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|
Exact Name of Registrant
|
Commission
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I.R.S. Employer
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as Specified in Its Charter
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File Number
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Identification No.
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Hawaiian Electric Industries, Inc.
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1-8503
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99-0208097
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Hawaiian Electric Company, Inc.
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1-4955
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99-0040500
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Registrant
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Title of each class
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Trading Symbol
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Name of each exchange
on which registered
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Hawaiian Electric Industries, Inc.
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Common Stock, Without Par Value
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|
HE
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New York Stock Exchange
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Registrant
|
|
Title of each class
|
Hawaiian Electric Industries, Inc.
|
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None
|
Hawaiian Electric Company, Inc.
|
|
Cumulative Preferred Stock
|
|
|
|
Hawaiian Electric Industries, Inc.
|
Yes
|
☒
|
No
|
☐
|
|
Hawaiian Electric Company, Inc.
|
Yes
|
☐
|
No
|
☒
|
Hawaiian Electric Industries, Inc.
|
Yes
|
☐
|
No
|
☒
|
|
Hawaiian Electric Company, Inc.
|
Yes
|
☐
|
No
|
☒
|
Hawaiian Electric Industries, Inc.
|
Yes
|
☒
|
No
|
☐
|
|
Hawaiian Electric Company, Inc.
|
Yes
|
☒
|
No
|
☐
|
Hawaiian Electric Industries, Inc.
|
Yes
|
☒
|
No
|
☐
|
|
Hawaiian Electric Company, Inc.
|
Yes
|
☒
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No
|
☐
|
Hawaiian Electric Industries, Inc.:
|
|
|
|
Hawaiian Electric Company, Inc.:
|
|
|
|
Large accelerated filer
|
☒
|
Smaller reporting company
|
☐
|
Large accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Accelerated filer
|
☐
|
Emerging growth company
|
☐
|
Accelerated filer
|
☐
|
Emerging growth company
|
☐
|
Non-accelerated filer
|
☐
|
|
|
Non-accelerated filer
|
☒
|
|
|
Hawaiian Electric Industries, Inc.
|
Yes
|
☐
|
No
|
☐
|
|
Hawaiian Electric Company, Inc.
|
Yes
|
☐
|
No
|
☐
|
Hawaiian Electric Industries, Inc.
|
Yes
|
☐
|
No
|
☒
|
|
Hawaiian Electric Company, Inc.
|
Yes
|
☐
|
No
|
☒
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate market value
of the voting and non-
voting common equity
held by non-affiliates of
the registrants as of
|
|
Number of shares of common stock
outstanding of the registrants as of
|
||
|
|
June 30, 2019
|
|
June 30, 2019
|
|
February 13, 2020
|
Hawaiian Electric Industries, Inc. (Without Par Value)
|
|
$4,745,752,027
|
|
108,972,492
|
|
108,973,328
|
Hawaiian Electric Company, Inc.
($6-2/3 Par Value)
|
|
None
|
|
16,751,488
|
|
17,048,783
|
|
|
|
|
|
|
|
|
|
This combined Form 10-K represents separate filings by Hawaiian Electric Industries, Inc. and Hawaiian Electric Company, Inc. Information contained herein relating to any individual registrant is filed by each registrant on its own behalf. Hawaiian Electric makes no representations as to any information not relating to it or its subsidiaries.
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Page
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|
|
Cautionary Note Regarding Forward-Looking Statements
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||
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|
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Information About Our Executive Officers (HEI)
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||
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Item 16.
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Form 10-K Summary
|
|
Terms
|
|
Definitions
|
|
|
|
ABO
|
|
Accumulated benefit obligation
|
ACL
|
|
Allowance for credit losses as determined under the new credit loss standard (ASU No. 2016-13), which requires the measurement of lifetime expected credit losses for financial assets held at the reporting date (based on historical experience, current conditions and reasonable and supportable forecasts)
|
ADIT
|
|
Accumulated deferred income tax balances
|
AES Hawaii
|
|
AES Hawaii, Inc.
|
AFS
|
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Available-for-sale
|
AFUDC
|
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Allowance for funds used during construction
|
ALL
|
|
Allowance for loan losses, as determined under the existing credit loss standard, requires recording the allowance based on an incurred loss model
|
AOCI
|
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Accumulated other comprehensive income (loss)
|
AOS
|
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Adequacy of supply
|
APBO
|
|
Accumulated postretirement benefit obligation
|
ARO
|
|
Asset retirement obligations
|
ASB
|
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American Savings Bank, F.S.B., a wholly-owned subsidiary of ASB Hawaii Inc.
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ASB Hawaii
|
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ASB Hawaii, Inc. (formerly American Savings Holdings, Inc.), a wholly-owned subsidiary of Hawaiian Electric Industries, Inc. and the parent company of American Savings Bank, F.S.B.
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ASC
|
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Accounting Standards Codification
|
ASU
|
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Accounting Standards Update
|
Btu
|
|
British thermal unit
|
CAA
|
|
Clean Air Act
|
CERCLA
|
|
Comprehensive Environmental Response, Compensation and Liability Act
|
Chevron
|
|
Chevron Products Company, which assigned their fuel oil supply contracts with the Utilities to Island Energy Services, LLC
|
CIAC
|
|
Contributions in aid of construction
|
CIS
|
|
Customer Information System
|
Company
|
|
When used in Hawaiian Electric Industries, Inc. sections and in the Notes to Consolidated Financial Statements, “Company” refers to Hawaiian Electric Industries, Inc. and its direct and indirect subsidiaries, including, without limitation, Hawaiian Electric Company, Inc. and its subsidiaries (listed under Hawaiian Electric); ASB Hawaii, Inc. and its subsidiary, American Savings Bank, F.S.B.; Pacific Current, LLC and its subsidiaries, Hamakua Holdings, LLC (and its subsidiary, Hamakua Energy, LLC) and Mauo Holdings, LLC (and its subsidiary, Mauo, LLC) and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.).
When used in Hawaiian Electric Company, Inc. sections, “Company” refers to Hawaiian Electric Company, Inc. and its direct subsidiaries.
|
Consolidated Financial Statements
|
|
HEI’s or Hawaiian Electric’s Consolidated Financial Statements, including notes, in Item 8 of this Form 10-K
|
Consumer Advocate
|
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Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii
|
CBRE
|
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Community-based renewable energy
|
D&O
|
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Decision and order from the PUC
|
DBF
|
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State of Hawaii Department of Budget and Finance
|
DG
|
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Distributed generation
|
DER
|
|
Distributed energy resources
|
Dodd-Frank Act
|
|
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
|
DOH
|
|
State of Hawaii Department of Health
|
DRIP
|
|
HEI Dividend Reinvestment and Stock Purchase Plan
|
ECAC
|
|
Energy cost adjustment clause
|
ECRC
|
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Energy cost recovery clause
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EEPS
|
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Energy Efficiency Portfolio Standards
|
EGU
|
|
Electrical generating unit
|
EIP
|
|
2010 Executive Incentive Plan, as amended
|
EPA
|
|
Environmental Protection Agency - federal
|
Terms
|
|
Definitions
|
|
|
|
EPS
|
|
Earnings per share
|
ERISA
|
|
Employee Retirement Income Security Act of 1974, as amended
|
ERL
|
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Environmental Response Law of the State of Hawaii
|
ERP/EAM
|
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Enterprise Resource Planning/Enterprise Asset Management
|
ESG
|
|
Environmental, social and governance
|
Exchange Act
|
|
Securities Exchange Act of 1934
|
FASB
|
|
Financial Accounting Standards Board
|
FDIC
|
|
Federal Deposit Insurance Corporation
|
FDICIA
|
|
Federal Deposit Insurance Corporation Improvement Act of 1991
|
federal
|
|
U.S. Government
|
FERC
|
|
Federal Energy Regulatory Commission
|
FHLB
|
|
Federal Home Loan Bank
|
FHLMC
|
|
Federal Home Loan Mortgage Corporation
|
FICO
|
|
Fair Isaac Corporation
|
Fitch
|
|
Fitch Ratings, Inc.
|
FNMA
|
|
Federal National Mortgage Association
|
FRB
|
|
Federal Reserve Board
|
GAAP
|
|
Accounting principles generally accepted in the United States of America
|
GHG
|
|
Greenhouse gas
|
GNMA
|
|
Government National Mortgage Association
|
Gramm Act
|
|
Gramm-Leach-Bliley Act of 1999
|
Hamakua Energy
|
|
Hamakua Energy, LLC, an indirect subsidiary of Pacific Current and successor in interest to Hamakua Energy Partners, L.P., an affiliate of Arclight Capital Partners (a Boston based private equity firm focused on energy infrastructure investments) and successor in interest to Encogen Hawaii, L.P.
|
Hawaii Electric Light
|
|
Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc.
|
Hawaiian Electric
|
|
Hawaiian Electric Company, Inc., an electric utility subsidiary of Hawaiian Electric Industries, Inc. and parent company of Hawaii Electric Light Company, Inc., Maui Electric Company, Limited, HECO Capital Trust III (unconsolidated financing subsidiary), Renewable Hawaii, Inc. and Uluwehiokama Biofuels Corp.
|
Hawaiian Electric’s MD&A
|
|
Hawaiian Electric Company, Inc.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K
|
HEI
|
|
Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc., Pacific Current, LLC and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.)
|
HEI’s 2020 Proxy Statement
|
|
Selected sections of Proxy Statement for the 2020 Annual Meeting of Shareholders of Hawaiian Electric Industries, Inc. to be filed after the date of this Form 10-K and not later than 120 days after December 31, 2019, which are incorporated in this Form 10-K by reference
|
HEI’s MD&A
|
|
Hawaiian Electric Industries, Inc.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K
|
HEIRSP
|
|
Hawaiian Electric Industries Retirement Savings Plan
|
HELOC
|
|
Home equity line of credit
|
HPOWER
|
|
City and County of Honolulu with respect to a power purchase agreement for a refuse-fired plant
|
HSFO
|
|
High sulfur fuel oil
|
HTM
|
|
Held-to-maturity
|
IPP
|
|
Independent power producer
|
IRP
|
|
Integrated resource plan
|
IRR
|
|
Interest rate risk
|
Kalaeloa
|
|
Kalaeloa Partners, L.P.
|
kV
|
|
Kilovolt
|
kW
|
|
Kilowatt/s (as applicable)
|
kWh
|
|
Kilowatthour/s (as applicable)
|
LNG
|
|
Liquefied natural gas
|
LSFO
|
|
Low sulfur fuel oil
|
LTIP
|
|
Long-term incentive plan
|
Maui Electric
|
|
Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc.
|
Terms
|
|
Definitions
|
|
|
|
Mauo
|
|
Mauo, LLC, an indirect subsidiary of Pacific Current
|
MBtu
|
|
Million British thermal unit
|
MD&A
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Merger
|
|
As provided in the Merger Agreement (see below), merger of NEE Acquisition Sub II, Inc. with and into HEI, with HEI surviving, and then merger of HEI with and into NEE Acquisition Sub I, LLC, with NEE Acquisition Sub I, LLC surviving as a wholly owned subsidiary of NextEra Energy, Inc.
|
Merger Agreement
|
|
Agreement and Plan of Merger by and among HEI, NextEra Energy, Inc., NEE Acquisition Sub II, Inc. and NEE Acquisition Sub I, LLC, dated December 3, 2014 and terminated July 16, 2016
|
Moody’s
|
|
Moody’s Investors Service’s
|
MOU
|
|
Memorandum of Understanding
|
MPIR
|
|
Major Project Interim Recovery
|
MSFO
|
|
Medium sulfur fuel oil
|
MSR
|
|
Mortgage servicing right
|
MW
|
|
Megawatt/s (as applicable)
|
MWh
|
|
Megawatthour/s (as applicable)
|
NA
|
|
Not applicable
|
NEE
|
|
NextEra Energy, Inc.
|
NEM
|
|
Net energy metering
|
NII
|
|
Net interest income
|
NM
|
|
Not meaningful
|
NPBC
|
|
Net periodic benefits costs
|
NPPC
|
|
Net periodic pension costs
|
O&M
|
|
Other operation and maintenance
|
OCC
|
|
Office of the Comptroller of the Currency
|
OPEB
|
|
Postretirement benefits other than pensions
|
OTS
|
|
Office of Thrift Supervision, Department of Treasury
|
OTTI
|
|
Other-than-temporary impairment
|
Pacific Current
|
|
Pacific Current, LLC, a wholly owned subsidiary of HEI and indirect parent company of Hamakua Energy and Mauo
|
PBO
|
|
Projected benefit obligation
|
PCB
|
|
Polychlorinated biphenyls
|
PGV
|
|
Puna Geothermal Venture
|
PIMs
|
|
Performance incentive mechanisms
|
PPA
|
|
Power purchase agreement
|
PPAC
|
|
Purchased power adjustment clause
|
PSIPs
|
|
Power Supply Improvement Plans
|
PUC
|
|
Public Utilities Commission of the State of Hawaii
|
PURPA
|
|
Public Utility Regulatory Policies Act of 1978
|
PV
|
|
Photovoltaic
|
QF
|
|
Qualifying Facility under the Public Utility Regulatory Policies Act of 1978
|
QTL
|
|
Qualified Thrift Lender
|
RAM
|
|
Rate adjustment mechanism
|
RBA
|
|
Revenue balancing account
|
Registrant
|
|
Each of Hawaiian Electric Industries, Inc. and Hawaiian Electric Company, Inc.
|
REIP
|
|
Renewable Energy Infrastructure Program
|
RFP
|
|
Request for proposals
|
RHI
|
|
Renewable Hawaii, Inc., a wholly-owned nonregulated subsidiary of Hawaiian Electric Company, Inc.
|
ROA
|
|
Return on assets
|
ROACE
|
|
Return on average common equity
|
RORB
|
|
Return on rate base
|
RPS
|
|
Renewable portfolio standards
|
S&P
|
|
Standard & Poor’s
|
SASB
|
|
Sustainability Accounting Standards Board
|
SEC
|
|
Securities and Exchange Commission
|
Terms
|
|
Definitions
|
|
|
|
See
|
|
Means the referenced material is incorporated by reference (or means refer to the referenced section in this document or the referenced exhibit or other document)
|
SLHCs
|
|
Savings & Loan Holding Companies
|
SOIP
|
|
1987 Stock Option and Incentive Plan, as amended. Shares of HEI common stock reserved for issuance under the SOIP were deregistered and delisted in 2015.
|
Spin-Off
|
|
The previously planned distribution to HEI shareholders of all of the common stock of ASB Hawaii immediately prior to the Merger, which was terminated
|
SPRBs
|
|
Special Purpose Revenue Bonds
|
ST
|
|
Steam turbine
|
state
|
|
State of Hawaii
|
Tax Act
|
|
2017 Tax Cuts and Jobs Act (H.R. 1, An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018)
|
TCFD
|
|
Task Force on Climate-related Financial Disclosure
|
TDR
|
|
Troubled debt restructuring
|
Tesoro
|
|
Tesoro Hawaii Corporation dba BHP Petroleum Americas Refining Inc., a fuel oil supplier
|
TOOTS
|
|
The Old Oahu Tug Service, Inc., a wholly-owned subsidiary of Hawaiian Electric Industries, Inc.
|
Trust III
|
|
HECO Capital Trust III
|
UBC
|
|
Uluwehiokama Biofuels Corp., a wholly-owned nonregulated subsidiary of Hawaiian Electric Company, Inc.
|
Utilities
|
|
Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited
|
VIE
|
|
Variable interest entity
|
Cautionary Note Regarding Forward-Looking Statements
|
•
|
international, national and local economic and political conditions—including the state of the Hawaii tourism, defense and construction industries; the strength or weakness of the Hawaii and continental U.S. real estate markets (including the fair value and/or the actual performance of collateral underlying loans held by ASB, which could result in higher loan loss provisions and write-offs); decisions concerning the extent of the presence of the federal government and military in Hawaii; the implications and potential impacts of future Federal government shutdowns, including the impact to our customers to pay their electric bills and/or bank loans and the impact on the state of Hawaii economy; the implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions; and the potential impacts of global and local developments (including economic conditions and uncertainties; unrest, terrorist acts, wars, conflicts, political protests, deadly virus epidemic, potential pandemic or other crisis; the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade);
|
•
|
the effects of future actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling or budget funding, monetary policy, trade policy and tariffs, and other policy and regulatory changes advanced or proposed by President Trump and his administration;
|
•
|
weather, natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the increasing effects of climate change, such as more severe storms, flooding, droughts, heat waves, and rising sea levels) and wildfires, including their impact on the Company’s and Utilities’ operations and the economy;
|
•
|
the timing, speed and extent of changes in interest rates and the shape of the yield curve;
|
•
|
the ability of the Company and the Utilities to access the credit and capital markets (e.g., to obtain commercial paper and other short-term and long-term debt financing, including lines of credit, and, in the case of HEI, to issue common stock) under volatile and challenging market conditions, and the cost of such financings, if available;
|
•
|
the risks inherent in changes in the value of the Company’s pension and other retirement plan assets and ASB’s securities available for sale, and the risks inherent in changes in the value of the Company’s pension liabilities, including changes driven by interest rates;
|
•
|
changes in laws, regulations (including tax regulations), market conditions, interest rates and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements;
|
•
|
the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and of the rules and regulations that the Dodd-Frank Act requires to be promulgated, as amended by the Economic Growth, Regulatory Relief and Consumer Protection Act;
|
•
|
increasing competition in the banking industry (e.g., increased price competition for deposits, or an outflow of deposits to alternative investments, which may have an adverse impact on ASB’s cost of funds);
|
•
|
the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) renewable energy proposals and related costs; reliance by the Utilities on outside parties such as the state, independent power producers (IPPs) and developers; and uncertainties surrounding technologies, solar power, wind power, biofuels, environmental assessments required to meet renewable portfolio standards (RPS) goals and the impacts of implementation of the renewable energy proposals on future costs of electricity;
|
•
|
the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans included in their updated Power Supply Improvement Plans, Demand Response Portfolio Plan, Distributed Generation Interconnection Plan, Grid Modernization Plans, and business model changes, which have been and are continuing to be developed and updated in response to the orders issued by the PUC, the PUC’s April 2014 statement of its inclinations on the future of Hawaii’s electric utilities and the vision, business strategies and regulatory policy changes required to align the Utilities’ business model with customer interests and the state’s public policy goals, and subsequent orders of the PUC;
|
•
|
capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management, distributed generation (DG), combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;
|
•
|
fuel oil price changes, delivery of adequate fuel by suppliers and the continued availability to the electric utilities of their energy cost recovery clauses (ECRCs);
|
•
|
the continued availability to the electric utilities or modifications of other cost recovery mechanisms, including the purchased power adjustment clauses (PPACs), rate adjustment mechanisms (RAMs) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatthour sales;
|
•
|
the ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by RAMs;
|
•
|
the ability of the Utilities to achieve performance incentive goals currently in place;
|
•
|
the impact from the PUC’s implementation of performance-based ratemaking for the Utilities pursuant to Act 005, Session Laws 2018, including the potential addition of new performance incentive mechanisms (PIMs), third-party proposals adopted by the PUC in its implementation of performance-based regulation (PBR), and the implications of not achieving performance incentive goals;
|
•
|
the impact of fuel price levels and volatility on customer satisfaction and political and regulatory support for the Utilities;
|
•
|
the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational impacts of adding intermittent sources of renewable energy to the electric grid;
|
•
|
the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities’ electric systems and as customers reduce their energy usage;
|
•
|
the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
|
•
|
the potential that, as IPP contracts near the end of their terms, there may be less economic incentive for the IPPs to make investments in their units to ensure the availability of their units;
|
•
|
the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements and avoid or mitigate labor disputes and work stoppages;
|
•
|
new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors such as the commercial development of energy storage and microgrids and banking through alternative channels;
|
•
|
cybersecurity risks and the potential for cyber incidents, including potential incidents at HEI, its third-party vendors, and its subsidiaries (including at ASB branches and electric utility plants) and incidents at data processing centers used, to the extent not prevented by intrusion detection and prevention systems, anti-virus software, firewalls and other general IT controls;
|
•
|
failure to achieve cost savings consistent with the minimum $246 million in Enterprise Resource Planning/Enterprise Asset Management
|
•
|
federal, state, county and international governmental and regulatory actions, such as existing, new and changes in laws, rules and regulations applicable to HEI, the Utilities and ASB (including changes in taxation, increases in capital requirements, regulatory policy changes, environmental laws and regulations (including resulting compliance costs and risks of fines and penalties and/or liabilities), the regulation of greenhouse gas emissions, governmental fees and assessments (such as Federal Deposit Insurance Corporation assessments), and potential carbon “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation);
|
•
|
developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;
|
•
|
discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;
|
•
|
decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);
|
•
|
decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);
|
•
|
potential enforcement actions by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC) and/or other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under existing or new banking and consumer protection laws and regulations or with respect to capital adequacy);
|
•
|
the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (i.e., first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);
|
•
|
changes in accounting principles applicable to HEI and its subsidiaries, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting, the effects of potentially required consolidation of variable interest entities (VIEs), or required capital/finance lease or on-balance-sheet operating lease accounting for PPAs with IPPs;
|
•
|
downgrades by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts;
|
•
|
faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage-servicing assets of ASB;
|
•
|
changes in ASB’s loan portfolio credit profile and asset quality and/or mix, which may increase or decrease the required level of provision for loan losses, allowance for loan losses (ALL) and charge-offs;
|
•
|
the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” on January 1, 2020, which may result in more volatility in the provision for loan losses prospectively;
|
•
|
changes in ASB’s deposit cost or mix which may have an adverse impact on ASB’s cost of funds;
|
•
|
unanticipated changes from the expected discontinuance of LIBOR and the transition to an alternative reference rate, which may include adverse impacts to the Company’s cost of capital, loan portfolio and interest income on loans;
|
•
|
the final outcome of tax positions taken by HEI and its subsidiaries;
|
•
|
the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits);
|
•
|
the ability of the Company’s non-regulated subsidiary, Pacific Current, LLC (Pacific Current), to achieve its performance and growth objectives, which in turn could affect its ability to service its non-recourse debt;
|
•
|
the Company’s reliance on third parties and the risk of their non-performance;
|
•
|
the impact of activism that could delay the construction, or preclude the completion, of third-party or Utility projects that are required to meet electricity demand and RPS goals; and
|
•
|
other risks or uncertainties described elsewhere in this report (e.g., Item 1A. Risk Factors) and in other reports previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission (SEC).
|
ITEM 1.
|
BUSINESS
|
December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
HEI
|
45
|
|
|
46
|
|
|
41
|
|
|
41
|
|
|
39
|
|
Hawaiian Electric and its subsidiaries
|
2,670
|
|
|
2,704
|
|
|
2,724
|
|
|
2,662
|
|
|
2,727
|
|
ASB
|
1,126
|
|
|
1,148
|
|
|
1,115
|
|
|
1,093
|
|
|
1,152
|
|
|
3,841
|
|
|
3,898
|
|
|
3,880
|
|
|
3,796
|
|
|
3,918
|
|
Years ended December 31
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(dollars in thousands)
|
Customer accounts*
|
|
Electric sales revenues
|
|
Customer accounts*
|
|
Electric sales revenues
|
|
Customer accounts*
|
|
Electric sales revenues
|
|||||||||
Hawaiian Electric
|
306,368
|
|
|
$
|
1,784,982
|
|
|
305,456
|
|
|
$
|
1,789,527
|
|
|
304,948
|
|
|
$
|
1,592,016
|
|
Hawaii Electric Light
|
86,576
|
|
|
360,019
|
|
|
85,758
|
|
|
371,713
|
|
|
85,925
|
|
|
331,697
|
|
|||
Maui Electric
|
72,522
|
|
|
372,034
|
|
|
71,875
|
|
|
364,967
|
|
|
71,352
|
|
|
323,882
|
|
|||
|
465,466
|
|
|
$
|
2,517,035
|
|
|
463,089
|
|
|
$
|
2,526,207
|
|
|
462,225
|
|
|
$
|
2,247,595
|
|
Mechanism
|
Description
|
Sales decoupling
|
Provides predictable revenue stream by fixing net revenues at the level approved in last rate case (revenues not linked to kWh sales)
|
Revenue adjustment mechanism (RAM)
|
Annually adjusts revenue to recover general inflation of operations and maintenance expenses and baseline plant additions between rate cases
|
Major Projects Interim Recovery adjustment mechanism (MPIR)
|
Reduces regulatory lag and permits recovery in between rate cases through the revenue balancing account (RBA) of costs (net of benefits) for major capital projects including, but not restricted to, projects to advance renewable energy
|
Energy cost recovery clause (ECRC) and purchased power adjustment clause (PPAC)
|
Allows for timely recovery of fuel and purchased power costs to reduce earnings volatility. Symmetrical fossil fuel cost risk-sharing (98% customer/2% utility) mechanism established for Hawaiian Electric and Maui Electric capped at $2.5 million and $0.6 million, respectively. Hawaii Electric Light’s ECRC does not have cost risk-sharing mechanism
|
Pension and post-employment benefit trackers
|
Allow tracking of pension and post-employment benefit costs and contributions above or below the cost included in rates in a separate regulatory asset/liability account
|
Renewable energy infrastructure program
|
Permits recovery of renewable energy infrastructure projects through a surcharge
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||
kWh sales (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
2,439.3
|
|
|
2,410.8
|
|
|
2,334.5
|
|
|
2,332.7
|
|
|
2,396.5
|
|
|||||
Commercial
|
2,793.0
|
|
|
2,810.8
|
|
|
2,867.9
|
|
|
2,911.5
|
|
|
2,977.8
|
|
|||||
Large light and power
|
3,467.2
|
|
|
3,425.1
|
|
|
3,443.3
|
|
|
3,555.1
|
|
|
3,532.9
|
|
|||||
Other
|
40.5
|
|
|
42.1
|
|
|
44.7
|
|
|
46.0
|
|
|
49.3
|
|
|||||
|
8,740.0
|
|
|
8,688.8
|
|
|
8,690.4
|
|
|
8,845.3
|
|
|
8,956.5
|
|
|||||
kWh net generated and purchased (millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net generated
|
4,972.7
|
|
|
4,966.4
|
|
|
4,888.4
|
|
|
4,940.4
|
|
|
5,124.5
|
|
|||||
Purchased
|
4,168.6
|
|
|
4,139.3
|
|
|
4,247.1
|
|
|
4,349.1
|
|
|
4,308.3
|
|
|||||
|
9,141.3
|
|
|
9,105.7
|
|
|
9,135.5
|
|
|
9,289.5
|
|
|
9,432.8
|
|
|||||
RPS (%)
|
28.4
|
|
|
26.7
|
|
|
26.8
|
|
|
25.8
|
|
|
23.2
|
|
|||||
Losses and system uses (%)
|
4.2
|
|
|
4.4
|
|
|
4.7
|
|
|
4.6
|
|
|
4.8
|
|
|||||
Energy supply (December 31)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net generating capability—MW
|
1,737
|
|
|
1,739
|
|
|
1,673
|
|
|
1,669
|
|
|
1,669
|
|
|||||
Firm and other purchased capability—MW1
|
517
|
|
|
517
|
|
|
551
|
|
|
551
|
|
|
555
|
|
|||||
|
2,254
|
|
|
2,256
|
|
|
2,224
|
|
|
2,220
|
|
|
2,224
|
|
|||||
Net peak demand—MW2
|
1,601
|
|
|
1,598
|
|
|
1,584
|
|
|
1,593
|
|
|
1,610
|
|
|||||
Btu per net kWh generated
|
10,860
|
|
|
10,826
|
|
|
10,812
|
|
|
10,710
|
|
|
10,632
|
|
|||||
Average fuel oil cost per MBtu (cents)
|
1,337.6
|
|
|
1,420.2
|
|
|
1,114.3
|
|
|
862.3
|
|
|
1,206.5
|
|
|||||
Customer accounts (December 31)
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential
|
409,689
|
|
|
407,505
|
|
|
406,241
|
|
|
402,818
|
|
|
400,655
|
|
|||||
Commercial
|
54,233
|
|
|
54,075
|
|
|
53,732
|
|
|
55,089
|
|
|
54,878
|
|
|||||
Large light and power
|
700
|
|
|
696
|
|
|
656
|
|
|
670
|
|
|
659
|
|
|||||
Other
|
844
|
|
|
813
|
|
|
1,596
|
|
|
1,585
|
|
|
1,608
|
|
|||||
|
465,466
|
|
|
463,089
|
|
|
462,225
|
|
|
460,162
|
|
|
457,800
|
|
|||||
Electric revenues (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
$
|
791,398
|
|
|
$
|
788,028
|
|
|
$
|
691,857
|
|
|
$
|
638,776
|
|
|
$
|
709,886
|
|
Commercial
|
829,000
|
|
|
843,326
|
|
|
766,921
|
|
|
711,553
|
|
|
798,202
|
|
|||||
Large light and power
|
884,722
|
|
|
882,443
|
|
|
776,808
|
|
|
720,878
|
|
|
802,366
|
|
|||||
Other
|
11,915
|
|
|
12,410
|
|
|
12,009
|
|
|
11,306
|
|
|
13,356
|
|
|||||
|
$
|
2,517,035
|
|
|
$
|
2,526,207
|
|
|
$
|
2,247,595
|
|
|
$
|
2,082,513
|
|
|
$
|
2,323,810
|
|
Average revenue per kWh sold (cents)
|
28.80
|
|
|
29.07
|
|
|
25.86
|
|
|
23.54
|
|
|
25.90
|
|
|||||
Residential
|
32.44
|
|
|
32.69
|
|
|
29.64
|
|
|
27.38
|
|
|
29.62
|
|
|||||
Commercial
|
29.68
|
|
|
30.00
|
|
|
26.74
|
|
|
24.44
|
|
|
26.81
|
|
|||||
Large light and power
|
25.52
|
|
|
25.76
|
|
|
22.56
|
|
|
20.28
|
|
|
22.71
|
|
|||||
Other
|
29.39
|
|
|
29.47
|
|
|
26.82
|
|
|
24.61
|
|
|
27.05
|
|
|||||
Residential statistics
|
|
|
|
|
|
|
|
|
|
||||||||||
Average annual use per customer account (kWh)
|
5,967
|
|
|
5,923
|
|
|
5,779
|
|
|
5,806
|
|
|
5,996
|
|
|||||
Average annual revenue per customer account
|
$
|
1,936
|
|
|
$
|
1,936
|
|
|
$
|
1,713
|
|
|
$
|
1,590
|
|
|
$
|
1,776
|
|
Average number of customer accounts
|
408,768
|
|
|
407,044
|
|
|
403,983
|
|
|
401,796
|
|
|
399,674
|
|
1
|
Since May 2018, Puna Geothermal Venture (PGV) has been offline due to lava flow on Hawaii Island; therefore, PGV’s capability has not been incorporated into the utility’s firm contract power capability as of December 31, 2019.
|
2
|
Sum of the net peak demands on all islands served, noncoincident and nonintegrated.
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
|
||||||||||
|
Island of
Oahu |
|
Island of
Hawaii |
|
Island of
Maui |
|
Island of
Lanai |
|
Island of
Molokai |
|
Total
|
||||||
Net generating and firm purchased capability (MW) as of December 31, 20191
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Conventional oil-fired steam units
|
999.5
|
|
|
50.1
|
|
|
35.9
|
|
|
—
|
|
|
—
|
|
|
1,085.5
|
|
Diesel
|
—
|
|
|
29.5
|
|
|
96.8
|
|
|
9.4
|
|
|
9.8
|
|
|
145.5
|
|
Combustion turbines (peaking units)
|
230.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230.8
|
|
Other combustion turbines
|
—
|
|
|
46.3
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
48.5
|
|
Combined-cycle unit
|
—
|
|
|
56.3
|
|
|
113.6
|
|
|
—
|
|
|
—
|
|
|
169.9
|
|
Biodiesel
|
57.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.4
|
|
Firm contract power2
|
456.5
|
|
|
60.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
516.5
|
|
|
1,744.2
|
|
|
242.2
|
|
|
246.3
|
|
|
9.4
|
|
|
12.0
|
|
|
2,254.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net peak demand (MW)3
|
1,193.0
|
|
|
192.1
|
|
|
204.3
|
|
|
6.1
|
|
|
6.0
|
|
|
1,601.5
|
|
Reserve margin
|
44.8
|
%
|
|
26.1
|
%
|
|
23.2
|
%
|
|
54.1
|
%
|
|
100.0
|
%
|
|
40.7
|
%
|
Annual load factor
|
65.4
|
%
|
|
66.7
|
%
|
|
62.5
|
%
|
|
64.4
|
%
|
|
61.7
|
%
|
|
65.2
|
%
|
kWh net generated and purchased (millions)
|
6,833.8
|
|
|
1,122.1
|
|
|
1,118.6
|
|
|
34.4
|
|
|
32.4
|
|
|
9,141.3
|
|
1
|
Hawaiian Electric units at normal ratings; Hawaii Electric Light and Maui Electric units at reserve ratings.
|
2
|
Nonutility generators - Hawaiian Electric: 208 MW (Kalaeloa Partners, L.P., oil-fired), 180 MW (AES Hawaii, Inc., coal-fired) and 68.5 MW (HPOWER, refuse-fired); Hawaii Electric Light: 60 MW (Hamakua Energy, LLC, oil-fired). Hawaii Electric Light also has a firm capacity PPA with PGV for 34.6 MW. However, since May 2018, PGV has been offline due to lava flow on Hawaii Island; therefore, PGV’s capability has not been incorporated into the utility’s firm contract power capability as of December 31, 2019.
|
3
|
Noncoincident and nonintegrated.
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Consolidated
|
||||||||||||||||
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
||||||||
2019
|
81.02
|
|
|
1,304.8
|
|
|
81.96
|
|
|
1,354.0
|
|
|
86.58
|
|
|
1,454.8
|
|
|
82.17
|
|
|
1,337.6
|
|
2018
|
86.11
|
|
|
1,371.8
|
|
|
89.81
|
|
|
1,489.5
|
|
|
93.60
|
|
|
1,573.6
|
|
|
87.90
|
|
|
1,420.2
|
|
2017
|
67.96
|
|
|
1,087.1
|
|
|
68.02
|
|
|
1,125.2
|
|
|
72.29
|
|
|
1,214.6
|
|
|
68.78
|
|
|
1,114.3
|
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||||||||
|
% LSFO
|
|
|
% Biodiesel/Diesel
|
|
|
% HSFO
|
|
|
% Diesel
|
|
|
% HSFO
|
|
|
% Diesel
|
|
2019
|
93
|
|
|
7
|
|
|
44
|
|
|
56
|
|
|
24
|
|
|
76
|
|
2018
|
96
|
|
|
4
|
|
|
39
|
|
|
61
|
|
|
23
|
|
|
77
|
|
2017
|
95
|
|
|
5
|
|
|
43
|
|
|
57
|
|
|
23
|
|
|
77
|
|
Property
|
Location (island)
|
Principal Fuel Type
|
Generating Capacity (MW)
|
Status
|
Hawaiian Electric:
|
|
|
|
|
Waiau1
|
Oahu
|
LSFO / Diesel
|
480.8
|
Active
|
Kahe1
|
Oahu
|
LSFO
|
620.5
|
Active
|
Campbell Industrial Park (CIP)1
|
Oahu
|
Diesel
|
129.0
|
Active
|
Honolulu Power Plant1
|
Oahu
|
N/A
|
—
|
Deactivated in 2014
|
Schofield Generating Station2
|
Oahu
|
Biodiesel / ULSD
|
49.4
|
Active
|
West Loch PV Project3
|
Oahu
|
Renewable (Solar)
|
20.0
|
Active
|
Hawaii Electric Light4:
|
|
|
|
|
Shipman
|
Hawaii
|
N/A
|
—
|
Retired in 2015
|
Waimea
|
Hawaii
|
ULSD
|
7.5
|
Active
|
Keahole
|
Hawaii
|
Diesel / ULSD
|
77.6
|
Active
|
Puna
|
Hawaii
|
HSFO / Diesel
|
36.7
|
Active
|
Hill/Kanoelehua
|
Hawaii
|
HSFO / ULSD
|
55.4
|
Active
|
Distributed generators at substation sites
|
Hawaii
|
ULSD
|
5.0
|
Active
|
Maui Electric5:
|
|
|
|
|
Kahului
|
Maui
|
HSFO
|
35.9
|
Active
|
Maalaea
|
Maui
|
Diesel / ULSD
|
210.4
|
Active
|
Miki Basin
|
Lanai
|
ULSD
|
9.4
|
Active
|
Palaau
|
Molokai
|
ULSD
|
12.0
|
Active
|
3
|
Hawaiian Electric has a 37-year land lease on 102 acres, effective July 1, 2017, with the Secretary of the Navy.
|
5
|
The four plants are situated on Maui Electric-owned land having a combined area of 60.7 acres.
|
Facility
|
Location (island)
|
Fuel Type
|
Capacity (barrels in thousands)
|
Generation Serviced
|
Hawaiian Electric:
|
|
|
|
|
Barbers Point Tank Farm
|
Oahu
|
LSFO
|
1,000
|
Kahe, Waiau
|
Generation sites - various (in aggregate)
|
Oahu
|
LSFO
|
770
|
Various
|
Generation sites - various (in aggregate)
|
Oahu
|
Diesel
|
132
|
Various
|
Generation sites - various (in aggregate)
|
Oahu
|
Biodiesel
|
11
|
Various
|
Hawaii Electric Light1:
|
|
|
|
|
Generation sites - various (in aggregate)
|
Hawaii
|
HSFO
|
48
|
Various
|
Generation sites - various (in aggregate)
|
Hawaii
|
Diesel
|
82
|
Various
|
Maui Electric2:
|
|
|
|
|
Generation sites - various (in aggregate)
|
Maui
|
HSFO
|
81
|
Various
|
Generation sites - various (in aggregate)
|
Maui
|
Diesel
|
95
|
Various
|
2
|
There are an additional 56,358 barrels of diesel oil storage capacity off-site at Aloha Petroleum, Ltd. (Aloha Petroleum)-owned terminalling facilities.
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
Equity to assets ratio
|
|
|
|
|
|
|
|
|
Average equity divided by average total assets
|
9.30
|
%
|
|
8.86
|
%
|
|
9.10
|
%
|
Return on assets
|
|
|
|
|
|
|||
Net income divided by average total assets
|
1.25
|
|
|
1.20
|
|
|
1.02
|
|
Return on equity
|
|
|
|
|
|
|||
Net income divided by average equity
|
13.48
|
|
|
13.51
|
|
|
11.20
|
|
•
|
ASB met applicable minimum regulatory capital requirements (noted in parentheses) as of December 31, 2019 with a Tier 1 leverage ratio of 9.1% (4.0%), a common equity Tier 1 capital ratio of 13.2% (4.5%), a Tier 1 capital ratio of 13.2% (6.0%) and a total capital ratio of 14.3% (8.0%).
|
•
|
ASB met the capital requirements to be generally considered “well-capitalized” (noted in parentheses) as of December 31, 2019 with a Tier 1 leverage ratio of 9.1% (5.0%), a common equity Tier 1 capital ratio of 13.2% (6.5%), a Tier 1 capital ratio of 13.2% (8.0%) and a total capital ratio of 14.3% (10.0%).
|
|
Number of branches
|
|||||||
December 31, 2019
|
Owned
|
|
Leased
|
|
Total
|
|||
Oahu
|
9
|
|
|
25
|
|
|
34
|
|
Maui
|
2
|
|
|
4
|
|
|
6
|
|
Hawaii
|
3
|
|
|
2
|
|
|
5
|
|
Kauai
|
2
|
|
|
1
|
|
|
3
|
|
Molokai
|
—
|
|
|
1
|
|
|
1
|
|
|
16
|
|
|
33
|
|
|
49
|
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the provisions of an HEI agreement with the PUC, which could limit the ability of HEI’s principal electric public utility subsidiary, Hawaiian Electric, to pay dividends to HEI in the event that the consolidated common stock equity of the Utilities falls below 35% of total capitalization of the electric utilities;
|
•
|
the provisions of an HEI agreement entered into with federal bank regulators in connection with its acquisition of its bank subsidiary, ASB, which require HEI to contribute additional capital to ASB (up to a maximum amount of additional capital of $28.3 million as of December 31, 2019 under the Regulatory Capital Maintenance/Dividend Agreement dated May 26, 1988, between HEI, HEIDI (HEI Diversified Inc.) and the Federal Savings and Loan Insurance Corporation) upon request of the regulators in order to maintain ASB’s regulatory capital at the level required by regulation;
|
•
|
the minimum capital and capital distribution regulations of the OCC that are applicable to ASB and capital regulations that become applicable to HEI and ASB Hawaii;
|
•
|
the receipt of a letter from the FRB communicating the OCC’s and FRB’s non-objection to the payment of any dividend ASB proposes to declare and pay to ASB Hawaii and HEI; and
|
•
|
the provisions of preferred stock resolutions and debt instruments of HEI and its subsidiaries.
|
•
|
ASB, one of the largest financial institutions in the state, is in direct competition for deposits and loans not only with two larger institutions that have substantial capital, technology and marketing resources, but also with smaller Hawaii institutions and other U.S. institutions, including credit unions, mutual funds, mortgage brokers, finance companies and investment banking firms. Larger financial institutions may have greater access to capital at lower costs, which could impair ASB’s ability to compete effectively. New or significant advances in technology (e.g., significant advances in internet banking) could render the operations of ASB less competitive or obsolete.
|
•
|
The Utilities face competition from IPPs; customer self-generation, with or without cogeneration; customer energy storage; and the potential formation of community-based, cooperative ownership or municipality structures for electrical service on all islands it serves. With the exception of certain identified projects, the Utilities are required to use competitive bidding to acquire a future generation resource unless the PUC finds competitive bidding to be unsuitable. The PUC sets policies for distributed generation (DG) interconnection agreements and standby rates. The results of competitive bidding, competition from IPPs, customer self-generation, and potential cooperative ownership or municipality structures for electric utility service, and the rate at which technological developments facilitating nonutility generation of electricity, combined heat and power technology, off-grid microgrids, and customer energy storage may render the operations of the Utilities less competitive or outdated and adversely affect the Utilities and the results of their operations.
