lawsuit

The cause of the Maui wildfires remains under investigation.

August 15, 2023, 2:40 PM

Shares of Hawaiian Electric have plummeted nearly 40% since trading opened Monday over concerns that the utility company could be held liable for damage wrought by the Maui wildfires.

A class-action lawsuit filed against Hawaiian Electric on Saturday alleges that the company "inexcusably kept their power lines energized" despite forecasts of high winds that could topple power lines and potentially ignite a fast-spreading blaze. Hawaiian Electric provides power for 95% of Hawaii residents, according to the company's website.

The wildfires that erupted on the Hawaiian island of Maui on Aug. 8 have claimed the lives of at least 99 people as of Tuesday, while many more remain unaccounted for, according to authorities.

Much of the historic community of Lahaina has been "destroyed," officials said, and the inferno has burned thousands of residential and commercial buildings to the ground.

The estimated value of the roughly 2,700 buildings damaged in Lahaina as of Sunday totals $5.6 billion, Hawaii Gov. Josh Green said in a video statement.

On Tuesday, S&P Global Ratings announced that it had downgraded Hawaiian Electric's credit rating and warned of potential additional downgrades in the coming months, citing the class-action litigation.

"While the full resolution of these lawsuits may take years, should the plaintiffs prevail, the company's financial measures would materially deteriorate," S&P Global Ratings said in the announcement.

Authorities have yet to determine the cause of the Maui wildfires, the fifth-deadliest wildfire in U.S. history and the deadliest in more than a century.

Hawaiian Electric, which oversees subsidiary Maui Electric, did not immediately respond to ABC News' request for comment.

In response to a previous query from ABC News about the class-action lawsuit, Jim Kelly, vice president for government and community relations and corporate communications for Hawaiian Electric, said in a statement that the company would cooperate with local officials in their investigation of the cause of the wildfires.

"As has always been our policy, we don't comment on pending litigation. Our immediate focus is on supporting emergency response efforts on Maui and restoring power for our customers and communities as quickly as possible," Kelly said. "At this early stage, the cause of the fire has not been determined and we will work with the state and county as they conduct their review."

Hawaii's Governor Josh Green speaks about the Maui fire during a media conference in Kahului on Maui island, Hawaii, Aug. 12, 2023.
Mike Blake/Reuters

At a news conference on Monday, Hawaiian Electric President and CEO Shelee Kimura said that an investigation is underway. When pressed about why power lines were not de-energized during powerful winds, Kimura said that, unlike California, the state does not have a shut-off program. She described such programs as "controversial," adding that they're not universally accepted and create a hardship for vulnerable residents and those with medical needs.

Kimura also noted that electricity has powered the pumps that in turn have provided water to fight the fire.

"We all believe it's important to understand what happened," Kimura said. "And we all believe it's important to make sure this doesn't happen again."

The wildfire in the historic Maui community of Lahaina has burned a total of 2,170 acres since Aug. 8 and is 85% contained, according to a press release from Maui County on Monday.

Meanwhile, the Upcountry/Kula wildfire, which was initially reported on Aug. 8, has burned a total of 678 acres and is now 65% contained, officials said.

The Pulehu/Kihei wildfire, also initially reported on Aug. 8, was declared 100% contained on Saturday and remains so. However, 100% containment does not mean the blaze has been extinguished, but rather that firefighters have the flames fully surrounded by a perimeter, according to Maui County.

Hawaiian Electric has restored power to about 80% of the customers who have been without electricity since Aug. 8, the company said in a statement on Monday.

Hawaii Gov. Josh Green said at a news conference Monday night that 2,000 rooms have been secured for those displaced by the Maui fires.

In addition to loss of life and the damaged property, the Maui wildfires have also "left severe mental stress and emotional devastation in its wake," according to the class-action lawsuit filed against Hawaiian Electric.