House committee hears debate on wildfire liability trust fund; decision deferred

The House Committee on Energy & Environmental Protection on March 11 took testimony on Senate Bill 897, which would establish a wildfire liability trust fund to be placed within the Department of Commerce and Consumer Affairs for administrative purposes. After several hours of testimony from utilities, regulators and advocacy groups, the committee deferred decision making to a follow‑up meeting scheduled March 12 at 11:15 a.m.

Why it matters: Proponents told the committee the measure would shield customers and the broader economy from the cost of unlimited wildfire liability while helping Hawaiian Electric recover an investment‑grade credit rating. Opponents warned the bill would cap recoveries for some claimants and could shift costs to ratepayers unless shareholder commitments are increased and governance and oversight are tightened.

Hawaiian Electric Vice President Jason Ben, testifying in support, urged the committee to insert the contents of House Bill 982, HD 3 into SB 897 and adopt technical amendments the company proposed. Ben said the measure ‘‘is forward looking and remains in the public interest, by protecting property owners, renters, insurers, and the economy’’ and argued it would ‘‘preserve accountability for wildfire risk mitigation.’’ He described the company’s financing challenge, saying Hawaiian Electric ‘‘must prioritize raising an additional $1,500,000,000 of our $2,000,000,000 share of the global settlement over the next four years, from shareholders and with no customer contribution.’’

Company witnesses outlined a proposed compromise that the utility said would increase total shareholder contributions (the testimony cited $105,000,000) and reduce the portion expected from customers (the testimony cited roughly $900,000,000 under one proposal). Hawaiian Electric said its illustrative analysis (in written testimony) modeled a $250 million capital need for near‑term safety and resilience investments and concluded the credit‑spread improvement could ‘‘pay off the $4 charge within, I think, five years of the restoration of the credit rating.’’ The company offered to provide the committee additional modeling and interest‑rate scenarios after the hearing.

Regulators and consumer advocates spoke cautiously. Daniel Park, appearing for the Public Utilities Commission, and Michael Angelo, executive director of the Division of Consumer Advocacy (DCCA), stood on written comments and answered members’ questions but said there is uncertainty about the timing and magnitude of any credit‑rating benefit. Angelo said the DCCA supports a multi‑pronged approach and prefers a ‘‘balanced sharing of the financial risk between shareholders and ratepayers’’ while noting the bill attempts to address one of several factors affecting creditworthiness.

Civil‑justice and consumer‑protection advocates raised objections. Evan Oi of the Hawaii Association for Justice said the bill’s liability caps could ‘‘undercut consumer rights’’ and expressed concerns about the breadth of discretion given to an executive director in the bill. Janine Suki of Hawaiian Telcom urged clarifying language tying any obligations to existing FCC pole‑attachment agreements. Beth Amaro of Kauai Island Utility Cooperative said KIUC stood on written comments and was available for questions.

Several clean‑energy developers and industry groups — including Ulupono Initiative, AES Hawaii, Clearway Energy Group and independent power producers — generally supported the bill, saying it would reduce financing risk for projects tied to Hawaiian Electric’s procurement. Testimony from many of those parties said they support amendments that preserve timely payments and limit unintended cross‑subsidies.

Committee action: At the end of the hearing the committee voted to defer decision making on SB 897 (along with two other bills on the same day) to the committee’s next meeting on March 12 at 11:15 a.m. The committee said extra time was needed to sort through proposed amendments, governance language and shareholder‑contribution mechanics before final action.

Where it goes from here: Committee staff and stakeholders indicated they will circulate red‑lines and supplemental modeling ahead of the March 12 decision meeting. The record includes written testimony and several requests for follow‑up data from Hawaiian Electric and DCCA.

Quotes in context: During questioning, Ben said the fund ‘‘is forward looking and remains in the public interest’’ and described it as an element of restoring creditworthiness. Michael Angelo said DCCA’s position is the bill ‘‘needs to be a balanced sharing of the financial risk between shareholders and ratepayers.’’

What the transcript shows and does not show: The committee record contains multiple illustrative dollar figures and models presented by Hawaiian Electric and referenced by members; the transcript and written testimony show those figures were illustrative and based on point‑in‑time interest assumptions. The committee did not adopt final amendment language on March 11 and took no vote to approve or reject the bill; the only formal action recorded was the deferral to March 12.

Next steps: Committee staff will post an agenda with proposed amendments for the March 12 meeting. Stakeholders told the committee they will submit additional analyses and red‑lines in advance of that session.