|
•
|
local, regional, national and other economic and political conditions that could result in declines in employment and real estate values, which in turn could adversely affect the ability of borrowers to make loan payments and the ability of ASB to recover the full amounts owing to it under defaulted loans;
|
•
|
the ability of borrowers to obtain insurance and the ability of ASB to place insurance where borrowers fail to do so, particularly in the event of catastrophic damage to collateral securing loans made by ASB;
|
•
|
faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage servicing assets of ASB;
|
•
|
changes in ASB’s loan portfolio credit profiles and asset quality, which may increase or decrease the required level of allowance for loan losses;
|
•
|
technological disruptions affecting ASB’s operations or financial or operational difficulties experienced by any outside vendor on whom ASB relies to provide key components of its business operations, such as business processing, network access or internet connections;
|
•
|
events of default and foreclosure of loans whereby ASB becomes the owner of a mortgage properties that presents environmental risk or potential clean up liability;
|
•
|
the impact of legislative and regulatory changes, including changes affecting capital requirements, increasing oversight of and reporting by banks, or affecting the lending programs or other business activities of ASB;
|
•
|
additional legislative changes regulating the assessment of overdraft, interchange and credit card fees, which can have a negative impact on noninterest income;
|
•
|
public opinion about ASB and financial institutions in general, which, if negative, could impact the public’s trust and confidence in ASB and adversely affect ASB’s ability to attract and retain customers and expose ASB to adverse legal and regulatory consequences;
|
•
|
increases in operating costs (including employee compensation expense and benefits and regulatory compliance costs), inflation and other factors, that exceed increases in ASB’s net interest, fee and other income; and
|
•
|
the ability of ASB to maintain or increase the level of deposits, ASB’s lowest costing funds.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
Name
|
|
Age
|
|
Business experience for last 5 years and prior positions with the Company
|
Constance H. Lau
|
|
67
|
|
HEI President and Chief Executive Officer since 5/06
HEI Director, 6/01 to 12/04 and since 5/06 Hawaiian Electric Chairman of the Board, 5/06 to 5/19
ASB Hawaii Director since 5/06
ASB Chairman of the Board since 5/06, Risk Committee member since 2012 and Director since 1999
· ASB Chief Executive Officer, 6/01 to 11/10, and President, 6/01 to 1/08
· ASB Senior Executive Vice President and Chief Operating Officer and Director, 12/99 to 5/01
· HEI Power Corp. Financial Vice President and Treasurer, 5/97 to 8/99
· HEI Treasurer, 4/89 to 10/99, and HEI Assistant Treasurer, 12/87 to 4/89
· Hawaiian Electric Treasurer 12/87 to 4/89 and Assistant Corporate Counsel, 9/84 to 12/87
|
Gregory C. Hazelton
|
|
55
|
|
HEI Executive Vice President and Chief Financial Officer since 4/17
HEI Treasurer, 3/18 to 11/19
HEI Senior Vice President, Finance, 10/16 to 4/17
· Prior to rejoining the Company in 2016: Northwest Natural Gas Company, Senior Vice President, Chief Financial Officer and Treasurer, 2/16 to 9/16, and Northwest Natural Gas Company, Senior Vice President and Chief Financial Officer, 6/15 to 2/16
· HEI Vice President, Finance, Treasurer and Controller, 8/13 to 6/15
· Prior to joining the Company in 2013: UBS Investment Bank, Managing Director, Global Power & Utilities Group 3/11 to 5/13
|
Scott W. H. Seu
|
|
54
|
|
Hawaiian Electric President and Chief Executive Officer since 2/20
Hawaiian Electric Director since 2/20
· Hawaiian Electric Senior Vice President, Public Affairs, 1/17 to 2/20
· Hawaiian Electric Vice President, System Operation, 5/14 to 1/17
· Hawaiian Electric Vice President, Energy Resources and Operations, 1/13 to 5/14
· Hawaiian Electric Vice President, Energy Resources, 8/10 to 12/12
· Hawaiian Electric Manager, Resource Acquisition Department, 3/09 to 8/10
· Hawaiian Electric Manager, Energy Projects Department, 5/04 to 3/09
· Hawaiian Electric Manager, Customer Installations Department, 1/03 to 5/04
· Hawaiian Electric Manager, Environmental Department, 4/98 to 12/02
· Hawaiian Electric Principal Environmental Scientist, 1/97 to 4/98
· Hawaiian Electric Senior Environmental Scientist, 5/96 to 12/96
· Hawaiian Electric Environmental Scientist, 8/93 to 5/96
|
Richard F. Wacker
|
|
57
|
|
ASB President and Chief Executive Officer since 11/10
ASB Director since 11/10
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Period*
|
Total Number
of Shares Purchased **
|
|
Average
Price Paid
per Share **
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||
October 1 to 31, 2019
|
23,372
|
|
|
$
|
44.80
|
|
—
|
|
|
NA
|
November 1 to 30, 2019
|
11,248
|
|
|
$
|
43.55
|
|
—
|
|
|
NA
|
December 1 to 31, 2019
|
148,516
|
|
|
$
|
44.48
|
|
—
|
|
|
NA
|
Total
|
183,136
|
|
|
$
|
44.47
|
|
—
|
|
|
NA
|
Quarters ended
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
||||
March 31
|
$
|
25,313
|
|
|
$
|
25,826
|
|
June 30
|
25,313
|
|
|
25,826
|
|
||
September 30
|
25,313
|
|
|
25,827
|
|
||
December 31
|
25,313
|
|
|
25,826
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Hawaiian Electric Industries, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||
(dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Results of operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
2,874,601
|
|
|
$
|
2,860,849
|
|
|
$
|
2,555,625
|
|
|
$
|
2,380,654
|
|
|
$
|
2,602,982
|
|
Net income for common stock
|
217,882
|
|
|
201,774
|
|
|
165,297
|
|
|
248,256
|
|
|
159,877
|
|
|||||
Basic earnings per common share
|
2.00
|
|
|
1.85
|
|
|
1.52
|
|
|
2.30
|
|
|
1.50
|
|
|||||
Diluted earnings per common share
|
1.99
|
|
|
1.85
|
|
|
1.52
|
|
|
2.29
|
|
|
1.50
|
|
|||||
Return on average common equity
|
9.8
|
%
|
|
9.5
|
%
|
|
7.9
|
%
|
|
12.4
|
%
|
|
8.6
|
%
|
|||||
Financial position *
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
13,745,251
|
|
|
$
|
13,104,051
|
|
|
$
|
12,534,160
|
|
|
$
|
11,881,981
|
|
|
$
|
11,275,931
|
|
Deposit liabilities
|
6,271,902
|
|
|
6,158,852
|
|
|
5,890,597
|
|
|
5,548,929
|
|
|
5,025,254
|
|
|||||
Other bank borrowings
|
115,110
|
|
|
110,040
|
|
|
190,859
|
|
|
192,618
|
|
|
328,582
|
|
|||||
Long-term debt, net—other than bank
|
1,964,365
|
|
|
1,879,641
|
|
|
1,683,797
|
|
|
1,619,019
|
|
|
1,578,368
|
|
|||||
Preferred stock of subsidiaries – not subject to mandatory redemption
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|||||
Common stock equity
|
2,280,260
|
|
|
2,162,280
|
|
|
2,097,386
|
|
|
2,066,753
|
|
|
1,927,640
|
|
|||||
Common equity ratio
|
51
|
%
|
|
52
|
%
|
|
53
|
%
|
|
56
|
%
|
|
53
|
%
|
|||||
Common stock
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Book value per common share *
|
$
|
20.92
|
|
|
$
|
19.86
|
|
|
$
|
19.28
|
|
|
$
|
19.03
|
|
|
$
|
17.94
|
|
Dividends declared per common share
|
1.28
|
|
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|||||
Dividend payout ratio
|
64
|
%
|
|
67
|
%
|
|
82
|
%
|
|
54
|
%
|
|
82
|
%
|
|||||
Market price to book value per common share *
|
224
|
%
|
|
184
|
%
|
|
188
|
%
|
|
174
|
%
|
|
161
|
%
|
|||||
Price earnings ratio **
|
23.5x
|
|
|
19.8x
|
|
|
23.8x
|
|
|
14.4x
|
|
|
19.3x
|
|
|||||
Common shares outstanding (thousands) *
|
108,973
|
|
|
108,879
|
|
|
108,788
|
|
|
108,583
|
|
|
107,460
|
|
|||||
Weighted-average-basic (thousands)
|
108,949
|
|
|
108,855
|
|
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|||||
Shareholders ***
|
24,766
|
|
|
25,369
|
|
|
26,064
|
|
|
26,831
|
|
|
27,927
|
|
|||||
Employees *
|
3,841
|
|
|
3,898
|
|
|
3,880
|
|
|
3,796
|
|
|
3,918
|
|
*
|
At December 31.
|
**
|
Calculated using December 31 market price per common share divided by basic earnings per common share.
|
***
|
At December 31. Represents registered shareholders plus participants in the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP) who are not registered shareholders. As of February 13, 2020, HEI had 5,564 registered shareholders (i.e., holders of record of HEI common stock), 22,060 DRIP participants and total shareholders of 24,651.
|
Years ended December 31
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
(in thousands)
|
|
|
|
|
|
||||||||||
Results of operations
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
2,545,942
|
|
$
|
2,546,525
|
|
$
|
2,257,566
|
|
$
|
2,094,368
|
|
$
|
2,335,166
|
|
Net income for common stock
|
156,840
|
|
143,653
|
|
119,951
|
|
142,317
|
|
135,714
|
|
|||||
|
|
|
|
|
|
||||||||||
Financial position *
|
|
|
|
|
|
||||||||||
Utility plant
|
$
|
7,485,178
|
|
$
|
7,092,483
|
|
$
|
6,717,311
|
|
$
|
6,327,102
|
|
$
|
6,037,712
|
|
Accumulated depreciation
|
(2,690,157
|
)
|
(2,577,342
|
)
|
(2,476,352
|
)
|
(2,369,282
|
)
|
(2,266,004
|
)
|
|||||
Net utility plant
|
$
|
4,795,021
|
|
$
|
4,515,141
|
|
$
|
4,240,959
|
|
$
|
3,957,820
|
|
$
|
3,771,708
|
|
Total assets
|
$
|
6,388,682
|
|
$
|
5,967,503
|
|
$
|
5,630,613
|
|
$
|
5,431,903
|
|
$
|
5,166,123
|
|
Current portion of long-term debt
|
$
|
95,953
|
|
$
|
—
|
|
$
|
49,963
|
|
$
|
—
|
|
$
|
—
|
|
Short-term borrowings from non-affiliates
|
88,987
|
|
25,000
|
|
4,999
|
|
—
|
|
—
|
|
|||||
Long-term debt, net
|
1,401,714
|
|
1,418,802
|
|
1,318,516
|
|
1,319,260
|
|
1,278,702
|
|
|||||
Common stock equity
|
2,047,352
|
|
1,957,641
|
|
1,845,283
|
|
1,799,787
|
|
1,728,325
|
|
|||||
Cumulative preferred stock-not
subject to mandatory redemption
|
34,293
|
|
34,293
|
|
34,293
|
|
34,293
|
|
34,293
|
|
|||||
Capital structure
|
$
|
3,668,299
|
|
$
|
3,435,736
|
|
$
|
3,253,054
|
|
$
|
3,153,340
|
|
$
|
3,041,320
|
|
Capital structure ratios (%)
|
|
|
|
|
|
||||||||||
Debt (short-term borrowings, and long-term debt, net, including current portion)
|
43.3
|
|
42.0
|
|
42.2
|
|
41.8
|
|
42.1
|
|
|||||
Cumulative preferred stock
|
0.9
|
|
1.0
|
|
1.1
|
|
1.1
|
|
1.1
|
|
|||||
Common stock equity
|
55.8
|
|
57.0
|
|
56.7
|
|
57.1
|
|
56.8
|
|
*
|
At December 31.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
HEI Consolidated
|
(dollars in millions, except per share amounts)
|
2019
|
|
|
% change
|
|
|
2018
|
|
|
% change
|
|
|
2017
|
|
|||
Revenues
|
$
|
2,875
|
|
|
—
|
|
|
$
|
2,861
|
|
|
12
|
|
|
$
|
2,556
|
|
Operating income
|
349
|
|
|
5
|
|
|
333
|
|
|
(4
|
)
|
|
346
|
|
|||
Net income for common stock
|
218
|
|
|
8
|
|
|
202
|
|
|
22
|
|
|
165
|
|
|||
Net income (loss) by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Electric utility
|
$
|
157
|
|
|
9
|
|
|
$
|
144
|
|
|
20
|
|
|
$
|
120
|
|
Bank
|
89
|
|
|
8
|
|
|
83
|
|
|
23
|
|
|
67
|
|
|||
Other
|
(28
|
)
|
|
(15
|
)
|
|
(24
|
)
|
|
(13
|
)
|
|
(22
|
)
|
|||
Net income for common stock
|
$
|
218
|
|
|
8
|
|
|
$
|
202
|
|
|
22
|
|
|
$
|
165
|
|
Basic earnings per share
|
$
|
2.00
|
|
|
8
|
|
|
$
|
1.85
|
|
|
22
|
|
|
$
|
1.52
|
|
Diluted earnings per share
|
$
|
1.99
|
|
|
8
|
|
|
$
|
1.85
|
|
|
22
|
|
|
$
|
1.52
|
|
Dividends per share
|
$
|
1.28
|
|
|
3
|
|
|
$
|
1.24
|
|
|
—
|
|
|
$
|
1.24
|
|
Weighted-average number of common shares outstanding (millions)
|
108.9
|
|
|
—
|
|
|
108.9
|
|
|
—
|
|
|
108.7
|
|
|||
Dividend payout ratio
|
64
|
%
|
|
|
|
|
67
|
%
|
|
|
|
|
82
|
%
|
(in millions)
|
|
2019
|
|
2018
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
||||||
Operating loss1
|
|
$
|
(17
|
)
|
|
$
|
(16
|
)
|
|
$
|
(1
|
)
|
|
Lower Pacific Current operating income ($3 million in 2019 vs $4 million in 2018) due to higher Pacific Current administrative and general expenses. HEI corporate expenses were comparable year-over-year ($19 million in 2019 and 2018).
|
Interest expense & other
|
|
(21
|
)
|
|
(16
|
)
|
|
(5
|
)
|
|
Increase due to higher average borrowings and higher average interest rates. Average borrowings increased due primarily to $100 million tranche B private placement drawn in December 2018 to fund a contribution of utility equity.
|
|||
Income tax benefit
|
|
10
|
|
|
8
|
|
|
2
|
|
|
Higher tax benefit due to an increase in pretax losses
|
|||
Net loss
|
|
$
|
(28
|
)
|
|
$
|
(24
|
)
|
|
$
|
(4
|
)
|
|
|
December 31
|
2019
|
|
2018
|
||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings—other than bank
|
$
|
186
|
|
|
4
|
%
|
|
$
|
74
|
|
|
2
|
%
|
Long-term debt, net—other than bank
|
1,964
|
|
|
44
|
|
|
1,880
|
|
|
45
|
|
||
Preferred stock of subsidiaries
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
2,280
|
|
|
51
|
|
|
2,162
|
|
|
52
|
|
||
|
$
|
4,464
|
|
|
100
|
%
|
|
$
|
4,150
|
|
|
100
|
%
|
|
Year ended
December 31, 2019
|
|
|
||||||||
(in millions)
|
Average
balance
|
|
End-of-period
balance
|
|
December 31,
2018
|
||||||
Commercial paper
|
$
|
41
|
|
|
$
|
97
|
|
|
$
|
49
|
|
Line of credit draws
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under HEI’s line of credit facility
|
—
|
|
|
150
|
|
|
150
|
|
*
|
Moody’s long-term debt rating was withdrawn because HEI does not currently have any outstanding, publicly traded debt. Moody’s continues to rate Hawaiian Electric’s long-term debt. See ‘Electric utility–Liquidity and capital resources’ below.
|
**
|
On February 20, 2020, S&P revised HEI’s outlook to positive and affirmed HEI’s issuer credit and commercial paper ratings.
|
December 31, 2019
|
|
||||||||||||||||||
(in millions)
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment in qualifying affordable housing projects
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
23
|
|
Time certificates
|
503
|
|
|
200
|
|
|
64
|
|
|
3
|
|
|
770
|
|
|||||
Short-term borrowings
|
186
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|||||
Other bank borrowings
|
115
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|||||
Long-term debt
|
102
|
|
|
267
|
|
|
159
|
|
|
1,446
|
|
|
1,974
|
|
|||||
Interest on CDs, other bank borrowings, short-term loan and long-term debt
|
86
|
|
|
158
|
|
|
130
|
|
|
718
|
|
|
1,092
|
|
|||||
Operating leases
|
|
|
|
|
|
|
|
|
|
||||||||||
PPAs classified as leases
|
63
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|||||
Other operating leases
|
12
|
|
|
16
|
|
|
9
|
|
|
9
|
|
|
46
|
|
|||||
Service bureau contract, maintenance agreements and other
|
20
|
|
|
18
|
|
|
4
|
|
|
1
|
|
|
43
|
|
|||||
Hawaiian Electric open purchase order obligations1
|
54
|
|
|
19
|
|
|
1
|
|
|
—
|
|
|
74
|
|
|||||
Hawaiian Electric fuel oil purchase obligations (estimate based on fuel oil price at December 31)
|
7
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Hawaiian Electric power purchase–minimum fixed capacity charges not classified as leases
|
51
|
|
|
76
|
|
|
76
|
|
|
241
|
|
|
444
|
|
|||||
Total (estimated)
|
$
|
1,212
|
|
|
$
|
885
|
|
|
$
|
443
|
|
|
$
|
2,419
|
|
|
$
|
4,959
|
|
1
|
Includes contractual obligations and commitments for capital expenditures and expense amounts.
|
1.
|
obligations under guarantee contracts,
|
2.
|
retained or contingent interests in assets transferred to an unconsolidated entity or similar arrangements that serve as credit, liquidity or market risk support to that entity for such assets,
|
3.
|
obligations under derivative instruments, and
|
4.
|
obligations under a material variable interest held by the Company or the Utilities in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company or the Utilities, or engages in leasing, hedging or research and development services with the Company or the Utilities.
|
Actuarial assumption
|
Change in assumption
in basis points
|
Impact on HEI Consolidated
PBO or APBO
|
|
Impact on Consolidated Hawaiian Electric
PBO or APBO
|
(dollars in millions)
|
|
|
|
|
Pension benefits
|
|
|
|
|
Discount rate
|
‘+/- 50
|
$(177)/$202
|
|
$(167)/$190
|
Other benefits
|
|
|
|
|
Discount rate
|
‘+/- 50
|
$(14)/$15
|
|
$(13)/$15
|
Electric utility
|
%
|
|
Rate-making Return on rate base (RORB)*
|
|
ROACE**
|
|
Rate-making ROACE***
|
|||||||||||||||||||||
Year ended December 31, 2019
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|||||||||
Utility returns
|
|
6.90
|
|
|
5.97
|
|
|
6.37
|
|
|
8.02
|
|
|
7.00
|
|
|
7.79
|
|
|
8.80
|
|
|
6.72
|
|
|
7.95
|
|
PUC-allowed returns
|
|
7.57
|
|
|
7.52
|
|
|
7.43
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
Difference
|
|
(0.67
|
)
|
|
(1.55
|
)
|
|
(1.06
|
)
|
|
(1.48
|
)
|
|
(2.50
|
)
|
|
(1.71
|
)
|
|
(0.70
|
)
|
|
(2.78
|
)
|
|
(1.55
|
)
|
2019
|
|
2018
|
|
Increase (decrease)
|
|
(dollars in millions, except per barrel amounts)
|
||||||||||
$
|
2,546
|
|
|
$
|
2,547
|
|
|
$
|
(1
|
)
|
|
|
|
|
Revenues. Net decrease largely due to:
|
|
|
|
|
|
|
|
$
|
(45
|
)
|
|
net of lower fuel prices and higher kWh generated11
|
||||||
|
|
|
|
|
|
(6
|
)
|
|
net of lower purchased power energy costs and higher kWh purchased2
|
|||||||
|
|
|
|
|
|
26
|
|
|
higher electric rates
|
|||||||
|
|
|
|
|
|
16
|
|
|
MPIR for Schofield Generating Station
|
|||||||
|
|
|
|
|
|
3
|
|
|
higher PIM award due to low-cost variable renewable procurement, better reliability and call center performance
|
|||||||
|
|
|
|
|
|
2
|
|
|
billing to a third party for mutual assistance work reimbursement
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher state refundable credit due to reduction in amortization period
|
|||||||
|
|
|
|
|
|
1
|
|
|
pole attachment revenues
|
|||||||
721
|
|
|
761
|
|
|
(40
|
)
|
|
|
|
Fuel oil expense.1 Net decrease due to lower fuel oil prices offset in part by higher kWh generated
|
|||||
633
|
|
|
639
|
|
|
(6
|
)
|
|
|
|
|
Purchased power expense1,2. Net decrease largely due to lower purchased power energy price offset in part by higher kWh purchased
|
||||
482
|
|
|
461
|
|
|
21
|
|
|
|
|
|
Operation and maintenance expense. Increase largely due to:
|
||||
|
|
|
|
|
|
|
7
|
|
|
higher outside services for system support (Asset management, Energy Management, Enterprise Resources and Grid Modernization systems)
|
||||||
|
|
|
|
|
|
7
|
|
|
higher generation overhaul costs
|
|||||||
|
|
|
|
|
|
3
|
|
|
reset of pension costs included in rates as part of rate case decisions
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher preventive/corrective maintenance expense for generation facilities
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher medical premium costs
|
|||||||
456
|
|
|
444
|
|
|
12
|
|
|
|
|
|
Other expenses. Increase due to higher depreciation expense for plant investments in 2018
|
||||
254
|
|
|
242
|
|
|
12
|
|
|
|
|
|
Operating income. Increase due to higher electric rates, offset in part by higher operation and maintenance, and depreciation expenses
|
||||
197
|
|
|
180
|
|
|
17
|
|
|
|
|
Income before income taxes. Increase due to higher electric rates, lower interest expense related to the hybrid securities redemption replaced with lower cost debt and refinancing of revenue bonds and higher AFUDC, offset in part by higher operation and maintenance and depreciation expense
|
|||||
157
|
|
|
144
|
|
|
13
|
|
|
|
|
|
Net income for common stock. Increase due to higher electric rates and MPIR revenues, offset in part by higher operating expenses
|
||||
7.8
|
%
|
|
7.6
|
%
|
|
0.2
|
%
|
|
|
|
Return on average common equity
|
|||||
82.17
|
|
|
87.90
|
|
|
(5.73
|
)
|
|
|
|
Average fuel oil cost per barrel
|
|||||
8,740
|
|
|
8,689
|
|
|
51
|
|
|
|
|
Kilowatthour sales (millions) 3
|
|||||
2,670
|
|
|
2,704
|
|
|
(34
|
)
|
|
|
|
Number of employees (at December 31)
|
1
|
The rate schedules of the electric utilities currently contain ECRCs (changed from ECACs in 2019) through which changes in fuel oil prices and certain components of purchased energy costs are passed on to customers.
|
2
|
The rate schedules of the electric utilities currently contain PPACs through which changes in purchase power expenses (except purchased energy costs) are passed on to customers.
|
3
|
kWh sales were higher in 2019 when compared to the prior year due largely to warmer humid weather in 2019 than 2018.
|
Test year
(dollars in millions)
|
|
Date
(filed/
implemented)
|
|
Amount
|
|
% over
rates in
effect
|
|
ROACE
(%)
|
|
RORB
(%)
|
|
Rate
base
|
|
Common
equity
%
|
|
Stipulated
agreement
reached with
Consumer
Advocate
|
||||||||
Hawaiian Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
20171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Request
|
|
12/16/16
|
|
$
|
106.4
|
|
|
6.9
|
|
|
10.60
|
|
|
8.28
|
|
|
$
|
2,002
|
|
|
57.36
|
|
|
Yes
|
Interim increase
|
|
2/16/18
|
|
36.0
|
|
|
2.3
|
|
|
9.50
|
|
|
7.57
|
|
|
1,980
|
|
|
57.10
|
|
|
|
||
Interim increase with Tax Act
|
|
4/13/18
|
|
(0.6
|
)
|
|
—
|
|
|
9.50
|
|
|
7.57
|
|
|
1,993
|
|
|
57.10
|
|
|
|
||
Final increase
|
|
9/1/18
|
|
(0.6
|
)
|
|
—
|
|
|
9.50
|
|
|
7.57
|
|
|
1,993
|
|
|
57.10
|
|
|
|
||
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
8/21/19
|
|
$
|
77.6
|
|
|
4.1
|
|
|
10.50
|
|
|
7.97
|
|
|
$
|
2,477
|
|
|
57.15
|
|
|
|
Hawaii Electric Light
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
20162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
9/19/16
|
|
$
|
19.3
|
|
|
6.5
|
|
|
10.60
|
|
|
8.44
|
|
|
$
|
479
|
|
|
57.12
|
|
|
Yes
|
Interim increase
|
|
8/31/17
|
|
9.9
|
|
|
3.4
|
|
|
9.50
|
|
|
7.80
|
|
|
482
|
|
|
56.69
|
|
|
|
||
Interim increase with Tax Act
|
|
5/1/18
|
|
1.5
|
|
|
0.5
|
|
|
9.50
|
|
|
7.80
|
|
|
481
|
|
|
56.69
|
|
|
|
||
Final increase
|
|
10/1/18
|
|
—
|
|
|
—
|
|
|
9.50
|
|
|
7.80
|
|
|
481
|
|
|
56.69
|
|
|
|
||
20193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
12/14/18
|
|
$
|
13.4
|
|
|
3.4
|
|
|
10.50
|
|
|
8.30
|
|
|
$
|
537
|
|
|
56.91
|
|
|
|
Interim increase
|
|
1/1/20
|
|
0.0
|
|
|
0.0
|
|
|
9.50
|
|
|
7.52
|
|
|
534
|
|
|
56.83
|
|
|
|
||
Maui Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
20184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
10/12/17
|
|
$
|
30.1
|
|
|
9.3
|
|
|
10.60
|
|
|
8.05
|
|
|
$
|
473
|
|
|
56.94
|
|
|
Yes
|
Interim increase
|
|
8/23/18
|
|
12.5
|
|
|
3.8
|
|
|
9.50
|
|
|
7.43
|
|
|
462
|
|
|
57.02
|
|
|
|
||
Final increase
|
|
6/1/19
|
|
12.2
|
|
|
3.7
|
|
|
9.50
|
|
|
7.43
|
|
|
454
|
|
|
57.02
|
|
|
|
1
|
Final D&O was issued on June 22, 2018.
|
•
|
In December 2014, the PUC approved a PPA for Renewable As-Available Energy dated October 3, 2013 between Hawaiian Electric and Na Pua Makani Power Partners, LLC (NPM) for a proposed 24-MW wind farm on Oahu. The NPM wind farm was expected to be placed into service by August 31, 2019, but has been delayed due to an appeal of the decision in the Habitat Conservation Permit contested case. NPM has now received its Habitat Conservation Permit and is constructing the project. Life of the Land (LOL) filed a Motion for Relief to argue the PPA approval was invalid and should be revised. The Utilities and the Consumer Advocate filed an opposition to this motion for relief. A hearing on the motion for relief was held on November 22, 2019. The PUC has not yet ruled.
|
•
|
In July 2017, the PUC approved, with certain modifications and conditions, three PPAs for solar energy on Oahu with Waipio PV, LLC for 45.9 MW, Lanikuhana Solar, LLC for 14.7 MW and Kawailoa Solar, LLC for 49.0 MW. The three projects are now owned by Clearway Energy Group LLC, whose controlling investor is Global Infrastructure Partners. On September 19, 2019, Lanikuhana Solar and Waipio PV projects achieved commercial operations. On November 20, 2019, Kawailoa Solar, LLC achieved commercial operations.
|
•
|
In July 2018, the PUC approved Maui Electric’s PPA with Molokai New Energy Partners to purchase solar energy from a PV plus battery storage project. The 4.88 MW project will deliver no more than 2.64 MW at any time to the Molokai system. The project is expected to be in service in 2020.
|
•
|
In November 2018, Hawaiian Electric filed with the PUC a PPA for Renewable As-Available Energy dated October 22, 2018 between Hawaiian Electric and EE Ewa, LLC (Palehua) for a proposed 46.8 MW wind farm on Oahu, subject to PUC approval. On September 6, 2019, the PUC issued an order dismissing without prejudice Hawaiian Electric’s application for a waiver of the proposed Palehua wind project from the PUC’s framework for competitive bidding and approval of the PPA. Due to the foregoing, the PPA has been declared null and void.
|
•
|
On December 31, 2019, Hawaii Electric Light and PGV entered into an Amended and Restated Power Purchase Agreement (ARPPA), subject to approval by the PUC. The ARPPA extends the term of the existing PPA by 25 years to 2052, expands the firm capacity of the facility to 46 MW and delinks the pricing for energy delivered from the facility from fossil fuel prices to reduce cost to customers. The existing PPA (except for lower-tiered pricing for certain energy dispatched above 30 MW) will remain in effect until it is superseded by the ARPPA when the expanded capacity is in commercial operation.
|
•
|
As of December 31, 2019, there were approximately 471 MW, 104 MW and 118 MW of installed distributed renewable energy technologies (mainly PV) at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively, for tariff-based private customer generation programs, namely Standard Interconnection Agreement, Net Energy Metering, Net Energy Metering Plus, Customer Grid Supply, Customer Self Supply, Customer Grid Supply Plus and Interim Smart Export. As of December 31, 2019, an estimated 29% of single-family homes on the islands of Oahu, Hawaii and Maui have installed private rooftop solar systems, and approximately 18% of the Utilities’ total customers have solar systems.
|
•
|
The Utilities began accepting energy from feed-in tariff projects in 2011. As of December 31, 2019, there were 34 MW, 3 MW and 5 MW of installed feed-in tariff capacity from renewable energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
|
•
|
In July 2018, the PUC approved Hawaiian Electric’s 3-year biodiesel supply contract with Pacific Biodiesel Technologies, LLC (PBT) to supply 2 million to 4 million gallons of biodiesel at Hawaiian Electric’s Schofield Generating Station and the Honolulu International Airport Emergency Power Facility (HIA Facility) and any other generating unit on Oahu, as necessary. The PBT contract became effective on November 1, 2018. Hawaiian Electric also has a spot buy contract with PBT to purchase additional quantities of biodiesel at or below the price of diesel. Some purchases of “at parity” biodiesel have been made under the spot purchase contract, which was recently extended through June 2021.
|
•
|
Hawaiian Electric has a contingency supply contract with REG Marketing & Logistics Group, LLC to also supply biodiesel to any generating unit on Oahu in the event PBT is not able to supply necessary quantities. This contingency contract has been extended to November 2020, and will continue with no volume purchase requirements.
|
•
|
Under a request for proposal process governed by the PUC and monitored by independent observers, in February 2018, the Utilities issued RFPs for 220 MW of renewable generation on Oahu, 50 MW of renewable generation on Hawaii Island, and 60 MW of renewable generation on Maui. The Utilities selected a final award group for Hawaii Island in August 2018 and for Maui and Oahu in September 2018.
|
Utilities
|
|
Number of contracts
|
|
Total photovoltaic size (MW)
|
|
BESS Size (MW/MWh)
|
|
Guaranteed commercial operation dates
|
|
Contract term (years)
|
|
Total projected annual payment
(in millions)
|
||
Hawaiian Electric
|
|
4
|
|
139.5
|
|
139.5/558
|
|
9/30/21 & 12/31/21
|
|
20 & 25
|
|
$
|
30.9
|
|
Hawaii Electric Light
|
|
2
|
|
60
|
|
60/240
|
|
7/20/21 & 6/30/22
|
|
25
|
|
14.1
|
|
|
Maui Electric
|
|
2
|
|
75
|
|
75/300
|
|
7/20/21 & 6/30/22
|
|
25
|
|
17.6
|
|
|
Total
|
|
8
|
|
274.5
|
|
274.5 /1,098
|
|
|
|
|
|
$
|
62.6
|
|
•
|
In continuation of its February 2018 request for proposal process, the Utilities issued its Stage 2 Renewable RFPs for Oahu, Maui and Hawaii Island and Grid Services RFP on August 22, 2019. This procurement plan sought approximately 900 MW of renewable energy, including 594 MW on Oahu, 135 MW on Maui and a range between 32 to 203 MW on Hawaii Island. This second phase, as approved by the PUC, was open to all renewable and storage resources, including efforts to add more renewable generation, renewable plus storage, standalone storage and grid services. The scope of these RFPs has been expanded to accelerate renewable energy procurements beyond the remainder of the 2022 targets identified in Stage 1 to include the energy requirement associated with the planned retirement of the Kahului Power Plant on Maui and the upcoming expiration of the agreement for the AES Hawaii facility on Oahu. For the Grid Services RFP, the targets had been expanded in alignment with the Renewable RFPs.
|
•
|
On November 27, 2019, the Utilities issued RFPs for renewable generation paired with energy storage on the islands of Lanai and Molokai. Projects may come online as early as 2022. The Utilities are seeking PV paired with storage or small wind (specified as 100 kW turbines or smaller) on Molokai and PV paired with storage on Lanai. Proposals for the Molokai RFP were received on February 14, 2020, and are currently being evaluated by the Utilities. The Lanai RFP has been temporarily postponed, while the Utilities reevaluate the system needs. The Utilities expect to issue an update to the Lanai RFP no later than March 10, 2020.
|
December 31
|
2019
|
|
2018
|
||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings1
|
$
|
89
|
|
|
2
|
%
|
|
$
|
25
|
|
|
1
|
%
|
Long-term debt, net
|
1,498
|
|
|
41
|
|
|
1,419
|
|
|
41
|
|
||
Preferred stock
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
2,047
|
|
|
56
|
|
|
1,958
|
|
|
57
|
|
||
|
$
|
3,668
|
|
|
100
|
%
|
|
$
|
3,436
|
|
|
100
|
%
|
1
|
Short-term borrowings as of December 31, 2019 reflect the impact of funding for a senior note of $82 million included in long-term debt, net, which was paid off on January 1, 2020 (see Note 6 of the Consolidated Financial Statements).
|
|
Year ended December 31, 2019
|
|
|
||||||||
(in millions)
|
Average
balance
|
|
End-of-period
balance
|
|
December 31,
2018
|
||||||
Short-term borrowings1
|
|
|
|
|
|
||||||
Commercial paper
|
$
|
44
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Line of credit draws
|
—
|
|
|
—
|
|
|
—
|
|
|||
Borrowings from HEI
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under line of credit facility
|
—
|
|
|
200
|
|
|
200
|
|
1
|
The maximum amount of external short-term borrowings by Hawaiian Electric during 2019 was $158 million. At December 31, 2019, Hawaiian Electric had short-term borrowings from Hawaii Electric Light of $8 million and Maui Electric had short-term borrowings from Hawaiian Electric of $27.7 million, which intercompany borrowings are eliminated in consolidation. In addition to the short-term borrowings above, Hawaiian Electric drew $50 million on December 23, 2019 on a 364-day term loan facility (see Note 5 of the Consolidated Financial Statements).
|
**
|
On February 20, 2020, S&P revised Utilities’ outlook to positive and affirmed Utilities’ issuer credit and commercial paper ratings.
|
(in millions)
|
Hawaiian Electric
|
Hawaii Electric Light
|
Maui Electric
|
||||||
Total “up to” amounts of taxable debt authorized through 2022
|
$
|
410
|
|
$
|
150
|
|
$
|
130
|
|
Less:
|
|
|
|
||||||
Taxable debt authorized and issued in 2018 under April 2018 Approval
|
75
|
|
15
|
|
10
|
|
|||
Taxable debt issuance to refinance the 2004 QUIDS
|
30
|
|
10
|
|
10
|
|
|||
Remaining authorized amounts
|
$
|
305
|
|
$
|
125
|
|
$
|
110
|
|
(in millions)
|
Hawaiian Electric
|
Hawaii Electric Light
|
Maui Electric
|
||||||
Total “up to” amounts of common stock authorized to issue and sell through 2021
|
$
|
150.0
|
|
$
|
10.0
|
|
$
|
10.0
|
|
Supplemental increase authorized
|
280.0
|
|
100.0
|
|
100.0
|
|
|||
Total “up to” amounts of common stock authorized to issue and sell through 2022
|
430.0
|
|
110.0
|
|
110.0
|
|
|||
Common stock authorized and issued in 2017, 2018 and 2019
|
120.2
|
|
—
|
|
11.2
|
|
|||
Remaining authorized amounts
|
$
|
309.8
|
|
$
|
110.0
|
|
$
|
98.8
|
|
|
Years ended December 31
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
423,956
|
|
|
$
|
393,613
|
|
|
$
|
30,343
|
|
Net cash used in investing activities
|
(408,524
|
)
|
|
(405,182
|
)
|
|
(3,342
|
)
|
|||
Net cash provided by (used in) financing activities
|
(9,415
|
)
|
|
34,929
|
|
|
(44,344
|
)
|
December 31, 2019
|
Payments due by period
|
||||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
Short-term borrowings
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89
|
|
Long-term debt
|
96
|
|
|
52
|
|
|
100
|
|
|
1,257
|
|
|
1,505
|
|
|||||
Interest on long-term debt
|
61
|
|
|
121
|
|
|
111
|
|
|
691
|
|
|
984
|
|
|||||
Operating leases
|
|
|
|
|
|
|
|
|
|
||||||||||
PPAs classified as leases
|
63
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|||||
Other leases
|
7
|
|
|
8
|
|
|
3
|
|
|
2
|
|
|
20
|
|
|||||
Open purchase order obligations 1
|
54
|
|
|
19
|
|
|
1
|
|
|
—
|
|
|
74
|
|
|||||
Fuel oil purchase obligations (estimate based on fuel oil price at December 31)
|
7
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Purchase power obligations-minimum fixed capacity charges not classified as leases
|
51
|
|
|
76
|
|
|
76
|
|
|
241
|
|
|
444
|
|
|||||
Total (estimated)
|
$
|
428
|
|
|
$
|
398
|
|
|
$
|
291
|
|
|
$
|
2,191
|
|
|
$
|
3,308
|
|
Bank
|
1.
|
deepening customer relationships;
|
2.
|
building out product and service offerings to open new segments;
|
3.
|
fully deploying online and remotely-assisted account opening capabilities; and
|
4.
|
prioritizing efficiency actions to gain earnings leverage on organic growth.
|
1.
|
attracting and retaining low-cost deposits, particularly those in non-interest bearing transaction accounts;
|
2.
|
diversifying the loan portfolio with higher-spread, shorter-maturity loans and/or variable rate loans;
|
3.
|
focusing investment growth in securities that exhibit less extension risk (i.e., risk of longer average lives) as rates rise.
|
•
|
2019 vs. 2018
|
(in millions)
|
|
2019
|
|
2018
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
266
|
|
|
$
|
258
|
|
|
$
|
8
|
|
|
Higher interest income was due to higher average loan portfolio balances and yields, partly offset by a decrease in balances and yields in the investment securities portfolio. ASB’s average loan portfolio balance for 2019 was $231 million higher than 2018’s average loan portfolio balance primarily due to increases in the average HELOC, residential, commercial and consumer loan portfolio balances of $99 million, $59 million, $40 million and $30 million, respectively. The growth in these loan portfolios was consistent with ASB’s portfolio mix targets and loan growth strategy. The 2019 loan portfolio yield increased 5 basis points compared to the prior year loan portfolio yield due to the repricing of adjustable rate loans in the latter part of 2018 and early 2019. The average investment securities portfolio balance decreased by $86 million and the portfolio yield decreased 14 basis points. The decrease in the portfolio balance was due to ASB’s decision to use investment portfolio repayments to fund the growth in the loan portfolio rather than redeploy it into investment securities. The decrease in the investment yields was due to an increase in the amortization of premiums in the investment portfolio.
|
(in millions)
|
|
2019
|
|
2018
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
||||||
Noninterest income
|
|
73
|
|
|
56
|
|
|
17
|
|
|
Noninterest income was higher in 2019 compared to 2018 primarily due to a gain on sale of real estate, an increase in mortgage banking income and higher bank-owned life insurance payouts. ASB sold two office facilities that were no longer needed when ASB moved into its new campus headquarters, which resulted in a gain on sale of real estate of $10.8 million. There were no such sales in 2018. The increase in mortgage banking income was due to an increase in loan sales into the secondary market as a result of higher residential mortgage loan production in 2019 compared to 2018. The higher bank-owned life insurance income was due to higher proceeds from life insurance policies received in 2019 compared to the previous year.
|
|||
Revenues
|
|
339
|
|
|
314
|
|
|
25
|
|
|
The increase in revenues was due to higher interest and noninterest income.
|
|||
Interest expense
|
|
18
|
|
|
15
|
|
|
3
|
|
|
Higher interest expense was primarily due to an increase in term certificate balances and increased deposit rates. Average deposit balances for 2019 increased by $155 million compared to 2018 due to an increase in core deposits and time certificates of $134 million and $21 million, respectively. Average cost of deposits for 2019 was 27 basis points, or 4 basis points above the average cost of deposits for 2018. The other borrowings average balance decreased by $28 million primarily due to a decrease in repurchase agreements. Average cost of other borrowings for 2019 was 1.42%, or 32 basis points above the average cost of borrowings for 2018.
|
|||
Provision for loan losses
|
|
24
|
|
|
15
|
|
|
9
|
|
|
The provision for loan losses for 2019 increased by $8.7 million compared to the provision for loan losses in 2018. The provision for loan losses in 2019 was primarily for additional loss reserves for the consumer and credit scored loan portfolios to cover net charge-offs, and reserves for an impaired commercial credit, partly offset by the release of reserves resulting from recoveries of previously charged-off loans. The provision for loan losses for 2018 was primarily for additional loss reserves for the consumer loan portfolio as a result of growth and increased net charge-offs, partly offset by the release of reserves for the commercial, commercial real estate and HELOC loan portfolios as a result of improved credit trends.
|
|||
Noninterest expense
|
|
185
|
|
|
177
|
|
|
8
|
|
|
Higher noninterest expense was primarily due to higher compensation and employee benefit costs, and increases in occupancy and equipment expenses. The increase in compensation and employee benefits was due to an increase in the minimum pay rate for employees, annual merit increases and higher employee benefit costs. Occupancy and equipment expenses for 2019 included occupancy, depreciation and equipment expenses for the new campus while still including the costs of properties being vacated.
|
|||
Expenses
|
|
227
|
|
|
207
|
|
|
20
|
|
|
The increase in expenses was primarily due to higher provision for loan losses, and increases in interest and noninterest expenses.
|
|||
Operating income
|
|
112
|
|
|
107
|
|
|
5
|
|
|
Higher interest and noninterest income was partly offset by higher provision for loan losses, higher interest expense and higher noninterest expenses.
|
|||
Net income
|
|
89
|
|
|
83
|
|
|
6
|
|
|
The increase in net income was the result of higher operating income and lower income tax expense.
|
|||
Return on average equity 1
|
|
13.5
|
%
|
|
13.5
|
%
|
|
—
|
%
|
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
(dollars in thousands)
|
Average
balance
|
|
Interest
income/
expense
|
|
Yield/
rate
(%)
|
|
Average
balance |
|
Interest
income/
expense |
|
Yield/
rate (%) |
|
Average
balance |
|
Interest
income/
expense |
|
Yield/
rate (%) |
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning deposits
|
$
|
16,618
|
|
|
$
|
320
|
|
|
1.92
|
|
|
$
|
50,658
|
|
|
$
|
940
|
|
|
1.86
|
|
|
$
|
79,927
|
|
|
$
|
898
|
|
|
1.12
|
|
FHLB stock
|
9,716
|
|
|
350
|
|
|
3.60
|
|
|
9,726
|
|
|
351
|
|
|
3.60
|
|
|
10,770
|
|
|
208
|
|
|
1.93
|
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable
|
1,406,564
|
|
|
31,178
|
|
|
2.22
|
|
|
1,503,036
|
|
|
35,862
|
|
|
2.39
|
|
|
1,265,240
|
|
|
27,291
|
|
|
2.16
|
|
||||||
Non-taxable
|
27,512
|
|
|
1,360
|
|
|
4.94
|
|
|
17,485
|
|
|
771
|
|
|
4.41
|
|
|
15,427
|
|
|
655
|
|
|
4.24
|
|
||||||
Total investment securities
|
1,434,076
|
|
|
32,538
|
|
|
2.27
|
|
|
1,520,521
|
|
|
36,633
|
|
|
2.41
|
|
|
1,280,667
|
|
|
27,946
|
|
|
2.18
|
|
||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential 1-4 family
|
2,181,554
|
|
|
89,956
|
|
|
4.12
|
|
|
2,122,895
|
|
|
86,936
|
|
|
4.10
|
|
|
2,077,705
|
|
|
86,934
|
|
|
4.18
|
|
||||||
Commercial real estate
|
863,468
|
|
|
40,324
|
|
|
4.67
|
|
|
860,155
|
|
|
39,579
|
|
|
4.60
|
|
|
887,890
|
|
|
37,806
|
|
|
4.26
|
|
||||||
Home equity line of credit
|
1,043,479
|
|
|
38,826
|
|
|
3.72
|
|
|
944,065
|
|
|
34,634
|
|
|
3.67
|
|
|
889,360
|
|
|
30,001
|
|
|
3.37
|
|
||||||
Residential land
|
14,065
|
|
|
774
|
|
|
5.50
|
|
|
14,935
|
|
|
823
|
|
|
5.51
|
|
|
16,837
|
|
|
1,011
|
|
|
6.00
|
|
||||||
Commercial
|
620,206
|
|
|
27,950
|
|
|
4.51
|
|
|
579,765
|
|
|
26,689
|
|
|
4.60
|
|
|
631,170
|
|
|
27,405
|
|
|
4.34
|
|
||||||
Consumer
|
270,340
|
|
|
35,864
|
|
|
13.27
|
|
|
240,414
|
|
|
31,802
|
|
|
13.23
|
|
|
205,334
|
|
|
24,098
|
|
|
11.74
|
|
||||||
Total loans 1,2
|
4,993,112
|
|
|
233,694
|
|
|
4.68
|
|
|
4,762,229
|
|
|
220,463
|
|
|
4.63
|
|
|
4,708,296
|
|
|
207,255
|
|
|
4.40
|
|
||||||
Total interest-earning assets 3
|
6,453,522
|
|
|
266,902
|
|
|
4.14
|
|
|
6,343,134
|
|
|
258,387
|
|
|
4.07
|
|
|
6,079,660
|
|
|
236,307
|
|
|
3.89
|
|
||||||
Allowance for loan losses
|
(54,640
|
)
|
|
|
|
|
|
|
(53,593
|
)
|
|
|
|
|
|
|
(55,629
|
)
|
|
|
|
|
|
|
||||||||
Noninterest-earning assets
|
696,270
|
|
|
|
|
|
|
|
606,304
|
|
|
|
|
|
|
|
546,523
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
$
|
7,095,152
|
|
|
|
|
|
|
|
$
|
6,895,845
|
|
|
|
|
|
|
|
|
$
|
6,570,554
|
|
|
|
|
|
|
|
||||
Liabilities and Shareholder’s Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Savings
|
$
|
2,340,671
|
|
|
1,904
|
|
|
0.08
|
|
|
$
|
2,334,681
|
|
|
1,639
|
|
|
0.07
|
|
|
$
|
2,278,396
|
|
|
1,567
|
|
|
0.07
|
|
|||
Interest-bearing checking
|
1,044,315
|
|
|
1,298
|
|
|
0.12
|
|
|
1,006,839
|
|
|
706
|
|
|
0.07
|
|
|
902,678
|
|
|
238
|
|
|
0.03
|
|
||||||
Money market
|
145,939
|
|
|
953
|
|
|
0.65
|
|
|
140,225
|
|
|
602
|
|
|
0.43
|
|
|
142,068
|
|
|
168
|
|
|
0.12
|
|
||||||
Time certificates
|
810,749
|
|
|
12,675
|
|
|
1.56
|
|
|
789,926
|
|
|
11,044
|
|
|
1.40
|
|
|
696,799
|
|
|
7,687
|
|
|
1.10
|
|
||||||
Total interest-bearing deposits
|
4,341,674
|
|
|
16,830
|
|
|
0.39
|
|
|
4,271,671
|
|
|
13,991
|
|
|
0.33
|
|
|
4,019,941
|
|
|
9,660
|
|
|
0.24
|
|
||||||
Advances from Federal Home Loan Bank
|
33,652
|
|
|
843
|
|
|
2.50
|
|
|
41,855
|
|
|
845
|
|
|
2.02
|
|
|
79,374
|
|
|
2,245
|
|
|
2.83
|
|
||||||
Securities sold under agreements to repurchase
|
79,647
|
|
|
767
|
|
|
0.96
|
|
|
99,162
|
|
|
703
|
|
|
0.71
|
|
|
97,535
|
|
|
251
|
|
|
0.26
|
|
||||||
Total interest-bearing liabilities
|
4,454,973
|
|
|
18,440
|
|
|
0.41
|
|
|
4,412,688
|
|
|
15,539
|
|
|
0.35
|
|
|
4,196,850
|
|
|
12,156
|
|
|
0.29
|
|
||||||
Noninterest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits
|
1,848,336
|
|
|
|
|
|
|
|
|
1,763,331
|
|
|
|
|
|
|
|
|
1,672,780
|
|
|
|
|
|
|
|
||||||
Other
|
131,691
|
|
|
|
|
|
|
|
|
108,976
|
|
|
|
|
|
|
|
|
102,789
|
|
|
|
|
|
|
|
||||||
Shareholder’s equity
|
660,152
|
|
|
|
|
|
|
|
|
610,850
|
|
|
|
|
|
|
|
|
598,135
|
|
|
|
|
|
|
|
||||||
Total Liabilities and Shareholder’s Equity
|
$
|
7,095,152
|
|
|
|
|
|
|
|
|
$
|
6,895,845
|
|
|
|
|
|
|
|
|
$
|
6,570,554
|
|
|
|
|
|
|
|
|||
Net interest income
|
|
|
|
$
|
248,462
|
|
|
|
|
|
|
|
$
|
242,848
|
|
|
|
|
|
|
|
|
$
|
224,151
|
|
|
|
|
||||
Net interest margin (%)4
|
|
|
|
|
|
|
3.85
|
|
|
|
|
|
|
|
|
3.83
|
|
|
|
|
|
|
|
|
3.69
|
|
1
|
Includes loans held for sale, at lower of cost or fair value, of $6.3 million, $2.3 million and $7.4 million as of December 31, 2019, 2018 and 2017, respectively.
|
2
|
Includes recognition of net deferred loan fees of $0.2 million, $0.1 million and $1.7 million for 2019, 2018 and 2017 respectively, together with interest accrued prior to suspension of interest accrual on nonaccrual loans.
|
3
|
For 2019, 2018 and 2017, the taxable-equivalent basis adjustments made to the table above were not material.
|
4
|
Defined as net interest income, on a fully taxable equivalent basis, as a percentage of average total interest-earning assets.
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||||||||
(in thousands)
|
Rate
|
|
Volume
|
|
Total
|
|
Rate
|
|
Volume
|
|
Total
|
||||||||||||
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-earning deposits
|
$
|
31
|
|
|
$
|
(651
|
)
|
|
$
|
(620
|
)
|
|
$
|
455
|
|
|
$
|
(413
|
)
|
|
$
|
42
|
|
FHLB stock
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
165
|
|
|
(22
|
)
|
|
143
|
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Taxable
|
(2,462
|
)
|
|
(2,222
|
)
|
|
(4,684
|
)
|
|
3,100
|
|
|
5,471
|
|
|
8,571
|
|
||||||
Non-taxable
|
102
|
|
|
487
|
|
|
589
|
|
|
27
|
|
|
89
|
|
|
116
|
|
||||||
Total investment securities
|
(2,360
|
)
|
|
(1,735
|
)
|
|
(4,095
|
)
|
|
3,127
|
|
|
5,560
|
|
|
8,687
|
|
||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
454
|
|
|
2,566
|
|
|
3,020
|
|
|
(1,768
|
)
|
|
1,770
|
|
|
2
|
|
||||||
Commercial real estate
|
595
|
|
|
150
|
|
|
745
|
|
|
2,972
|
|
|
(1,199
|
)
|
|
1,773
|
|
||||||
Home equity line of credit
|
481
|
|
|
3,711
|
|
|
4,192
|
|
|
2,740
|
|
|
1,893
|
|
|
4,633
|
|
||||||
Residential land
|
(1
|
)
|
|
(48
|
)
|
|
(49
|
)
|
|
(79
|
)
|
|
(109
|
)
|
|
(188
|
)
|
||||||
Commercial
|
(539
|
)
|
|
1,800
|
|
|
1,261
|
|
|
1,587
|
|
|
(2,303
|
)
|
|
(716
|
)
|
||||||
Consumer
|
96
|
|
|
3,966
|
|
|
4,062
|
|
|
3,284
|
|
|
4,420
|
|
|
7,704
|
|
||||||
Total loans
|
1,086
|
|
|
12,145
|
|
|
13,231
|
|
|
8,736
|
|
|
4,472
|
|
|
13,208
|
|
||||||
Total increase (decrease) in interest income
|
(1,243
|
)
|
|
9,758
|
|
|
8,515
|
|
|
12,483
|
|
|
9,597
|
|
|
22,080
|
|
||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Savings
|
(261
|
)
|
|
(4
|
)
|
|
(265
|
)
|
|
—
|
|
|
(72
|
)
|
|
(72
|
)
|
||||||
Interest-bearing checking
|
(563
|
)
|
|
(29
|
)
|
|
(592
|
)
|
|
(431
|
)
|
|
(37
|
)
|
|
(468
|
)
|
||||||
Money market
|
(325
|
)
|
|
(26
|
)
|
|
(351
|
)
|
|
(436
|
)
|
|
2
|
|
|
(434
|
)
|
||||||
Time certificates
|
(1,325
|
)
|
|
(306
|
)
|
|
(1,631
|
)
|
|
(2,253
|
)
|
|
(1,104
|
)
|
|
(3,357
|
)
|
||||||
Advances from Federal Home Loan Bank
|
(181
|
)
|
|
183
|
|
|
2
|
|
|
528
|
|
|
872
|
|
|
1,400
|
|
||||||
Securities sold under agreements to repurchase
|
(219
|
)
|
|
155
|
|
|
(64
|
)
|
|
(448
|
)
|
|
(4
|
)
|
|
(452
|
)
|
||||||
Total decrease (increase) in interest expense
|
(2,874
|
)
|
|
(27
|
)
|
|
(2,901
|
)
|
|
(3,040
|
)
|
|
(343
|
)
|
|
(3,383
|
)
|
||||||
Increase (decrease) in net interest income
|
$
|
(4,117
|
)
|
|
$
|
9,731
|
|
|
$
|
5,614
|
|
|
$
|
9,443
|
|
|
$
|
9,254
|
|
|
$
|
18,697
|
|
December 31
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||
(dollars in thousands)
|
Balance
|
|
% of
total
|
|
|
Balance
|
|
% of
total |
|
|
Balance
|
|
% of
total |
|
|
Balance
|
|
% of
total |
|
|
Balance
|
|
% of
total |
|
||||||||||
Real estate: 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
2,178,135
|
|
|
42.6
|
|
|
$
|
2,143,397
|
|
|
44.3
|
|
|
$
|
2,118,047
|
|
|
45.3
|
|
|
$
|
2,048,051
|
|
|
43.2
|
|
|
$
|
2,069,665
|
|
|
44.8
|
|
Commercial real estate
|
824,830
|
|
|
16.1
|
|
|
748,398
|
|
|
15.4
|
|
|
733,106
|
|
|
15.7
|
|
|
800,395
|
|
|
16.9
|
|
|
690,561
|
|
|
14.9
|
|
|||||
Home equity line of credit
|
1,092,125
|
|
|
21.3
|
|
|
978,237
|
|
|
20.2
|
|
|
913,052
|
|
|
19.6
|
|
|
863,163
|
|
|
18.2
|
|
|
846,294
|
|
|
18.3
|
|
|||||
Residential land
|
14,704
|
|
|
0.3
|
|
|
13,138
|
|
|
0.3
|
|
|
15,797
|
|
|
0.3
|
|
|
18,889
|
|
|
0.4
|
|
|
18,229
|
|
|
0.4
|
|
|||||
Commercial construction
|
70,605
|
|
|
1.4
|
|
|
92,264
|
|
|
1.9
|
|
|
108,273
|
|
|
2.3
|
|
|
126,768
|
|
|
2.7
|
|
|
100,796
|
|
|
2.2
|
|
|||||
Residential construction
|
11,670
|
|
|
0.2
|
|
|
14,307
|
|
|
0.3
|
|
|
14,910
|
|
|
0.3
|
|
|
16,080
|
|
|
0.3
|
|
|
14,089
|
|
|
0.3
|
|
|||||
Total real estate
|
4,192,069
|
|
|
81.9
|
|
|
3,989,741
|
|
|
82.4
|
|
|
3,903,185
|
|
|
83.5
|
|
|
3,873,346
|
|
|
81.7
|
|
|
3,739,634
|
|
|
80.9
|
|
|||||
Commercial
|
670,674
|
|
|
13.1
|
|
|
587,891
|
|
|
12.1
|
|
|
544,828
|
|
|
11.7
|
|
|
692,051
|
|
|
14.6
|
|
|
758,659
|
|
|
16.4
|
|
|||||
Consumer
|
257,921
|
|
|
5.0
|
|
|
266,002
|
|
|
5.5
|
|
|
223,564
|
|
|
4.8
|
|
|
178,222
|
|
|
3.7
|
|
|
123,775
|
|
|
2.7
|
|
|||||
Total loans
|
5,120,664
|
|
|
100.0
|
|
|
4,843,634
|
|
|
100.0
|
|
|
4,671,577
|
|
|
100.0
|
|
|
4,743,619
|
|
|
100.0
|
|
|
4,622,068
|
|
|
100.0
|
|
|||||
Less: Deferred fees and discounts
|
512
|
|
|
|
|
|
(613
|
)
|
|
|
|
|
(809
|
)
|
|
|
|
|
(4,926
|
)
|
|
|
|
|
(6,249
|
)
|
|
|
|
|||||
Allowance for loan losses
|
(53,355
|
)
|
|
|
|
|
(52,119
|
)
|
|
|
|
|
(53,637
|
)
|
|
|
|
|
(55,533
|
)
|
|
|
|
|
(50,038
|
)
|
|
|
|
|||||
Total loans, net
|
$
|
5,067,821
|
|
|
|
|
|
$
|
4,790,902
|
|
|
|
|
|
$
|
4,617,131
|
|
|
|
|
|
$
|
4,683,160
|
|
|
|
|
|
$
|
4,565,781
|
|
|
|
|
1
|
Includes renegotiated loans.
|
December 31
|
2019
|
||||||||||||||
Due
|
In
1 year
or less
|
|
|
After 1 year
through
5 years
|
|
|
After
5 years
|
|
|
Total
|
|
||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial – Fixed
|
$
|
73
|
|
|
$
|
135
|
|
|
$
|
37
|
|
|
$
|
245
|
|
Commercial – Adjustable
|
163
|
|
|
247
|
|
|
16
|
|
|
426
|
|
||||
Total commercial
|
236
|
|
|
382
|
|
|
53
|
|
|
671
|
|
||||
Commercial construction – Fixed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial construction – Adjustable
|
26
|
|
|
27
|
|
|
18
|
|
|
71
|
|
||||
Total commercial construction
|
26
|
|
|
27
|
|
|
18
|
|
|
71
|
|
||||
Residential construction – Fixed
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Residential construction – Adjustable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total residential construction
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Total loans – Fixed
|
85
|
|
|
135
|
|
|
37
|
|
|
257
|
|
||||
Total loans – Adjustable
|
189
|
|
|
274
|
|
|
34
|
|
|
497
|
|
||||
Total loans
|
$
|
274
|
|
|
$
|
409
|
|
|
$
|
71
|
|
|
$
|
754
|
|
December 31
|
|
2019
|
|
|
2018
|
|
||
Outstanding balance of home equity loans (in thousands)
|
|
$
|
1,092,125
|
|
|
$
|
978,237
|
|
Percent of portfolio in first lien position
|
|
53.7
|
%
|
|
49.2
|
%
|
||
Net charge-off ratio
|
|
0.01
|
%
|
|
0.01
|
%
|
||
Delinquency ratio
|
|
0.27
|
%
|
|
0.46
|
%
|
|
|
|
|
|
|
End of draw period – interest only
|
|
Current
|
||||||||||||||||
December 31, 2019
|
|
Total
|
|
Interest only
|
|
2019-2020
|
|
2021-2023
|
|
Thereafter
|
|
amortizing
|
||||||||||||
Outstanding balance (in thousands)
|
|
$
|
1,092,125
|
|
|
$
|
814,174
|
|
|
$
|
42,694
|
|
|
$
|
118,153
|
|
|
$
|
653,327
|
|
|
$
|
277,951
|
|
% of total
|
|
100
|
%
|
|
75
|
%
|
|
4
|
%
|
|
11
|
%
|
|
60
|
%
|
|
25
|
%
|
December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nonaccrual loans—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
11,395
|
|
|
$
|
12,037
|
|
|
$
|
12,598
|
|
|
$
|
11,154
|
|
|
$
|
20,554
|
|
Commercial real estate
|
195
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
1,188
|
|
|||||
Home equity line of credit
|
6,638
|
|
|
6,348
|
|
|
4,466
|
|
|
3,080
|
|
|
2,254
|
|
|||||
Residential land
|
448
|
|
|
436
|
|
|
841
|
|
|
878
|
|
|
970
|
|
|||||
Commercial construction
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total real estate
|
18,676
|
|
|
18,821
|
|
|
17,905
|
|
|
15,335
|
|
|
24,966
|
|
|||||
Commercial
|
5,947
|
|
|
4,278
|
|
|
3,069
|
|
|
6,708
|
|
|
20,174
|
|
|||||
Consumer
|
5,113
|
|
|
4,196
|
|
|
2,617
|
|
|
1,282
|
|
|
895
|
|
|||||
Total nonaccrual loans
|
$
|
29,736
|
|
|
$
|
27,295
|
|
|
$
|
23,591
|
|
|
$
|
23,325
|
|
|
$
|
46,035
|
|
Troubled debt restructured loans not included above—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
9,869
|
|
|
$
|
10,194
|
|
|
$
|
10,982
|
|
|
$
|
14,450
|
|
|
$
|
13,962
|
|
Commercial real estate
|
853
|
|
|
915
|
|
|
1,016
|
|
|
1,346
|
|
|
—
|
|
|||||
Home equity line of credit
|
10,376
|
|
|
11,597
|
|
|
6,584
|
|
|
4,934
|
|
|
2,467
|
|
|||||
Residential land
|
2,644
|
|
|
1,622
|
|
|
425
|
|
|
2,751
|
|
|
4,713
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
23,742
|
|
|
24,328
|
|
|
19,007
|
|
|
23,481
|
|
|
21,142
|
|
|||||
Commercial
|
2,614
|
|
|
1,527
|
|
|
1,741
|
|
|
14,146
|
|
|
1,104
|
|
|||||
Consumer
|
57
|
|
|
62
|
|
|
66
|
|
|
10
|
|
|
—
|
|
|||||
Total troubled debt restructured loans
|
$
|
26,413
|
|
|
$
|
25,917
|
|
|
$
|
20,814
|
|
|
$
|
37,637
|
|
|
$
|
22,246
|
|
(dollars in millions)
|
Year ended December 31, 2019
|
||
Gross amount of interest income that would have been recorded if the loans had been current in accordance with original contractual terms, and had been outstanding throughout the period or since origination, if held for only part of the period 1
|
$
|
3
|
|
Interest income actually recognized
|
2
|
|
|
Total interest income foregone
|
$
|
1
|
|
1
|
Based on the contractual rate that was being charged at the time the loan was restructured or placed on nonaccrual status.
|
(dollars in thousands)
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||
Allowance for loan losses, January 1
|
$
|
52,119
|
|
|
$
|
53,637
|
|
|
$
|
55,533
|
|
|
$
|
50,038
|
|
|
$
|
45,618
|
|
Provision for loan losses
|
23,480
|
|
|
14,745
|
|
|
10,901
|
|
|
16,763
|
|
|
6,275
|
|
|||||
Charge-offs
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
26
|
|
|
128
|
|
|
826
|
|
|
639
|
|
|
356
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
144
|
|
|
353
|
|
|
14
|
|
|
112
|
|
|
205
|
|
|||||
Residential land
|
4
|
|
|
18
|
|
|
210
|
|
|
138
|
|
|
—
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
174
|
|
|
499
|
|
|
1,050
|
|
|
889
|
|
|
561
|
|
|||||
Commercial
|
6,811
|
|
|
2,722
|
|
|
4,006
|
|
|
5,943
|
|
|
1,074
|
|
|||||
Consumer
|
21,677
|
|
|
17,296
|
|
|
11,757
|
|
|
7,413
|
|
|
4,791
|
|
|||||
Total charge-offs
|
28,662
|
|
|
20,517
|
|
|
16,813
|
|
|
14,245
|
|
|
6,426
|
|
|||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
854
|
|
|
74
|
|
|
157
|
|
|
421
|
|
|
226
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
17
|
|
|
257
|
|
|
308
|
|
|
59
|
|
|
80
|
|
|||||
Residential land
|
229
|
|
|
179
|
|
|
482
|
|
|
461
|
|
|
507
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
1,100
|
|
|
510
|
|
|
947
|
|
|
941
|
|
|
813
|
|
|||||
Commercial
|
2,351
|
|
|
2,136
|
|
|
1,852
|
|
|
1,093
|
|
|
2,773
|
|
|||||
Consumer
|
2,967
|
|
|
1,608
|
|
|
1,217
|
|
|
943
|
|
|
985
|
|
|||||
Total recoveries
|
6,418
|
|
|
4,254
|
|
|
4,016
|
|
|
2,977
|
|
|
4,571
|
|
|||||
Net charge-offs
|
22,244
|
|
|
16,263
|
|
|
12,797
|
|
|
11,268
|
|
|
1,855
|
|
|||||
Allowance for loan losses, December 31
|
$
|
53,355
|
|
|
$
|
52,119
|
|
|
$
|
53,637
|
|
|
$
|
55,533
|
|
|
$
|
50,038
|
|
Ratio of allowance for loan losses to loans held for investment
|
1.04
|
%
|
|
1.08
|
%
|
|
1.15
|
%
|
|
1.17
|
%
|
|
1.08
|
%
|
|||||
Ratio of provision for loan losses during the year to average total loans
|
0.47
|
%
|
|
0.31
|
%
|
|
0.23
|
%
|
|
0.36
|
%
|
|
0.14
|
%
|
|||||
Ratio of net charge-offs during the year to average total loans
|
0.45
|
%
|
|
0.34
|
%
|
|
0.27
|
%
|
|
0.24
|
%
|
|
0.04
|
%
|
December 31
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
(dollars in thousands)
|
Allow-ance balance
|
|
Allowance
to loan
receivable
%
|
|
Loan
receivable
% of
total
|
|
Allow-ance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
|
Allow-ance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Residential 1-4 family
|
$
|
2,380
|
|
|
0.11
|
|
|
42.6
|
|
|
$
|
1,976
|
|
|
0.09
|
|
|
44.3
|
|
|
$
|
2,902
|
|
|
0.14
|
|
|
45.3
|
|
Commercial real estate
|
15,053
|
|
|
1.82
|
|
|
16.1
|
|
|
14,505
|
|
|
1.94
|
|
|
15.4
|
|
|
15,796
|
|
|
2.15
|
|
|
15.7
|
|
|||
Home equity line of credit
|
6,922
|
|
|
0.63
|
|
|
21.3
|
|
|
6,371
|
|
|
0.65
|
|
|
20.2
|
|
|
7,522
|
|
|
0.82
|
|
|
19.6
|
|
|||
Residential land
|
449
|
|
|
3.05
|
|
|
0.3
|
|
|
479
|
|
|
3.65
|
|
|
0.3
|
|
|
896
|
|
|
5.67
|
|
|
0.3
|
|
|||
Commercial construction
|
2,097
|
|
|
2.97
|
|
|
1.4
|
|
|
2,790
|
|
|
3.02
|
|
|
1.9
|
|
|
4,671
|
|
|
4.31
|
|
|
2.3
|
|
|||
Residential construction
|
3
|
|
|
0.03
|
|
|
0.2
|
|
|
4
|
|
|
0.03
|
|
|
0.3
|
|
|
12
|
|
|
0.08
|
|
|
0.3
|
|
|||
Total real estate
|
26,904
|
|
|
0.64
|
|
|
81.9
|
|
|
26,125
|
|
|
0.65
|
|
|
82.4
|
|
|
31,799
|
|
|
0.81
|
|
|
83.5
|
|
|||
Commercial
|
10,245
|
|
|
1.53
|
|
|
13.1
|
|
|
9,225
|
|
|
1.57
|
|
|
12.1
|
|
|
10,851
|
|
|
1.99
|
|
|
11.7
|
|
|||
Consumer
|
16,206
|
|
|
6.28
|
|
|
5.0
|
|
|
16,769
|
|
|
6.30
|
|
|
5.5
|
|
|
10,987
|
|
|
4.91
|
|
|
4.8
|
|
|||
Total allowance for loan losses
|
$
|
53,355
|
|
|
1.04
|
|
|
100.0
|
|
|
$
|
52,119
|
|
|
1.08
|
|
|
100.0
|
|
|
$
|
53,637
|
|
|
1.15
|
|
|
100.0
|
|
December 31
|
2016
|
|
2015
|
||||||||||||||||
(dollars in thousands)
|
Allowance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
|
Allowance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
2,873
|
|
|
0.14
|
|
|
43.2
|
|
|
$
|
4,186
|
|
|
0.20
|
|
|
44.8
|
|
Commercial real estate
|
16,004
|
|
|
2.00
|
|
|
16.9
|
|
|
11,342
|
|
|
1.64
|
|
|
14.9
|
|
||
Home equity line of credit
|
5,039
|
|
|
0.58
|
|
|
18.2
|
|
|
7,260
|
|
|
0.86
|
|
|
18.3
|
|
||
Residential land
|
1,738
|
|
|
9.20
|
|
|
0.4
|
|
|
1,671
|
|
|
9.17
|
|
|
0.4
|
|
||
Commercial construction
|
6,449
|
|
|
5.09
|
|
|
2.7
|
|
|
4,461
|
|
|
4.43
|
|
|
2.2
|
|
||
Residential construction
|
12
|
|
|
0.07
|
|
|
0.3
|
|
|
13
|
|
|
0.09
|
|
|
0.3
|
|
||
Total real estate
|
32,115
|
|
|
0.83
|
|
|
81.7
|
|
|
28,933
|
|
|
0.77
|
|
|
80.9
|
|
||
Commercial
|
16,618
|
|
|
2.40
|
|
|
14.6
|
|
|
17,208
|
|
|
2.27
|
|
|
16.4
|
|
||
Consumer
|
6,800
|
|
|
3.82
|
|
|
3.7
|
|
|
3,897
|
|
|
3.15
|
|
|
2.7
|
|
||
Total allowance for loan losses
|
$
|
55,533
|
|
|
1.17
|
|
|
100.0
|
|
|
$
|
50,038
|
|
|
1.08
|
|
|
100.0
|
|
December 31
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
|||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
117,787
|
|
|
9
|
%
|
|
$
|
154,349
|
|
|
10
|
%
|
|
$
|
184,298
|
|
|
13
|
%
|
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
|
1,165,836
|
|
|
85
|
|
|
1,303,291
|
|
|
85
|
|
|
1,245,988
|
|
|
86
|
|
|||
Corporate bonds
|
|
60,057
|
|
|
4
|
|
|
49,132
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
Mortgage revenue bonds
|
|
28,597
|
|
|
2
|
|
|
23,636
|
|
|
2
|
|
|
15,427
|
|
|
1
|
|
|||
Total investment securities
|
|
$
|
1,372,277
|
|
|
100
|
%
|
|
$
|
1,530,408
|
|
|
100
|
%
|
|
$
|
1,445,713
|
|
|
100
|
%
|
(dollars in millions)
|
In 1 year
or less
|
|
After 1 year
through 5 years
|
|
After 5 years
through 10 years
|
|
After
10 years
|
|
Mortgage-backed securities
|
|
Total1
|
||||||||||||
U.S. Treasury and federal agency obligations
|
$
|
47
|
|
|
$
|
41
|
|
|
$
|
29
|
|
|
|
|
|
|
$
|
117
|
|
||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
|
|
|
|
|
|
|
|
1,164
|
|
|
1,164
|
|
||||||||||
Corporate bonds
|
|
|
35
|
|
|
24
|
|
|
|
|
|
|
59
|
|
|||||||||
Mortgage revenue bonds2
|
13
|
|
|
|
|
|
|
16
|
|
|
|
|
29
|
|
|||||||||
|
$
|
60
|
|
|
$
|
76
|
|
|
$
|
53
|
|
|
$
|
16
|
|
|
$
|
1,164
|
|
|
$
|
1,369
|
|
Weighted average yield
|
2.26
|
%
|
|
2.75
|
%
|
|
2.44
|
%
|
|
3.17
|
%
|
|
2.44
|
%
|
|
2.54
|
%
|
1
|
As of December 31, 2019, no investment exceeded 10% of ASB’s shareholder’s equity.
|
2
|
Weighted average yield on the mortgage revenue bonds is computed on a tax equivalent basis using a federal statutory tax rate of 21%.
|
Years ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
(dollars in thousands)
|
Average
balance
|
|
|
% of
total interest-bearing
deposits
|
|
|
Weighted
average
rate %
|
|
|
Average
balance
|
|
|
% of
total interest-bearing deposits |
|
|
Weighted
average
rate %
|
|
|
Average
balance |
|
|
% of
total interest-bearing deposits |
|
|
Weighted
average rate % |
|
|||
Interest-bearing deposit liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Savings
|
$
|
2,340,671
|
|
|
53.9
|
%
|
|
0.08
|
%
|
|
$
|
2,334,681
|
|
|
54.6
|
%
|
|
0.07
|
%
|
|
$
|
2,278,396
|
|
|
56.7
|
%
|
|
0.07
|
%
|
Checking
|
1,044,315
|
|
|
24.0
|
|
|
0.12
|
|
|
1,006,839
|
|
|
23.6
|
|
|
0.07
|
|
|
902,678
|
|
|
22.5
|
|
|
0.03
|
|
|||
Money market
|
145,939
|
|
|
3.4
|
|
|
0.65
|
|
|
140,225
|
|
|
3.3
|
|
|
0.43
|
|
|
142,068
|
|
|
3.5
|
|
|
0.12
|
|
|||
Certificate
|
810,749
|
|
|
18.7
|
|
|
1.56
|
|
|
789,926
|
|
|
18.5
|
|
|
1.40
|
|
|
696,799
|
|
|
17.3
|
|
|
1.10
|
|
|||
Total interest-bearing deposit liabilities
|
$
|
4,341,674
|
|
|
100.0
|
%
|
|
0.39
|
%
|
|
$
|
4,271,671
|
|
|
100.0
|
%
|
|
0.33
|
%
|
|
$
|
4,019,941
|
|
|
100.0
|
%
|
|
0.24
|
%
|
Total noninterest-bearing demand deposit liabilities
|
1,848,336
|
|
|
|
|
|
|
1,763,331
|
|
|
|
|
|
|
1,672,780
|
|
|
|
|
|
|||||||||
Total deposit liabilities
|
$
|
6,190,010
|
|
|
|
|
|
|
$
|
6,035,002
|
|
|
|
|
|
|
$
|
5,692,721
|
|
|
|
|
|
(in thousands)
|
Amount
|
|
|
Three months or less
|
$
|
204,100
|
|
Greater than three months through six months
|
72,436
|
|
|
Greater than six months through twelve months
|
64,370
|
|
|
Greater than twelve months
|
115,604
|
|
|
|
$
|
456,510
|
|
Effective dates
|
|
1/1/2015
|
|
1/1/2016
|
|
1/1/2017
|
|
1/1/2018
|
|
1/1/2019
|
|||||
Capital conservation buffer
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.50
|
%
|
Common equity Tier 1 ratio + conservation buffer
|
|
4.50
|
%
|
|
5.125
|
%
|
|
5.75
|
%
|
|
6.375
|
%
|
|
7.00
|
%
|
Tier 1 capital ratio + conservation buffer
|
|
6.00
|
%
|
|
6.625
|
%
|
|
7.25
|
%
|
|
7.875
|
%
|
|
8.50
|
%
|
Total capital ratio + conservation buffer
|
|
8.00
|
%
|
|
8.625
|
%
|
|
9.25
|
%
|
|
9.875
|
%
|
|
10.50
|
%
|
Tier 1 leverage ratio
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Countercyclical capital buffer — not applicable to ASB
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.50
|
%
|
December 31
|
2019
|
|
|
% change
|
|
|
2018
|
|
|
% change
|
|
||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Total assets
|
$
|
7,233
|
|
|
3
|
|
|
$
|
7,028
|
|
|
3
|
|
Investment securities
|
1,372
|
|
|
(10
|
)
|
|
1,530
|
|
|
6
|
|
||
Loans held for investment, net
|
5,068
|
|
|
6
|
|
|
4,791
|
|
|
4
|
|
||
Deposit liabilities
|
6,272
|
|
|
2
|
|
|
6,159
|
|
|
5
|
|
||
Other bank borrowings
|
115
|
|
|
5
|
|
|
110
|
|
|
(42
|
)
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Bank interest rate risk
|
|
|
Change in NII
(gradual change in interest rates)
|
|
Change in EVE
(instantaneous change in interest rates)
|
||||||||
Change in interest rates
(basis points)
|
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
+300
|
|
2.8
|
%
|
|
2.5
|
%
|
|
15.3
|
%
|
|
10.0
|
%
|
+200
|
|
2.1
|
|
|
1.9
|
|
|
12.2
|
|
|
8.1
|
|
+100
|
|
1.3
|
|
|
1.1
|
|
|
7.5
|
|
|
5.1
|
|
-100
|
|
(2.0
|
)
|
|
(2.3
|
)
|
|
(12.7
|
)
|
|
(11.0
|
)
|
Other than bank interest rate risk
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Index to Consolidated Financial Statements
|
Page
|
Reports of Independent Registered Public Accounting Firms - HEI
|
|
Reports of Independent Registered Public Accounting Firms - Hawaiian Electric
|
|
HEI
|
|
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
Hawaiian Electric
|
|
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
|
Consolidated Statements of Capitalization at December 31, 2019 and 2018
|
|
Consolidated Statements of Changes in Common Stock Equity for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
Notes to Consolidated Financial Statements
|
Report of Independent Registered Public Accounting Firm
|
•
|
We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. Such controls include the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or incurring future reductions in rates.
|
•
|
We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
|
•
|
We read relevant regulatory orders issued by the PUC for the Company, regulatory statutes, filings made by interveners, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedence of the PUC’s treatment of similar costs under similar circumstances. We evaluated the external information and compared to management’s recorded regulatory asset and liability balances for completeness.
|
•
|
For regulatory matters in process, we inspected the Company’s filings with the PUC and the filings with the PUC by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
|
•
|
We obtained analyses from management, which includes input from regulatory and legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery, or a future reduction in rates.
|
•
|
We tested the effectiveness of controls over the Allowance, including management’s controls over the respective qualitative factors.
|
•
|
We evaluated the reasonableness and conceptual soundness of the Allowance modeling framework, including the use of qualitative factors.
|
•
|
We tested the mathematical accuracy of the calculation of the qualitative Allowance as well as the accuracy and completeness of data used as inputs to the determination of qualitative factors.
|
•
|
We evaluated the qualitative factors applied to the historical loss rates under the incurred loss model, including assessing the basis for the factors and the reasonableness of the qualitative factors used in the Allowance.
|
•
|
In order to identify potential bias in the determination of the Allowance, we performed analytical analysis, including retrospective review, where we compared the estimate of losses to actual losses, analyzed ratios of the Allowance to loans and other relevant metric, such as losses and nonperforming loans, and performed peer analysis where we compared relevant metrics to comparable financial institutions.
|
•
|
We evaluated the directional consistency and magnitude of the qualitative adjustments as well as the absolute value of the Allowance attributable to the qualitative adjustments.
|
•
|
We tested the effectiveness of management’s internal controls over key assumptions and judgments, expected loss estimation models, selection and application of new accounting policies, and disclosure of the impact of adoption discussed in the financial statements.
|
•
|
We evaluated the adequacy of the Company’s disclosure related to the Adoption of ASU No. 2016-13.
|
•
|
We evaluated the appropriateness of the Company’s policies, methodologies, and elections involved in the adoption of the expected loss model.
|
•
|
We tested the mathematical accuracy of the expected loss estimation models, including the completeness and accuracy of inputs to the models.
|
•
|
We involved credit specialist to assist us in evaluating the reasonableness and conceptual soundness of the methodology as applied in the expected loss estimation models.
|
•
|
We evaluated the reasonableness of management’s key assumptions and judgments in estimating future credit losses.
|
Report of Independent Registered Public Accounting Firm
|
Consolidated Statements of Income
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
$
|
2,545,942
|
|
|
$
|
2,546,525
|
|
|
$
|
2,257,566
|
|
Bank
|
328,570
|
|
|
314,275
|
|
|
297,640
|
|
|||
Other
|
89
|
|
|
49
|
|
|
419
|
|
|||
Total revenues
|
2,874,601
|
|
|
2,860,849
|
|
|
2,555,625
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
2,291,564
|
|
|
2,304,864
|
|
|
1,994,042
|
|
|||
Bank (includes $10.8 million gain on sales of properties in 2019)
|
217,008
|
|
|
206,040
|
|
|
198,104
|
|
|||
Other
|
17,355
|
|
|
16,589
|
|
|
17,246
|
|
|||
Total expenses
|
2,525,927
|
|
|
2,527,493
|
|
|
2,209,392
|
|
|||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
254,378
|
|
|
241,661
|
|
|
263,524
|
|
|||
Bank
|
111,562
|
|
|
108,235
|
|
|
99,536
|
|
|||
Other
|
(17,266
|
)
|
|
(16,540
|
)
|
|
(16,827
|
)
|
|||
Total operating income
|
348,674
|
|
|
333,356
|
|
|
346,233
|
|
|||
Retirement defined benefits expense—other than service costs
|
(2,806
|
)
|
|
(5,962
|
)
|
|
(7,942
|
)
|
|||
Interest expense, net – other than on deposit liabilities and other bank borrowings
|
(90,899
|
)
|
|
(88,677
|
)
|
|
(78,972
|
)
|
|||
Allowance for borrowed funds used during construction
|
4,453
|
|
|
4,867
|
|
|
4,778
|
|
|||
Allowance for equity funds used during construction
|
11,987
|
|
|
10,877
|
|
|
12,483
|
|
|||
Income before income taxes
|
271,409
|
|
|
254,461
|
|
|
276,580
|
|
|||
Income taxes
|
51,637
|
|
|
50,797
|
|
|
109,393
|
|
|||
Net income
|
219,772
|
|
|
203,664
|
|
|
167,187
|
|
|||
Preferred stock dividends of subsidiaries
|
1,890
|
|
|
1,890
|
|
|
1,890
|
|
|||
Net income for common stock
|
$
|
217,882
|
|
|
$
|
201,774
|
|
|
$
|
165,297
|
|
Basic earnings per common share
|
$
|
2.00
|
|
|
$
|
1.85
|
|
|
$
|
1.52
|
|
Diluted earnings per common share
|
$
|
1.99
|
|
|
$
|
1.85
|
|
|
$
|
1.52
|
|
Weighted-average number of common shares outstanding
|
108,949
|
|
|
108,855
|
|
|
108,749
|
|
|||
Net effect of potentially dilutive shares
|
458
|
|
|
291
|
|
|
184
|
|
|||
Weighted-average shares assuming dilution
|
109,407
|
|
|
109,146
|
|
|
108,933
|
|
Consolidated Statements of Comprehensive Income
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Net income for common stock
|
$
|
217,882
|
|
|
$
|
201,774
|
|
|
$
|
165,297
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|||
Net unrealized gains (losses) on available-for sale investment securities:
|
|
|
|
|
|
|
|
|
|||
Net unrealized gains (losses) on available-for sale investment securities arising during the period, net of (taxes) benefits of $(10,024), $3,468 and $2,886 for 2019, 2018 and 2017, respectively
|
27,382
|
|
|
(9,472
|
)
|
|
(4,370
|
)
|
|||
Reclassification adjustment for net realized gains included in net income, net of taxes of $175, nil and nil for 2019, 2018 and 2017, respectively
|
(478
|
)
|
|
—
|
|
|
—
|
|
|||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Unrealized interest rate hedging losses, net of tax benefit of $409, $151 and nil for 2019, 2018 and 2017, respectively
|
(1,177
|
)
|
|
(436
|
)
|
|
—
|
|
|||
Reclassification adjustment to net income, net of tax benefits of nil, nil and $289 for 2019, 2018 and 2017, respectively
|
—
|
|
|
—
|
|
|
454
|
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of (taxes) benefits of $(3,892), $9,810 and $(41,129) for 2019, 2018 and 2017, respectively
|
10,914
|
|
|
(28,101
|
)
|
|
65,531
|
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $3,512, $7,317 and $10,041 for 2019, 2018 and 2017, respectively
|
10,107
|
|
|
21,015
|
|
|
15,737
|
|
|||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of (taxes) benefits of $(5,610), $2,887 and $(49,523) for 2019, 2018 and 2017, respectively
|
(16,177
|
)
|
|
8,325
|
|
|
(78,724
|
)
|
|||
Other comprehensive income (loss), net of taxes
|
30,571
|
|
|
(8,669
|
)
|
|
(1,372
|
)
|
|||
Comprehensive income attributable to Hawaiian Electric Industries, Inc.
|
$
|
248,453
|
|
|
$
|
193,105
|
|
|
$
|
163,925
|
|
Consolidated Balance Sheets
|
December 31
|
|
|
|
2019
|
|
|
|
|
|
2018
|
|
||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
$
|
196,813
|
|
|
|
|
|
$
|
169,208
|
|
||
Restricted cash
|
|
|
30,872
|
|
|
|
|
—
|
|
||||||
Accounts receivable and unbilled revenues, net
|
|
|
|
300,794
|
|
|
|
|
|
325,672
|
|
||||
Available-for-sale investment securities, at fair value
|
|
|
|
1,232,826
|
|
|
|
|
|
1,388,533
|
|
||||
Held-to-maturity investment securities, at amortized cost
|
|
|
139,451
|
|
|
|
|
141,875
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
|
|
8,434
|
|
|
|
|
|
9,958
|
|
||||
Loans held for investment, net
|
|
|
|
5,067,821
|
|
|
|
|
|
4,790,902
|
|
||||
Loans held for sale, at lower of cost or fair value
|
|
|
|
12,286
|
|
|
|
|
|
1,805
|
|
||||
Property, plant and equipment, net
|
|
|
|
|
|
|
|
|
|
|
|
||||
Land
|
$
|
100,161
|
|
|
|
|
|
$
|
102,925
|
|
|
|
|
||
Plant and equipment
|
7,545,083
|
|
|
|
|
|
7,118,709
|
|
|
|
|
||||
Construction in progress
|
229,953
|
|
|
|
|
|
267,714
|
|
|
|
|
||||
|
7,875,197
|
|
|
|
|
|
7,489,348
|
|
|
|
|
||||
Less – accumulated depreciation
|
(2,765,569
|
)
|
|
5,109,628
|
|
|
(2,659,230
|
)
|
|
4,830,118
|
|
||||
Operating lease right-of-use assets
|
|
|
199,171
|
|
|
|
|
—
|
|
||||||
Regulatory assets
|
|
|
|
715,080
|
|
|
|
|
|
833,426
|
|
||||
Other
|
|
|
|
649,885
|
|
|
|
|
|
530,364
|
|
||||
Goodwill
|
|
|
|
82,190
|
|
|
|
|
|
82,190
|
|
||||
Total assets
|
|
|
|
$
|
13,745,251
|
|
|
|
|
|
$
|
13,104,051
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
|
|
$
|
220,633
|
|
|
|
|
|
$
|
214,773
|
|
||
Interest and dividends payable
|
|
|
|
24,941
|
|
|
|
|
|
28,254
|
|
||||
Deposit liabilities
|
|
|
|
6,271,902
|
|
|
|
|
|
6,158,852
|
|
||||
Short-term borrowings—other than bank
|
|
|
|
185,710
|
|
|
|
|
|
73,992
|
|
||||
Other bank borrowings
|
|
|
|
115,110
|
|
|
|
|
|
110,040
|
|
||||
Long-term debt, net—other than bank
|
|
|
|
1,964,365
|
|
|
|
|
|
1,879,641
|
|
||||
Deferred income taxes
|
|
|
|
379,324
|
|
|
|
|
|
372,518
|
|
||||
Operating lease liabilities
|
|
|
199,571
|
|
|
|
|
—
|
|
||||||
Regulatory liabilities
|
|
|
|
972,310
|
|
|
|
|
|
950,236
|
|
||||
Defined benefit pension and other postretirement benefit plans liability
|
|
|
|
513,287
|
|
|
|
|
|
538,384
|
|
||||
Other
|
|
|
|
583,545
|
|
|
|
|
|
580,788
|
|
||||
Total liabilities
|
|
|
|
11,430,698
|
|
|
|
|
|
10,907,478
|
|
||||
Preferred stock of subsidiaries - not subject to mandatory redemption
|
|
|
|
34,293
|
|
|
|
|
|
34,293
|
|
||||
Commitments and contingencies (Notes 3 and 4)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
||||
Preferred stock, no par value, authorized 10,000,000 shares; issued: none
|
|
|
|
—
|
|
|
|
|
|
—
|
|
||||
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 108,973,328 shares and 108,879,245 shares at December 31, 2019 and 2018, respectively
|
|
|
|
1,678,257
|
|
|
|
|
|
1,669,267
|
|
||||
Retained earnings
|
|
|
|
622,042
|
|
|
|
|
|
543,623
|
|
||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains (losses) on securities
|
$
|
2,481
|
|
|
|
|
|
$
|
(24,423
|
)
|
|
|
|
||
Unrealized losses on derivatives
|
(1,613
|
)
|
|
|
|
|
(436
|
)
|
|
|
|
||||
Retirement benefit plans
|
(20,907
|
)
|
|
(20,039
|
)
|
|
(25,751
|
)
|
|
(50,610
|
)
|
||||
Total shareholders’ equity
|
|
|
|
2,280,260
|
|
|
|
|
|
2,162,280
|
|
||||
Total liabilities and shareholders’ equity
|
|
|
|
$
|
13,745,251
|
|
|
|
|
|
$
|
13,104,051
|
|
Consolidated Statements of Changes in Shareholders’ Equity
|
|
Common stock
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
|
|||||||||||
(in thousands, except per share amounts)
|
Shares
|
|
Amount
|
|
|
|
Total
|
|||||||||||
Balance, December 31, 2016
|
108,583
|
|
|
$
|
1,660,910
|
|
|
$
|
438,972
|
|
|
$
|
(33,129
|
)
|
|
$
|
2,066,753
|
|
Net income for common stock
|
—
|
|
|
—
|
|
|
165,297
|
|
|
—
|
|
|
165,297
|
|
||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,372
|
)
|
|
(1,372
|
)
|
||||
Reclass of AOCI for tax rate reduction impact
|
—
|
|
|
—
|
|
|
7,440
|
|
|
(7,440
|
)
|
|
—
|
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based plans
|
205
|
|
|
4,664
|
|
|
—
|
|
|
—
|
|
|
4,664
|
|
||||
Share-based expenses and other, net
|
—
|
|
|
(3,083
|
)
|
|
—
|
|
|
—
|
|
|
(3,083
|
)
|
||||
Common stock dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
(134,873
|
)
|
|
—
|
|
|
(134,873
|
)
|
||||
Balance, December 31, 2017
|
108,788
|
|
|
1,662,491
|
|
|
476,836
|
|
|
(41,941
|
)
|
|
2,097,386
|
|
||||
Net income for common stock
|
—
|
|
|
—
|
|
|
201,774
|
|
|
—
|
|
|
201,774
|
|
||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,669
|
)
|
|
(8,669
|
)
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based plans
|
91
|
|
|
2,650
|
|
|
—
|
|
|
—
|
|
|
2,650
|
|
||||
Share-based expenses and other, net
|
—
|
|
|
4,126
|
|
|
—
|
|
|
—
|
|
|
4,126
|
|
||||
Common stock dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
(134,987
|
)
|
|
—
|
|
|
(134,987
|
)
|
||||
Balance, December 31, 2018
|
108,879
|
|
|
1,669,267
|
|
|
543,623
|
|
|
(50,610
|
)
|
|
2,162,280
|
|
||||
Net income for common stock
|
—
|
|
|
—
|
|
|
217,882
|
|
|
—
|
|
|
217,882
|
|
||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
30,571
|
|
|
30,571
|
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based plans
|
94
|
|
|
3,092
|
|
|
—
|
|
|
—
|
|
|
3,092
|
|
||||
Share-based expenses and other, net
|
—
|
|
|
5,898
|
|
|
—
|
|
|
—
|
|
|
5,898
|
|
||||
Common stock dividends ($1.28 per share)
|
—
|
|
|
—
|
|
|
(139,463
|
)
|
|
—
|
|
|
(139,463
|
)
|
||||
Balance, December 31, 2019
|
108,973
|
|
|
$
|
1,678,257
|
|
|
$
|
622,042
|
|
|
$
|
(20,039
|
)
|
|
$
|
2,280,260
|
|
Consolidated Statements of Cash Flows
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
219,772
|
|
|
$
|
203,664
|
|
|
$
|
167,187
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
229,858
|
|
|
214,036
|
|
|
200,658
|
|
|||
Other amortization
|
48,255
|
|
|
41,593
|
|
|
21,340
|
|
|||
Provision for loan losses
|
23,480
|
|
|
14,745
|
|
|
10,901
|
|
|||
Loans originated, held for sale
|
(285,042
|
)
|
|
(109,537
|
)
|
|
(115,104
|
)
|
|||
Proceeds from sale of loans, held for sale
|
277,119
|
|
|
112,182
|
|
|
127,951
|
|
|||
Gain on sale of real estate, held for sale
|
(10,762
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(15,085
|
)
|
|
(9,368
|
)
|
|
37,835
|
|
|||
Share-based compensation expense
|
9,986
|
|
|
7,792
|
|
|
5,404
|
|
|||
Allowance for equity funds used during construction
|
(11,987
|
)
|
|
(10,877
|
)
|
|
(12,483
|
)
|
|||
Other
|
10,822
|
|
|
(4,219
|
)
|
|
(3,324
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in accounts receivable and unbilled revenues, net
|
26,083
|
|
|
(64,321
|
)
|
|
(12,875
|
)
|
|||
Decrease (increase) in fuel oil stock
|
(11,493
|
)
|
|
7,054
|
|
|
(20,794
|
)
|
|||
Decrease (increase) in regulatory assets
|
71,262
|
|
|
9,252
|
|
|
(17,256
|
)
|
|||
Increase (decrease) in accounts, interest and dividends payable
|
(3,054
|
)
|
|
21,528
|
|
|
34,985
|
|
|||
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes
|
(27,538
|
)
|
|
29,429
|
|
|
20,685
|
|
|||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
(4,482
|
)
|
|
20,871
|
|
|
882
|
|
|||
Change in other assets and liabilities, net
|
(34,724
|
)
|
|
15,488
|
|
|
(25,551
|
)
|
|||
Net cash provided by operating activities
|
512,470
|
|
|
499,312
|
|
|
420,441
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Available-for-sale investment securities purchased
|
(108,088
|
)
|
|
(224,335
|
)
|
|
(528,379
|
)
|
|||
Principal repayments on available-for-sale investment securities
|
272,949
|
|
|
218,930
|
|
|
220,231
|
|
|||
Proceeds from sale of available-for-sale investment securities
|
19,810
|
|
|
—
|
|
|
—
|
|
|||
Purchases of held-to-maturity investment securities
|
(13,057
|
)
|
|
(103,184
|
)
|
|
(44,515
|
)
|
|||
Proceeds from repayments or maturities of held-to-maturity investment securities
|
15,505
|
|
|
5,720
|
|
|
—
|
|
|||
Purchase of stock from Federal Home Loan Bank
|
(95,636
|
)
|
|
(28,292
|
)
|
|
(2,868
|
)
|
|||
Redemption of stock from Federal Home Loan Bank
|
97,160
|
|
|
28,040
|
|
|
4,380
|
|
|||
Net decrease (increase) in loans held for investment
|
(300,210
|
)
|
|
(189,352
|
)
|
|
15,887
|
|
|||
Proceeds from sale of commercial loans
|
—
|
|
|
7,149
|
|
|
36,760
|
|
|||
Proceeds from sale of real estate held for sale
|
21,060
|
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(457,520
|
)
|
|
(506,770
|
)
|
|
(430,454
|
)
|
|||
Contributions to low income housing investments
|
(6,974
|
)
|
|
(14,499
|
)
|
|
(17,505
|
)
|
|||
Acquisition of business
|
—
|
|
|
—
|
|
|
(76,323
|
)
|
|||
Other, net
|
13,292
|
|
|
14,534
|
|
|
7,487
|
|
|||
Net cash used in investing activities
|
(541,709
|
)
|
|
(792,059
|
)
|
|
(815,299
|
)
|
Consolidated Statements of Cash Flows (continued)
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase in deposit liabilities
|
113,050
|
|
|
165,880
|
|
|
341,668
|
|
|||
Net increase (decrease) in short-term borrowings with original maturities of three months or less
|
86,718
|
|
|
(18,999
|
)
|
|
67,992
|
|
|||
Proceeds from issuance of short-term debt
|
75,000
|
|
|
25,000
|
|
|
125,000
|
|
|||
Repayment of short-term debt
|
(50,000
|
)
|
|
(50,000
|
)
|
|
(75,000
|
)
|
|||
Net increase in other bank borrowings with original maturities of three months or less
|
5,070
|
|
|
71,556
|
|
|
61,776
|
|
|||
Repayment of other bank borrowings
|
—
|
|
|
(50,000
|
)
|
|
(63,534
|
)
|
|||
Proceeds from issuance of long-term debt
|
289,349
|
|
|
250,000
|
|
|
532,325
|
|
|||
Repayment of long-term debt and funds transferred for repayment of long-term debt
|
(287,285
|
)
|
|
(53,887
|
)
|
|
(465,000
|
)
|
|||
Withheld shares for employee taxes on vested share-based compensation
|
(997
|
)
|
|
(996
|
)
|
|
(3,828
|
)
|
|||
Common stock dividends
|
(139,463
|
)
|
|
(134,987
|
)
|
|
(134,873
|
)
|
|||
Preferred stock dividends of subsidiaries
|
(1,890
|
)
|
|
(1,890
|
)
|
|
(1,890
|
)
|
|||
Other
|
(1,836
|
)
|
|
(1,603
|
)
|
|
(6,349
|
)
|
|||
Net cash provided by financing activities
|
87,716
|
|
|
200,074
|
|
|
378,287
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
58,477
|
|
|
(92,673
|
)
|
|
(16,571
|
)
|
|||
Cash, cash equivalents and restricted cash, January 1
|
169,208
|
|
|
261,881
|
|
|
278,452
|
|
|||
Cash, cash equivalents and restricted cash, December 31
|
227,685
|
|
|
169,208
|
|
|
261,881
|
|
|||
Less: Restricted cash
|
(30,872
|
)
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, December 31
|
$
|
196,813
|
|
|
$
|
169,208
|
|
|
$
|
261,881
|
|
Consolidated Statements of Income
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
2,545,942
|
|
|
$
|
2,546,525
|
|
|
$
|
2,257,566
|
|
Expenses
|
|
|
|
|
|
|
|
|
|||
Fuel oil
|
720,709
|
|
|
760,528
|
|
|
587,768
|
|
|||
Purchased power
|
633,256
|
|
|
639,307
|
|
|
586,634
|
|
|||
Other operation and maintenance
|
481,737
|
|
|
461,491
|
|
|
411,907
|
|
|||
Depreciation
|
215,731
|
|
|
203,626
|
|
|
192,784
|
|
|||
Taxes, other than income taxes
|
240,131
|
|
|
239,912
|
|
|
214,949
|
|
|||
Total expenses
|
2,291,564
|
|
|
2,304,864
|
|
|
1,994,042
|
|
|||
Operating income
|
254,378
|
|
|
241,661
|
|
|
263,524
|
|
|||
Allowance for equity funds used during construction
|
11,987
|
|
|
10,877
|
|
|
12,483
|
|
|||
Retirement defined benefits expense—other than service costs
|
(2,836
|
)
|
|
(3,631
|
)
|
|
(6,003
|
)
|
|||
Interest expense and other charges, net
|
(70,842
|
)
|
|
(73,348
|
)
|
|
(69,637
|
)
|
|||
Allowance for borrowed funds used during construction
|
4,453
|
|
|
4,867
|
|
|
4,778
|
|
|||
Income before income taxes
|
197,140
|
|
|
180,426
|
|
|
205,145
|
|
|||
Income taxes
|
38,305
|
|
|
34,778
|
|
|
83,199
|
|
|||
Net income
|
158,835
|
|
|
145,648
|
|
|
121,946
|
|
|||
Preferred stock dividends of subsidiaries
|
915
|
|
|
915
|
|
|
915
|
|
|||
Net income attributable to Hawaiian Electric
|
157,920
|
|
|
144,733
|
|
|
121,031
|
|
|||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
1,080
|
|
|
1,080
|
|
|||
Net income for common stock
|
$
|
156,840
|
|
|
$
|
143,653
|
|
|
$
|
119,951
|
|
Consolidated Statements of Comprehensive Income
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Net income for common stock
|
$
|
156,840
|
|
|
$
|
143,653
|
|
|
$
|
119,951
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
||||||
Reclassification adjustment to net income, net of tax benefits of nil, nil and $289 for 2019, 2018 and 2017, respectively
|
—
|
|
|
—
|
|
|
454
|
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of (taxes) benefits of $(1,821), $9,024 and $(39,587) for 2019, 2018 and 2017, respectively
|
5,249
|
|
|
(26,019
|
)
|
|
63,105
|
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $3,312, $6,594 and $9,221 for 2019, 2018 and 2017, respectively
|
9,550
|
|
|
19,012
|
|
|
14,477
|
|
|||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of (taxes) benefits of $(5,610), $2,887 and $(49,523) for 2019, 2018 and 2017, respectively
|
(16,177
|
)
|
|
8,325
|
|
|
(78,724
|
)
|
|||
Other comprehensive income (loss), net of taxes
|
(1,378
|
)
|
|
1,318
|
|
|
(688
|
)
|
|||
Comprehensive income attributable to Hawaiian Electric Company, Inc.
|
$
|
155,462
|
|
|
$
|
144,971
|
|
|
$
|
119,263
|
|
Consolidated Balance Sheets
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
||||
Utility property, plant and equipment
|
|
|
|
|
|
||
Land
|
$
|
51,816
|
|
|
$
|
49,667
|
|
Plant and equipment
|
7,240,288
|
|
|
6,809,671
|
|
||
Less accumulated depreciation
|
(2,690,157
|
)
|
|
(2,577,342
|
)
|
||
Construction in progress
|
193,074
|
|
|
233,145
|
|
||
Utility property, plant and equipment, net
|
4,795,021
|
|
|
4,515,141
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation of $111 and $1,255 as of December 31, 2019 and 2018, respectively
|
6,956
|
|
|
6,961
|
|
||
Total property, plant and equipment, net
|
4,801,977
|
|
|
4,522,102
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
11,022
|
|
|
35,877
|
|
||
Restricted cash
|
30,872
|
|
|
—
|
|
||
Customer accounts receivable, net
|
152,790
|
|
|
177,896
|
|
||
Accrued unbilled revenues, net
|
117,227
|
|
|
121,738
|
|
||
Other accounts receivable, net
|
11,568
|
|
|
6,215
|
|
||
Fuel oil stock, at average cost
|
91,937
|
|
|
79,935
|
|
||
Materials and supplies, at average cost
|
60,702
|
|
|
55,204
|
|
||
Prepayments and other
|
116,980
|
|
|
32,118
|
|
||
Regulatory assets
|
30,710
|
|
|
71,016
|
|
||
Total current assets
|
623,808
|
|
|
579,999
|
|
||
Other long-term assets
|
|
|
|
|
|
||
Operating lease right-of-use-assets
|
176,809
|
|
|
—
|
|
||
Regulatory assets
|
684,370
|
|
|
762,410
|
|
||
Other
|
101,718
|
|
|
102,992
|
|
||
Total other long-term assets
|
962,897
|
|
|
865,402
|
|
||
Total assets
|
$
|
6,388,682
|
|
|
$
|
5,967,503
|
|
Capitalization and liabilities
|
|
|
|
|
|
||
Capitalization (see Consolidated Statements of Capitalization)
|
|
|
|
|
|
||
Common stock equity
|
$
|
2,047,352
|
|
|
$
|
1,957,641
|
|
Cumulative preferred stock – not subject to mandatory redemption
|
34,293
|
|
|
34,293
|
|
||
Commitments and contingencies (Note 3)
|
|
|
|
|
|
||
Long-term debt, net
|
1,401,714
|
|
|
1,418,802
|
|
||
Total capitalization
|
3,483,359
|
|
|
3,410,736
|
|
||
Current liabilities
|
|
|
|
|
|
||
Current portion of operating lease liabilities
|
63,707
|
|
|
—
|
|
||
Current portion of long-term debt, net
|
95,953
|
|
|
—
|
|
||
Short-term borrowings from non-affiliate
|
88,987
|
|
|
25,000
|
|
||
Accounts payable
|
187,770
|
|
|
171,791
|
|
||
Interest and preferred dividends payable
|
20,728
|
|
|
23,215
|
|
||
Taxes accrued, including revenue taxes
|
207,992
|
|
|
233,333
|
|
||
Regulatory liabilities
|
30,724
|
|
|
17,977
|
|
||
Other
|
67,305
|
|
|
60,003
|
|
||
Total current liabilities
|
763,166
|
|
|
531,319
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
||
Operating lease liabilities
|
113,400
|
|
|
—
|
|
||
Deferred income taxes
|
377,150
|
|
|
383,197
|
|
||
Regulatory liabilities
|
941,586
|
|
|
932,259
|
|
||
Unamortized tax credits
|
117,868
|
|
|
91,522
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
478,763
|
|
|
503,659
|
|
||
Other
|
113,390
|
|
|
114,811
|
|
||
Total deferred credits and other liabilities
|
2,142,157
|
|
|
2,025,448
|
|
||
Total capitalization and liabilities
|
$
|
6,388,682
|
|
|
$
|
5,967,503
|
|
Consolidated Statements of Capitalization
|
December 31
|
2019
|
|
|
2018
|
|
||||
(dollars in thousands, except par value)
|
|
|
|
|
|
|
|
||
Common stock equity
|
|
|
|
|
|
|
|
||
Common stock of $6 2/3 par value
|
|
|
|
|
|
|
|
||
Authorized: 50,000,000 shares. Outstanding: 17,048,783 shares and
|
|
|
|
|
|
|
|
||
16,751,488 shares at December 31, 2019 and 2018, respectively
|
|
$
|
113,678
|
|
|
|
$
|
111,696
|
|
Premium on capital stock
|
|
714,824
|
|
|
|
681,305
|
|
||
Retained earnings
|
|
1,220,129
|
|
|
|
1,164,541
|
|
||
Accumulated other comprehensive income (loss), net of taxes-retirement benefit plans
|
|
(1,279
|
)
|
|
|
99
|
|
||
Common stock equity
|
|
2,047,352
|
|
|
|
1,957,641
|
|
Consolidated Statements of Capitalization (continued)
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
|
|
||
Long-term debt
|
|
|
|
|
|
||
Obligations to the State of Hawaii for the repayment of Special Purpose Revenue Bonds (subsidiary obligations unconditionally guaranteed by Hawaiian Electric):
|
|
|
|
||||
3.50%, Series 2019, due 2049
|
$
|
80,000
|
|
|
$
|
—
|
|
3.20%, Refunding series 2019, due 2039
|
150,000
|
|
|
—
|
|
||
3.10%, Refunding series 2017A, due 2026
|
125,000
|
|
|
125,000
|
|
||
4.00%, Refunding series 2017B, due 2037
|
140,000
|
|
|
140,000
|
|
||
3.25%, Refunding series 2015, due 2025
|
47,000
|
|
|
47,000
|
|
||
6.50%, Series 2009, due 2039 - redeemed in 2019
|
—
|
|
|
150,000
|
|
||
Total obligations to the State of Hawaii
|
$
|
542,000
|
|
|
$
|
462,000
|
|
Other long-term debt – unsecured:
|
|
|
|
|
|
||
Taxable senior notes:
|
|
|
|
||||
4.21%, Series 2019A, due 2033
|
$
|
50,000
|
|
|
$
|
—
|
|
4.38%, Series 2018A, due 2028
|
67,500
|
|
|
67,500
|
|
||
4.53%, Series 2018B, due 2033
|
17,500
|
|
|
17,500
|
|
||
4.72%, Series 2018C, due 2048
|
15,000
|
|
|
15,000
|
|
||
4.31%, Series 2017A, due 2047
|
50,000
|
|
|
50,000
|
|
||
4.54%, Series 2016A, due 2046
|
40,000
|
|
|
40,000
|
|
||
5.23%, Series 2015A, due 2045
|
80,000
|
|
|
80,000
|
|
||
3.83%, Series 2013A, due 2020
|
14,000
|
|
|
14,000
|
|
||
4.45%, Series 2013A and 2013B, due 2022
|
52,000
|
|
|
52,000
|
|
||
4.84%, Series 2013A, 2013B and 2013C, due 2027
|
100,000
|
|
|
100,000
|
|
||
5.65%, Series 2013B and 2013C, due 2043
|
70,000
|
|
|
70,000
|
|
||
4.03%, Series 2012B, due 2020
|
82,000
|
|
|
82,000
|
|
||
4.55%, Series 2012B and 2012C, due 2023
|
100,000
|
|
|
100,000
|
|
||
4.72%, Series 2012D, due 2029
|
35,000
|
|
|
35,000
|
|
||
5.39%, Series 2012E, due 2042
|
150,000
|
|
|
150,000
|
|
||
4.53%, Series 2012F, due 2032
|
40,000
|
|
|
40,000
|
|
||
Total taxable senior notes
|
963,000
|
|
|
913,000
|
|
||
6.50 %, series 2004, Junior subordinated deferrable interest debentures, due 2034 - redeemed in 2019
|
—
|
|
|
51,546
|
|
||
Total other long-term debt – unsecured
|
963,000
|
|
|
964,546
|
|
||
Total long-term debt
|
1,505,000
|
|
|
1,426,546
|
|
||
Less unamortized debt issuance costs
|
7,333
|
|
|
7,744
|
|
||
Less current portion long-term debt, net of unamortized debt issuance costs
|
95,953
|
|
|
—
|
|
||
Long-term debt, net
|
1,401,714
|
|
|
1,418,802
|
|
||
Total capitalization
|
$
|
3,483,359
|
|
|
$
|
3,410,736
|
|
Consolidated Statements of Changes in Common Stock Equity
|
|
Common stock
|
|
Premium
on
capital
stock
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
|
|||||||||||||
(in thousands)
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
||||||||||||||
Balance, December 31, 2016
|
16,020
|
|
|
$
|
106,818
|
|
|
$
|
601,491
|
|
|
$
|
1,091,800
|
|
|
$
|
(322
|
)
|
|
$
|
1,799,787
|
|
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
119,951
|
|
|
—
|
|
|
119,951
|
|
|||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(688
|
)
|
|
(688
|
)
|
|||||
Reclass of AOCI for tax rate reduction impact
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|
(209
|
)
|
|
—
|
|
|||||
Issuance of common stock, net of expenses
|
122
|
|
|
816
|
|
|
13,184
|
|
|
—
|
|
|
—
|
|
|
14,000
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,767
|
)
|
|
—
|
|
|
(87,767
|
)
|
|||||
Balance, December 31, 2017
|
16,142
|
|
|
107,634
|
|
|
614,675
|
|
|
1,124,193
|
|
|
(1,219
|
)
|
|
1,845,283
|
|
|||||
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
143,653
|
|
|
—
|
|
|
143,653
|
|
|||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,318
|
|
|
1,318
|
|
|||||
Issuance of common stock, net of expenses
|
609
|
|
|
4,062
|
|
|
66,630
|
|
|
—
|
|
|
—
|
|
|
70,692
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(103,305
|
)
|
|
—
|
|
|
(103,305
|
)
|
|||||
Balance, December 31, 2018
|
16,751
|
|
|
111,696
|
|
|
681,305
|
|
|
1,164,541
|
|
|
99
|
|
|
1,957,641
|
|
|||||
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
156,840
|
|
|
—
|
|
|
156,840
|
|
|||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,378
|
)
|
|
(1,378
|
)
|
|||||
Issuance of common stock, net of expenses
|
297
|
|
|
1,982
|
|
|
33,519
|
|
|
—
|
|
|
—
|
|
|
35,501
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(101,252
|
)
|
|
—
|
|
|
(101,252
|
)
|
|||||
Balance, December 31, 2019
|
17,048
|
|
|
$
|
113,678
|
|
|
$
|
714,824
|
|
|
$
|
1,220,129
|
|
|
$
|
(1,279
|
)
|
|
$
|
2,047,352
|
|
Consolidated Statements of Cash Flows
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
158,835
|
|
|
$
|
145,648
|
|
|
$
|
121,946
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
215,731
|
|
|
203,626
|
|
|
192,784
|
|
|||
Other amortization
|
29,631
|
|
|
26,602
|
|
|
8,498
|
|
|||
Deferred income taxes
|
(16,284
|
)
|
|
(7,982
|
)
|
|
38,037
|
|
|||
Income tax credits, net
|
27,259
|
|
|
(99
|
)
|
|
(52
|
)
|
|||
State refundable credit
|
(8,369
|
)
|
|
(6,239
|
)
|
|
(2,251
|
)
|
|||
Allowance for equity funds used during construction
|
(11,987
|
)
|
|
(10,877
|
)
|
|
(12,483
|
)
|
|||
Other
|
200
|
|
|
4,768
|
|
|
1,237
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in accounts receivable
|
20,956
|
|
|
(50,917
|
)
|
|
2,914
|
|
|||
Decrease (increase) in accrued unbilled revenues
|
4,511
|
|
|
(14,684
|
)
|
|
(15,361
|
)
|
|||
Decrease (increase) in fuel oil stock
|
(12,002
|
)
|
|
6,938
|
|
|
(20,443
|
)
|
|||
Increase in materials and supplies
|
(5,498
|
)
|
|
(807
|
)
|
|
(718
|
)
|
|||
Decrease (increase) in regulatory assets
|
71,262
|
|
|
9,252
|
|
|
(17,256
|
)
|
|||
Increase in regulatory liabilities
|
1,953
|
|
|
37,358
|
|
|
3,602
|
|
|||
Increase (decrease) in accounts payable
|
(2,051
|
)
|
|
24,358
|
|
|
25,734
|
|
|||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
(28,523
|
)
|
|
25,036
|
|
|
29,862
|
|
|||
Increase (decrease) in defined benefit pension and other postretirement
benefit plans liability |
(4,448
|
)
|
|
18,746
|
|
|
604
|
|
|||
Change in other assets and liabilities
|
(17,220
|
)
|
|
(17,114
|
)
|
|
(21,468
|
)
|
|||
Net cash provided by operating activities
|
423,956
|
|
|
393,613
|
|
|
335,186
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(419,898
|
)
|
|
(415,264
|
)
|
|
(376,865
|
)
|
|||
Other
|
11,374
|
|
|
10,082
|
|
|
4,578
|
|
|||
Net cash used in investing activities
|
(408,524
|
)
|
|
(405,182
|
)
|
|
(372,287
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Common stock dividends
|
(101,252
|
)
|
|
(103,305
|
)
|
|
(87,767
|
)
|
|||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,995
|
)
|
|
(1,995
|
)
|
|
(1,995
|
)
|
|||
Proceeds from issuance of common stock
|
35,500
|
|
|
70,700
|
|
|
14,000
|
|
|||
Proceeds from issuance of long-term debt
|
280,000
|
|
|
100,000
|
|
|
315,000
|
|
|||
Repayment of long-term debt and funds transferred for repayment of long-term debt
|
(283,546
|
)
|
|
(50,000
|
)
|
|
(265,000
|
)
|
|||
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
38,987
|
|
|
(4,999
|
)
|
|
4,999
|
|
|||
Proceeds from issuance of short-term debt
|
75,000
|
|
|
25,000
|
|
|
—
|
|
|||
Repayment of short-term debt
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(2,109
|
)
|
|
(472
|
)
|
|
(3,905
|
)
|
|||
Net cash provided by (used in) financing activities
|
(9,415
|
)
|
|
34,929
|
|
|
(24,668
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
6,017
|
|
|
23,360
|
|
|
(61,769
|
)
|
|||
Cash, cash equivalents and restricted cash, January 1
|
35,877
|
|
|
12,517
|
|
|
74,286
|
|
|||
Cash, cash equivalents and restricted cash, December 31
|
41,894
|
|
|
35,877
|
|
|
12,517
|
|
|||
Less: Restricted cash
|
(30,872
|
)
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, December 31
|
$
|
11,022
|
|
|
$
|
35,877
|
|
|
$
|
12,517
|
|
Note 1 · Summary of significant accounting policies
|
General
|
Level 1:
|
Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available.
|
Level 2:
|
Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means.
|
Level 3:
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
•
|
With respect to Topic 326, Financial Instruments - Credit Losses, ASU No. 2019-04 allows entities to measure the allowance for credit losses on accrued interest receivable balances separately from other components of the amortized cost basis of associated financial assets, or to make an accounting policy election not to measure an allowance for credit losses on accrued interest receivable amounts if an entity writes off the uncollectible accrued interest receivable balance in a timely manner and makes certain disclosures. ASU No. 2019-04 also allows an entity to make an accounting policy election regarding the presentation and disclosure of accrued interest receivables and the related allowance for credit losses for those accrued interest receivables. ASU No. 2019-04 also clarifies certain issues related
|
•
|
With respect to Topic 815, Derivatives and Hedging, ASU No. 2019-04 provides amendments, among others, that address partial-term fair value hedges, fair value hedge basis adjustments, and certain transition requirements.
|
•
|
With respect to Topic 825, Financial Instruments, ASU No. 2019-04 clarifies the scope of the guidance and disclosure requirements with respect to recognizing and measuring financial instruments.
|
Electric utility
|
Bank (HEI only)
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in millions)
|
|
|
|
|
|
|
|
|
|||
Amounts in income taxes related to low-income housing tax credit investments
|
|
|
|
|
|
|
|
|
|||
Amortization recognized in the provision for income taxes
|
$
|
(7.9
|
)
|
|
$
|
(7.7
|
)
|
|
$
|
(7.4
|
)
|
Tax credits and other tax benefits recognized in the provision for income taxes
|
11.9
|
|
|
10.9
|
|
|
10.7
|
|
|||
Net benefit to income tax expense
|
$
|
4.0
|
|
|
$
|
3.2
|
|
|
$
|
3.3
|
|
Note 2 · Segment financial information
|
Electric utility
|
Bank
|
Other
|
(in thousands)
|
Electric utility
|
|
|
Bank
|
|
|
Other
|
|
|
Total
|
|
||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,545,865
|
|
|
$
|
328,570
|
|
|
$
|
166
|
|
|
$
|
2,874,601
|
|
Intersegment revenues (eliminations)
|
77
|
|
|
—
|
|
|
(77
|
)
|
|
—
|
|
||||
Revenues
|
2,545,942
|
|
|
328,570
|
|
|
89
|
|
|
2,874,601
|
|
||||
Depreciation and amortization
|
245,362
|
|
|
28,675
|
|
|
4,076
|
|
|
278,113
|
|
||||
Interest expense, net
|
70,842
|
|
|
18,440
|
|
|
20,057
|
|
|
109,339
|
|
||||
Income (loss) before income taxes
|
197,140
|
|
|
112,034
|
|
|
(37,765
|
)
|
|
271,409
|
|
||||
Income taxes (benefit)
|
38,305
|
|
|
23,061
|
|
|
(9,729
|
)
|
|
51,637
|
|
||||
Net income (loss)
|
158,835
|
|
|
88,973
|
|
|
(28,036
|
)
|
|
219,772
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income (loss) for common stock
|
156,840
|
|
|
88,973
|
|
|
(27,931
|
)
|
|
217,882
|
|
||||
Capital expenditures
|
419,898
|
|
|
24,175
|
|
|
13,447
|
|
|
457,520
|
|
||||
Assets (at December 31, 2019)
|
6,388,682
|
|
|
7,233,017
|
|
|
123,552
|
|
|
13,745,251
|
|
||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,546,472
|
|
|
$
|
314,275
|
|
|
$
|
102
|
|
|
$
|
2,860,849
|
|
Intersegment revenues (eliminations)
|
53
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
||||
Revenues
|
2,546,525
|
|
|
314,275
|
|
|
49
|
|
|
2,860,849
|
|
||||
Depreciation and amortization
|
230,228
|
|
|
21,443
|
|
|
3,958
|
|
|
255,629
|
|
||||
Interest expense, net
|
73,348
|
|
|
15,539
|
|
|
15,329
|
|
|
104,216
|
|
||||
Income (loss) before income taxes
|
180,426
|
|
|
106,578
|
|
|
(32,543
|
)
|
|
254,461
|
|
||||
Income taxes (benefit)
|
34,778
|
|
|
24,069
|
|
|
(8,050
|
)
|
|
50,797
|
|
||||
Net income (loss)
|
145,648
|
|
|
82,509
|
|
|
(24,493
|
)
|
|
203,664
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income (loss) for common stock
|
143,653
|
|
|
82,509
|
|
|
(24,388
|
)
|
|
201,774
|
|
||||
Capital expenditures1
|
415,264
|
|
|
72,666
|
|
|
18,840
|
|
|
537,369
|
|
||||
Assets (at December 31, 2018)
|
5,967,503
|
|
|
7,027,894
|
|
|
108,654
|
|
|
13,104,051
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,257,455
|
|
|
$
|
297,640
|
|
|
$
|
530
|
|
|
$
|
2,555,625
|
|
Intersegment revenues (eliminations)
|
111
|
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
||||
Revenues
|
2,257,566
|
|
|
297,640
|
|
|
419
|
|
|
2,555,625
|
|
||||
Depreciation and amortization
|
201,282
|
|
|
19,416
|
|
|
1,300
|
|
|
221,998
|
|
||||
Interest expense, net
|
69,637
|
|
|
12,156
|
|
|
9,335
|
|
|
91,128
|
|
||||
Income (loss) before income taxes
|
205,145
|
|
|
98,716
|
|
|
(27,281
|
)
|
|
276,580
|
|
||||
Income taxes (benefit)
|
83,199
|
|
|
31,719
|
|
|
(5,525
|
)
|
|
109,393
|
|
||||
Net income (loss)
|
121,946
|
|
|
66,997
|
|
|
(21,756
|
)
|
|
167,187
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income (loss) for common stock
|
119,951
|
|
|
66,997
|
|
|
(21,651
|
)
|
|
165,297
|
|
||||
Capital expenditures1
|
376,865
|
|
|
53,272
|
|
|
317
|
|
|
495,187
|
|
||||
Assets (at December 31, 2017)
|
5,630,613
|
|
|
6,798,659
|
|
|
104,888
|
|
|
12,534,160
|
|
1
|
Contributions in aid of construction balances are included in capital expenditures.
|
Note 3 · Electric utility segment
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
|
|
||
Retirement benefit plans (balance primarily varies with plans’ funded statuses)
|
$
|
554,485
|
|
|
$
|
624,126
|
|
Income taxes (1-55 years)
|
102,612
|
|
|
114,076
|
|
||
Decoupling revenue balancing account and RAM (1-2 years)
|
—
|
|
|
49,560
|
|
||
Unamortized expense and premiums on retired debt and equity issuances (1-20 years; 1-19 years remaining)
|
10,228
|
|
|
10,065
|
|
||
Vacation earned, but not yet taken (1 year)
|
12,535
|
|
|
10,820
|
|
||
Other (1-39 years remaining)
|
35,220
|
|
|
24,779
|
|
||
Total regulatory assets
|
$
|
715,080
|
|
|
$
|
833,426
|
|
Included in:
|
|
|
|
|
|
||
Current assets
|
$
|
30,710
|
|
|
$
|
71,016
|
|
Long-term assets
|
684,370
|
|
|
762,410
|
|
||
Total regulatory assets
|
$
|
715,080
|
|
|
$
|
833,426
|
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
|
|
||
Cost of removal in excess of salvage value (1-60 years)
|
$
|
521,977
|
|
|
$
|
491,006
|
|
Income taxes (1-55 years)
|
386,990
|
|
|
413,339
|
|
||
Decoupling revenue balancing account and RAM (1-2 years)
|
16,370
|
|
|
—
|
|
||
Retirement benefit plans (balance primarily varies with plans’ funded statuses)
|
21,707
|
|
|
19,129
|
|
||
Other (1-19 years remaining)
|
25,266
|
|
|
26,762
|
|
||
Total regulatory liabilities
|
$
|
972,310
|
|
|
$
|
950,236
|
|
Included in:
|
|
|
|
||||
Current liabilities
|
$
|
30,724
|
|
|
$
|
17,977
|
|
Long-term liabilities
|
941,586
|
|
|
932,259
|
|
||
Total regulatory liabilities
|
$
|
972,310
|
|
|
$
|
950,236
|
|
December 31, 2019
|
Voluntary
liquidation price
|
|
Redemption
price
|
||||
Series
|
|
|
|
|
|
||
C, D, E, H, J and K (Hawaiian Electric)
|
$
|
20
|
|
|
$
|
21
|
|
I (Hawaiian Electric)
|
20
|
|
|
20
|
|
||
G (Hawaii Electric Light)
|
100
|
|
|
100
|
|
||
H (Maui Electric)
|
100
|
|
|
100
|
|
Years ended December 31
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in millions)
|
|
|
|
|
|
|
||||||
Kalaeloa
|
|
$
|
214
|
|
|
$
|
216
|
|
|
$
|
180
|
|
AES Hawaii
|
|
139
|
|
|
140
|
|
|
140
|
|
|||
HPOWER
|
|
76
|
|
|
69
|
|
|
67
|
|
|||
Puna Geothermal Venture
|
|
—
|
|
|
15
|
|
|
38
|
|
|||
Hamakua Energy
|
|
68
|
|
|
56
|
|
|
35
|
|
|||
Wind IPPs
|
|
95
|
|
|
107
|
|
|
97
|
|
|||
Solar IPPs
|
|
36
|
|
|
29
|
|
|
27
|
|
|||
Other IPPs1
|
|
5
|
|
|
7
|
|
|
3
|
|
|||
Total IPPs
|
|
$
|
633
|
|
|
$
|
639
|
|
|
$
|
587
|
|
(in thousands)
|
2019
|
|
|
2018
|
|
||
Balance, January 1
|
$
|
8,426
|
|
|
$
|
6,035
|
|
Accretion expense
|
312
|
|
|
282
|
|
||
Liabilities incurred
|
1,594
|
|
|
1,058
|
|
||
Liabilities settled
|
(8
|
)
|
|
(74
|
)
|
||
Revisions in estimated cash flows
|
—
|
|
|
1,125
|
|
||
Balance, December 31
|
$
|
10,324
|
|
|
$
|
8,426
|
|
•
|
Service Quality performance incentives are measured on a calendar-year basis. The PIM tariff requires the performance targets, deadbands and the amount of maximum financial incentives used to determine the PIM financial incentive levels for each of the PIMs to be re-determined upon issuance of an interim or final order in a general rate case for each utility.
|
•
|
Service Reliability Performance measured by System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical 10-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 20 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties of approximately $6.7 million - for both indices in total for the three utilities).
|
•
|
Call Center Performance measured by the percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent 8 quarters with a deadband of 3% above and below the target. The maximum penalty or reward is 8 basis points applied to the common equity share of
|
•
|
In December 2018, the Utilities accrued $2.1 million in estimated penalties for service reliability, net of call center performance rewards, for 2018. As a result of a PUC order denying the exclusion of the impact of a specific project on the service reliability performance, in May 2019, Hawaiian Electric accrued an additional $1.3 million in service reliability penalties related to 2018. The net service quality performance penalties related to 2018 were reflected in the 2019 annual decoupling filing and will reduce customer rates in the period June 1, 2019 through May 31, 2020.
|
•
|
In December 2019, the Utilities accrued $0.3 million in estimated rewards for call center performance, net of service reliability penalties, for 2019. The net service quality performance rewards related to 2019 will be reflected in the 2020 annual decoupling filing and will increase customer rates in the period June 1, 2020 through May 31, 2021.
|
•
|
Procurement of low-cost variable renewable resources through the request for proposal process in 2018 measured by comparison of the procurement price to target prices. The incentive is a percentage of the savings determined by comparing procured price to a target of 11.5 cents per kilowatt-hour for renewable projects with storage capability and 9.5 cents per kilowatt-hour for energy-only renewable projects. For PPAs filed by December 31, 2018 and subsequently approved by the PUC, the incentive is 20% of the savings, with a cap of $3.5 million for the three utilities in total. For PPAs filed in January, February, and March 2019 and subsequently approved by the PUC, scaled incentives are 15%, 10% and 5%, respectively, of the savings for PPAs, with a cap of $3 million for the three utilities in total. There are no penalties. On March 25, 2019, the PUC approved six contracts, which were filed by December 31, 2018 and qualified for incentives. A seventh contract, which was filed in February 2019 and approved in August 2019, also qualified for incentives. Half of the incentive is earned upon PUC approval of the contract and the other half is eligible to be earned in the year following the in-service date of the projects. The Utilities accrued $1.7 million in incentives in March 2019, which were reflected in the 2019 annual decoupling filing and will be recovered in rates in the period June 1, 2019 through May 31, 2020.
|
(in millions)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Total
|
||||||||
2019 Annual incremental RAM adjusted revenues,net of changes in Tax Act adjustment*
|
|
$
|
6.5
|
|
|
$
|
1.1
|
|
|
$
|
5.4
|
|
|
$
|
13.0
|
|
Annual change in accrued RBA balance as of December 31, 2018 (and associated revenue taxes) which incorporates MPIR recovery
|
|
(12.2
|
)
|
|
(2.0
|
)
|
|
0.8
|
|
|
(13.4
|
)
|
||||
Performance Incentive Mechanisms (net)
|
|
(1.3
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(1.7
|
)
|
||||
Net annual incremental amount to be collected (refunded) under the tariffs
|
|
$
|
(7.0
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
5.8
|
|
|
$
|
(2.1
|
)
|
*
|
The 2017 Tax Cuts and Jobs Act (the Tax Act) had two incremental impacts in 2019. First, the 2019 RAM calculation for all of the Utilities incorporated additional amortization of the regulatory liability associated with certain deferred taxes. Secondly, Maui Electric incorporated a $2.8 million adjustment in its 2018 annual decoupling filing related to the Tax Act which is not recurring in 2019.
|
•
|
Greater cost control and reduced rate volatility;
|
•
|
Efficient investment and allocation of resources regardless of classification as capital or operating expense;
|
•
|
Fair distribution of risks between utilities and customers; and
|
•
|
Fulfillment of State policy goals.
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,803,698
|
|
|
364,590
|
|
|
378,202
|
|
|
—
|
|
|
(548
|
)
|
[1]
|
|
$
|
2,545,942
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
494,728
|
|
|
84,565
|
|
|
141,416
|
|
|
—
|
|
|
—
|
|
|
|
720,709
|
|
||
Purchased power
|
494,215
|
|
|
90,989
|
|
|
48,052
|
|
|
—
|
|
|
—
|
|
|
|
633,256
|
|
||
Other operation and maintenance
|
319,771
|
|
|
76,091
|
|
|
85,875
|
|
|
—
|
|
|
—
|
|
|
|
481,737
|
|
||
Depreciation
|
143,470
|
|
|
41,812
|
|
|
30,449
|
|
|
—
|
|
|
—
|
|
|
|
215,731
|
|
||
Taxes, other than income taxes
|
170,979
|
|
|
33,787
|
|
|
35,365
|
|
|
—
|
|
|
—
|
|
|
|
240,131
|
|
||
Total expenses
|
1,623,163
|
|
|
327,244
|
|
|
341,157
|
|
|
—
|
|
|
—
|
|
|
|
2,291,564
|
|
||
Operating income
|
180,535
|
|
|
37,346
|
|
|
37,045
|
|
|
—
|
|
|
(548
|
)
|
|
|
254,378
|
|
||
Allowance for equity funds used during construction
|
9,955
|
|
|
816
|
|
|
1,216
|
|
|
—
|
|
|
—
|
|
|
|
11,987
|
|
||
Equity in earnings of subsidiaries
|
43,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,167
|
)
|
[2]
|
|
—
|
|
||
Retirement defined benefits expense—other than service costs
|
(2,287
|
)
|
|
(422
|
)
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,836
|
)
|
||
Interest expense and other charges, net
|
(51,199
|
)
|
|
(10,741
|
)
|
|
(9,450
|
)
|
|
—
|
|
|
548
|
|
[1]
|
|
(70,842
|
)
|
||
Allowance for borrowed funds used during construction
|
3,666
|
|
|
342
|
|
|
445
|
|
|
—
|
|
|
—
|
|
|
|
4,453
|
|
||
Income before income taxes
|
183,837
|
|
|
27,341
|
|
|
29,129
|
|
|
—
|
|
|
(43,167
|
)
|
|
|
197,140
|
|
||
Income taxes
|
25,917
|
|
|
5,990
|
|
|
6,398
|
|
|
—
|
|
|
—
|
|
|
|
38,305
|
|
||
Net income
|
157,920
|
|
|
21,351
|
|
|
22,731
|
|
|
—
|
|
|
(43,167
|
)
|
|
|
158,835
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
157,920
|
|
|
20,817
|
|
|
22,350
|
|
|
—
|
|
|
(43,167
|
)
|
|
|
157,920
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
156,840
|
|
|
20,817
|
|
|
22,350
|
|
|
—
|
|
|
(43,167
|
)
|
|
|
$
|
156,840
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
156,840
|
|
|
20,817
|
|
|
22,350
|
|
|
—
|
|
|
(43,167
|
)
|
|
|
$
|
156,840
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of taxes
|
5,249
|
|
|
373
|
|
|
(204
|
)
|
|
—
|
|
|
(169
|
)
|
[1]
|
|
5,249
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
9,550
|
|
|
1,455
|
|
|
1,182
|
|
|
—
|
|
|
(2,637
|
)
|
[1]
|
|
9,550
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
(16,177
|
)
|
|
(1,840
|
)
|
|
(1,152
|
)
|
|
—
|
|
|
2,992
|
|
[1]
|
|
(16,177
|
)
|
||
Other comprehensive loss, net of tax benefits
|
(1,378
|
)
|
|
(12
|
)
|
|
(174
|
)
|
|
—
|
|
|
186
|
|
|
|
(1,378
|
)
|
||
Comprehensive income attributable to common shareholder
|
$
|
155,462
|
|
|
20,805
|
|
|
22,176
|
|
|
—
|
|
|
(42,981
|
)
|
|
|
$
|
155,462
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,802,550
|
|
|
375,493
|
|
|
368,700
|
|
|
—
|
|
|
(218
|
)
|
[1]
|
|
$
|
2,546,525
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
523,706
|
|
|
90,792
|
|
|
146,030
|
|
|
—
|
|
|
—
|
|
|
|
760,528
|
|
||
Purchased power
|
494,450
|
|
|
95,838
|
|
|
49,019
|
|
|
—
|
|
|
—
|
|
|
|
639,307
|
|
||
Other operation and maintenance
|
313,346
|
|
|
70,396
|
|
|
77,749
|
|
|
—
|
|
|
—
|
|
|
|
461,491
|
|
||
Depreciation
|
137,410
|
|
|
40,235
|
|
|
25,981
|
|
|
—
|
|
|
—
|
|
|
|
203,626
|
|
||
Taxes, other than income taxes
|
170,363
|
|
|
34,850
|
|
|
34,699
|
|
|
—
|
|
|
—
|
|
|
|
239,912
|
|
||
Total expenses
|
1,639,275
|
|
|
332,111
|
|
|
333,478
|
|
|
—
|
|
|
—
|
|
|
|
2,304,864
|
|
||
Operating income
|
163,275
|
|
|
43,382
|
|
|
35,222
|
|
|
—
|
|
|
(218
|
)
|
|
|
241,661
|
|
||
Allowance for equity funds used
during construction
|
9,208
|
|
|
478
|
|
|
1,191
|
|
|
—
|
|
|
—
|
|
|
|
10,877
|
|
||
Equity in earnings of subsidiaries
|
45,393
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,393
|
)
|
[2]
|
|
—
|
|
||
Retirement defined benefits expense—other than service costs
|
(2,649
|
)
|
|
(417
|
)
|
|
(565
|
)
|
|
—
|
|
|
—
|
|
|
|
(3,631
|
)
|
||
Interest expense and other charges, net
|
(52,180
|
)
|
|
(11,836
|
)
|
|
(9,550
|
)
|
|
—
|
|
|
218
|
|
[1]
|
|
(73,348
|
)
|
||
Allowance for borrowed funds used during construction
|
4,019
|
|
|
276
|
|
|
572
|
|
|
—
|
|
|
—
|
|
|
|
4,867
|
|
||
Income before income taxes
|
167,066
|
|
|
31,883
|
|
|
26,870
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
180,426
|
|
||
Income taxes
|
22,333
|
|
|
6,868
|
|
|
5,577
|
|
|
—
|
|
|
—
|
|
|
|
34,778
|
|
||
Net income
|
144,733
|
|
|
25,015
|
|
|
21,293
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
145,648
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
144,733
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
144,733
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
143,653
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
$
|
143,653
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
143,653
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
$
|
143,653
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net losses arising during the period, net of tax benefits
|
(26,019
|
)
|
|
(6,090
|
)
|
|
(5,004
|
)
|
|
—
|
|
|
11,094
|
|
[1]
|
|
(26,019
|
)
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
19,012
|
|
|
2,819
|
|
|
2,423
|
|
|
—
|
|
|
(5,242
|
)
|
[1]
|
|
19,012
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
8,325
|
|
|
3,305
|
|
|
2,788
|
|
|
—
|
|
|
(6,093
|
)
|
[1]
|
|
8,325
|
|
||
Other comprehensive income, net of taxes
|
1,318
|
|
|
34
|
|
|
207
|
|
|
—
|
|
|
(241
|
)
|
|
|
1,318
|
|
||
Comprehensive income attributable to common shareholder
|
$
|
144,971
|
|
|
24,515
|
|
|
21,119
|
|
|
—
|
|
|
(45,634
|
)
|
|
|
$
|
144,971
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,598,504
|
|
|
333,467
|
|
|
325,678
|
|
|
—
|
|
|
(83
|
)
|
[1]
|
|
$
|
2,257,566
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
408,204
|
|
|
63,894
|
|
|
115,670
|
|
|
—
|
|
|
—
|
|
|
|
587,768
|
|
||
Purchased power
|
454,189
|
|
|
87,772
|
|
|
44,673
|
|
|
—
|
|
|
—
|
|
|
|
586,634
|
|
||
Other operation and maintenance
|
274,391
|
|
|
66,184
|
|
|
71,332
|
|
|
—
|
|
|
—
|
|
|
|
411,907
|
|
||
Depreciation
|
130,889
|
|
|
38,741
|
|
|
23,154
|
|
|
—
|
|
|
—
|
|
|
|
192,784
|
|
||
Taxes, other than income taxes
|
152,933
|
|
|
31,184
|
|
|
30,832
|
|
|
—
|
|
|
—
|
|
|
|
214,949
|
|
||
Total expenses
|
1,420,606
|
|
|
287,775
|
|
|
285,661
|
|
|
—
|
|
|
—
|
|
|
|
1,994,042
|
|
||
Operating income
|
177,898
|
|
|
45,692
|
|
|
40,017
|
|
|
—
|
|
|
(83
|
)
|
|
|
263,524
|
|
||
Allowance for equity funds used
during construction
|
10,896
|
|
|
554
|
|
|
1,033
|
|
|
—
|
|
|
—
|
|
|
|
12,483
|
|
||
Equity in earnings of subsidiaries
|
38,057
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,057
|
)
|
[2]
|
|
—
|
|
||
Retirement defined benefits expense—other than service costs
|
(5,049
|
)
|
|
(93
|
)
|
|
(861
|
)
|
|
—
|
|
|
—
|
|
|
|
(6,003
|
)
|
||
Interest expense and other charges, net
|
(48,277
|
)
|
|
(11,799
|
)
|
|
(9,644
|
)
|
|
—
|
|
|
83
|
|
[1]
|
|
(69,637
|
)
|
||
Allowance for borrowed funds used during construction
|
4,089
|
|
|
238
|
|
|
451
|
|
|
—
|
|
|
—
|
|
|
|
4,778
|
|
||
Income before income taxes
|
177,614
|
|
|
34,592
|
|
|
30,996
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
205,145
|
|
||
Income taxes
|
56,583
|
|
|
13,912
|
|
|
12,704
|
|
|
—
|
|
|
—
|
|
|
|
83,199
|
|
||
Net income
|
121,031
|
|
|
20,680
|
|
|
18,292
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
121,946
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
121,031
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
121,031
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
119,951
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
$
|
119,951
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
119,951
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
$
|
119,951
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment to net income, net of tax benefits
|
454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
454
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net gains arising during the period, net of taxes
|
63,105
|
|
|
3,093
|
|
|
7,329
|
|
|
—
|
|
|
(10,422
|
)
|
[1]
|
|
63,105
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
14,477
|
|
|
1,903
|
|
|
1,619
|
|
|
—
|
|
|
(3,522
|
)
|
[1]
|
|
14,477
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
(78,724
|
)
|
|
(4,994
|
)
|
|
(9,003
|
)
|
|
—
|
|
|
13,997
|
|
[1]
|
|
(78,724
|
)
|
||
Other comprehensive income (loss), net of taxes
|
(688
|
)
|
|
2
|
|
|
(55
|
)
|
|
—
|
|
|
53
|
|
|
|
(688
|
)
|
||
Comprehensive income attributable to common shareholder
|
$
|
119,263
|
|
|
20,148
|
|
|
17,856
|
|
|
—
|
|
|
(38,004
|
)
|
|
|
$
|
119,263
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
$
|
42,598
|
|
|
5,606
|
|
|
3,612
|
|
|
—
|
|
|
—
|
|
|
|
$
|
51,816
|
|
Plant and equipment
|
4,765,362
|
|
|
1,313,727
|
|
|
1,161,199
|
|
|
—
|
|
|
—
|
|
|
|
7,240,288
|
|
||
Less accumulated depreciation
|
(1,591,241
|
)
|
|
(574,615
|
)
|
|
(524,301
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,690,157
|
)
|
||
Construction in progress
|
165,137
|
|
|
9,993
|
|
|
17,944
|
|
|
—
|
|
|
—
|
|
|
|
193,074
|
|
||
Utility property, plant and equipment, net
|
3,381,856
|
|
|
754,711
|
|
|
658,454
|
|
|
—
|
|
|
—
|
|
|
|
4,795,021
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
5,310
|
|
|
114
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
|
6,956
|
|
||
Total property, plant and equipment, net
|
3,387,166
|
|
|
754,825
|
|
|
659,986
|
|
|
—
|
|
|
—
|
|
|
|
4,801,977
|
|
||
Investment in wholly-owned subsidiaries, at equity
|
591,969
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(591,969
|
)
|
[2]
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
2,239
|
|
|
6,885
|
|
|
1,797
|
|
|
101
|
|
|
—
|
|
|
|
11,022
|
|
||
Restricted cash
|
30,749
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
30,872
|
|
||
Advances to affiliates
|
27,700
|
|
|
8,000
|
|
|
—
|
|
|
—
|
|
|
(35,700
|
)
|
[1]
|
|
—
|
|
||
Customer accounts receivable, net
|
105,454
|
|
|
24,520
|
|
|
22,816
|
|
|
—
|
|
|
—
|
|
|
|
152,790
|
|
||
Accrued unbilled revenues, net
|
83,148
|
|
|
17,071
|
|
|
17,008
|
|
|
—
|
|
|
—
|
|
|
|
117,227
|
|
||
Other accounts receivable, net
|
18,396
|
|
|
1,907
|
|
|
1,960
|
|
|
—
|
|
|
(10,695
|
)
|
[1]
|
|
11,568
|
|
||
Fuel oil stock, at average cost
|
69,003
|
|
|
8,901
|
|
|
14,033
|
|
|
—
|
|
|
—
|
|
|
|
91,937
|
|
||
Materials and supplies, at average cost
|
34,876
|
|
|
8,313
|
|
|
17,513
|
|
|
—
|
|
|
—
|
|
|
|
60,702
|
|
||
Prepayments and other
|
88,334
|
|
|
3,725
|
|
|
24,921
|
|
|
—
|
|
|
—
|
|
|
|
116,980
|
|
||
Regulatory assets
|
27,689
|
|
|
1,641
|
|
|
1,380
|
|
|
—
|
|
|
—
|
|
|
|
30,710
|
|
||
Total current assets
|
487,588
|
|
|
81,086
|
|
|
101,428
|
|
|
101
|
|
|
(46,395
|
)
|
|
|
623,808
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Operating lease right-of-use assets
|
174,886
|
|
|
1,537
|
|
|
386
|
|
|
—
|
|
|
—
|
|
|
|
176,809
|
|
||
Regulatory assets
|
476,390
|
|
|
109,163
|
|
|
98,817
|
|
|
—
|
|
|
—
|
|
|
|
684,370
|
|
||
Other
|
69,010
|
|
|
15,493
|
|
|
17,215
|
|
|
—
|
|
|
—
|
|
|
|
101,718
|
|
||
Total other long-term assets
|
720,286
|
|
|
126,193
|
|
|
116,418
|
|
|
—
|
|
|
—
|
|
|
|
962,897
|
|
||
Total assets
|
$
|
5,187,009
|
|
|
962,104
|
|
|
877,832
|
|
|
101
|
|
|
(638,364
|
)
|
|
|
$
|
6,388,682
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
$
|
2,047,352
|
|
|
298,998
|
|
|
292,870
|
|
|
101
|
|
|
(591,969
|
)
|
[2]
|
|
$
|
2,047,352
|
|
Cumulative preferred stock–not subject to mandatory redemption
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
|
34,293
|
|
||
Long-term debt, net
|
1,006,737
|
|
|
206,416
|
|
|
188,561
|
|
|
—
|
|
|
—
|
|
|
|
1,401,714
|
|
||
Total capitalization
|
3,076,382
|
|
|
512,414
|
|
|
486,431
|
|
|
101
|
|
|
(591,969
|
)
|
|
|
3,483,359
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Current portion of operating lease liabilities
|
63,582
|
|
|
94
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
|
63,707
|
|
||
Current portion of long-term debt, net
|
61,958
|
|
|
13,995
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
|
95,953
|
|
||
Short-term borrowings-non-affiliate
|
88,987
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
88,987
|
|
||
Short-term borrowings-affiliate
|
8,000
|
|
|
—
|
|
|
27,700
|
|
|
—
|
|
|
(35,700
|
)
|
[1]
|
|
—
|
|
||
Accounts payable
|
139,056
|
|
|
25,629
|
|
|
23,085
|
|
|
—
|
|
|
—
|
|
|
|
187,770
|
|
||
Interest and preferred dividends payable
|
14,759
|
|
|
3,115
|
|
|
2,900
|
|
|
—
|
|
|
(46
|
)
|
[1]
|
|
20,728
|
|
||
Taxes accrued
|
143,522
|
|
|
32,541
|
|
|
31,929
|
|
|
—
|
|
|
—
|
|
|
|
207,992
|
|
||
Regulatory liabilities
|
13,363
|
|
|
9,454
|
|
|
7,907
|
|
|
—
|
|
|
—
|
|
|
|
30,724
|
|
||
Other
|
51,295
|
|
|
11,362
|
|
|
15,297
|
|
|
—
|
|
|
(10,649
|
)
|
[1]
|
|
67,305
|
|
||
Total current liabilities
|
584,522
|
|
|
96,190
|
|
|
128,849
|
|
|
—
|
|
|
(46,395
|
)
|
|
|
763,166
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating lease liabilities
|
111,598
|
|
|
1,442
|
|
|
360
|
|
|
—
|
|
|
—
|
|
|
|
113,400
|
|
||
Deferred income taxes
|
265,864
|
|
|
53,534
|
|
|
57,752
|
|
|
—
|
|
|
—
|
|
|
|
377,150
|
|
||
Regulatory liabilities
|
664,894
|
|
|
178,474
|
|
|
98,218
|
|
|
—
|
|
|
—
|
|
|
|
941,586
|
|
||
Unamortized tax credits
|
86,852
|
|
|
16,196
|
|
|
14,820
|
|
|
—
|
|
|
—
|
|
|
|
117,868
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
339,471
|
|
|
69,928
|
|
|
69,364
|
|
|
—
|
|
|
—
|
|
|
|
478,763
|
|
||
Other
|
57,426
|
|
|
33,926
|
|
|
22,038
|
|
|
—
|
|
|
—
|
|
|
|
113,390
|
|
||
Total deferred credits and other liabilities
|
1,526,105
|
|
|
353,500
|
|
|
262,552
|
|
|
—
|
|
|
—
|
|
|
|
2,142,157
|
|
||
Total capitalization and liabilities
|
$
|
5,187,009
|
|
|
962,104
|
|
|
877,832
|
|
|
101
|
|
|
(638,364
|
)
|
|
|
$
|
6,388,682
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
$
|
40,449
|
|
|
5,606
|
|
|
3,612
|
|
|
—
|
|
|
—
|
|
|
|
$
|
49,667
|
|
Plant and equipment
|
4,456,090
|
|
|
1,259,553
|
|
|
1,094,028
|
|
|
—
|
|
|
—
|
|
|
|
6,809,671
|
|
||
Less accumulated depreciation
|
(1,523,861
|
)
|
|
(547,848
|
)
|
|
(505,633
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,577,342
|
)
|
||
Construction in progress
|
193,677
|
|
|
8,781
|
|
|
30,687
|
|
|
—
|
|
|
—
|
|
|
|
233,145
|
|
||
Utility property, plant and equipment, net
|
3,166,355
|
|
|
726,092
|
|
|
622,694
|
|
|
—
|
|
|
—
|
|
|
|
4,515,141
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
5,314
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
|
6,961
|
|
||
Total property, plant and equipment, net
|
3,171,669
|
|
|
726,207
|
|
|
624,226
|
|
|
—
|
|
|
—
|
|
|
|
4,522,102
|
|
||
Investment in wholly-owned subsidiaries, at equity
|
576,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(576,838
|
)
|
[2]
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
16,732
|
|
|
15,623
|
|
|
3,421
|
|
|
101
|
|
|
—
|
|
|
|
35,877
|
|
||
Customer accounts receivable, net
|
125,960
|
|
|
26,483
|
|
|
25,453
|
|
|
—
|
|
|
—
|
|
|
|
177,896
|
|
||
Accrued unbilled revenues, net
|
88,060
|
|
|
17,051
|
|
|
16,627
|
|
|
—
|
|
|
—
|
|
|
|
121,738
|
|
||
Other accounts receivable, net
|
21,962
|
|
|
3,131
|
|
|
3,033
|
|
|
—
|
|
|
(21,911
|
)
|
[1]
|
|
6,215
|
|
||
Fuel oil stock, at average cost
|
54,262
|
|
|
11,027
|
|
|
14,646
|
|
|
—
|
|
|
—
|
|
|
|
79,935
|
|
||
Materials and supplies, at average cost
|
30,291
|
|
|
7,155
|
|
|
17,758
|
|
|
—
|
|
|
—
|
|
|
|
55,204
|
|
||
Prepayments and other
|
23,214
|
|
|
5,212
|
|
|
3,692
|
|
|
—
|
|
|
—
|
|
|
|
32,118
|
|
||
Regulatory assets
|
60,093
|
|
|
3,177
|
|
|
7,746
|
|
|
—
|
|
|
—
|
|
|
|
71,016
|
|
||
Total current assets
|
420,574
|
|
|
88,859
|
|
|
92,376
|
|
|
101
|
|
|
(21,911
|
)
|
|
|
579,999
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
537,708
|
|
|
120,658
|
|
|
104,044
|
|
|
—
|
|
|
—
|
|
|
|
762,410
|
|
||
Other
|
69,749
|
|
|
15,944
|
|
|
17,299
|
|
|
—
|
|
|
—
|
|
|
|
102,992
|
|
||
Total other long-term assets
|
607,457
|
|
|
136,602
|
|
|
121,343
|
|
|
—
|
|
|
—
|
|
|
|
865,402
|
|
||
Total assets
|
$
|
4,776,538
|
|
|
951,668
|
|
|
837,945
|
|
|
101
|
|
|
(598,749
|
)
|
|
|
$
|
5,967,503
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
$
|
1,957,641
|
|
|
295,874
|
|
|
280,863
|
|
|
101
|
|
|
(576,838
|
)
|
[2]
|
|
$
|
1,957,641
|
|
Cumulative preferred stock–not subject to mandatory redemption
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
|
34,293
|
|
||
Long-term debt, net
|
1,000,137
|
|
|
217,749
|
|
|
200,916
|
|
|
—
|
|
|
—
|
|
|
|
1,418,802
|
|
||
Total capitalization
|
2,980,071
|
|
|
520,623
|
|
|
486,779
|
|
|
101
|
|
|
(576,838
|
)
|
|
|
3,410,736
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings-non-affiliate
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
||
Accounts payable
|
126,384
|
|
|
20,045
|
|
|
25,362
|
|
|
—
|
|
|
—
|
|
|
|
171,791
|
|
||
Interest and preferred dividends payable
|
16,203
|
|
|
4,203
|
|
|
2,841
|
|
|
—
|
|
|
(32
|
)
|
[1]
|
|
23,215
|
|
||
Taxes accrued
|
164,747
|
|
|
34,128
|
|
|
34,458
|
|
|
—
|
|
|
—
|
|
|
|
233,333
|
|
||
Regulatory liabilities
|
7,699
|
|
|
4,872
|
|
|
5,406
|
|
|
—
|
|
|
—
|
|
|
|
17,977
|
|
||
Other
|
46,391
|
|
|
15,077
|
|
|
20,414
|
|
|
—
|
|
|
(21,879
|
)
|
[1]
|
|
60,003
|
|
||
Total current liabilities
|
386,424
|
|
|
78,325
|
|
|
88,481
|
|
|
—
|
|
|
(21,911
|
)
|
|
|
531,319
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Deferred income taxes
|
271,438
|
|
|
54,936
|
|
|
56,823
|
|
|
—
|
|
|
—
|
|
|
|
383,197
|
|
||
Regulatory liabilities
|
657,210
|
|
|
176,101
|
|
|
98,948
|
|
|
—
|
|
|
—
|
|
|
|
932,259
|
|
||
Unamortized tax credits
|
60,271
|
|
|
16,217
|
|
|
15,034
|
|
|
—
|
|
|
—
|
|
|
|
91,522
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
359,174
|
|
|
73,147
|
|
|
71,338
|
|
|
—
|
|
|
—
|
|
|
|
503,659
|
|
||
Other
|
61,950
|
|
|
32,319
|
|
|
20,542
|
|
|
—
|
|
|
—
|
|
|
|
114,811
|
|
||
Total deferred credits and other liabilities
|
1,410,043
|
|
|
352,720
|
|
|
262,685
|
|
|
—
|
|
|
—
|
|
|
|
2,025,448
|
|
||
Total capitalization and liabilities
|
$
|
4,776,538
|
|
|
951,668
|
|
|
837,945
|
|
|
101
|
|
|
(598,749
|
)
|
|
|
$
|
5,967,503
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Balance, December 31, 2016
|
$
|
1,799,787
|
|
|
291,291
|
|
|
259,554
|
|
|
101
|
|
|
(550,946
|
)
|
|
$
|
1,799,787
|
|
Net income for common stock
|
119,951
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
119,951
|
|
||
Other comprehensive income (loss), net of taxes
|
(688
|
)
|
|
2
|
|
|
(55
|
)
|
|
—
|
|
|
53
|
|
|
(688
|
)
|
||
Issuance of common stock, net of expenses
|
14,000
|
|
|
4
|
|
|
4,801
|
|
|
—
|
|
|
(4,805
|
)
|
|
14,000
|
|
||
Common stock dividends
|
(87,767
|
)
|
|
(24,796
|
)
|
|
(11,946
|
)
|
|
—
|
|
|
36,742
|
|
|
(87,767
|
)
|
||
Balance, December 31, 2017
|
1,845,283
|
|
|
286,647
|
|
|
270,265
|
|
|
101
|
|
|
(557,013
|
)
|
|
1,845,283
|
|
||
Net income for common stock
|
143,653
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
143,653
|
|
||
Other comprehensive income, net of taxes
|
1,318
|
|
|
34
|
|
|
207
|
|
|
—
|
|
|
(241
|
)
|
|
1,318
|
|
||
Issuance of common stock, net of expenses
|
70,692
|
|
|
1
|
|
|
1,498
|
|
|
—
|
|
|
(1,499
|
)
|
|
70,692
|
|
||
Common stock dividends
|
(103,305
|
)
|
|
(15,289
|
)
|
|
(12,019
|
)
|
|
—
|
|
|
27,308
|
|
|
(103,305
|
)
|
||
Balance, December 31, 2018
|
1,957,641
|
|
|
295,874
|
|
|
280,863
|
|
|
101
|
|
|
(576,838
|
)
|
|
1,957,641
|
|
||
Net income for common stock
|
156,840
|
|
|
20,817
|
|
|
22,350
|
|
|
—
|
|
|
(43,167
|
)
|
|
156,840
|
|
||
Other comprehensive loss, net of tax benefits
|
(1,378
|
)
|
|
(12
|
)
|
|
(174
|
)
|
|
—
|
|
|
186
|
|
|
(1,378
|
)
|
||
Issuance of common stock, net of expenses
|
35,501
|
|
|
(1
|
)
|
|
4,899
|
|
|
—
|
|
|
(4,898
|
)
|
|
35,501
|
|
||
Common stock dividends
|
(101,252
|
)
|
|
(17,680
|
)
|
|
(15,068
|
)
|
|
—
|
|
|
32,748
|
|
|
(101,252
|
)
|
||
Balance, December 31, 2019
|
$
|
2,047,352
|
|
|
298,998
|
|
|
292,870
|
|
|
101
|
|
|
(591,969
|
)
|
|
$
|
2,047,352
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
157,920
|
|
|
21,351
|
|
|
22,731
|
|
|
—
|
|
|
(43,167
|
)
|
[2]
|
|
$
|
158,835
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(43,204
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,167
|
|
[2]
|
|
(37
|
)
|
||
Common stock dividends received from subsidiaries
|
32,783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,748
|
)
|
[2]
|
|
35
|
|
||
Depreciation of property, plant and equipment
|
143,470
|
|
|
41,812
|
|
|
30,449
|
|
|
—
|
|
|
—
|
|
|
|
215,731
|
|
||
Other amortization
|
23,351
|
|
|
4,810
|
|
|
1,470
|
|
|
—
|
|
|
—
|
|
|
|
29,631
|
|
||
Deferred income taxes
|
(13,547
|
)
|
|
(2,383
|
)
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|
|
(16,284
|
)
|
||
Income tax credits, net
|
27,277
|
|
|
(13
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
|
27,259
|
|
||
State refundable credit
|
(6,245
|
)
|
|
(559
|
)
|
|
(1,565
|
)
|
|
—
|
|
|
—
|
|
|
|
(8,369
|
)
|
||
Allowance for equity funds used during construction
|
(9,955
|
)
|
|
(816
|
)
|
|
(1,216
|
)
|
|
—
|
|
|
—
|
|
|
|
(11,987
|
)
|
||
Other
|
298
|
|
|
(48
|
)
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
|
200
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Decrease in accounts receivable
|
25,376
|
|
|
3,326
|
|
|
3,469
|
|
|
—
|
|
|
(11,215
|
)
|
[1]
|
|
20,956
|
|
||
Decrease (increase) in accrued unbilled revenues
|
4,912
|
|
|
(20
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
4,511
|
|
||
Decrease (increase) in fuel oil stock
|
(14,741
|
)
|
|
2,126
|
|
|
613
|
|
|
—
|
|
|
—
|
|
|
|
(12,002
|
)
|
||
Decrease (increase) in materials and supplies
|
(4,585
|
)
|
|
(1,158
|
)
|
|
245
|
|
|
—
|
|
|
—
|
|
|
|
(5,498
|
)
|
||
Decrease in regulatory assets
|
55,494
|
|
|
9,218
|
|
|
6,550
|
|
|
—
|
|
|
—
|
|
|
|
71,262
|
|
||
Increase (decrease) in regulatory liabilities
|
102
|
|
|
(1,558
|
)
|
|
3,409
|
|
|
|
|
|
|
|
|
|
1,953
|
|
||
Increase (decrease) in accounts payable
|
4,687
|
|
|
(3,160
|
)
|
|
(3,578
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,051
|
)
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
(24,900
|
)
|
|
(893
|
)
|
|
(3,097
|
)
|
|
—
|
|
|
367
|
|
[1]
|
|
(28,523
|
)
|
||
Decrease in defined benefit pension and other postretirement benefit plans liability
|
(3,033
|
)
|
|
(762
|
)
|
|
(653
|
)
|
|
—
|
|
|
—
|
|
|
|
(4,448
|
)
|
||
Change in other assets and liabilities
|
(15,341
|
)
|
|
(6,152
|
)
|
|
(6,940
|
)
|
|
—
|
|
|
11,215
|
|
[1]
|
|
(17,218
|
)
|
||
Net cash provided by operating activities
|
340,119
|
|
|
65,121
|
|
|
51,097
|
|
|
—
|
|
|
(32,381
|
)
|
|
|
423,956
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(311,538
|
)
|
|
(49,811
|
)
|
|
(58,549
|
)
|
|
—
|
|
|
—
|
|
|
|
(419,898
|
)
|
||
Advances to affiliates
|
(27,700
|
)
|
|
(8,000
|
)
|
|
—
|
|
|
—
|
|
|
35,700
|
|
[1]
|
|
—
|
|
||
Other
|
5,241
|
|
|
297
|
|
|
1,303
|
|
|
—
|
|
|
4,533
|
|
[1],[2]
|
|
11,374
|
|
||
Net cash used in investing activities
|
(333,997
|
)
|
|
(57,514
|
)
|
|
(57,246
|
)
|
|
—
|
|
|
40,233
|
|
|
|
(408,524
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(101,252
|
)
|
|
(17,680
|
)
|
|
(15,068
|
)
|
|
—
|
|
|
32,748
|
|
[2]
|
|
(101,252
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from issuance of common stock
|
35,500
|
|
|
—
|
|
|
4,900
|
|
|
—
|
|
|
(4,900
|
)
|
[2]
|
|
35,500
|
|
||
Proceeds from issuance of long-term debt
|
190,000
|
|
|
72,500
|
|
|
17,500
|
|
|
—
|
|
|
—
|
|
|
|
280,000
|
|
||
Repayment of long-term debt and funds transferred for repayment of long-term dent
|
(183,546
|
)
|
|
(70,000
|
)
|
|
(30,000
|
)
|
|
—
|
|
|
—
|
|
|
|
(283,546
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
46,987
|
|
|
—
|
|
|
27,700
|
|
|
—
|
|
|
(35,700
|
)
|
[1]
|
|
38,987
|
|
||
Proceeds from issuance of short-term debt
|
75,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
75,000
|
|
||
Repayment of short-term debt
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(50,000
|
)
|
||
Other
|
(1,475
|
)
|
|
(508
|
)
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,109
|
)
|
||
Net cash provided by (used in) financing activities
|
10,134
|
|
|
(16,222
|
)
|
|
4,525
|
|
|
—
|
|
|
(7,852
|
)
|
|
|
(9,415
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
16,256
|
|
|
(8,615
|
)
|
|
(1,624
|
)
|
|
—
|
|
|
—
|
|
|
|
6,017
|
|
||
Cash, cash equivalents and restricted cash, January 1
|
16,732
|
|
|
15,623
|
|
|
3,421
|
|
|
101
|
|
|
—
|
|
|
|
35,877
|
|
||
Cash, cash equivalents and restricted cash, December 31
|
32,988
|
|
|
7,008
|
|
|
1,797
|
|
|
101
|
|
|
—
|
|
|
|
41,894
|
|
||
Less: Restricted cash
|
(30,749
|
)
|
|
(123
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(30,872
|
)
|
||
Cash and cash equivalents, December 31
|
$
|
2,239
|
|
|
6,885
|
|
|
1,797
|
|
|
101
|
|
|
—
|
|
|
|
$
|
11,022
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
144,733
|
|
|
25,015
|
|
|
21,293
|
|
|
—
|
|
|
(45,393
|
)
|
[2]
|
|
$
|
145,648
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(45,493
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,393
|
|
[2]
|
|
(100
|
)
|
||
Common stock dividends received from subsidiaries
|
27,408
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,308
|
)
|
[2]
|
|
100
|
|
||
Depreciation of property, plant and equipment
|
137,410
|
|
|
40,235
|
|
|
25,981
|
|
|
—
|
|
|
—
|
|
|
|
203,626
|
|
||
Other amortization
|
20,956
|
|
|
5,069
|
|
|
577
|
|
|
—
|
|
|
—
|
|
|
|
26,602
|
|
||
Deferred income taxes
|
(9,806
|
)
|
|
(341
|
)
|
|
2,165
|
|
|
—
|
|
|
—
|
|
|
|
(7,982
|
)
|
||
Income tax credits, net
|
(83
|
)
|
|
(14
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
|
(99
|
)
|
||
State refundable credit
|
(4,941
|
)
|
|
(547
|
)
|
|
(751
|
)
|
|
—
|
|
|
—
|
|
|
|
(6,239
|
)
|
||
Allowance for equity funds used during construction
|
(9,208
|
)
|
|
(478
|
)
|
|
(1,191
|
)
|
|
—
|
|
|
—
|
|
|
|
(10,877
|
)
|
||
Other
|
3,991
|
|
|
348
|
|
|
429
|
|
|
—
|
|
|
—
|
|
|
|
4,768
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Increase in accounts receivable
|
(51,656
|
)
|
|
(4,867
|
)
|
|
(8,614
|
)
|
|
—
|
|
|
14,220
|
|
[1]
|
|
(50,917
|
)
|
||
Increase in accrued unbilled revenues
|
(10,884
|
)
|
|
(1,111
|
)
|
|
(2,689
|
)
|
|
—
|
|
|
—
|
|
|
|
(14,684
|
)
|
||
Decrease (increase) in fuel oil stock
|
10,710
|
|
|
(2,329
|
)
|
|
(1,443
|
)
|
|
—
|
|
|
—
|
|
|
|
6,938
|
|
||
Decrease (increase) in materials and supplies
|
(1,966
|
)
|
|
886
|
|
|
273
|
|
|
—
|
|
|
—
|
|
|
|
(807
|
)
|
||
Decrease (increase) in regulatory assets
|
12,192
|
|
|
71
|
|
|
(3,011
|
)
|
|
—
|
|
|
—
|
|
|
|
9,252
|
|
||
Increase in regulatory liabilities
|
26,540
|
|
|
5,380
|
|
|
5,438
|
|
|
—
|
|
|
—
|
|
|
|
37,358
|
|
||
Increase in accounts payable
|
14,748
|
|
|
6,104
|
|
|
3,506
|
|
|
—
|
|
|
—
|
|
|
|
24,358
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
24,438
|
|
|
(2,118
|
)
|
|
3,047
|
|
|
—
|
|
|
(331
|
)
|
[1]
|
|
25,036
|
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
17,178
|
|
|
(760
|
)
|
|
2,328
|
|
|
—
|
|
|
—
|
|
|
|
18,746
|
|
||
Change in other assets and liabilities
|
(8,056
|
)
|
|
2,806
|
|
|
2,356
|
|
|
—
|
|
|
(14,220
|
)
|
[1]
|
|
(17,114
|
)
|
||
Net cash provided by operating activities
|
298,211
|
|
|
73,349
|
|
|
49,692
|
|
|
—
|
|
|
(27,639
|
)
|
|
|
393,613
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(305,703
|
)
|
|
(51,054
|
)
|
|
(58,507
|
)
|
|
—
|
|
|
—
|
|
|
|
(415,264
|
)
|
||
Advances from affiliates
|
—
|
|
|
—
|
|
|
12,000
|
|
|
—
|
|
|
(12,000
|
)
|
[1]
|
|
—
|
|
||
Other
|
3,226
|
|
|
1,182
|
|
|
3,843
|
|
|
—
|
|
|
1,831
|
|
[1],[2]
|
|
10,082
|
|
||
Net cash used in investing activities
|
(302,477
|
)
|
|
(49,872
|
)
|
|
(42,664
|
)
|
|
—
|
|
|
(10,169
|
)
|
|
|
(405,182
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(103,305
|
)
|
|
(15,289
|
)
|
|
(12,019
|
)
|
|
—
|
|
|
27,308
|
|
[2]
|
|
(103,305
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from the issuance of common stock
|
70,700
|
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
(1,500
|
)
|
[2]
|
|
70,700
|
|
||
Proceeds from the issuance of long-term debt
|
75,000
|
|
|
15,000
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
|
100,000
|
|
||
Repayment of long-term debt
|
(30,000
|
)
|
|
(11,000
|
)
|
|
(9,000
|
)
|
|
—
|
|
|
—
|
|
|
|
(50,000
|
)
|
||
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
(16,999
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
[1]
|
|
(4,999
|
)
|
||
Proceeds from issuance of short-term debt
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
||
Other
|
(377
|
)
|
|
(56
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
|
(472
|
)
|
||
Net cash provided by (used in) financing activities
|
18,939
|
|
|
(11,879
|
)
|
|
(9,939
|
)
|
|
—
|
|
|
37,808
|
|
|
|
34,929
|
|
||
Net increase (decrease) in cash and cash equivalents
|
14,673
|
|
|
11,598
|
|
|
(2,911
|
)
|
|
—
|
|
|
—
|
|
|
|
23,360
|
|
||
Cash and cash equivalents, January 1
|
2,059
|
|
|
4,025
|
|
|
6,332
|
|
|
101
|
|
|
—
|
|
|
|
12,517
|
|
||
Cash and cash equivalents, December 31
|
$
|
16,732
|
|
|
15,623
|
|
|
3,421
|
|
|
101
|
|
|
—
|
|
|
|
$
|
35,877
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments |
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
121,031
|
|
|
20,680
|
|
|
18,292
|
|
|
—
|
|
|
(38,057
|
)
|
[2]
|
|
$
|
121,946
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(38,157
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,057
|
|
[2]
|
|
(100
|
)
|
||
Common stock dividends received from subsidiaries
|
36,867
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,742
|
)
|
[2]
|
|
125
|
|
||
Depreciation of property, plant and equipment
|
130,889
|
|
|
38,741
|
|
|
23,154
|
|
|
—
|
|
|
—
|
|
|
|
192,784
|
|
||
Other amortization
|
2,398
|
|
|
3,225
|
|
|
2,875
|
|
|
—
|
|
|
—
|
|
|
|
8,498
|
|
||
Deferred income taxes
|
26,342
|
|
|
3,954
|
|
|
8,004
|
|
|
—
|
|
|
(263
|
)
|
[1]
|
|
38,037
|
|
||
Income tax credits, net
|
(35
|
)
|
|
(16
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
|
(52
|
)
|
||
State refundable credit
|
(1,382
|
)
|
|
(528
|
)
|
|
(341
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,251
|
)
|
||
Allowance for equity funds used during construction
|
(10,896
|
)
|
|
(554
|
)
|
|
(1,033
|
)
|
|
—
|
|
|
—
|
|
|
|
(12,483
|
)
|
||
Other
|
263
|
|
|
974
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,237
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Decrease (increase) in accounts receivable
|
1,817
|
|
|
(359
|
)
|
|
45
|
|
|
—
|
|
|
1,411
|
|
[1]
|
|
2,914
|
|
||
Increase in accrued unbilled revenues
|
(11,355
|
)
|
|
(2,376
|
)
|
|
(1,630
|
)
|
|
—
|
|
|
—
|
|
|
|
(15,361
|
)
|
||
Increase in fuel oil stock
|
(17,733
|
)
|
|
(469
|
)
|
|
(2,241
|
)
|
|
—
|
|
|
—
|
|
|
|
(20,443
|
)
|
||
Decrease (increase) in materials and supplies
|
1,603
|
|
|
(661
|
)
|
|
(1,660
|
)
|
|
—
|
|
|
—
|
|
|
|
(718
|
)
|
||
Increase in regulatory assets
|
(8,395
|
)
|
|
(4,007
|
)
|
|
(4,854
|
)
|
|
—
|
|
|
—
|
|
|
|
(17,256
|
)
|
||
Increase in regulatory liabilities
|
2,552
|
|
|
315
|
|
|
735
|
|
|
—
|
|
|
—
|
|
|
|
3,602
|
|
||
Increase (decrease) in accounts payable
|
23,519
|
|
|
(3,547
|
)
|
|
5,762
|
|
|
—
|
|
|
—
|
|
|
|
25,734
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
16,716
|
|
|
7,961
|
|
|
5,362
|
|
|
—
|
|
|
(177
|
)
|
[1]
|
|
29,862
|
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
709
|
|
|
52
|
|
|
(157
|
)
|
|
—
|
|
|
—
|
|
|
|
604
|
|
||
Change in other assets and liabilities
|
(18,765
|
)
|
|
(748
|
)
|
|
(569
|
)
|
|
—
|
|
|
(1,411
|
)
|
[1]
|
|
(21,493
|
)
|
||
Net cash provided by operating activities
|
257,988
|
|
|
62,637
|
|
|
51,743
|
|
|
—
|
|
|
(37,182
|
)
|
|
|
335,186
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(281,752
|
)
|
|
(47,784
|
)
|
|
(47,329
|
)
|
|
—
|
|
|
—
|
|
|
|
(376,865
|
)
|
||
Advances from (to) affiliates
|
—
|
|
|
3,500
|
|
|
(2,000
|
)
|
|
—
|
|
|
(1,500
|
)
|
[1]
|
|
—
|
|
||
Other
|
(1,711
|
)
|
|
649
|
|
|
400
|
|
|
—
|
|
|
5,240
|
|
[1],[2]
|
|
4,578
|
|
||
Net cash used in investing activities
|
(283,463
|
)
|
|
(43,635
|
)
|
|
(48,929
|
)
|
|
—
|
|
|
3,740
|
|
|
|
(372,287
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(87,767
|
)
|
|
(24,796
|
)
|
|
(11,946
|
)
|
|
—
|
|
|
36,742
|
|
[2]
|
|
(87,767
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from the issuance of common stock
|
14,000
|
|
|
—
|
|
|
4,800
|
|
|
—
|
|
|
(4,800
|
)
|
[2]
|
|
14,000
|
|
||
Proceeds from the issuance of long-term debt
|
202,000
|
|
|
28,000
|
|
|
85,000
|
|
|
—
|
|
|
—
|
|
|
|
315,000
|
|
||
Repayment of long-term debt
|
(162,000
|
)
|
|
(28,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
|
(265,000
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
3,499
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
[1]
|
|
4,999
|
|
||
Other
|
(2,506
|
)
|
|
(396
|
)
|
|
(1,003
|
)
|
|
—
|
|
|
—
|
|
|
|
(3,905
|
)
|
||
Net cash provided by (used in) financing activities
|
(33,854
|
)
|
|
(25,726
|
)
|
|
1,470
|
|
|
—
|
|
|
33,442
|
|
|
|
(24,668
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(59,329
|
)
|
|
(6,724
|
)
|
|
4,284
|
|
|
—
|
|
|
—
|
|
|
|
(61,769
|
)
|
||
Cash and cash equivalents, January 1
|
61,388
|
|
|
10,749
|
|
|
2,048
|
|
|
101
|
|
|
—
|
|
|
|
74,286
|
|
||
Cash and cash equivalents, December 31
|
$
|
2,059
|
|
|
4,025
|
|
|
6,332
|
|
|
101
|
|
|
—
|
|
|
|
$
|
12,517
|
|
[1]
|
Eliminations of intercompany receivables and payables and other intercompany transactions.
|
[2]
|
Elimination of investment in subsidiaries, carried at equity.
|
Note 4· Bank segment (HEI only)
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Interest and dividend income
|
|
|
|
|
|
|
|
|
|||
Interest and fees on loans
|
$
|
233,632
|
|
|
$
|
220,463
|
|
|
$
|
207,255
|
|
Interest and dividends on investment securities
|
32,922
|
|
|
37,762
|
|
|
28,823
|
|
|||
Total interest and dividend income
|
266,554
|
|
|
258,225
|
|
|
236,078
|
|
|||
Interest expense
|
|
|
|
|
|
|
|
|
|||
Interest on deposit liabilities
|
16,830
|
|
|
13,991
|
|
|
9,660
|
|
|||
Interest on other borrowings
|
1,610
|
|
|
1,548
|
|
|
2,496
|
|
|||
Total interest expense
|
18,440
|
|
|
15,539
|
|
|
12,156
|
|
|||
Net interest income
|
248,114
|
|
|
242,686
|
|
|
223,922
|
|
|||
Provision for loan losses
|
23,480
|
|
|
14,745
|
|
|
10,901
|
|
|||
Net interest income after provision for loan losses
|
224,634
|
|
|
227,941
|
|
|
213,021
|
|
|||
Noninterest income
|
|
|
|
|
|
|
|
|
|||
Fees from other financial services
|
19,275
|
|
|
18,937
|
|
|
22,796
|
|
|||
Fee income on deposit liabilities
|
20,877
|
|
|
21,311
|
|
|
22,204
|
|
|||
Fee income on other financial products
|
6,507
|
|
|
7,052
|
|
|
7,205
|
|
|||
Bank-owned life insurance
|
7,687
|
|
|
5,057
|
|
|
5,539
|
|
|||
Mortgage banking income
|
4,943
|
|
|
1,493
|
|
|
2,201
|
|
|||
Gain on sale of real estate
|
10,762
|
|
|
—
|
|
|
—
|
|
|||
Gains on sale of investment securities, net
|
653
|
|
|
—
|
|
|
—
|
|
|||
Other income, net
|
2,074
|
|
|
2,200
|
|
|
1,617
|
|
|||
Total noninterest income
|
72,778
|
|
|
56,050
|
|
|
61,562
|
|
|||
Noninterest expense
|
|
|
|
|
|
|
|
|
|||
Compensation and employee benefits
|
103,009
|
|
|
98,387
|
|
|
94,931
|
|
|||
Occupancy
|
21,272
|
|
|
17,073
|
|
|
16,699
|
|
|||
Data processing
|
15,306
|
|
|
14,268
|
|
|
13,280
|
|
|||
Services
|
10,239
|
|
|
10,847
|
|
|
10,994
|
|
|||
Equipment
|
8,760
|
|
|
7,186
|
|
|
7,232
|
|
|||
Office supplies, printing and postage
|
5,512
|
|
|
6,134
|
|
|
6,182
|
|
|||
Marketing
|
4,490
|
|
|
3,567
|
|
|
3,501
|
|
|||
FDIC insurance
|
1,204
|
|
|
2,713
|
|
|
2,904
|
|
|||
Other expense
|
15,586
|
|
|
17,238
|
|
|
20,144
|
|
|||
Total noninterest expense
|
185,378
|
|
|
177,413
|
|
|
175,867
|
|
|||
Income before income taxes
|
112,034
|
|
|
106,578
|
|
|
98,716
|
|
|||
Income taxes
|
23,061
|
|
|
24,069
|
|
|
31,719
|
|
|||
Net income
|
88,973
|
|
|
82,509
|
|
|
66,997
|
|
|||
Other comprehensive income (loss), net of taxes
|
29,406
|
|
|
(7,119
|
)
|
|
(3,139
|
)
|
|||
Comprehensive income
|
$
|
118,379
|
|
|
$
|
75,390
|
|
|
$
|
63,858
|
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Interest and dividend income
|
$
|
266,554
|
|
|
$
|
258,225
|
|
|
$
|
236,078
|
|
Noninterest income
|
72,778
|
|
|
56,050
|
|
|
61,562
|
|
|||
Less: Gain on sale of real estate
|
(10,762
|
)
|
|
—
|
|
|
—
|
|
|||
*Revenues-Bank
|
328,570
|
|
|
314,275
|
|
|
297,640
|
|
|||
Total interest expense
|
18,440
|
|
|
15,539
|
|
|
12,156
|
|
|||
Provision for loan losses
|
23,480
|
|
|
14,745
|
|
|
10,901
|
|
|||
Noninterest expense
|
185,378
|
|
|
177,413
|
|
|
175,867
|
|
|||
Less: Retirement defined benefits credit (expense)—other than service costs
|
472
|
|
|
(1,657
|
)
|
|
(820
|
)
|
|||
Add: Gain on sale of real estate
|
(10,762
|
)
|
|
—
|
|
|
—
|
|
|||
*Expenses-Bank
|
217,008
|
|
|
206,040
|
|
|
198,104
|
|
|||
*Operating income-Bank
|
111,562
|
|
|
108,235
|
|
|
99,536
|
|
|||
Add back: Retirement defined benefits expense (credit)—other than service costs
|
(472
|
)
|
|
1,657
|
|
|
820
|
|
|||
Income before income taxes
|
$
|
112,034
|
|
|
$
|
106,578
|
|
|
$
|
98,716
|
|
December 31
|
|
2019
|
|
|
2018
|
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Cash and due from banks
|
|
$
|
129,770
|
|
|
$
|
122,059
|
|
||||
Interest-bearing deposits
|
|
48,628
|
|
|
4,225
|
|
||||||
Investment securities
|
|
|
|
|
||||||||
Available-for-sale, at fair value
|
|
1,232,826
|
|
|
1,388,533
|
|
||||||
Held-to-maturity, at amortized cost (fair value of $143,467 and $142,057 at December 31, 2019 and 2018, respectively)
|
|
139,451
|
|
|
141,875
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
8,434
|
|
|
9,958
|
|
||||||
Loans held for investment
|
|
5,121,176
|
|
|
4,843,021
|
|
||||||
Allowance for loan losses
|
|
(53,355
|
)
|
|
(52,119
|
)
|
||||||
Net loans
|
|
5,067,821
|
|
|
4,790,902
|
|
||||||
Loans held for sale, at lower of cost or fair value
|
|
12,286
|
|
|
1,805
|
|
||||||
Other
|
|
511,611
|
|
|
486,347
|
|
||||||
Goodwill
|
|
82,190
|
|
|
82,190
|
|
||||||
Total assets
|
|
$
|
7,233,017
|
|
|
$
|
7,027,894
|
|
||||
Liabilities and shareholder’s equity
|
|
|
|
|
|
|
||||||
Deposit liabilities–noninterest-bearing
|
|
$
|
1,909,682
|
|
|
$
|
1,800,727
|
|
||||
Deposit liabilities–interest-bearing
|
|
4,362,220
|
|
|
4,358,125
|
|
||||||
Other borrowings
|
|
115,110
|
|
|
110,040
|
|
||||||
Other
|
|
146,954
|
|
|
124,613
|
|
||||||
Total liabilities
|
|
6,533,966
|
|
|
6,393,505
|
|
||||||
Commitments and contingencies
|
|
|
|
|
|
|
||||||
Common stock
|
|
1
|
|
|
1
|
|
||||||
Additional paid in capital
|
|
349,453
|
|
|
347,170
|
|
||||||
Retained earnings
|
|
358,259
|
|
|
325,286
|
|
||||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
||||||||
Net unrealized gains (losses) on securities
|
$
|
2,481
|
|
|
$
|
(24,423
|
)
|
|
||||
Retirement benefit plans
|
(11,143
|
)
|
(8,662
|
)
|
(13,645
|
)
|
(38,068
|
)
|
||||
Total shareholder’s equity
|
|
699,051
|
|
|
634,389
|
|
||||||
Total liabilities and shareholder’s equity
|
|
$
|
7,233,017
|
|
|
$
|
7,027,894
|
|
December 31
|
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
|
|
|
||
Other assets
|
|
|
|
|
|
|
||
Bank-owned life insurance
|
|
$
|
157,465
|
|
|
$
|
151,172
|
|
Premises and equipment, net
|
|
204,449
|
|
|
214,415
|
|
||
Accrued interest receivable
|
|
19,365
|
|
|
20,140
|
|
||
Mortgage servicing rights
|
|
9,101
|
|
|
8,062
|
|
||
Low-income housing investments
|
|
66,302
|
|
|
67,626
|
|
||
Real estate acquired in settlement of loans, net
|
|
—
|
|
|
406
|
|
||
Other
|
|
54,929
|
|
|
24,526
|
|
||
|
|
$
|
511,611
|
|
|
$
|
486,347
|
|
Other liabilities
|
|
|
|
|
|
|
||
Accrued expenses
|
|
$
|
45,822
|
|
|
$
|
54,084
|
|
Federal and state income taxes payable
|
|
14,996
|
|
|
2,012
|
|
||
Cashier’s checks
|
|
23,647
|
|
|
26,906
|
|
||
Advance payments by borrowers
|
|
10,486
|
|
|
10,183
|
|
||
Other
|
|
52,003
|
|
|
31,428
|
|
||
|
|
$
|
146,954
|
|
|
$
|
124,613
|
|
|
|
|
|
|
|
|
|
|
Gross unrealized losses
|
||||||||||||||||||||||||||
|
|
|
Gross unrealized
gains
|
|
Gross unrealized
losses |
|
Estimated fair value
|
|
Less than 12 months
|
|
12 months or longer
|
||||||||||||||||||||||||
(dollars in thousands)
|
Amortized
cost
|
|
|
|
|
Number of issues
|
|
Fair value
|
|
Amount
|
|
Number of issues
|
|
Fair value
|
|
Amount
|
|||||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and federal agency obligations
|
$
|
117,255
|
|
|
$
|
652
|
|
|
$
|
(120
|
)
|
|
$
|
117,787
|
|
|
2
|
|
$
|
4,110
|
|
|
$
|
(11
|
)
|
|
3
|
|
$
|
27,637
|
|
|
$
|
(109
|
)
|
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
1,024,892
|
|
|
6,000
|
|
|
(4,507
|
)
|
|
1,026,385
|
|
|
19
|
|
152,071
|
|
|
(819
|
)
|
|
75
|
|
318,020
|
|
|
(3,688
|
)
|
||||||||
Corporate bonds
|
58,694
|
|
|
1,363
|
|
|
—
|
|
|
60,057
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Mortgage revenue bonds
|
28,597
|
|
|
—
|
|
|
—
|
|
|
28,597
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
|
$
|
1,229,438
|
|
|
$
|
8,015
|
|
|
$
|
(4,627
|
)
|
|
$
|
1,232,826
|
|
|
21
|
|
$
|
156,181
|
|
|
$
|
(830
|
)
|
|
78
|
|
$
|
345,657
|
|
|
$
|
(3,797
|
)
|
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
139,451
|
|
|
$
|
4,087
|
|
|
$
|
(71
|
)
|
|
$
|
143,467
|
|
|
1
|
|
$
|
12,986
|
|
|
$
|
(71
|
)
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
139,451
|
|
|
$
|
4,087
|
|
|
$
|
(71
|
)
|
|
$
|
143,467
|
|
|
1
|
|
$
|
12,986
|
|
|
$
|
(71
|
)
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Gross unrealized losses
|
||||||||||||||||||||||||||
|
|
|
Gross unrealized
gains
|
|
Gross unrealized
losses |
|
Estimated fair value
|
|
Less than 12 months
|
|
12 months or longer
|
||||||||||||||||||||||||
(dollars in thousands)
|
Amortized
cost
|
|
|
|
|
Number of issues
|
|
Fair value
|
|
Amount
|
|
Number of issues
|
|
Fair value
|
|
Amount
|
|||||||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and federal agency obligations
|
$
|
156,694
|
|
|
$
|
62
|
|
|
$
|
(2,407
|
)
|
|
$
|
154,349
|
|
|
5
|
|
$
|
25,882
|
|
|
$
|
(208
|
)
|
|
19
|
|
$
|
118,405
|
|
|
$
|
(2,199
|
)
|
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
1,192,169
|
|
|
789
|
|
|
(31,542
|
)
|
|
1,161,416
|
|
|
22
|
|
129,011
|
|
|
(1,330
|
)
|
|
145
|
|
947,890
|
|
|
(30,212
|
)
|
||||||||
Corporate bonds
|
49,398
|
|
|
103
|
|
|
(369
|
)
|
|
49,132
|
|
|
6
|
|
23,175
|
|
|
(369
|
)
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Mortgage revenue bond
|
23,636
|
|
|
—
|
|
|
—
|
|
|
23,636
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
|
$
|
1,421,897
|
|
|
$
|
954
|
|
|
$
|
(34,318
|
)
|
|
$
|
1,388,533
|
|
|
33
|
|
$
|
178,068
|
|
|
$
|
(1,907
|
)
|
|
164
|
|
$
|
1,066,295
|
|
|
$
|
(32,411
|
)
|
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
141,875
|
|
|
$
|
1,446
|
|
|
$
|
(1,264
|
)
|
|
$
|
142,057
|
|
|
3
|
|
$
|
29,814
|
|
|
$
|
(400
|
)
|
|
2
|
|
$
|
31,505
|
|
|
$
|
(864
|
)
|
|
$
|
141,875
|
|
|
$
|
1,446
|
|
|
$
|
(1,264
|
)
|
|
$
|
142,057
|
|
|
3
|
|
$
|
29,814
|
|
|
$
|
(400
|
)
|
|
2
|
|
$
|
31,505
|
|
|
$
|
(864
|
)
|
|
Amortized
|
|
Fair
|
||||
December 31, 2019
|
Cost
|
|
value
|
||||
(in thousands)
|
|
|
|
||||
Available-for-sale
|
|
|
|
||||
Due in one year or less
|
$
|
60,200
|
|
|
$
|
60,249
|
|
Due after one year through five years
|
75,694
|
|
|
77,225
|
|
||
Due after five years through ten years
|
53,225
|
|
|
53,540
|
|
||
Due after ten years
|
15,427
|
|
|
15,427
|
|
||
|
204,546
|
|
|
206,441
|
|
||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
1,024,892
|
|
|
1,026,385
|
|
||
Total available-for-sale securities
|
$
|
1,229,438
|
|
|
$
|
1,232,826
|
|
Held-to-maturity
|
|
|
|
||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
139,451
|
|
|
$
|
143,467
|
|
Total held-to-maturity securities
|
$
|
139,451
|
|
|
$
|
143,467
|
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in millions)
|
|
|
|
|
|
||||||
Proceeds
|
$
|
19.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gross gains
|
0.7
|
|
|
—
|
|
|
—
|
|
|||
Gross losses
|
—
|
|
|
—
|
|
|
—
|
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Taxable
|
$
|
31,847
|
|
|
$
|
37,153
|
|
|
$
|
28,398
|
|
Non-taxable
|
1,074
|
|
|
609
|
|
|
425
|
|
|||
|
$
|
32,921
|
|
|
$
|
37,762
|
|
|
$
|
28,823
|
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
|
|
||
Real estate:
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
2,178,135
|
|
|
$
|
2,143,397
|
|
Commercial real estate
|
824,830
|
|
|
748,398
|
|
||
Home equity line of credit
|
1,092,125
|
|
|
978,237
|
|
||
Residential land
|
14,704
|
|
|
13,138
|
|
||
Commercial construction
|
70,605
|
|
|
92,264
|
|
||
Residential construction
|
11,670
|
|
|
14,307
|
|
||
Total real estate
|
4,192,069
|
|
|
3,989,741
|
|
||
Commercial
|
670,674
|
|
|
587,891
|
|
||
Consumer
|
257,921
|
|
|
266,002
|
|
||
Total loans
|
5,120,664
|
|
|
4,843,634
|
|
||
Less: Deferred fees and discounts
|
512
|
|
|
(613
|
)
|
||
Allowance for loan losses
|
(53,355
|
)
|
|
(52,119
|
)
|
||
Total loans, net
|
$
|
5,067,821
|
|
|
$
|
4,790,902
|
|
(in thousands)
|
Residential 1-4 family
|
|
Commercial
real estate |
|
Home equity
line of credit |
|
Residential land
|
|
Commercial construction
|
|
Residential construction
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Beginning balance
|
$
|
1,976
|
|
|
$
|
14,505
|
|
|
$
|
6,371
|
|
|
$
|
479
|
|
|
$
|
2,790
|
|
|
$
|
4
|
|
|
$
|
9,225
|
|
|
$
|
16,769
|
|
|
$
|
52,119
|
|
Charge-offs
|
(26
|
)
|
|
—
|
|
|
(144
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(6,811
|
)
|
|
(21,677
|
)
|
|
(28,662
|
)
|
|||||||||
Recoveries
|
854
|
|
|
—
|
|
|
17
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
2,351
|
|
|
2,967
|
|
|
6,418
|
|
|||||||||
Provision
|
(424
|
)
|
|
548
|
|
|
678
|
|
|
(255
|
)
|
|
(693
|
)
|
|
(1
|
)
|
|
5,480
|
|
|
18,147
|
|
|
23,480
|
|
|||||||||
Ending balance
|
$
|
2,380
|
|
|
$
|
15,053
|
|
|
$
|
6,922
|
|
|
$
|
449
|
|
|
$
|
2,097
|
|
|
$
|
3
|
|
|
$
|
10,245
|
|
|
$
|
16,206
|
|
|
$
|
53,355
|
|
Ending balance: individually evaluated for impairment
|
$
|
898
|
|
|
$
|
2
|
|
|
$
|
322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,015
|
|
|
$
|
454
|
|
|
$
|
2,691
|
|
Ending balance: collectively evaluated for impairment
|
$
|
1,482
|
|
|
$
|
15,051
|
|
|
$
|
6,600
|
|
|
$
|
449
|
|
|
$
|
2,097
|
|
|
$
|
3
|
|
|
$
|
9,230
|
|
|
$
|
15,752
|
|
|
$
|
50,664
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ending balance
|
$
|
2,178,135
|
|
|
$
|
824,830
|
|
|
$
|
1,092,125
|
|
|
$
|
14,704
|
|
|
$
|
70,605
|
|
|
$
|
11,670
|
|
|
$
|
670,674
|
|
|
$
|
257,921
|
|
|
$
|
5,120,664
|
|
Ending balance: individually evaluated for impairment
|
$
|
15,600
|
|
|
$
|
1,048
|
|
|
$
|
12,073
|
|
|
$
|
3,091
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,418
|
|
|
$
|
507
|
|
|
$
|
40,737
|
|
Ending balance: collectively evaluated for impairment
|
$
|
2,162,535
|
|
|
$
|
823,782
|
|
|
$
|
1,080,052
|
|
|
$
|
11,613
|
|
|
$
|
70,605
|
|
|
$
|
11,670
|
|
|
$
|
662,256
|
|
|
$
|
257,414
|
|
|
$
|
5,079,927
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Beginning balance
|
$
|
2,902
|
|
|
$
|
15,796
|
|
|
$
|
7,522
|
|
|
$
|
896
|
|
|
$
|
4,671
|
|
|
$
|
12
|
|
|
$
|
10,851
|
|
|
$
|
10,987
|
|
|
$
|
53,637
|
|
Charge-offs
|
(128
|
)
|
|
—
|
|
|
(353
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(2,722
|
)
|
|
(17,296
|
)
|
|
(20,517
|
)
|
|||||||||
Recoveries
|
74
|
|
|
—
|
|
|
257
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
2,136
|
|
|
1,608
|
|
|
4,254
|
|
|||||||||
Provision
|
(872
|
)
|
|
(1,291
|
)
|
|
(1,055
|
)
|
|
(578
|
)
|
|
(1,881
|
)
|
|
(8
|
)
|
|
(1,040
|
)
|
|
21,470
|
|
|
14,745
|
|
|||||||||
Ending balance
|
$
|
1,976
|
|
|
$
|
14,505
|
|
|
$
|
6,371
|
|
|
$
|
479
|
|
|
$
|
2,790
|
|
|
$
|
4
|
|
|
$
|
9,225
|
|
|
$
|
16,769
|
|
|
$
|
52,119
|
|
Ending balance: individually evaluated for impairment
|
$
|
876
|
|
|
$
|
7
|
|
|
$
|
701
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
628
|
|
|
$
|
4
|
|
|
$
|
2,222
|
|
Ending balance: collectively evaluated for impairment
|
$
|
1,100
|
|
|
$
|
14,498
|
|
|
$
|
5,670
|
|
|
$
|
473
|
|
|
$
|
2,790
|
|
|
$
|
4
|
|
|
$
|
8,597
|
|
|
$
|
16,765
|
|
|
$
|
49,897
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ending balance
|
$
|
2,143,397
|
|
|
$
|
748,398
|
|
|
$
|
978,237
|
|
|
$
|
13,138
|
|
|
$
|
92,264
|
|
|
$
|
14,307
|
|
|
$
|
587,891
|
|
|
$
|
266,002
|
|
|
$
|
4,843,634
|
|
Ending balance: individually evaluated for impairment
|
$
|
16,494
|
|
|
$
|
915
|
|
|
$
|
14,800
|
|
|
$
|
2,059
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,340
|
|
|
$
|
89
|
|
|
$
|
39,697
|
|
Ending balance: collectively evaluated for impairment
|
$
|
2,126,903
|
|
|
$
|
747,483
|
|
|
$
|
963,437
|
|
|
$
|
11,079
|
|
|
$
|
92,264
|
|
|
$
|
14,307
|
|
|
$
|
582,551
|
|
|
$
|
265,913
|
|
|
$
|
4,803,937
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Beginning balance
|
$
|
2,873
|
|
|
$
|
16,004
|
|
|
$
|
5,039
|
|
|
$
|
1,738
|
|
|
$
|
6,449
|
|
|
$
|
12
|
|
|
$
|
16,618
|
|
|
$
|
6,800
|
|
|
$
|
55,533
|
|
Charge-offs
|
(826
|
)
|
|
—
|
|
|
(14
|
)
|
|
(210
|
)
|
|
—
|
|
|
—
|
|
|
(4,006
|
)
|
|
(11,757
|
)
|
|
(16,813
|
)
|
|||||||||
Recoveries
|
157
|
|
|
—
|
|
|
308
|
|
|
482
|
|
|
—
|
|
|
—
|
|
|
1,852
|
|
|
1,217
|
|
|
4,016
|
|
|||||||||
Provision
|
698
|
|
|
(208
|
)
|
|
2,189
|
|
|
(1,114
|
)
|
|
(1,778
|
)
|
|
—
|
|
|
(3,613
|
)
|
|
14,727
|
|
|
10,901
|
|
|||||||||
Ending balance
|
$
|
2,902
|
|
|
$
|
15,796
|
|
|
$
|
7,522
|
|
|
$
|
896
|
|
|
$
|
4,671
|
|
|
$
|
12
|
|
|
$
|
10,851
|
|
|
$
|
10,987
|
|
|
$
|
53,637
|
|
Ending balance: individually evaluated for impairment
|
$
|
1,248
|
|
|
$
|
65
|
|
|
$
|
647
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
694
|
|
|
$
|
29
|
|
|
$
|
2,730
|
|
Ending balance: collectively evaluated for impairment
|
$
|
1,654
|
|
|
$
|
15,731
|
|
|
$
|
6,875
|
|
|
$
|
849
|
|
|
$
|
4,671
|
|
|
$
|
12
|
|
|
$
|
10,157
|
|
|
$
|
10,958
|
|
|
$
|
50,907
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Ending balance
|
$
|
2,118,047
|
|
|
$
|
733,106
|
|
|
$
|
913,052
|
|
|
$
|
15,797
|
|
|
$
|
108,273
|
|
|
$
|
14,910
|
|
|
$
|
544,828
|
|
|
$
|
223,564
|
|
|
$
|
4,671,577
|
|
Ending balance: individually evaluated for impairment
|
$
|
18,284
|
|
|
$
|
1,016
|
|
|
$
|
8,188
|
|
|
$
|
1,265
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,574
|
|
|
$
|
66
|
|
|
$
|
33,393
|
|
Ending balance: collectively evaluated for impairment
|
$
|
2,099,763
|
|
|
$
|
732,090
|
|
|
$
|
904,864
|
|
|
$
|
14,532
|
|
|
$
|
108,273
|
|
|
$
|
14,910
|
|
|
$
|
540,254
|
|
|
$
|
223,498
|
|
|
$
|
4,638,184
|
|
December 31
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
(in thousands)
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Total
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Total
|
||||||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pass
|
$
|
756,747
|
|
|
$
|
68,316
|
|
|
$
|
621,657
|
|
|
$
|
1,446,720
|
|
|
$
|
658,288
|
|
|
$
|
89,974
|
|
|
$
|
547,640
|
|
|
$
|
1,295,902
|
|
Special mention
|
4,451
|
|
|
—
|
|
|
29,921
|
|
|
34,372
|
|
|
32,871
|
|
|
—
|
|
|
11,598
|
|
|
44,469
|
|
||||||||
Substandard
|
63,632
|
|
|
2,289
|
|
|
19,096
|
|
|
85,017
|
|
|
57,239
|
|
|
2,290
|
|
|
28,653
|
|
|
88,182
|
|
||||||||
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
824,830
|
|
|
$
|
70,605
|
|
|
$
|
670,674
|
|
|
$
|
1,566,109
|
|
|
$
|
748,398
|
|
|
$
|
92,264
|
|
|
$
|
587,891
|
|
|
$
|
1,428,553
|
|
(in thousands)
|
30-59
days
past due
|
|
60-89
days
past due
|
|
Greater
than
90 days
|
|
Total
past due
|
|
Current
|
|
Total
financing
receivables
|
|
Recorded
investment>
90 days and
accruing
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
$
|
2,588
|
|
|
$
|
290
|
|
|
$
|
1,808
|
|
|
$
|
4,686
|
|
|
$
|
2,173,449
|
|
|
$
|
2,178,135
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
824,830
|
|
|
824,830
|
|
|
—
|
|
|||||||
Home equity line of credit
|
813
|
|
|
—
|
|
|
2,117
|
|
|
2,930
|
|
|
1,089,195
|
|
|
1,092,125
|
|
|
—
|
|
|||||||
Residential land
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
|
14,679
|
|
|
14,704
|
|
|
—
|
|
|||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,605
|
|
|
70,605
|
|
|
—
|
|
|||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,670
|
|
|
11,670
|
|
|
—
|
|
|||||||
Commercial
|
1,077
|
|
|
311
|
|
|
172
|
|
|
1,560
|
|
|
669,114
|
|
|
670,674
|
|
|
—
|
|
|||||||
Consumer
|
4,386
|
|
|
3,257
|
|
|
2,907
|
|
|
10,550
|
|
|
247,371
|
|
|
257,921
|
|
|
—
|
|
|||||||
Total loans
|
$
|
8,864
|
|
|
$
|
3,858
|
|
|
$
|
7,029
|
|
|
$
|
19,751
|
|
|
$
|
5,100,913
|
|
|
$
|
5,120,664
|
|
|
$
|
—
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
$
|
3,757
|
|
|
$
|
2,773
|
|
|
$
|
2,339
|
|
|
$
|
8,869
|
|
|
$
|
2,134,528
|
|
|
$
|
2,143,397
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
748,398
|
|
|
748,398
|
|
|
—
|
|
|||||||
Home equity line of credit
|
1,139
|
|
|
681
|
|
|
2,720
|
|
|
4,540
|
|
|
973,697
|
|
|
978,237
|
|
|
—
|
|
|||||||
Residential land
|
9
|
|
|
—
|
|
|
319
|
|
|
328
|
|
|
12,810
|
|
|
13,138
|
|
|
—
|
|
|||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,264
|
|
|
92,264
|
|
|
—
|
|
|||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,307
|
|
|
14,307
|
|
|
—
|
|
|||||||
Commercial
|
315
|
|
|
281
|
|
|
548
|
|
|
1,144
|
|
|
586,747
|
|
|
587,891
|
|
|
—
|
|
|||||||
Consumer
|
5,220
|
|
|
3,166
|
|
|
2,702
|
|
|
11,088
|
|
|
254,914
|
|
|
266,002
|
|
|
—
|
|
|||||||
Total loans
|
$
|
10,440
|
|
|
$
|
6,901
|
|
|
$
|
8,628
|
|
|
$
|
25,969
|
|
|
$
|
4,817,665
|
|
|
$
|
4,843,634
|
|
|
$
|
—
|
|
|
Nonaccrual loans
|
|
Accruing loans 90 days or more past due
|
|
Troubled debt restructured loans not included in nonaccrual loans
|
||||||||||||||||||
December 31
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
$
|
11,395
|
|
|
$
|
12,037
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,869
|
|
|
$
|
10,194
|
|
Commercial real estate
|
195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
853
|
|
|
915
|
|
||||||
Home equity line of credit
|
6,638
|
|
|
6,348
|
|
|
—
|
|
|
—
|
|
|
10,376
|
|
|
11,597
|
|
||||||
Residential land
|
448
|
|
|
436
|
|
|
—
|
|
|
—
|
|
|
2,644
|
|
|
1,622
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
5,947
|
|
|
4,278
|
|
|
—
|
|
|
—
|
|
|
2,614
|
|
|
1,527
|
|
||||||
Consumer
|
5,113
|
|
|
4,196
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
62
|
|
||||||
Total
|
$
|
29,736
|
|
|
$
|
27,295
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,413
|
|
|
$
|
25,917
|
|
December 31
|
2019
|
|
2018
|
||||||||||||||||||||
(in thousands)
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
|
||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
$
|
6,817
|
|
|
$
|
7,207
|
|
|
$
|
—
|
|
|
$
|
7,822
|
|
|
$
|
8,333
|
|
|
$
|
—
|
|
Commercial real estate
|
195
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Home equity line of credit
|
1,984
|
|
|
2,135
|
|
|
—
|
|
|
2,743
|
|
|
3,004
|
|
|
—
|
|
||||||
Residential land
|
3,091
|
|
|
3,294
|
|
|
—
|
|
|
2,030
|
|
|
2,228
|
|
|
—
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
1,948
|
|
|
2,285
|
|
|
—
|
|
|
3,722
|
|
|
4,775
|
|
|
—
|
|
||||||
Consumer
|
2
|
|
|
2
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
—
|
|
||||||
|
14,037
|
|
|
15,123
|
|
|
—
|
|
|
16,349
|
|
|
18,372
|
|
|
—
|
|
||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
8,783
|
|
|
8,835
|
|
|
898
|
|
|
8,672
|
|
|
8,875
|
|
|
876
|
|
||||||
Commercial real estate
|
853
|
|
|
853
|
|
|
2
|
|
|
915
|
|
|
915
|
|
|
7
|
|
||||||
Home equity line of credit
|
10,089
|
|
|
10,099
|
|
|
322
|
|
|
12,057
|
|
|
12,086
|
|
|
701
|
|
||||||
Residential land
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
6
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
6,470
|
|
|
6,470
|
|
|
1,015
|
|
|
1,618
|
|
|
1,618
|
|
|
628
|
|
||||||
Consumer
|
505
|
|
|
505
|
|
|
454
|
|
|
57
|
|
|
57
|
|
|
4
|
|
||||||
|
26,700
|
|
|
26,762
|
|
|
2,691
|
|
|
23,348
|
|
|
23,580
|
|
|
2,222
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
15,600
|
|
|
16,042
|
|
|
898
|
|
|
16,494
|
|
|
17,208
|
|
|
876
|
|
||||||
Commercial real estate
|
1,048
|
|
|
1,053
|
|
|
2
|
|
|
915
|
|
|
915
|
|
|
7
|
|
||||||
Home equity line of credit
|
12,073
|
|
|
12,234
|
|
|
322
|
|
|
14,800
|
|
|
15,090
|
|
|
701
|
|
||||||
Residential land
|
3,091
|
|
|
3,294
|
|
|
—
|
|
|
2,059
|
|
|
2,257
|
|
|
6
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
8,418
|
|
|
8,755
|
|
|
1,015
|
|
|
5,340
|
|
|
6,393
|
|
|
628
|
|
||||||
Consumer
|
507
|
|
|
507
|
|
|
454
|
|
|
89
|
|
|
89
|
|
|
4
|
|
||||||
|
$
|
40,737
|
|
|
$
|
41,885
|
|
|
$
|
2,691
|
|
|
$
|
39,697
|
|
|
$
|
41,952
|
|
|
$
|
2,222
|
|
December 31
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
(in thousands)
|
Average
recorded investment |
|
Interest
income recognized* |
|
Average
recorded investment |
|
Interest
income recognized* |
|
Average
recorded investment |
|
Interest
income recognized* |
||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
$
|
8,169
|
|
|
$
|
907
|
|
|
$
|
8,595
|
|
|
$
|
445
|
|
|
$
|
9,440
|
|
|
$
|
316
|
|
Commercial real estate
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
11
|
|
||||||
Home equity line of credit
|
2,020
|
|
|
84
|
|
|
2,206
|
|
|
75
|
|
|
1,976
|
|
|
101
|
|
||||||
Residential land
|
2,662
|
|
|
129
|
|
|
1,532
|
|
|
40
|
|
|
1,094
|
|
|
117
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
4,534
|
|
|
276
|
|
|
3,275
|
|
|
28
|
|
|
2,776
|
|
|
54
|
|
||||||
Consumer
|
21
|
|
|
4
|
|
|
22
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
|
17,422
|
|
|
1,400
|
|
|
15,630
|
|
|
588
|
|
|
15,378
|
|
|
599
|
|
||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
8,390
|
|
|
359
|
|
|
8,878
|
|
|
363
|
|
|
9,818
|
|
|
493
|
|
||||||
Commercial real estate
|
886
|
|
|
37
|
|
|
982
|
|
|
42
|
|
|
1,241
|
|
|
54
|
|
||||||
Home equity line of credit
|
11,319
|
|
|
567
|
|
|
10,617
|
|
|
440
|
|
|
5,045
|
|
|
251
|
|
||||||
Residential land
|
27
|
|
|
—
|
|
|
37
|
|
|
3
|
|
|
1,308
|
|
|
97
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
6,990
|
|
|
132
|
|
|
1,789
|
|
|
122
|
|
|
3,691
|
|
|
723
|
|
||||||
Consumer
|
360
|
|
|
24
|
|
|
57
|
|
|
4
|
|
|
57
|
|
|
3
|
|
||||||
|
27,972
|
|
|
1,119
|
|
|
22,360
|
|
|
974
|
|
|
21,160
|
|
|
1,621
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
16,559
|
|
|
1,266
|
|
|
17,473
|
|
|
808
|
|
|
19,258
|
|
|
809
|
|
||||||
Commercial real estate
|
902
|
|
|
37
|
|
|
982
|
|
|
42
|
|
|
1,332
|
|
|
65
|
|
||||||
Home equity line of credit
|
13,339
|
|
|
651
|
|
|
12,823
|
|
|
515
|
|
|
7,021
|
|
|
352
|
|
||||||
Residential land
|
2,689
|
|
|
129
|
|
|
1,569
|
|
|
43
|
|
|
2,402
|
|
|
214
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
11,524
|
|
|
408
|
|
|
5,064
|
|
|
150
|
|
|
6,467
|
|
|
777
|
|
||||||
Consumer
|
381
|
|
|
28
|
|
|
79
|
|
|
4
|
|
|
58
|
|
|
3
|
|
||||||
|
$
|
45,394
|
|
|
$
|
2,519
|
|
|
$
|
37,990
|
|
|
$
|
1,562
|
|
|
$
|
36,538
|
|
|
$
|
2,220
|
|
Years ended
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
(dollars in thousands)
|
Number of contracts
|
|
Outstanding
recorded investment (as of period end)1 |
|
Related allowance
(as of period end) |
|
Number of contracts
|
|
Outstanding
recorded investment (as of period end)1 |
|
Related allowance
(as of period end) |
||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Residential 1-4 family
|
11
|
|
|
$
|
1,770
|
|
|
$
|
190
|
|
|
3
|
|
|
$
|
566
|
|
|
$
|
26
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Home equity line of credit
|
3
|
|
|
442
|
|
|
73
|
|
|
53
|
|
|
6,659
|
|
|
578
|
|
||||
Residential land
|
3
|
|
|
1,086
|
|
|
—
|
|
|
2
|
|
|
1,338
|
|
|
—
|
|
||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial
|
8
|
|
|
5,523
|
|
|
417
|
|
|
12
|
|
|
2,165
|
|
|
211
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
25
|
|
|
$
|
8,821
|
|
|
$
|
680
|
|
|
70
|
|
|
$
|
10,728
|
|
|
$
|
815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended
|
December 31, 2017
|
|
|
|
|
|
|
||||||||||||||
(dollars in thousands)
|
Number of contracts
|
|
|
Outstanding
recorded investment (as of period end)1 |
|
|
Related allowance
(as of period end) |
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
3
|
|
|
$
|
469
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||||||
Home equity line of credit
|
44
|
|
|
2,791
|
|
|
545
|
|
|
|
|
|
|
|
|||||||
Residential land
|
1
|
|
|
92
|
|
|
—
|
|
|
|
|
|
|
|
|||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||||||
Commercial
|
8
|
|
|
525
|
|
|
250
|
|
|
|
|
|
|
|
|||||||
Consumer
|
1
|
|
|
58
|
|
|
29
|
|
|
|
|
|
|
|
|||||||
|
57
|
|
|
$
|
3,935
|
|
|
$
|
889
|
|
|
|
|
|
|
|
1
|
The period end balances reflect all paydowns and charge-offs since the modification period. TDRs fully paid off, charged-off, or foreclosed upon by period end are not included.
|
Years ended December 31
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(dollars in thousands)
|
Number of
contracts
|
|
Recorded
investment
|
|
Number of
contracts
|
|
Recorded
investment
|
|
Number of
contracts |
|
Recorded
investment |
|||||||||
Troubled debt restructurings that subsequently defaulted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
222
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
—
|
|
|
—
|
|
|
1
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|||
Residential land
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
—
|
|
|
—
|
|
|
1
|
|
|
246
|
|
|
—
|
|
|
—
|
|
|||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
327
|
|
|
1
|
|
|
$
|
222
|
|
(in thousands)
|
Gross
carrying amount1 |
|
Accumulated amortization1
|
|
Valuation allowance
|
|
Net
carrying amount |
||||||||
December 31, 2019
|
$
|
21,543
|
|
|
$
|
(12,442
|
)
|
|
$
|
—
|
|
|
$
|
9,101
|
|
December 31, 2018
|
$
|
18,556
|
|
|
$
|
(10,494
|
)
|
|
$
|
—
|
|
|
$
|
8,062
|
|
(in thousands)
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Mortgage servicing rights
|
|
|
|
|
|
||||||
Balance, January 1
|
$
|
8,062
|
|
|
$
|
8,639
|
|
|
$
|
9,373
|
|
Amount capitalized
|
2,987
|
|
|
1,045
|
|
|
1,239
|
|
|||
Amortization
|
(1,948
|
)
|
|
(1,622
|
)
|
|
(1,973
|
)
|
|||
Sale of mortgage servicing rights
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other-than-temporary impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Carrying amount before valuation allowance, December 31
|
9,101
|
|
|
8,062
|
|
|
8,639
|
|
|||
Valuation allowance for mortgage servicing rights
|
|
|
|
|
|
||||||
Balance, January 1
|
—
|
|
|
—
|
|
|
—
|
|
|||
Provision (recovery)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other-than-temporary impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net carrying value of mortgage servicing rights
|
$
|
9,101
|
|
|
$
|
8,062
|
|
|
$
|
8,639
|
|
December 31
|
2019
|
|
|
2018
|
|
||
(dollars in thousands)
|
|
|
|
||||
Unpaid principal balance
|
$
|
1,276,437
|
|
|
$
|
1,188,514
|
|
Weighted average note rate
|
3.96
|
%
|
|
3.98
|
%
|
||
Weighted average discount rate
|
9.3
|
%
|
|
10.0
|
%
|
||
Weighted average prepayment speed
|
11.4
|
%
|
|
6.5
|
%
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
||||
Prepayment rate:
|
|
|
|
||||
25 basis points adverse rate change
|
$
|
(950
|
)
|
|
$
|
(250
|
)
|
50 basis points adverse rate change
|
(1,947
|
)
|
|
(566
|
)
|
||
Discount rate:
|
|
|
|
||||
25 basis points adverse rate change
|
(102
|
)
|
|
(139
|
)
|
||
50 basis points adverse rate change
|
(202
|
)
|
|
(275
|
)
|
December 31
|
2019
|
|
2018
|
||||||||||
(dollars in thousands)
|
Weighted-average stated rate
|
|
|
Amount
|
|
|
Weighted-average stated rate
|
|
|
Amount
|
|
||
Savings
|
0.09
|
%
|
|
$
|
2,379,522
|
|
|
0.07
|
%
|
|
$
|
2,322,552
|
|
Checking
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing
|
0.09
|
|
|
1,062,122
|
|
|
0.09
|
|
|
1,055,019
|
|
||
Noninterest-bearing
|
—
|
|
|
977,459
|
|
|
—
|
|
|
932,608
|
|
||
Commercial checking
|
—
|
|
|
932,223
|
|
|
—
|
|
|
868,119
|
|
||
Money market
|
0.69
|
|
|
150,751
|
|
|
0.63
|
|
|
152,713
|
|
||
Time certificates
|
1.42
|
|
|
769,825
|
|
|
1.61
|
|
|
827,841
|
|
||
|
0.24
|
%
|
|
$
|
6,271,902
|
|
|
0.27
|
%
|
|
$
|
6,158,852
|
|
(in thousands)
|
|
||
2020
|
$
|
503,214
|
|
2021
|
112,632
|
|
|
2022
|
87,132
|
|
|
2023
|
29,134
|
|
|
2024
|
35,253
|
|
|
Thereafter
|
2,460
|
|
|
|
$
|
769,825
|
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Time certificates
|
$
|
12,675
|
|
|
$
|
11,044
|
|
|
$
|
7,687
|
|
Savings
|
1,904
|
|
|
1,639
|
|
|
1,567
|
|
|||
Money market
|
953
|
|
|
602
|
|
|
168
|
|
|||
Interest-bearing checking
|
1,298
|
|
|
706
|
|
|
238
|
|
|||
|
$
|
16,830
|
|
|
$
|
13,991
|
|
|
$
|
9,660
|
|
(in millions)
|
|
Gross amount of
recognized liabilities
|
|
Gross amount
offset in the
Balance Sheets
|
|
Net amount of
liabilities presented
in the Balance Sheets
|
||||||
Repurchase agreements
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2019
|
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
115
|
|
December 31, 2018
|
|
65
|
|
|
—
|
|
|
65
|
|
|
|
Gross amount not offset in the Balance Sheets
|
||||||||||
(in millions)
|
|
Net amount of
liabilities presented
in the Balance Sheets
|
|
Financial
instruments
|
|
Cash
collateral
pledged
|
||||||
Commercial account holders
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2019
|
|
$
|
115
|
|
|
$
|
130
|
|
|
$
|
—
|
|
December 31, 2018
|
|
65
|
|
|
92
|
|
|
—
|
|
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Amount outstanding as of December 31
|
$
|
115
|
|
|
$
|
65
|
|
|
$
|
141
|
|
Average amount outstanding during the year
|
$
|
80
|
|
|
$
|
99
|
|
|
$
|
98
|
|
Maximum amount outstanding as of any month-end
|
$
|
115
|
|
|
$
|
152
|
|
|
$
|
141
|
|
Weighted-average interest rate as of December 31
|
0.98
|
%
|
|
0.75
|
%
|
|
0.65
|
%
|
|||
Weighted-average interest rate during the year
|
0.96
|
%
|
|
0.71
|
%
|
|
0.26
|
%
|
|||
Weighted-average remaining days to maturity as of December 31
|
1
|
|
|
1
|
|
|
1
|
|
December 31
|
2019
|
|
2018
|
||||||||||||||||||
Maturity
|
Repurchase liability
|
|
|
Weighted-average
interest rate
|
|
|
Collateralized by
mortgage-backed
securities and federal
agency obligations at fair value plus
accrued interest
|
|
|
Repurchase liability
|
|
|
Weighted-average
interest rate |
|
|
Collateralized by
mortgage-backed securities and federal agency obligations at fair value plus accrued interest |
|
||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Overnight
|
$
|
115,110
|
|
|
0.98
|
%
|
|
$
|
129,527
|
|
|
$
|
65,040
|
|
|
0.75
|
%
|
|
$
|
92,290
|
|
1 to 29 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
30 to 90 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Over 90 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
115,110
|
|
|
0.98
|
%
|
|
$
|
129,527
|
|
|
$
|
65,040
|
|
|
0.75
|
%
|
|
$
|
92,290
|
|
|
Actual
|
|
Minimum required
|
|
Required to be well capitalized
|
||||||||||||
(dollars in thousands)
|
Capital
|
|
Ratio
|
|
Capital
|
|
Ratio
|
|
Capital
|
|
Ratio
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 leverage
|
641,547
|
|
|
9.06
|
%
|
|
283,122
|
|
|
4.00
|
%
|
|
353,903
|
|
|
5.00
|
%
|
Common equity tier 1
|
641,547
|
|
|
13.18
|
%
|
|
219,071
|
|
|
4.50
|
%
|
|
316,435
|
|
|
6.50
|
%
|
Tier 1 capital
|
641,547
|
|
|
13.18
|
%
|
|
292,094
|
|
|
6.00
|
%
|
|
389,459
|
|
|
8.00
|
%
|
Total capital
|
696,643
|
|
|
14.31
|
%
|
|
389,459
|
|
|
8.00
|
%
|
|
486,823
|
|
|
10.00
|
%
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 leverage
|
606,291
|
|
|
8.70
|
%
|
|
278,811
|
|
|
4.00
|
%
|
|
348,514
|
|
|
5.00
|
%
|
Common equity tier 1
|
606,291
|
|
|
12.80
|
%
|
|
213,190
|
|
|
4.50
|
%
|
|
307,941
|
|
|
6.50
|
%
|
Tier 1 capital
|
606,291
|
|
|
12.80
|
%
|
|
284,253
|
|
|
6.00
|
%
|
|
379,004
|
|
|
8.00
|
%
|
Total capital
|
660,151
|
|
|
13.93
|
%
|
|
379,004
|
|
|
8.00
|
%
|
|
473,755
|
|
|
10.00
|
%
|
December 31
|
2019
|
|
2018
|
||||||||||||
(in thousands)
|
Notional amount
|
|
Fair value
|
|
Notional amount
|
|
Fair value
|
||||||||
Interest rate lock commitments
|
$
|
23,171
|
|
|
$
|
297
|
|
|
$
|
10,180
|
|
|
$
|
91
|
|
Forward commitments
|
29,383
|
|
|
(42
|
)
|
|
10,132
|
|
|
(43
|
)
|
Derivative Financial Instruments Not Designated
|
Location of net gains
|
|
|
|
|
|
|
||||||
as Hedging Instruments
|
(losses) recognized in
|
|
Years ended December 31
|
||||||||||
(in thousands)
|
the Statements of Income
|
|
2019
|
|
2018
|
|
2017
|
||||||
Interest rate lock commitments
|
Mortgage banking income
|
|
$
|
206
|
|
|
$
|
(40
|
)
|
|
$
|
(290
|
)
|
Forward commitments
|
Mortgage banking income
|
|
1
|
|
|
(19
|
)
|
|
153
|
|
|||
|
|
|
$
|
207
|
|
|
$
|
(59
|
)
|
|
$
|
(137
|
)
|
December 31
|
2019
|
|
|
2018
|
|
||
(in thousands)
|
|
|
|
||||
Unfunded commitments to extend credit:
|
|
|
|
|
|||
Home equity line of credit
|
$
|
1,290,854
|
|
|
$
|
1,242,804
|
|
Commercial and commercial real estate
|
484,806
|
|
|
515,058
|
|
||
Consumer
|
70,088
|
|
|
70,292
|
|
||
Residential 1-4 family
|
21,131
|
|
|
17,552
|
|
||
Commercial and financial standby letters of credit
|
11,912
|
|
|
13,340
|
|
||
Total
|
$
|
1,878,791
|
|
|
$
|
1,859,046
|
|
Note 5 · Short-term borrowings
|
Note 6 · Long-term debt
|
December 31
|
2019
|
|
|
2018
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
Long-term debt of Utilities, net of unamortized debt issuance costs 1
|
$
|
1,497,667
|
|
|
$
|
1,418,802
|
|
HEI 2.99% term loan, due 2022
|
150,000
|
|
|
150,000
|
|
||
HEI 5.67% senior notes, due 2021
|
50,000
|
|
|
50,000
|
|
||
HEI 3.99% senior notes, due 2023
|
50,000
|
|
|
50,000
|
|
||
HEI 4.58% senior notes, due 2025
|
50,000
|
|
|
50,000
|
|
||
HEI 4.72% senior notes, due 2028
|
100,000
|
|
|
100,000
|
|
||
Hamakua Energy 4.02% notes, due 2030, secured by real and personal property of Hamakua Energy, LLC
|
59,699
|
|
|
63,438
|
|
||
Mauo LIBOR + 1.375% loan, due 2022
|
9,349
|
|
|
—
|
|
||
Less unamortized debt issuance costs
|
(2,350
|
)
|
|
(2,599
|
)
|
||
|
$
|
1,964,365
|
|
|
$
|
1,879,641
|
|
1
|
See components of “Total long-term debt” and unamortized debt issuance costs in Hawaiian Electric and subsidiaries’ Consolidated Statements of Capitalization.
|
|
Series 2019A
|
Aggregate principal amount
|
$50 million
|
Fixed coupon interest rate
|
4.21%
|
Maturity date
|
May 15, 2034
|
Principal amount by company:
|
|
Hawaiian Electric
|
$30 million
|
Hawaii Electric Light
|
$10 million
|
Maui Electric
|
$10 million
|
|
2004 Junior subordinated deferrable interest debentures redeemed
|
Aggregate principal amount
|
$51.5 million
|
Fixed coupon interest rate
|
6.50%
|
Maturity date
|
May 15, 2034
|
Principal amount by company:
|
|
Hawaiian Electric
|
$31.5 million
|
Hawaii Electric Light
|
$10 million
|
Maui Electric
|
$10 million
|
|
Refunding Series 2019 Special Purpose Revenue Bonds
|
Aggregate principal amount
|
$150 million
|
Fixed coupon interest rate
|
3.20%
|
Maturity date
|
July 1, 2039
|
DBF loaned the proceeds to:
|
|
Hawaiian Electric
|
$90 million
|
Hawaii Electric Light
|
$60 million
|
|
Series 2009 Special Purpose Revenue Bonds Redeemed
|
Aggregate principal amount
|
$150 million
|
Fixed coupon interest rate
|
6.50%
|
Maturity date
|
July 1, 2039
|
Principal amount by company:
|
|
Hawaiian Electric
|
$90 million
|
Hawaii Electric Light
|
$60 million
|
|
Series 2019 Special Purpose Revenue Bonds
|
Aggregate principal amount
|
$80 million
|
Fixed coupon interest rate
|
3.50%
|
Maturity date
|
October 1, 2049
|
DBF loaned the proceeds to:
|
|
Hawaiian Electric
|
$70 million
|
Hawaii Electric Light
|
$2.5 million
|
Maui Electric
|
$7.5 million
|
Note 7 · Shareholders’ equity
|
|
HEI Consolidated
|
|
Hawaiian Electric Consolidated
|
||||||||||||||||||||||||
(in thousands)
|
Net unrealized gains (losses) on securities
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
||||||||||||||
Balance, December 31, 2016
|
$
|
(7,931
|
)
|
|
$
|
(454
|
)
|
|
$
|
(24,744
|
)
|
|
$
|
(33,129
|
)
|
|
$
|
(454
|
)
|
|
$
|
132
|
|
|
$
|
(322
|
)
|
Current period other comprehensive income (loss) and reclassifications, net of taxes
|
(4,370
|
)
|
|
454
|
|
|
2,544
|
|
|
(1,372
|
)
|
|
454
|
|
|
(1,142
|
)
|
|
(688
|
)
|
|||||||
Reclass of AOCI for tax rate reduction impact1
|
(2,650
|
)
|
|
—
|
|
|
(4,790
|
)
|
|
(7,440
|
)
|
|
—
|
|
|
(209
|
)
|
|
(209
|
)
|
|||||||
Balance, December 31, 2017
|
(14,951
|
)
|
|
—
|
|
|
(26,990
|
)
|
|
(41,941
|
)
|
|
—
|
|
|
(1,219
|
)
|
|
(1,219
|
)
|
|||||||
Current period other comprehensive income (loss) and reclassifications, net of taxes
|
(9,472
|
)
|
|
(436
|
)
|
|
1,239
|
|
|
(8,669
|
)
|
|
—
|
|
|
1,318
|
|
|
1,318
|
|
|||||||
Balance, December 31, 2018
|
(24,423
|
)
|
|
(436
|
)
|
|
(25,751
|
)
|
|
(50,610
|
)
|
|
—
|
|
|
99
|
|
|
99
|
|
|||||||
Current period other comprehensive income (loss) and reclassifications, net of taxes
|
26,904
|
|
|
(1,177
|
)
|
|
4,844
|
|
|
30,571
|
|
|
—
|
|
|
(1,378
|
)
|
|
(1,378
|
)
|
|||||||
Balance, December 31, 2019
|
$
|
2,481
|
|
|
$
|
(1,613
|
)
|
|
$
|
(20,907
|
)
|
|
$
|
(20,039
|
)
|
|
$
|
—
|
|
|
$
|
(1,279
|
)
|
|
$
|
(1,279
|
)
|
1
|
The Company and the Utilities adopted ASU No. 2018-02 as of the beginning of the fourth quarter of 2017 and elected to reclassify the income tax effects of the Tax Act from AOCI to retained earnings. Other than this reclassification to retained earnings, the Company and the Utilities release the income tax effects in AOCI from AOCI when the specific AOCI items (e.g., on a security-by-security basis for ASB’s gains/losses on investment securities) are included in net income.
|
|
|
Amount reclassified from AOCI
|
|
Affected line item in the Statement of
Income/Balance Sheet
|
||||||||||
Years ended December 31
|
|
2019
|
|
2018
|
|
2017
|
|
|||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
||||||
Net realized gains on securities included in net income
|
|
$
|
(478
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Revenues-bank (gains on sale of investment securities, net)
|
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||
Window forward contracts
|
|
—
|
|
|
—
|
|
|
454
|
|
|
Property, plant and equipment-electric utilities (2017)
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
10,107
|
|
|
21,015
|
|
|
15,737
|
|
|
See Note 10 for additional details
|
|||
Impact of D&Os of the PUC included in regulatory assets
|
|
(16,177
|
)
|
|
8,325
|
|
|
(78,724
|
)
|
|
See Note 10 for additional details
|
|||
Total reclassifications
|
|
$
|
(6,548
|
)
|
|
$
|
29,340
|
|
|
$
|
(62,533
|
)
|
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
||||||
Derivatives qualifying as cash flow hedges
|
|
|
|
|
|
|
|
|
||||||
Window forward contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
454
|
|
|
Property, plant and equipment (2017)
|
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
9,550
|
|
|
19,012
|
|
|
14,477
|
|
|
See Note 10 for additional details
|
|||
Impact of D&Os of the PUC included in regulatory assets
|
|
(16,177
|
)
|
|
8,325
|
|
|
(78,724
|
)
|
|
See Note 10 for additional details
|
|||
Total reclassifications
|
|
$
|
(6,627
|
)
|
|
$
|
27,337
|
|
|
$
|
(63,793
|
)
|
|
|
Note 8 · Leases
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||
Year ended December 31, 2019
|
Other leases
|
PPAs classified as leases
|
Total
|
|
Other leases
|
PPAs classified as leases
|
Total
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||||||||
Operating lease cost
|
$
|
10,265
|
|
$
|
63,319
|
|
$
|
73,584
|
|
|
$
|
4,955
|
|
$
|
63,319
|
|
$
|
68,274
|
|
Variable lease cost
|
13,034
|
|
192,138
|
|
205,172
|
|
|
10,272
|
|
192,138
|
|
202,410
|
|
||||||
Total lease cost
|
$
|
23,299
|
|
$
|
255,457
|
|
$
|
278,756
|
|
|
$
|
15,227
|
|
$
|
255,457
|
|
$
|
270,684
|
|
Other information
|
|
|
|
|
|
|
|
||||||||||||
Cash paid for amounts included in the measurement of lease liabilities—Operating cash flows from operating leases
|
$
|
10,447
|
|
$
|
62,594
|
|
$
|
73,041
|
|
|
$
|
5,768
|
|
$
|
62,594
|
|
$
|
68,362
|
|
Weighted-average remaining lease term—operating leases (in years)
|
6.5
|
|
2.8
|
|
3.5
|
|
|
4.5
|
|
2.8
|
|
2.9
|
|
||||||
Weighted-average discount rate—operating leases
|
3.50
|
%
|
4.08
|
%
|
3.96
|
%
|
|
4.11
|
%
|
4.08
|
%
|
4.08
|
%
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||
(in millions)
|
Other leases
|
PPAs classified as leases
|
Total
|
|
Other leases
|
PPAs classified as leases
|
Total
|
||||||||||||
2020
|
$
|
12
|
|
$
|
63
|
|
$
|
75
|
|
|
$
|
7
|
|
$
|
63
|
|
$
|
70
|
|
2021
|
10
|
|
63
|
|
73
|
|
|
5
|
|
63
|
|
68
|
|
||||||
2022
|
6
|
|
42
|
|
48
|
|
|
3
|
|
42
|
|
45
|
|
||||||
2023
|
5
|
|
—
|
|
5
|
|
|
2
|
|
—
|
|
2
|
|
||||||
2024
|
4
|
|
—
|
|
4
|
|
|
1
|
|
—
|
|
1
|
|
||||||
Thereafter
|
9
|
|
—
|
|
9
|
|
|
2
|
|
—
|
|
2
|
|
||||||
Total lease payments
|
46
|
|
168
|
|
214
|
|
|
20
|
|
168
|
|
188
|
|
||||||
Less: Imputed interest
|
(5
|
)
|
(9
|
)
|
(14
|
)
|
|
(2
|
)
|
(9
|
)
|
(11
|
)
|
||||||
Total present value of lease payments1
|
$
|
41
|
|
$
|
159
|
|
$
|
200
|
|
|
$
|
18
|
|
$
|
159
|
|
$
|
177
|
|
1
|
The fixed capacity payment related to the existing PPA with PGV, which will expire on December 31, 2027, is not included as a lease liability as of December 31, 2019 as the facility has been offline since May 2018 due to lava flow on Hawaii Island. The annual capacity payment is approximately $7 million. The lease liability will be remeasured when PGV is back in service.
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||
(in millions)
|
Other leases
|
PPAs classified as leases
|
Total
|
|
Other leases
|
PPAs classified as leases
|
Total
|
||||||||||||
2019
|
$
|
11
|
|
$
|
63
|
|
$
|
74
|
|
|
$
|
6
|
|
$
|
63
|
|
$
|
69
|
|
2020
|
9
|
|
63
|
|
72
|
|
|
6
|
|
63
|
|
69
|
|
||||||
2021
|
8
|
|
63
|
|
71
|
|
|
5
|
|
63
|
|
68
|
|
||||||
2022
|
5
|
|
42
|
|
47
|
|
|
2
|
|
42
|
|
44
|
|
||||||
2023
|
4
|
|
—
|
|
4
|
|
|
2
|
|
—
|
|
2
|
|
||||||
Thereafter
|
12
|
|
—
|
|
12
|
|
|
3
|
|
—
|
|
3
|
|
||||||
Total lease payments
|
$
|
49
|
|
$
|
231
|
|
$
|
280
|
|
|
$
|
24
|
|
$
|
231
|
|
$
|
255
|
|
Note 9· Revenues
|
|
|
Year ended December 31, 2019
|
|
Year ended December 31, 2018
|
||||||||||||||||||||||||||||
(in thousands)
|
|
Electric utility
|
|
Bank
|
|
Other
|
|
Total
|
|
Electric utility
|
|
Bank
|
|
Other
|
|
Total
|
||||||||||||||||
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Electric energy sales - residential
|
|
$
|
807,652
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
807,652
|
|
|
$
|
801,846
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
801,846
|
|
Electric energy sales - commercial
|
|
846,110
|
|
|
—
|
|
|
—
|
|
|
846,110
|
|
|
853,672
|
|
|
—
|
|
|
—
|
|
|
853,672
|
|
||||||||
Electric energy sales - large light and power
|
|
905,308
|
|
|
—
|
|
|
—
|
|
|
905,308
|
|
|
894,770
|
|
|
—
|
|
|
—
|
|
|
894,770
|
|
||||||||
Electric energy sales - other
|
|
16,296
|
|
|
—
|
|
|
—
|
|
|
16,296
|
|
|
17,243
|
|
|
—
|
|
|
—
|
|
|
17,243
|
|
||||||||
Bank fees
|
|
—
|
|
|
46,659
|
|
|
—
|
|
|
46,659
|
|
|
—
|
|
|
47,300
|
|
|
—
|
|
|
47,300
|
|
||||||||
Total revenues from contracts with customers
|
|
2,575,366
|
|
|
46,659
|
|
|
—
|
|
|
2,622,025
|
|
|
2,567,531
|
|
|
47,300
|
|
|
—
|
|
|
2,614,831
|
|
||||||||
Revenues from other sources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Regulatory revenue
|
|
(54,101
|
)
|
|
—
|
|
|
—
|
|
|
(54,101
|
)
|
|
(37,687
|
)
|
|
—
|
|
|
—
|
|
|
(37,687
|
)
|
||||||||
Bank interest and dividend income
|
|
—
|
|
|
266,554
|
|
|
—
|
|
|
266,554
|
|
|
—
|
|
|
258,225
|
|
|
—
|
|
|
258,225
|
|
||||||||
Other bank noninterest income
|
|
—
|
|
|
15,357
|
|
|
—
|
|
|
15,357
|
|
|
—
|
|
|
8,750
|
|
|
—
|
|
|
8,750
|
|
||||||||
Other
|
|
24,677
|
|
|
—
|
|
|
89
|
|
|
24,766
|
|
|
16,681
|
|
|
—
|
|
|
49
|
|
|
16,730
|
|
||||||||
Total revenues from other sources
|
|
(29,424
|
)
|
|
281,911
|
|
|
89
|
|
|
252,576
|
|
|
(21,006
|
)
|
|
266,975
|
|
|
49
|
|
|
246,018
|
|
||||||||
Total revenues
|
|
$
|
2,545,942
|
|
|
$
|
328,570
|
|
|
$
|
89
|
|
|
$
|
2,874,601
|
|
|
$
|
2,546,525
|
|
|
$
|
314,275
|
|
|
$
|
49
|
|
|
$
|
2,860,849
|
|
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Services/goods transferred at a point in time
|
|
$
|
—
|
|
|
$
|
46,659
|
|
|
$
|
—
|
|
|
$
|
46,659
|
|
|
$
|
—
|
|
|
$
|
47,300
|
|
|
$
|
—
|
|
|
$
|
47,300
|
|
Services/goods transferred over time
|
|
2,575,366
|
|
|
—
|
|
|
—
|
|
|
2,575,366
|
|
|
2,567,531
|
|
|
—
|
|
|
—
|
|
|
2,567,531
|
|
||||||||
Total revenues from contracts with customers
|
|
$
|
2,575,366
|
|
|
$
|
46,659
|
|
|
$
|
—
|
|
|
$
|
2,622,025
|
|
|
$
|
2,567,531
|
|
|
$
|
47,300
|
|
|
$
|
—
|
|
|
$
|
2,614,831
|
|
Note 10 · Retirement benefits
|
|
2019
|
|
2018
|
||||||||||||
(in thousands)
|
Pension
benefits
|
|
Other
benefits
|
|
Pension
benefits
|
|
Other
benefits
|
||||||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
1,837,653
|
|
|
$
|
181,162
|
|
|
$
|
1,928,648
|
|
|
$
|
204,644
|
|
Service cost
|
60,461
|
|
|
2,191
|
|
|
67,359
|
|
|
2,704
|
|
||||
Interest cost
|
77,851
|
|
|
7,673
|
|
|
71,294
|
|
|
7,628
|
|
||||
Actuarial losses (gains)
|
212,310
|
|
|
25,123
|
|
|
(158,258
|
)
|
|
(25,330
|
)
|
||||
Participants contributions
|
—
|
|
|
2,311
|
|
|
—
|
|
|
2,472
|
|
||||
Benefits paid and expenses
|
(77,060
|
)
|
|
(11,382
|
)
|
|
(71,535
|
)
|
|
(10,958
|
)
|
||||
Transfers
|
(311
|
)
|
|
(5
|
)
|
|
145
|
|
|
2
|
|
||||
Benefit obligation, December 31
|
2,110,904
|
|
|
207,073
|
|
|
1,837,653
|
|
|
181,162
|
|
||||
Fair value of plan assets, January 1
|
1,343,113
|
|
|
170,862
|
|
|
1,468,403
|
|
|
190,814
|
|
||||
Actual return on plan assets
|
326,204
|
|
|
34,928
|
|
|
(91,836
|
)
|
|
(11,625
|
)
|
||||
Employer contributions
|
47,808
|
|
|
—
|
|
|
37,550
|
|
|
—
|
|
||||
Participants contributions
|
—
|
|
|
2,311
|
|
|
—
|
|
|
2,472
|
|
||||
Benefits paid and expenses
|
(76,581
|
)
|
|
(10,532
|
)
|
|
(71,060
|
)
|
|
(10,801
|
)
|
||||
Other
|
(127
|
)
|
|
(5
|
)
|
|
56
|
|
|
2
|
|
||||
Fair value of plan assets, December 31
|
1,640,417
|
|
|
197,564
|
|
|
1,343,113
|
|
|
170,862
|
|
||||
Accrued benefit liability, December 31
|
$
|
(470,487
|
)
|
|
$
|
(9,509
|
)
|
|
$
|
(494,540
|
)
|
|
$
|
(10,300
|
)
|
Other liabilities (short-term)
|
(518
|
)
|
|
(715
|
)
|
|
(512
|
)
|
|
(669
|
)
|
||||
Defined benefit pension and other postretirement benefit plans liability
|
(469,969
|
)
|
|
(8,794
|
)
|
|
(494,028
|
)
|
|
(9,631
|
)
|
||||
Accrued benefit liability, December 31
|
$
|
(470,487
|
)
|
|
$
|
(9,509
|
)
|
|
$
|
(494,540
|
)
|
|
$
|
(10,300
|
)
|
AOCI debit, January 1 (excluding impact of PUC D&Os)
|
$
|
502,189
|
|
|
$
|
1,551
|
|
|
$
|
493,464
|
|
|
$
|
839
|
|
Recognized during year – prior service credit (cost)
|
(7
|
)
|
|
1,803
|
|
|
(8
|
)
|
|
1,803
|
|
||||
Recognized during year – net actuarial losses
|
(14,658
|
)
|
|
—
|
|
|
(27,302
|
)
|
|
(98
|
)
|
||||
Occurring during year – net actuarial losses (gains)
|
(9,446
|
)
|
|
2,376
|
|
|
36,035
|
|
|
(993
|
)
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
478,078
|
|
|
5,730
|
|
|
502,189
|
|
|
1,551
|
|
||||
Cumulative impact of PUC D&Os
|
(474,628
|
)
|
|
(7,458
|
)
|
|
(498,944
|
)
|
|
(4,929
|
)
|
||||
AOCI debit/(credit), December 31
|
$
|
3,450
|
|
|
$
|
(1,728
|
)
|
|
$
|
3,245
|
|
|
$
|
(3,378
|
)
|
Net actuarial loss
|
$
|
478,069
|
|
|
$
|
10,815
|
|
|
$
|
502,173
|
|
|
$
|
8,439
|
|
Prior service cost (gain)
|
9
|
|
|
(5,085
|
)
|
|
16
|
|
|
(6,888
|
)
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
478,078
|
|
|
5,730
|
|
|
502,189
|
|
|
1,551
|
|
||||
Cumulative impact of PUC D&Os
|
(474,628
|
)
|
|
(7,458
|
)
|
|
(498,944
|
)
|
|
(4,929
|
)
|
||||
AOCI debit/(credit), December 31
|
3,450
|
|
|
(1,728
|
)
|
|
3,245
|
|
|
(3,378
|
)
|
||||
Income taxes (benefits)
|
(888
|
)
|
|
445
|
|
|
(836
|
)
|
|
870
|
|
||||
AOCI debit/(credit), net of taxes (benefits), December 31
|
$
|
2,562
|
|
|
$
|
(1,283
|
)
|
|
$
|
2,409
|
|
|
$
|
(2,508
|
)
|
|
Pension benefits1
|
|
Other benefits2
|
||||||||||||||||||
|
|
|
|
|
Investment policy
|
|
|
|
|
|
Investment policy
|
||||||||||
December 31
|
2019
|
|
|
2018
|
|
|
Target
|
|
|
Range
|
|
2019
|
|
|
2018
|
|
|
Target
|
|
|
Range
|
Assets held by category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
71
|
%
|
|
69
|
%
|
|
70
|
%
|
|
65-75
|
|
71
|
%
|
|
70
|
%
|
|
70
|
%
|
|
65-75
|
Fixed income securities
|
29
|
|
|
31
|
|
|
30
|
|
|
25-35
|
|
29
|
|
|
30
|
|
|
30
|
|
|
25-35
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
1
|
Asset allocation (excluding cash) is applicable to only HEI and the Utilities. As of December 31, 2019 and 2018, nearly all of ASB’s pension assets were invested in fixed income securities.
|
2
|
Asset allocation (excluding cash) is applicable to only HEI and the Utilities. ASB does not fund its other benefits.
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||||||||||||||||
|
|
|
Fair value measurements using
|
|
|
|
Fair value measurements using
|
||||||||||||||||||||||||
(in millions)
|
December 31
|
|
Quoted prices in active markets for identical assets
(Level 1) |
|
Significant other observable inputs
(Level 2) |
|
Significant unobservable inputs
(Level 3) |
|
December 31
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
470
|
|
|
$
|
470
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity index and exchange-traded funds
|
610
|
|
|
610
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
|
—
|
|
|
—
|
|
||||||||
Equity investments at net asset value (NAV)
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total equity investments
|
1,158
|
|
|
1,080
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|
130
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed income securities and public mutual funds
|
353
|
|
|
123
|
|
|
230
|
|
|
—
|
|
|
52
|
|
|
49
|
|
|
2
|
|
|
—
|
|
||||||||
Fixed income investments at NAV
|
245
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total fixed income investments
|
598
|
|
|
123
|
|
|
230
|
|
|
—
|
|
|
56
|
|
|
49
|
|
|
2
|
|
|
—
|
|
||||||||
Cash equivalents at NAV
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
1,795
|
|
|
$
|
1,203
|
|
|
$
|
230
|
|
|
$
|
—
|
|
|
201
|
|
|
$
|
179
|
|
|
$
|
2
|
|
|
$
|
—
|
|
||
Cash, receivables and payables, net
|
4
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
1,799
|
|
|
|
|
|
|
|
|
|
|
|
$
|
201
|
|
|
|
|
|
|
|
|
|
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
507
|
|
|
$
|
507
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity index and exchange-traded funds
|
348
|
|
|
348
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
42
|
|
|
—
|
|
|
—
|
|
||||||||
Equity investments at NAV
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total equity investments
|
920
|
|
|
855
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
107
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed income securities and public mutual funds
|
310
|
|
|
123
|
|
|
187
|
|
|
—
|
|
|
47
|
|
|
45
|
|
|
2
|
|
|
—
|
|
||||||||
Fixed income investments at NAV
|
208
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total fixed income investments
|
518
|
|
|
123
|
|
|
187
|
|
|
—
|
|
|
51
|
|
|
45
|
|
|
2
|
|
|
—
|
|
||||||||
Cash equivalents at NAV
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
1,474
|
|
|
$
|
978
|
|
|
$
|
187
|
|
|
$
|
—
|
|
|
173
|
|
|
$
|
152
|
|
|
$
|
2
|
|
|
$
|
—
|
|
||
Cash, receivables and payables, net
|
5
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
$
|
174
|
|
|
|
|
|
|
|
|
|
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||
Measured at net asset value
|
December 31
|
|
|
Redemption frequency
|
|
Redemption notice period
|
|
December 31
|
|
|
Redemption frequency
|
|
Redemption notice period
|
||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non U.S. equity funds (a)
|
$
|
78
|
|
|
Daily-Monthly
|
|
5-30 days
|
|
$
|
11
|
|
|
Daily-Monthly
|
|
5-30 days
|
Fixed income investments (b)
|
245
|
|
|
Monthly
|
|
15 days
|
|
4
|
|
|
Monthly
|
|
15 days
|
||
Cash equivalents (c)
|
39
|
|
|
Daily
|
|
0-1 day
|
|
4
|
|
|
Daily
|
|
0-1 day
|
||
|
$
|
362
|
|
|
|
|
|
|
$
|
19
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non U.S. equity funds (a)
|
$
|
65
|
|
|
Daily-Monthly
|
|
5-30 days
|
|
$
|
10
|
|
|
Daily-Monthly
|
|
5-30 days
|
Fixed income investments (b)
|
208
|
|
|
Monthly
|
|
15 days
|
|
4
|
|
|
Monthly
|
|
15 days
|
||
Cash equivalents (c)
|
36
|
|
|
Daily
|
|
0-1 day
|
|
5
|
|
|
Daily
|
|
0-1 day
|
||
|
$
|
309
|
|
|
|
|
|
|
$
|
19
|
|
|
|
|
|
(a)
|
Represents investments in funds that primarily invest in non-U.S., emerging markets equities. Redemption frequency for pension benefits assets as of December 31, 2019 were: daily, 60% and monthly, 40%, and as of December 31, 2018 were daily, 32% and monthly, 68%. Redemption frequency for other benefits assets as of December 31, 2019 were: daily, 59% and monthly, 41% and as of December 31, 2018 were: daily, 27% and monthly, 73%.
|
(b)
|
Represents investments in fixed income securities invested in a US-dollar denominated fund that seeks to exceed the Barclays Capital Long Corporate A or better Index through investments in US-dollar denominated fixed income securities and commingled vehicles.
|
(c)
|
Represents investments in cash equivalent funds. This class includes funds that invest primarily in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. For pension benefits, the fund may also invest in fixed income securities of investment grade issuers.
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||
December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.61
|
%
|
|
4.31
|
%
|
|
3.74
|
%
|
|
3.52
|
%
|
|
4.34
|
%
|
|
3.72
|
%
|
Rate of compensation increase
|
3.5
|
|
|
3.5
|
|
|
3.5
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
Net periodic pension/benefit cost (years ended)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.31
|
|
|
3.74
|
|
|
4.26
|
|
|
4.34
|
|
|
3.72
|
|
|
4.22
|
|
Expected return on plan assets1
|
7.25
|
|
|
7.50
|
|
|
7.50
|
|
|
7.25
|
|
|
7.50
|
|
|
7.50
|
|
Rate of compensation increase2
|
3.5
|
|
|
3.5
|
|
|
3.5
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
62,135
|
|
|
$
|
68,987
|
|
|
$
|
64,906
|
|
|
$
|
2,209
|
|
|
$
|
2,721
|
|
|
$
|
3,374
|
|
Interest cost
|
84,267
|
|
|
77,374
|
|
|
81,185
|
|
|
8,004
|
|
|
7,933
|
|
|
9,453
|
|
||||||
Expected return on plan assets
|
(111,989
|
)
|
|
(108,953
|
)
|
|
(102,745
|
)
|
|
(12,356
|
)
|
|
(12,908
|
)
|
|
(12,326
|
)
|
||||||
Amortization of net prior service gain
|
(42
|
)
|
|
(42
|
)
|
|
(55
|
)
|
|
(1,806
|
)
|
|
(1,805
|
)
|
|
(1,793
|
)
|
||||||
Amortization of net actuarial losses
|
15,479
|
|
|
30,084
|
|
|
26,496
|
|
|
(13
|
)
|
|
95
|
|
|
1,130
|
|
||||||
Net periodic pension/benefit cost
|
49,850
|
|
|
67,450
|
|
|
69,787
|
|
|
(3,962
|
)
|
|
(3,964
|
)
|
|
(162
|
)
|
||||||
Impact of PUC D&Os
|
48,143
|
|
|
25,828
|
|
|
(18,004
|
)
|
|
3,258
|
|
|
3,842
|
|
|
1,211
|
|
||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
$
|
97,993
|
|
|
$
|
93,278
|
|
|
$
|
51,783
|
|
|
$
|
(704
|
)
|
|
$
|
(122
|
)
|
|
$
|
1,049
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
60,461
|
|
|
$
|
67,359
|
|
|
$
|
63,059
|
|
|
$
|
2,191
|
|
|
$
|
2,704
|
|
|
$
|
3,353
|
|
Interest cost
|
77,851
|
|
|
71,294
|
|
|
74,632
|
|
|
7,673
|
|
|
7,628
|
|
|
9,115
|
|
||||||
Expected return on plan assets
|
(104,632
|
)
|
|
(102,368
|
)
|
|
(95,892
|
)
|
|
(12,180
|
)
|
|
(12,713
|
)
|
|
(12,147
|
)
|
||||||
Amortization of net prior service (gain) cost
|
7
|
|
|
8
|
|
|
8
|
|
|
(1,803
|
)
|
|
(1,803
|
)
|
|
(1,804
|
)
|
||||||
Amortization of net actuarial losses
|
14,658
|
|
|
27,302
|
|
|
24,392
|
|
|
—
|
|
|
98
|
|
|
1,102
|
|
||||||
Net periodic pension/benefit cost
|
48,345
|
|
|
63,595
|
|
|
66,199
|
|
|
(4,119
|
)
|
|
(4,086
|
)
|
|
(381
|
)
|
||||||
Impact of PUC D&Os
|
48,143
|
|
|
25,828
|
|
|
(18,004
|
)
|
|
3,258
|
|
|
3,842
|
|
|
1,211
|
|
||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
$
|
96,488
|
|
|
$
|
89,423
|
|
|
$
|
48,195
|
|
|
$
|
(861
|
)
|
|
$
|
(244
|
)
|
|
$
|
830
|
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
December 31
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
(in billions)
|
|
|
|
|
|
|
|
||||||||
Defined benefit plans - ABOs
|
$
|
2.0
|
|
|
$
|
1.7
|
|
|
$
|
1.8
|
|
|
$
|
1.6
|
|
Defined benefit plans with ABO in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
ABOs
|
1.9
|
|
|
1.6
|
|
|
1.8
|
|
|
1.6
|
|
||||
Fair value of plan assets
|
1.7
|
|
|
1.4
|
|
|
1.6
|
|
|
1.3
|
|
||||
Defined benefit plans with PBOs in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
PBOs
|
2.2
|
|
|
1.9
|
|
|
2.1
|
|
|
1.8
|
|
||||
Fair value of plan assets
|
1.7
|
|
|
1.4
|
|
|
1.6
|
|
|
1.3
|
|
Note 11 · Share-based compensation
|
(in millions)
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Share-based compensation expense1
|
$
|
10.0
|
|
|
$
|
7.8
|
|
|
$
|
5.4
|
|
Income tax benefit
|
1.4
|
|
|
1.1
|
|
|
1.9
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Share-based compensation expense1
|
3.2
|
|
|
2.7
|
|
|
1.9
|
|
|||
Income tax benefit
|
0.6
|
|
|
0.5
|
|
|
0.7
|
|
1
|
For 2019, 2018 and 2017, the Company has not capitalized any share-based compensation.
|
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Shares granted
|
36,344
|
|
|
38,821
|
|
|
35,770
|
|
|||
Fair value
|
$
|
1.6
|
|
|
$
|
1.3
|
|
|
$
|
1.2
|
|
Income tax benefit
|
0.4
|
|
|
0.3
|
|
|
0.5
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
200,358
|
|
|
$
|
33.05
|
|
|
197,047
|
|
|
$
|
31.53
|
|
|
220,683
|
|
|
$
|
29.57
|
|
|||
Granted
|
96,565
|
|
|
37.82
|
|
|
93,853
|
|
|
34.12
|
|
|
97,873
|
|
|
33.47
|
|
||||||
Vested
|
(76,813
|
)
|
|
32.61
|
|
|
(75,683
|
)
|
|
30.56
|
|
|
(92,147
|
)
|
|
28.88
|
|
||||||
Forfeited
|
(12,469
|
)
|
|
34.20
|
|
|
(14,859
|
)
|
|
32.35
|
|
|
(29,362
|
)
|
|
31.57
|
|
||||||
Outstanding, December 31
|
207,641
|
|
|
$
|
35.36
|
|
|
200,358
|
|
|
$
|
33.05
|
|
|
197,047
|
|
|
$
|
31.53
|
|
|||
Total weighted-average grant-date fair value of shares granted (in millions)
|
$
|
3.7
|
|
|
|
|
$
|
3.2
|
|
|
|
|
$
|
3.3
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
65,578
|
|
|
$
|
38.81
|
|
|
32,904
|
|
|
$
|
39.51
|
|
|
83,106
|
|
|
$
|
22.95
|
|
|||
Granted
|
35,215
|
|
|
41.07
|
|
|
37,832
|
|
|
38.21
|
|
|
37,204
|
|
|
39.51
|
|
||||||
Vested (issued or unissued and cancelled)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,106
|
)
|
|
22.95
|
|
||||||
Forfeited
|
(4,391
|
)
|
|
39.19
|
|
|
(5,158
|
)
|
|
38.84
|
|
|
(4,300
|
)
|
|
39.51
|
|
||||||
Outstanding, December 31
|
96,402
|
|
|
$
|
39.62
|
|
|
65,578
|
|
|
$
|
38.81
|
|
|
32,904
|
|
|
$
|
39.51
|
|
|||
Total weighted-average grant-date fair value of shares granted (in millions)
|
$
|
1.4
|
|
|
|
|
$
|
1.4
|
|
|
|
|
$
|
1.5
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Risk-free interest rate
|
2.48
|
%
|
|
2.29
|
%
|
|
1.46
|
%
|
|||
Expected life in years
|
3
|
|
|
3
|
|
|
3
|
|
|||
Expected volatility
|
15.8
|
%
|
|
17.0
|
%
|
|
20.1
|
%
|
|||
Range of expected volatility for Peer Group
|
15.0% to 73.2%
|
|
|
15.1% to 26.2%
|
|
|
15.4% to 26.0%
|
|
|||
Grant date fair value (per share)
|
$
|
41.07
|
|
|
$
|
38.20
|
|
|
$
|
39.51
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
276,169
|
|
|
$
|
33.80
|
|
|
131,616
|
|
|
$
|
33.47
|
|
|
109,816
|
|
|
$
|
25.18
|
|
|||
Granted
|
140,855
|
|
|
37.78
|
|
|
151,328
|
|
|
34.12
|
|
|
148,818
|
|
|
33.47
|
|
||||||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,816
|
)
|
|
25.18
|
|
||||||
Increase above target (cancelled)
|
4,314
|
|
|
33.53
|
|
|
13,858
|
|
|
33.49
|
|
|
—
|
|
|
—
|
|
||||||
Forfeited
|
(17,570
|
)
|
|
34.66
|
|
|
(20,633
|
)
|
|
33.80
|
|
|
(17,202
|
)
|
|
33.48
|
|
||||||
Outstanding, December 31
|
403,768
|
|
|
$
|
35.15
|
|
|
276,169
|
|
|
$
|
33.80
|
|
|
131,616
|
|
|
$
|
33.47
|
|
|||
Total weighted-average grant-date fair value of shares granted (at target performance levels) (in millions)
|
$
|
5.3
|
|
|
|
|
$
|
5.2
|
|
|
|
|
$
|
5.0
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
Note 12 · Income taxes
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
Years ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Federal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current
|
$
|
28,736
|
|
|
$
|
42,903
|
|
|
$
|
61,534
|
|
|
$
|
21,751
|
|
|
$
|
29,649
|
|
|
$
|
36,267
|
|
Deferred*
|
(4,353
|
)
|
|
(6,099
|
)
|
|
33,967
|
|
|
(7,793
|
)
|
|
(5,245
|
)
|
|
35,229
|
|
||||||
Deferred tax credits, net**
|
13,410
|
|
|
(12
|
)
|
|
(20
|
)
|
|
13,155
|
|
|
(12
|
)
|
|
(20
|
)
|
||||||
|
37,793
|
|
|
36,792
|
|
|
95,481
|
|
|
27,113
|
|
|
24,392
|
|
|
71,476
|
|
||||||
State
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current
|
10,472
|
|
|
17,361
|
|
|
10,076
|
|
|
5,579
|
|
|
13,210
|
|
|
8,947
|
|
||||||
Deferred
|
(10,732
|
)
|
|
(3,269
|
)
|
|
3,868
|
|
|
(8,491
|
)
|
|
(2,737
|
)
|
|
2,808
|
|
||||||
Deferred tax credits, net**
|
14,104
|
|
|
(87
|
)
|
|
(32
|
)
|
|
14,104
|
|
|
(87
|
)
|
|
(32
|
)
|
||||||
|
13,844
|
|
|
14,005
|
|
|
13,912
|
|
|
11,192
|
|
|
10,386
|
|
|
11,723
|
|
||||||
Total
|
$
|
51,637
|
|
|
$
|
50,797
|
|
|
$
|
109,393
|
|
|
$
|
38,305
|
|
|
$
|
34,778
|
|
|
$
|
83,199
|
|
*
|
The 2018 deferred income tax expense includes the final adjustment to reduce the provisional amount recorded in 2017 pursuant to Staff Accounting Bulletin No. 118 (SAB No. 118). See “Major tax developments” disclosure below for details of the accounting for the enactment of the Tax Act.
|
**
|
Represents 2019 federal and state tax credits, primarily related to the West Loch PV project, deferred and amortized starting in 2020. See West Loch PV Project discussion in Note 3.
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
Years ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amount at the federal statutory income tax rate
|
$
|
56,996
|
|
|
$
|
53,437
|
|
|
$
|
96,796
|
|
|
$
|
41,399
|
|
|
$
|
37,889
|
|
|
$
|
71,801
|
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State income taxes, net of federal income tax benefit
|
11,658
|
|
|
11,832
|
|
|
9,789
|
|
|
8,703
|
|
|
8,080
|
|
|
7,584
|
|
||||||
Net deferred tax asset (liability) adjustment related to the Tax Act
|
(9,255
|
)
|
|
(9,540
|
)
|
|
13,420
|
|
|
(9,255
|
)
|
|
(9,285
|
)
|
|
9,168
|
|
||||||
Other, net
|
(7,762
|
)
|
|
(4,932
|
)
|
|
(10,612
|
)
|
|
(2,542
|
)
|
|
(1,906
|
)
|
|
(5,354
|
)
|
||||||
Total
|
$
|
51,637
|
|
|
$
|
50,797
|
|
|
$
|
109,393
|
|
|
$
|
38,305
|
|
|
$
|
34,778
|
|
|
$
|
83,199
|
|
Effective income tax rate
|
19.0
|
%
|
|
20.0
|
%
|
|
39.6
|
%
|
|
19.4
|
%
|
|
19.3
|
%
|
|
40.6
|
%
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
December 31
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
||||||
Regulatory liabilities, excluding amounts attributable to property, plant and equipment
|
$
|
100,427
|
|
|
$
|
104,868
|
|
|
$
|
100,427
|
|
|
$
|
104,868
|
|
Operating lease liabilities
|
51,573
|
|
|
—
|
|
|
45,608
|
|
|
—
|
|
||||
Allowance for bad debts
|
14,858
|
|
|
14,647
|
|
|
560
|
|
|
659
|
|
||||
Other1
|
54,028
|
|
|
46,036
|
|
|
41,181
|
|
|
26,522
|
|
||||
Total deferred tax assets
|
220,886
|
|
|
165,551
|
|
|
187,776
|
|
|
132,049
|
|
||||
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment related
|
464,312
|
|
|
437,644
|
|
|
458,349
|
|
|
434,831
|
|
||||
Operating lease right-of-use assets
|
51,542
|
|
|
—
|
|
|
45,608
|
|
|
—
|
|
||||
Regulatory assets, excluding amounts attributable to property, plant and equipment
|
33,897
|
|
|
37,345
|
|
|
33,897
|
|
|
37,345
|
|
||||
Deferred RAM and RBA revenues
|
—
|
|
|
11,278
|
|
|
—
|
|
|
11,278
|
|
||||
Retirement benefits
|
9,684
|
|
|
20,173
|
|
|
13,072
|
|
|
25,430
|
|
||||
Other
|
40,776
|
|
|
31,629
|
|
|
14,001
|
|
|
6,362
|
|
||||
Total deferred tax liabilities
|
600,211
|
|
|
538,069
|
|
|
564,927
|
|
|
515,246
|
|
||||
Net deferred income tax liability
|
$
|
379,325
|
|
|
$
|
372,518
|
|
|
$
|
377,151
|
|
|
$
|
383,197
|
|
1
|
As of December 31, 2019, HEI consolidated and Hawaiian Electric consolidated have deferred tax assets of $8.7 million and $6.7 million respectively, relating to the benefit of state tax credit carryforwards of $11.7 million and $9 million respectively. These state tax credit carryforwards primarily relate to the West Loch PV project and do not expire. The Company concluded that as of December 31, 2019, a valuation allowance is not required.
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Unrecognized tax benefits, January 1
|
$
|
2.1
|
|
|
$
|
4.0
|
|
|
$
|
3.8
|
|
|
$
|
1.6
|
|
|
$
|
3.5
|
|
|
3.8
|
|
|
Additions based on tax positions taken during the year
|
0.5
|
|
|
0.3
|
|
|
0.9
|
|
|
0.5
|
|
|
0.3
|
|
|
0.4
|
|
||||||
Reductions based on tax positions taken during the year
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||||
Additions for tax positions of prior years
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
||||||
Reductions for tax positions of prior years
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
||||||
Lapses of statute of limitations
|
(0.3
|
)
|
|
(2.2
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
(2.2
|
)
|
|
—
|
|
||||||
Unrecognized tax benefits, December 31
|
$
|
2.2
|
|
|
$
|
2.1
|
|
|
$
|
4.0
|
|
|
$
|
1.7
|
|
|
$
|
1.6
|
|
|
$
|
3.5
|
|
Note 13 · Cash flows
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in millions)
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Interest paid to non-affiliates, net of amounts capitalized
|
$
|
107
|
|
|
$
|
102
|
|
|
$
|
83
|
|
Income taxes paid (including refundable credits)
|
56
|
|
|
72
|
|
|
55
|
|
|||
Income taxes refunded (including refundable credits)
|
4
|
|
|
34
|
|
|
1
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Interest paid to non-affiliates, net of amounts capitalized
|
68
|
|
|
73
|
|
|
63
|
|
|||
Income taxes paid (including refundable credits)
|
55
|
|
|
64
|
|
|
26
|
|
|||
Income taxes refunded (including refundable credits)
|
4
|
|
|
31
|
|
|
—
|
|
|||
Supplemental disclosures of noncash activities
|
|
|
|
|
|
|
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Unpaid invoices and accruals for capital expenditures, balance, end of period (investing)
|
64
|
|
|
59
|
|
|
38
|
|
|||
Loans transferred from held for investment to held for sale (investing)
|
—
|
|
|
1
|
|
|
41
|
|
|||
Common stock issued (gross) for director and executive/management compensation (financing)1
|
5
|
|
|
4
|
|
|
11
|
|
|||
Obligations to fund low income housing investments, net (investing)
|
11
|
|
|
12
|
|
|
13
|
|
|||
Transfer of retail repurchase agreements to deposit liabilities (financing)
|
—
|
|
|
102
|
|
|
—
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Unpaid invoices and accruals for capital expenditures, balance, end of period (investing)
|
62
|
|
|
44
|
|
|
38
|
|
|||
HEI Consolidated and Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Electric utility property, plant and equipment
|
|
|
|
|
|
||||||
Estimated fair value of noncash contributions in aid of construction (investing)
|
9
|
|
|
14
|
|
|
18
|
|
|||
Acquisition of Hawaiian Telcom’s interest in joint poles (investing)
|
—
|
|
|
48
|
|
|
—
|
|
Note 14 · Regulatory restrictions on net assets
|
Note 15 · Significant group concentrations of credit risk
|
Note 16 · Fair value measurements
|
|
|
|
Estimated fair value
|
||||||||||||||||
(in thousands)
|
Carrying or notional
amount
|
|
Quoted prices in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3) |
|
Total
|
||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale investment securities
|
$
|
1,232,826
|
|
|
$
|
—
|
|
|
$
|
1,204,229
|
|
|
$
|
28,597
|
|
|
$
|
1,232,826
|
|
Held-to-maturity investment securities
|
139,451
|
|
|
—
|
|
|
143,467
|
|
|
—
|
|
|
143,467
|
|
|||||
Stock in Federal Home Loan Bank
|
8,434
|
|
|
—
|
|
|
8,434
|
|
|
—
|
|
|
8,434
|
|
|||||
Loans, net
|
5,080,107
|
|
|
—
|
|
|
12,295
|
|
|
5,145,242
|
|
|
5,157,537
|
|
|||||
Mortgage servicing rights
|
9,101
|
|
|
—
|
|
|
—
|
|
|
12,379
|
|
|
12,379
|
|
|||||
Derivative assets
|
25,179
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
|
769,825
|
|
|
—
|
|
|
765,976
|
|
|
—
|
|
|
765,976
|
|
|||||
Short-term borrowings—other than bank
|
185,710
|
|
|
—
|
|
|
185,710
|
|
|
—
|
|
|
185,710
|
|
|||||
Other bank borrowings
|
115,110
|
|
|
—
|
|
|
115,107
|
|
|
—
|
|
|
115,107
|
|
|||||
Long-term debt, net—other than bank
|
1,964,365
|
|
|
|
|
|
2,156,927
|
|
|
|
|
|
2,156,927
|
|
|||||
Derivative liabilities
|
51,375
|
|
|
33
|
|
|
2,185
|
|
|
—
|
|
|
2,218
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
88,987
|
|
|
—
|
|
|
88,987
|
|
|
—
|
|
|
88,987
|
|
|||||
Long-term debt, net
|
1,497,667
|
|
|
—
|
|
|
1,670,189
|
|
|
—
|
|
|
1,670,189
|
|
|||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale investment securities
|
$
|
1,388,533
|
|
|
$
|
—
|
|
|
$
|
1,364,897
|
|
|
$
|
23,636
|
|
|
$
|
1,388,533
|
|
Held-to-maturity investment securities
|
141,875
|
|
|
—
|
|
|
142,057
|
|
|
—
|
|
|
142,057
|
|
|||||
Stock in Federal Home Loan Bank
|
9,958
|
|
|
—
|
|
|
9,958
|
|
|
—
|
|
|
9,958
|
|
|||||
Loans, net
|
4,792,707
|
|
|
—
|
|
|
1,809
|
|
|
4,800,244
|
|
|
4,802,053
|
|
|||||
Mortgage servicing rights
|
8,062
|
|
|
—
|
|
|
—
|
|
|
13,618
|
|
|
13,618
|
|
|||||
Derivative assets
|
10,180
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
|
827,841
|
|
|
—
|
|
|
817,667
|
|
|
—
|
|
|
817,667
|
|
|||||
Short-term borrowings—other than bank
|
73,992
|
|
|
—
|
|
|
73,992
|
|
|
—
|
|
|
73,992
|
|
|||||
Other bank borrowings
|
110,040
|
|
|
—
|
|
|
110,037
|
|
|
—
|
|
|
110,037
|
|
|||||
Long-term debt, net—other than bank
|
1,879,641
|
|
|
—
|
|
|
1,904,261
|
|
|
—
|
|
|
1,904,261
|
|
|||||
Derivative liabilities
|
34,132
|
|
|
34
|
|
|
596
|
|
|
—
|
|
|
630
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|||||
Long-term debt, net
|
1,418,802
|
|
|
—
|
|
|
1,443,968
|
|
|
—
|
|
|
1,443,968
|
|
December 31
|
2019
|
|
2018
|
||||||||||||||||||||
|
Fair value measurements using
|
|
Fair value measurements using
|
||||||||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Available-for-sale investment securities (bank segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
—
|
|
|
$
|
1,026,385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,161,416
|
|
|
$
|
—
|
|
U.S. Treasury and federal agency obligations
|
—
|
|
|
117,787
|
|
|
—
|
|
|
—
|
|
|
154,349
|
|
|
—
|
|
||||||
Corporate bonds
|
—
|
|
|
60,057
|
|
|
—
|
|
|
—
|
|
|
49,132
|
|
|
—
|
|
||||||
Mortgage revenue bonds
|
—
|
|
|
—
|
|
|
28,597
|
|
|
—
|
|
|
—
|
|
|
23,636
|
|
||||||
|
$
|
—
|
|
|
$
|
1,204,229
|
|
|
$
|
28,597
|
|
|
$
|
—
|
|
|
$
|
1,364,897
|
|
|
$
|
23,636
|
|
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)1
|
$
|
—
|
|
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
Forward commitments (bank segment)1
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
—
|
|
|
$
|
300
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward commitments (bank segment)1
|
33
|
|
|
12
|
|
|
—
|
|
|
34
|
|
|
9
|
|
|
—
|
|
||||||
Interest rate swap (Other segment)2
|
—
|
|
|
2,173
|
|
|
—
|
|
|
—
|
|
|
587
|
|
|
—
|
|
||||||
|
$
|
33
|
|
|
$
|
2,185
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
596
|
|
|
$
|
—
|
|
2
|
Derivatives are included in Other liabilities in the balance sheets.
|
(in thousands)
|
2019
|
|
2018
|
|
||
Mortgage revenue bonds
|
|
|
||||
Balance, January 1
|
$
|
23,636
|
|
$
|
15,427
|
|
Principal payments received
|
—
|
|
—
|
|
||
Purchases
|
4,961
|
|
8,209
|
|
||
Unrealized gain (loss) included in other comprehensive income
|
—
|
|
—
|
|
||
Balance, December 31
|
$
|
28,597
|
|
$
|
23,636
|
|
|
|
|
Fair value measurements using
|
||||||||||||
(in thousands)
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Loans
|
77
|
|
|
—
|
|
|
—
|
|
|
77
|
|
||||
Real estate acquired in settlement of loans
|
186
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
|
|
|
|
|
|
Significant unobservable
input value (1)
|
||||
(dollars in thousands)
|
Fair value
|
|
Valuation technique
|
|
Significant unobservable input
|
|
Range
|
|
Weighted
Average |
||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||
Residential land
|
$
|
25
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
N/A (2)
|
|
N/A (2)
|
Total loans
|
$
|
25
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||
Home equity lines of credit
|
77
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
N/A (2)
|
|
N/A (2)
|
|
Total loans
|
$
|
77
|
|
|
|
|
|
|
|
|
|
Real estate acquired in settlement of loans
|
$
|
186
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
N/A (2)
|
|
N/A (2)
|
(1)
|
Represent percent of outstanding principal balance.
|
Note 17 · Quarterly information (unaudited)
|
|
Quarters ended
|
|
Years ended
|
||||||||||||||||
(in thousands, except per share amounts)
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
December 31
|
||||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
661,615
|
|
|
$
|
715,485
|
|
|
$
|
771,535
|
|
|
$
|
725,966
|
|
|
$
|
2,874,601
|
|
Operating income1
|
77,937
|
|
|
72,634
|
|
|
97,308
|
|
|
100,795
|
|
|
348,674
|
|
|||||
Net income1
|
46,161
|
|
|
42,985
|
|
|
63,890
|
|
|
66,736
|
|
|
219,772
|
|
|||||
Net income for common stock1
|
45,688
|
|
|
42,512
|
|
|
63,419
|
|
|
66,263
|
|
|
217,882
|
|
|||||
Basic earnings per common share 1,2
|
0.42
|
|
|
0.39
|
|
|
0.58
|
|
|
0.61
|
|
|
2.00
|
|
|||||
Diluted earnings per common share 1,3
|
0.42
|
|
|
0.39
|
|
|
0.58
|
|
|
0.61
|
|
|
1.99
|
|
|||||
Dividends per common share
|
0.32
|
|
|
0.32
|
|
|
0.32
|
|
|
0.32
|
|
|
1.28
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
645,874
|
|
|
$
|
685,277
|
|
|
$
|
768,048
|
|
|
$
|
761,650
|
|
|
$
|
2,860,849
|
|
Operating income
|
71,889
|
|
|
78,799
|
|
|
98,064
|
|
|
84,604
|
|
|
333,356
|
|
|||||
Net income
|
40,720
|
|
|
46,527
|
|
|
66,371
|
|
|
50,046
|
|
|
203,664
|
|
|||||
Net income for common stock
|
40,247
|
|
|
46,054
|
|
|
65,900
|
|
|
49,573
|
|
|
201,774
|
|
|||||
Basic earnings per common share 2
|
0.37
|
|
|
0.42
|
|
|
0.61
|
|
|
0.46
|
|
|
1.85
|
|
|||||
Diluted earnings per common share 3
|
0.37
|
|
|
0.42
|
|
|
0.60
|
|
|
0.45
|
|
|
1.85
|
|
|||||
Dividends per common share
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
1.24
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
578,495
|
|
|
$
|
633,784
|
|
|
$
|
688,330
|
|
|
$
|
645,333
|
|
|
$
|
2,545,942
|
|
Operating income
|
56,560
|
|
|
55,694
|
|
|
71,793
|
|
|
70,331
|
|
|
254,378
|
|
|||||
Net income
|
32,625
|
|
|
33,073
|
|
|
47,277
|
|
|
45,860
|
|
|
158,835
|
|
|||||
Net income for common stock
|
32,126
|
|
|
32,574
|
|
|
46,779
|
|
|
45,361
|
|
|
156,840
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
570,427
|
|
|
$
|
608,126
|
|
|
$
|
687,409
|
|
|
$
|
680,563
|
|
|
2,546,525
|
|
|
Operating income
|
51,369
|
|
|
55,144
|
|
|
74,036
|
|
|
61,112
|
|
|
241,661
|
|
|||||
Net income
|
27,974
|
|
|
31,668
|
|
|
50,210
|
|
|
35,796
|
|
|
145,648
|
|
|||||
Net income for common stock
|
27,475
|
|
|
31,169
|
|
|
49,712
|
|
|
35,297
|
|
|
143,653
|
|
1
|
Operating income for the fourth quarter of 2019 includes gains on property sales totaling $10.8 million, and net income and net income for common stock includes $7.9 million (or $0.07 per share (basic and diluted) at ASB’s 26.8% statutory tax rate).
|
2
|
The quarterly basic earnings per common share are based upon the weighted-average number of shares of common stock outstanding in each quarter.
|
3
|
The quarterly diluted earnings per common share are based upon the weighted-average number of shares of common stock outstanding in each quarter plus the dilutive incremental shares at quarter end.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
(1)
|
is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and
|
(2)
|
is accumulated and communicated to HEI management, including HEI’s CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
|
(1)
|
is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and
|
(2)
|
is accumulated and communicated to Hawaiian Electric management, including Hawaiian Electric’s CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
•
|
“Nominees for three Class III directors whose terms expire at the 2023 Annual Meeting”
|
•
|
“Nominee for one Class I director whose term expires at the 2021 Annual Meeting”
|
•
|
“Continuing Class I directors whose terms expire at the 2021 Annual Meeting”
|
•
|
“Continuing Class II directors whose terms expire at the 2022 Annual Meeting”
|
•
|
“Committees of the Board” (portions regarding whether HEI has an audit & risk committee and identifying its members; no other portion of the Committees of the Board section is incorporated herein by reference)
|
•
|
“Audit & Risk Committee Report” (portion identifying audit & risk committee financial experts who serve on the HEI Audit & Risk Committee only; no other portion of the Audit & Risk Committee Report is incorporated herein by reference)
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
•
|
Pages 6 to 31 of Hawaiian Electric Exhibit 99.1 to this Form 10-K;
|
•
|
The discussion of “2018-20 Long-Term Incentive Plan” at pages 15-16 of Hawaiian Electric’s Exhibit 99.1 to Annual Report on Form 10-K for the year ended December 31, 2017; and
|
•
|
Information concerning compensation paid to directors of Hawaiian Electric who are also directors of HEI under the section of HEI’s 2020 Proxy Statement entitled, “Director Compensation.”
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan category
|
(a)
Number of
securities
to be issued upon
exercise of
outstanding
options, warrants
and rights (1)
|
|
(b)
Weighted-average
exercise price of
outstanding
options,
warrants and
rights
|
|
(c)
Number of securities
remaining available for
future issuance
under equity
compensation plans
(excluding securities
reflected in column (a)) (2)
|
||||
Equity compensation plans approved by shareholders
|
706,851
|
|
|
$
|
—
|
|
|
2,759,090
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
706,851
|
|
|
$
|
—
|
|
|
2,759,090
|
|
EIP
|
|
|
158,649
|
|
Restricted stock units plus estimated compounded dividend equivalents (if applicable) *
|
548,202
|
|
Shares to be issued in February 2020, 2021 and 2022 under the 2017-2019, 2018-2020 and 2019-2021 LTIPs, respectively, plus compounded dividend equivalents
|
706,851
|
|
|
*
|
Under the amended EIP as of December 31, 2019, RSUs count as one share against shares available for issuance less estimated shares withheld for taxes under net share settlement which again become available for the issuance of new shares on a one-to-one basis.
|
(2)
|
This represents the number of shares available as of December 31, 2019 for future awards, including 2,448,827 shares available for future awards under the amended EIP and 310,263 shares available for future awards under the 2011 Nonemployee Director Plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Page/s in Form 10-K
|
|||
|
HEI
|
|
Hawaiian Electric
|
|
Schedule I
|
Condensed Financial Information of Registrant, Hawaiian Electric Industries, Inc. (Parent Company) at December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017
|
|
NA
|
|
Schedule II
|
Valuation and Qualifying Accounts, Hawaiian Electric Industries, Inc. and subsidiaries and Hawaiian Electric Company, Inc. and subsidiaries for the years ended December 31, 2019, 2018 and 2017
|
|
||
NA Not applicable.
|
|
|
|
|
ITEM 16.
|
FORM 10-K SUMMARY
|
December 31
|
2019
|
|
|
2018
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
953
|
|
|
$
|
3,742
|
|
Accounts receivable
|
779
|
|
|
2,604
|
|
||
Notes receivable from subsidiaries
|
22,598
|
|
|
20,789
|
|
||
Property, plant and equipment, net
|
2,931
|
|
|
3,456
|
|
||
Deferred income tax assets
|
10,754
|
|
|
10,147
|
|
||
Other assets and intercompany receivables
|
21,770
|
|
|
11,963
|
|
||
Investments in subsidiaries, at equity
|
2,761,802
|
|
|
2,605,038
|
|
||
Total assets
|
$
|
2,821,587
|
|
|
$
|
2,657,739
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,509
|
|
|
$
|
2,001
|
|
Interest payable
|
3,041
|
|
|
3,476
|
|
||
Notes payable to subsidiaries
|
—
|
|
|
34
|
|
||
Commercial paper
|
96,723
|
|
|
48,992
|
|
||
Long-term debt, net
|
399,064
|
|
|
398,874
|
|
||
Retirement benefits liability
|
29,367
|
|
|
29,565
|
|
||
Other
|
11,623
|
|
|
12,517
|
|
||
Total liabilities
|
541,327
|
|
|
495,459
|
|
||
Shareholders’ equity
|
|
|
|
|
|
||
Preferred stock, no par value, authorized 10,000,000 shares; issued: none
|
—
|
|
|
—
|
|
||
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 108,973,328
shares and 108,879,245 shares at December 31, 2019 and 2018, respectively |
1,678,257
|
|
|
1,669,267
|
|
||
Retained earnings
|
622,042
|
|
|
543,623
|
|
||
Accumulated other comprehensive loss
|
(20,039
|
)
|
|
(50,610
|
)
|
||
Total shareholders’ equity
|
2,280,260
|
|
|
2,162,280
|
|
||
Total liabilities and shareholders’ equity
|
$
|
2,821,587
|
|
|
$
|
2,657,739
|
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
777
|
|
|
$
|
429
|
|
|
$
|
798
|
|
Equity in net income of subsidiaries
|
246,005
|
|
|
226,972
|
|
|
187,097
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
||||
Operating, administrative and general
|
19,195
|
|
|
19,515
|
|
|
16,578
|
|
|||
Depreciation of property, plant and equipment
|
570
|
|
|
597
|
|
|
548
|
|
|||
Taxes, other than income taxes
|
570
|
|
|
509
|
|
|
496
|
|
|||
Total expenses
|
20,335
|
|
|
20,621
|
|
|
17,622
|
|
|||
Income before interest expense and income (taxes) benefits
|
226,447
|
|
|
206,780
|
|
|
170,273
|
|
|||
Retirement defined benefits expense—other than service costs
|
442
|
|
|
674
|
|
|
1,119
|
|
|||
Interest expense
|
17,930
|
|
|
12,664
|
|
|
9,389
|
|
|||
Income before income benefits
|
208,075
|
|
|
193,442
|
|
|
159,765
|
|
|||
Income benefits
|
9,807
|
|
|
8,332
|
|
|
5,532
|
|
|||
Net income
|
$
|
217,882
|
|
|
$
|
201,774
|
|
|
$
|
165,297
|
|
Years ended December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
131,120
|
|
|
$
|
135,470
|
|
|
$
|
99,600
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Increase in note receivable from subsidiary
|
(1,187
|
)
|
|
(20,596
|
)
|
|
(70,000
|
)
|
|||
Decrease in note receivable from subsidiary
|
—
|
|
|
—
|
|
|
66,391
|
|
|||
Capital expenditures
|
(47
|
)
|
|
(143
|
)
|
|
(317
|
)
|
|||
Investments in subsidiaries
|
(38,935
|
)
|
|
(71,970
|
)
|
|
(22,353
|
)
|
|||
Other
|
(1,001
|
)
|
|
140
|
|
|
(177
|
)
|
|||
Net cash used in investing activities
|
(41,170
|
)
|
|
(92,569
|
)
|
|
(26,456
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase (decrease) in notes payable to subsidiaries with original maturities of three months or less
|
—
|
|
|
(30
|
)
|
|
98
|
|
|||
Net increase (decrease) in short-term borrowings with original maturities of three months or less
|
47,731
|
|
|
(14,000
|
)
|
|
62,993
|
|
|||
Proceeds from issuance of short-term debt
|
—
|
|
|
—
|
|
|
125,000
|
|
|||
Repayment of short-term debt
|
—
|
|
|
(50,000
|
)
|
|
(75,000
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
150,000
|
|
|
150,000
|
|
|||
Repayment of long-term debt
|
—
|
|
|
—
|
|
|
(200,000
|
)
|
|||
Withheld shares for employee taxes on vested share-based compensation
|
(997
|
)
|
|
(996
|
)
|
|
(3,828
|
)
|
|||
Common stock dividends
|
(139,463
|
)
|
|
(134,987
|
)
|
|
(134,873
|
)
|
|||
Other
|
(10
|
)
|
|
(848
|
)
|
|
(756
|
)
|
|||
Net cash used in financing activities
|
(92,739
|
)
|
|
(50,861
|
)
|
|
(76,366
|
)
|
|||
Net decrease in cash and equivalents
|
(2,789
|
)
|
|
(7,960
|
)
|
|
(3,222
|
)
|
|||
Cash and cash equivalents, January 1
|
3,742
|
|
|
11,702
|
|
|
14,924
|
|
|||
Cash and cash equivalents, December 31
|
$
|
953
|
|
|
$
|
3,742
|
|
|
$
|
11,702
|
|
December 31
|
2019
|
|
|
2018
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
HEI 2.99% term loan, due 2022
|
$
|
150,000
|
|
|
$
|
150,000
|
|
HEI 5.67% senior note, due 2021
|
50,000
|
|
|
50,000
|
|
||
HEI 3.99% senior note, due 2023
|
50,000
|
|
|
50,000
|
|
||
HEI 4.58% senior notes, due 2025
|
50,000
|
|
|
50,000
|
|
||
HEI 4.72% senior notes, due 2028
|
100,000
|
|
|
100,000
|
|
||
Less unamortized debt issuance costs
|
(936
|
)
|
|
(1,126
|
)
|
||
Long-term debt, net
|
$
|
399,064
|
|
|
$
|
398,874
|
|
Col. A
|
Col. B
|
|
Col. C
|
|
|
Col. D
|
|
|
Col. E
|
||||||||||||
(in thousands)
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||||
Description
|
Balance
at begin-
ning of
period
|
|
Charged to
costs and
expenses
|
|
Charged
to other
accounts
|
|
|
Deductions
|
|
|
Balance at
end of
period
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,480
|
|
|
$
|
2,106
|
|
|
$
|
795
|
|
(a)
|
|
$
|
3,004
|
|
(b)
|
|
$
|
1,377
|
|
Allowance for uncollectible interest – bank
|
$
|
373
|
|
|
$
|
—
|
|
|
$
|
(99
|
)
|
|
|
$
|
—
|
|
|
|
$
|
274
|
|
Allowance for losses for loans – bank
|
$
|
52,119
|
|
|
$
|
23,480
|
|
(c)
|
$
|
6,418
|
|
(a)
|
|
$
|
28,662
|
|
(b)
|
|
$
|
53,355
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,178
|
|
|
$
|
2,474
|
|
|
$
|
(4,099
|
)
|
(a), (d)
|
|
$
|
(1,927
|
)
|
(b),(d)
|
|
$
|
1,480
|
|
Allowance for uncollectible interest – bank
|
$
|
367
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
|
$
|
—
|
|
|
|
$
|
373
|
|
Allowance for losses for loans – bank
|
$
|
53,637
|
|
|
$
|
14,745
|
|
(c)
|
$
|
4,254
|
|
(a)
|
|
$
|
20,517
|
|
(b)
|
|
$
|
52,119
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,121
|
|
|
$
|
1,810
|
|
|
$
|
785
|
|
(a)
|
|
$
|
2,538
|
|
(b),(d)
|
|
$
|
1,178
|
|
Allowance for uncollectible interest – bank
|
$
|
1,834
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,467
|
|
|
|
$
|
367
|
|
Allowance for losses for loans – bank
|
$
|
55,533
|
|
|
$
|
10,901
|
|
(c)
|
$
|
4,016
|
|
(a)
|
|
$
|
16,813
|
|
(b)
|
|
$
|
53,637
|
|
Deferred tax valuation allowance – HEI
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
38
|
|
|
|
$
|
—
|
|
(a)
|
Primarily recoveries.
|
(b)
|
Bad debts charged off.
|
(c)
|
Represents provision for loan losses.
|
(d)
|
Reclass (reversal) of allowance for one customer account into other long term assets in 2018 and 2017 were $(4,934), and $841, respectively.
|
Exhibit no.
|
Description
|
Form
|
File Number
|
Exhibit #
|
Filing date
|
|
*
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
*
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Electric:
|
|
|
|
|
||
|
3(i).1
|
Hawaiian Electric’s Certificate of Amendment of Articles of Incorporation.
|
10-K
|
1-4955
|
3.1
|
3/31/89
|
|
3(i).2
|
Articles of Amendment to Hawaiian Electric’s Amended Articles of Incorporation.
|
10-K
|
1-4955
|
3.1(b)
|
3/27/90**
|
|
3(i).3
|
Articles of Amendment to Hawaiian Electric’s Amended Articles of Incorporation.
|
10-K
|
1-4955
|
3(i).4
|
3/23/99
|
|
3(i).4
|
10-Q
|
1-4955
|
3(i).4
|
8/7/09
|
|
|
3(ii)
|
8-K
|
1-4955
|
3(ii)
|
8/9/10
|
|
*
|
4
|
|
|
|
|
|
|
4.1
|
10-K
|
1-4955
|
4.1
|
3/19/03
|
|
|
4.2
|
8-K
|
1-4955
|
4(a)
|
4/23/12
|
|
|
4.3
|
8-K
|
1-4955
|
4(b)
|
4/23/12
|
|
|
4.4
|
8-K
|
1-4955
|
4(c)
|
4/23/12
|
|
|
4.5
|
8-K
|
1-4955
|
4
|
9/14/12
|
|
|
4.6
|
8-K
|
1-4955
|
4(a)
|
10/7/13
|
|
|
4.7
|
8-K
|
1-4955
|
4(b)
|
10/7/13
|
|
|
4.8
|
10-Q
|
1-4955
|
4
|
11/7/13
|
|
|
4.9
|
8-K
|
1-4955
|
4(a)
|
10/16/15
|
|
|
4.10
|
8-K
|
1-4955
|
4(b)
|
10/16/15
|
|
|
4.11
|
8-K
|
1-4955
|
4(c)
|
10/16/15
|
|
|
4.12
|
8-K
|
1-4955
|
4
|
12/19/16
|
|
|
10.1(a)
|
Power Purchase Agreement between Kalaeloa Partners, L.P., and Hawaiian Electric dated October 14, 1988.
|
10-Q
|
1-4955
|
10(a)
|
11/14/88
|
|
10.1(b)
|
Amendment No. 1 to Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated June 15, 1989.
|
10-Q
|
1-4955
|
10(c)
|
8/14/89
|
|
10.1(c)
|
Lease Agreement between Kalaeloa Partners, L.P., as Lessor, and Hawaiian Electric, as Lessee, dated February 27, 1989.
|
10-Q
|
1-4955
|
10(d)
|
8/14/89
|
|
10.1(d)
|
Restated and Amended Amendment No. 2 to Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated February 9, 1990.
|
10-K
|
1-4955
|
10.2(c)
|
3/27/90**
|
|
10.1(e)
|
Amendment No. 3 to Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated December 10, 1991.
|
10-K
|
1-4955
|
10.2(e)
|
3/24/92
|
|
10.1(f)
|
10-Q
|
1-4955
|
10.1
|
11/8/00
|
Exhibit no.
|
Description
|
Form
|
File Number
|
Exhibit #
|
Filing date
|
|
|
10.1(g)
|
10-Q
|
1-4955
|
10.3
|
11/5/04
|
|
|
10.1(h)
|
10-Q
|
1-4955
|
10.4
|
11/5/04
|
|
|
10.1(i)
|
10-Q
|
1-4955
|
10
|
11/4/16
|
|
|
10.2(a)
|
Power Purchase Agreement between AES Barbers Point, Inc. and Hawaiian Electric, entered into on March 25, 1988.
|
10-Q
|
1-4955
|
10(a)
|
5/16/88
|
|
10.2(b)
|
Agreement between Hawaiian Electric and AES Barbers Point, Inc., pursuant to letters dated May 10, 1988 and April 20, 1988.
|
10-K
|
1-4955
|
10.4
|
3/31/89
|
|
10.2(c)
|
Amendment No. 1, entered into as of August 28, 1988, to Power Purchase Agreement between AES Barbers Point, Inc. and Hawaiian Electric.
|
10-Q
|
1-4955
|
10
|
11/13/89
|
|
10.2(d)
|
Hawaiian Electric’s Conditional Notice of Acceptance to AES Barbers Point, Inc. dated January 15, 1990.
|
10-K
|
1-4955
|
13(c)
|
3/27/90**
|
|
10.2(e)
|
10-K
|
1-4955
|
10.2(e)
|
3/9/04
|
|
|
10.2(f)
|
10-Q
|
1-4955
|
10
|
5/10/18
|
|
|
10.3(a)
|
Purchase Power Contract between Hawaii Electric Light and Thermal Power Company dated March 24, 1986.
|
10-Q
|
1-4955
|
10(a)
|
8/14/89
|
|
10.3(b)
|
Firm Capacity Amendment between Hawaii Electric Light and Puna Geothermal Venture (assignee of AMOR VIII, who is the assignee of Thermal Power Company) dated July 28, 1989 to Purchase Power Contract between Hawaii Electric Light and Thermal Power Company dated March 24, 1986.
|
10-Q
|
1-4955
|
10(b)
|
8/14/89
|
|
10.3(c)
|
Amendment made in October 1993 to Purchase Power Contract between Hawaii Electric Light and Puna Geothermal Venture dated March 24, 1986, as amended.
|
10-K
|
1-4955
|
10.5(b)
|
3/27/98
|
|
10.3(d)
|
Third Amendment dated March 7, 1995 to the Purchase Power Contract between Hawaii Electric Light and Puna Geothermal Venture dated March 24, 1986, as amended.
|
10-K
|
1-4955
|
10.5(c)
|
3/27/98
|
|
10.3(e)
|
Performance Agreement and Fourth Amendment dated February 12, 1996 to the Purchase Power Contract between Hawaii Electric Light and Puna Geothermal Venture dated March 24, 1986, as amended.
|
10-K
|
1-4955
|
10.5(b)
|
3/25/96
|
|
10.3(f)
|
10-K
|
1-4955
|
10.4(f)
|
2/17/12
|
|
|
10.3(g)
|
10-K
|
1-4955
|
10.4(g)
|
2/17/12
|
|
*
|
10.3(h)
|
|
|
|
|
|
|
10.4(a)
|
Power Purchase Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light dated October 22, 1997 (but with the following attachments omitted: Attachment C, “Selected portions of the North American Electric Reliability Council Generating Availability Data System Data Reporting Instructions dated October 1996” and Attachment E, “Form of the Interconnection Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light,” which is provided in final form as Exhibit 10.6(b)).
|
10-K
|
1-4955
|
10.7
|
3/27/98
|
|
10.4(b)
|
Interconnection Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light dated October 22, 1997.
|
10-K
|
1-4955
|
10.7(a)
|
3/27/98
|
|
10.4(c)
|
Amendment No. 1, executed on January 14, 1999, to Power Purchase Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light dated October 22, 1997.
|
10-K
|
1-4955
|
10.7(b)
|
3/23/99
|
|
10.4(d)
|
10-K
|
1-4955
|
10.4(d)
|
3/1/18
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
||||
|
|
(Registrant)
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
/s/ Gregory C. Hazelton
|
|
By
|
|
/s/ Tayne S. Y. Sekimura
|
|
|
Gregory C. Hazelton
|
|
|
|
Tayne S. Y. Sekimura
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer of HEI)
|
|
|
|
(Principal Financial Officer of Hawaiian Electric)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
|
February 28, 2020
|
|
Date:
|
|
February 28, 2020
|
Signature
|
|
Title
|
|
|
|
/s/ Constance H. Lau
|
|
President & Chief Executive Officer of HEI and
|
Constance H. Lau
|
|
Director of HEI
|
|
|
(Principal Executive Officer of HEI)
|
|
|
|
/s/ Scott W. H. Seu
|
|
President & Chief Executive Officer of Hawaiian Electric
|
Scott W. H. Seu
|
|
and Director of Hawaiian Electric
|
|
|
(Principal Executive Officer of Hawaiian Electric)
|
|
|
|
/s/ Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer
|
Gregory C. Hazelton
|
|
of HEI (Principal Financial Officer of HEI)
|
|
|
|
/s/ Tayne S. Y. Sekimura
|
|
Senior Vice President and Chief Financial Officer
|
Tayne S. Y. Sekimura
|
|
of Hawaiian Electric (Principal Financial Officer
|
|
|
of Hawaiian Electric)
|
|
|
|
/s/ Paul K. Ito
|
|
Vice President, Tax, Controller and Treasurer
|
Paul K. Ito
|
|
of HEI (Principal Accounting Officer of HEI)
|
|
|
|
/s/ Patsy H. Nanbu
|
|
Controller of Hawaiian Electric
|
Patsy H. Nanbu
|
|
(Principal Accounting Officer of Hawaiian Electric)
|
|
|
|
|
|
|
Signature
|
|
Title
|
/s/ Kevin M. Burke
|
|
Director of Hawaiian Electric
|
Kevin M. Burke
|
|
|
|
|
|
|
|
|
/s/ Celeste A. Connors
|
|
Director of HEI
|
Celeste A. Connors
|
|
|
|
|
|
|
|
|
/s/ Richard J. Dahl
|
|
Director of HEI
|
Richard J. Dahl
|
|
|
|
|
|
|
|
|
/s/ Thomas B. Fargo
|
|
Director of HEI
|
Thomas B. Fargo
|
|
|
|
|
|
|
|
|
/s/ Peggy Y. Fowler
|
|
Director of HEI
|
Peggy Y. Fowler
|
|
|
|
|
|
|
|
|
/s/ Timothy E. Johns
|
|
Chairman of the Board of Directors of Hawaiian Electric
|
Timothy E. Johns
|
|
|
|
|
|
|
|
|
/s/ Micah A. Kane
|
|
Director of HEI
|
Micah A. Kane
|
|
|
|
|
|
|
|
|
/s/ Bert A. Kobayashi, Jr.
|
|
Director of Hawaiian Electric
|
Bert A. Kobayashi, Jr.
|
|
|
|
|
|
|
|
|
/s/ Mary G. Powell
|
|
Director of HEI
|
Mary G. Powell
|
|
|
|
|
|
|
|
|
/s/ Keith P. Russell
|
|
Director of HEI
|
Keith P. Russell
|
|
|
|
|
|
|
|
|
/s/ William James Scilacci, Jr.
|
|
Director of HEI
|
William James Scilacci, Jr.
|
|
|
|
|
|
|
|
|
/s/ Kelvin H. Taketa
|
|
Director of Hawaiian Electric
|
Kelvin H. Taketa
|
|
|
|
|
|
|
|
|
/s/ Jeffrey N. Watanabe
|
|
Chairman of the Board of Directors of HEI
|
Jeffrey N. Watanabe
|
|
|
|
|
|
|
|
|
/s/ Eva T. Zlotnicka
|
|
Director of HEI
|
Eva T. Zlotnicka
|
|
|
Legal Plan Name
|
FPRS Plan Number
|
Plan Type(reference only)
|
Hawaiian Electric Industries Retirement Savings Plan
|
56566
|
Qualified Plan
|
American Savings Bank 401(k) Plan
|
75615
|
Qualified Plan
|
Plan
#
|
Live Date
|
Ticker
|
Legal Fund Name
|
FPRS
Code
|
VRS
Code
|
Redemption/Short-Term
Trading Fees
|
56566
|
11/1/2019
|
VTSNX
|
Vanguard Total International Stock Index Fund Institutional Shares
|
OERM
|
877800
|
N/A
|
75615
|
11/1/2019
|
VTSNX
|
Vanguard Total International Stock Index Fund Institutional Shares
|
OERM
|
877800
|
N/A
|
•
|
Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the new investment options will be opened for all money-in and money-out transactions, and will not be restricted from any transaction.
|
•
|
Fund Performance will be made available on NetBenefits and in participant statements. Fund Performance is also available through a Customer Service Representative.
|
•
|
Fidelity displays certain investment performance-related and holdings-based data for investment products on NetBenefits that may be based on data received from various third-party sources including but not limited to Morningstar, LLC, investment managers, trustees or plan sponsors. Depending on such source and type of underlying data and the particular investment product, information may not be available or updated on NetBenefits for several days after receipt; for custom investment options where past performance is not available, at least thirty days may be required for performance history to be generated and calculated.
|
•
|
The following Standard Performance will be made available, where applicable:
|
•
|
1, 3, 5, 10 Year Average Annual
|
•
|
Life of Fund Average Annual
|
•
|
3 Month Cumulative
|
•
|
Year-To-Date Cumulative
|
•
|
52 Week High
|
•
|
52 Week Low
|
•
|
The new funds will be added to the redemption methods for all withdrawals, loans and/or fee processing, as currently provided in your Agreement:
|
•
|
For redemption methods and/or fee processing using hierarchal method, the new funds will be added in the last position; and/or,
|
•
|
For redemption methods and/or fee processing using a pro-rata method, the new funds will be added to the list.
|
Plan
#
|
Request
Type-
Redirection/
Reallocation/
Both
|
Re-Direct
Trade
Date
|
Re-
Allocate
Trade
Date
|
Fidelity
(FROM)
FPRS
Code &
Ticker
|
From
Legal
Name
|
ð
|
To
Legal
Name
|
Fidelity
(TO)
FPRS
Code &
Ticker
|
Redemption/
Short-Term
Trading Fees
on From
Fund
|
56566
|
Both
|
11/1/2019
|
11/1/2019
|
OS4X VTIAX
|
Vanguard Total International Stock Index Fund Admiral Shares
|
ð
|
Vanguard Total International Stock Index Fund Institutional Shares
|
OERM VTSNX
|
N/A
|
75615
|
Both
|
11/1/2019
|
11/1/2019
|
OS4X VTIAX
|
Vanguard Total International Stock Index Fund Admiral Shares
|
ð
|
Vanguard Total International Stock Index Fund Institutional Shares
|
OERM VTSNX
|
N/A
|
•
|
Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the "From Fund" investment options will be closed for all money-in and money-out transactions, and will be restricted from all transactions.
|
•
|
All assets will be liquidated and processed as a cash transaction.
|
1.
|
Purposes of the Plan
|
2.
|
Definitions
|
3.
|
Shares of Common Stock Subject to the Plan
|
4.
|
Administration of the Plan
|
5.
|
Participation in the Plan
|
6.
|
Determination of Nonemployee Directors’ Stock Payments
|
7.
|
Shareholder Rights
|
8.
|
Adjustment for Changes in Capitalization
|
9.
|
Continuation of Director or Other Status
|
10.
|
Compliance with Government Regulations
|
11.
|
Nontransferability of Rights
|
12.
|
Amendment and Termination of Plan
|
13.
|
Governing Law
|
14.
|
Effective Date and Duration of the Plan
|
1.
|
Purpose and Explanation. This Amendment is adopted to simplify and clarify the SelectMatch eligibility and calculation.
|
a.
|
SelectMatch Eligibility. Eligibility for the SelectMatch shall require a one year waiting period. Specifically, eligibility shall begin on the first day of the quarter coinciding with or next following the completion of one year of employment with American Savings Bank (including, in certain cases, employment with an Affiliate). Rehired employees who completed one year of employment with the Bank or an Affiliate prior to their termination date are immediately eligible upon the date of their rehire or hire by the Bank. Rehired employees who did not complete one year of employment prior to their termination shall be required to be employed for one year from the date of their rehire or hire by the Bank.
|
b.
|
SelectMatch Contributions. A quarterly SelectMatch Contribution shall be made once each calendar quarter with respect to that quarter and an additional SelectMatch Contribution may be made at year’s end with respect to the Plan Year.
|
2.
|
Supersession. This Amendment No. 5 shall supersede the provisions of the SDCP to the extent that those provisions are inconsistent with this Amendment.
|
3.
|
Effective Date. This Amendment No. 5 is effective for Plan Years beginning on or after January 1, 2019.
|
4.
|
Section 4A.1. Section 4A.1 is amended in its entirety as follows:
|
a.
|
General. Each Participant who elects to make Deferral Contributions to the Plan for a Plan Year and who has completed one year of employment shall be entitled to receive employer-matching contributions which shall be known as “SelectMatch Contributions”.
|
b.
|
Definition of “SelectMatch Compensation”. “SelectMatch Compensation” for a Plan Year shall mean “Compensation” as defined under the American Savings Bank 401(k) Plan, modified by the inclusion of Deferral Contributions under this Plan and not limited by the annual limit imposed by Section 401(a)(17) of the Code on compensation which may be taken into account by qualified plans (“401(a)(17) Limit”). The SelectMatch Compensation taken into account for a Plan Year shall include only compensation earned on or after the date that participation in the SelectMatch has commenced. Where such date is the first day of the second, third, or fourth quarter of the Plan Year, the 401(a)(17) Limit shall be prorated.
|
c.
|
Eligibility and Participation. For purposes of the SelectMatch, “one year of employment” shall mean continuous employment for one year with the Bank on and after the employee’s date of hire. For purposes of satisfying the one year of employment requirement, service with an Affiliate shall be taken into account, provided that, in the case of service of less than one year with the Affiliate, there is no break in service between employment with the Affiliate and employment with the Bank. Former employees of the Bank or an Affiliate who completed one year of employment with the Bank or the Affiliate prior to their termination date are immediately eligible upon the date of their rehire or hire by the Bank. Former employees of the Bank or an Affiliate who did not complete one year of employment prior to their termination date shall be required to be employed for one year from the date of their rehire or hire by the Bank. Participation in the SelectMatch by an eligible Participant shall commence on the first day of the quarter coinciding with or next following the date that one year of employment has been completed.
|
d.
|
Amount of SelectMatch Contribution.
|
i.
|
Quarterly SelectMatch Contributions. A SelectMatch Contribution shall be made for each calendar quarter in which an eligible Participant makes Deferral Contributions to the Plan. The amount of a quarterly SelectMatch Contribution shall be equal to 4% of the Participant’s Deferral Contributions for that calendar quarter.
|
ii.
|
Annual SelectMatch Contribution. An additional SelectMatch Contribution at year-end may be necessary for Participants whose SelectMatch Compensation exceeds the annual 401(a)(17) limit. The calculation will first determine the lesser of
|
◦
|
First step: Determine the lesser of deferrals or 4% of excess compensation.
|
◦
|
Second step: Subtract any contribution already received.
|
e.
|
Investment Adjustments. SelectMatch Contributions shall be deemed to include Investment Adjustments thereon, which shall be credited to a Participant’s SelectMatch Account.
|
f.
|
Salary Deferral Agreement to Control. Any SelectMatch Contributions made to the Plan for the Participant’s benefit with respect to a Plan Year, together with any Investment Adjustments thereon, shall be subject to the terms of the Participant’s Salary Deferral Agreement for such Plan Year.
|
5.
|
Except as modified herein, all of the terms and provisions of the SDCP, as amended, shall continue in full force and effect.
|
ARTICLE 1 -
|
DEFINITIONS ...........................................................................................
|
3
|
ARTICLE 2 -
|
SCOPE OF AGREEMENT ........................................................................
|
25
|
ARTICLE 3 -
|
SPECIFIC RIGHTS AND OBLIGATIONS OF THE PARTIES .............
|
38
|
ARTICLE 4 -
|
SUSPENSION OR REDUCTION OF DELIVERIES ...............................
|
54
|
ARTICLE 5 -
|
RATE FOR PURCHASE ...........................................................................
|
56
|
ARTICLE 6 -
|
BILLING AND PAYMENT .......................................................................
|
58
|
ARTICLE 7 -
|
CREDIT ASSURANCE AND SECURITY ...............................................
|
60
|
ARTICLE 8 -
|
DEFALULT ................................................................................................
|
63
|
ARTICLE 9 -
|
LIQUIDATED DAMAGES .......................................................................
|
74
|
ARTICLE 10 -
|
COMPANY’S USE OF AND ACCESS TO FACILITY ............................
|
78
|
ARTICLE 11 -
|
AUDIT RIGHTS ........................................................................................
|
80
|
ARTICLE 12 -
|
REPRESENTATIONS, WARRANTIES AND COVENANTS .................
|
81
|
ARTICLE 13 -
|
INDEMNIFICATION .................................................................................
|
87
|
ARTICLE 14 -
|
CONSEQUNTIAL DAMAGES .................................................................
|
90
|
ARTICLE 15 -
|
INSURANCE .............................................................................................
|
91
|
ARTICLE 16 -
|
SET OFF .....................................................................................................
|
93
|
ARTICLE 17 -
|
DISPUTE RESOLUTION ..........................................................................
|
94
|
ARTICLE 18 -
|
FORCE MAJEURE ....................................................................................
|
95
|
ARTICLE 19 -
|
ELECTRIC SERVICE SUPPLIED BY COMPANY .................................
|
99
|
ARTICLE 20 -
|
ASSIGNMENTS AND FINANCING DEBT ............................................
|
100
|
ARTICLE 21 -
|
SALE OF FACILITY BY SELLER ...........................................................
|
102
|
ARTICLE 22 -
|
SALE OF ENERGY TO THIRD PARTIES ...............................................
|
103
|
ARTICLE 23 -
|
EQUAL EMPLOYMENT OPPORTUNITY ..............................................
|
104
|
ARTICLE 24 -
|
PROCESS FOR ADDRESSING REVISIONS TO PERFORMANCE
STANDARDS ........................................................................................
|
105
|
ARTICLE 25 -
|
MISCELLANEOUS ...................................................................................
|
109
|
Attachment A.
|
|
Facility Description
|
Attachment B.
|
|
Facility Owned by Seller
|
Attachment C.
|
|
Methods and Formulas for Measuring Performance Standards/Selected Portions of NERC GADS
|
Attachment D.
|
|
Consultants List - Qualified Independent Engineering Companies
|
Attachment E.
|
|
Single-Line Diagram and Interface Block Diagram
|
Attachment F.
|
|
Relay List and Trip Scheme
|
Attachment G.
|
|
Company-Owned Interconnection Facilities
|
Attachment H.
|
|
Form of Bill of Sale and Assignment
|
Attachment I.
|
|
Form of Assignment of Lease and Assumption
|
Attachment J.
|
|
Energy Charge and Capacity Charge Payment Formulas
|
Attachment K.
|
|
Guaranteed Project Milestones
|
Attachment L.
|
|
Reporting Milestones
|
Attachment M.
|
|
Form of Standby Letter of Credit
|
Attachment N.
|
|
Acceptance Test General Criteria
|
Attachment O.
|
|
Control System Acceptance Test Criteria
|
Attachment P.
|
|
Sale of Facility by Seller
|
Attachment Q.
|
|
[RESERVED]
|
Attachment R.
|
|
Required Insurance
|
Attachment S.
|
|
Form of Monthly Progress Report
|
Attachment T.
|
|
[RESERVED]
|
Attachment U.
|
|
[RESERVED]
|
Attachment V.
|
|
Summary of Maintenance and Inspection Performed
|
Attachment W.
|
|
Capacity Test Procedures
|
Attachment X.
|
|
Unit Incident Report
|
Attachment Y.
|
|
Operation and Maintenance of the Facility
|
Attachment Z.
|
|
Critical Spare Parts
|
Attachment AA.
|
|
Renewable Portfolio Standards
|
Attachment BB.
|
|
Generator Acceptance Test General Criteria
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
1
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
2
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
3
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
4
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
5
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
6
|
•
|
Seller’s substation/equipment status – breaker open/closed status, equipment normal/alarm operating status, running/stopped, etc.
|
•
|
Seller’s generation data (analog values) – generators, voltage, current, MW, MVAR, etc.
|
•
|
Seller’s generation performance (status and/or analog values) – available ramp rate, generator frequency, etc.
|
•
|
Dispatch Active Power control interface – MW setpoint, Available Capacity, Minimum dispatch limit, etc.
|
•
|
Reactive Power control interface – reactive power mode (AVR, PF, constant MVAR), voltage kV setpoint feedback, voltage raise/lower, etc.
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
7
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
8
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
9
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
10
|
1.
|
Adequate materials, Geothermal Resources and supplies are available to meet the Facility’s needs under normal conditions and reasonably foreseeable abnormal conditions.
|
2.
|
Sufficient operating personnel are available and are adequately experienced and trained to operate the Facility properly, efficiently and within manufacturer’s guidelines and specifications and are capable of responding to emergency conditions.
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
11
|
3.
|
Preventive, predictive, routine and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation, and are performed by knowledgeable, trained and experienced personnel utilizing proper equipment, tools, and procedures.
|
4.
|
Appropriate monitoring and testing is done to ensure that equipment is functioning as designed and to provide assurance that equipment will function properly under both normal and reasonably foreseeable abnormal conditions.
|
5.
|
Equipment is operated in a manner safe to workers, the general public and the environment and in accordance with equipment manufacturer’s specifications, including, without limitation, defined limitations such as steam pressure, temperature, moisture content, chemical content, quality of make-up water, operating voltage, current, frequency, rotational speed, polarity, synchronization, control system limits, etc.
|
6.
|
Facility design and operation meets the Contract Firm Capacity under natural conditions reasonably anticipated to occur during the life of this Agreement including consideration of probable seismic events, tropical storms, hurricanes, and volcanic eruptions.
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
12
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
13
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
14
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
15
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
16
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
17
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
18
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
19
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
20
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
21
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
22
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
23
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 1
24
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
25
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
26
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
27
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
28
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
29
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
30
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
31
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
32
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
33
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
34
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
35
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
36
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 2
37
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
38
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
39
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
40
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
41
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
42
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
43
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
44
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
45
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
46
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
47
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
48
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
49
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
50
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
51
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
52
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 3
53
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 4
54
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 4
55
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 5
56
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 5
57
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 6
58
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 6
59
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 7
60
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 7
61
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 7
62
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
63
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
64
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
65
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
66
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
67
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
68
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
69
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
70
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
71
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
72
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 8
73
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 9
74
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 9
75
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 9
76
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 9
77
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 10
78
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 10
79
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 11
80
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 12
81
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 12
82
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 12
83
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 12
84
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 12
85
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 12
86
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 13
87
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 13
88
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 13
89
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 14
90
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 15
91
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 15
92
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 16
93
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 17
94
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 18
95
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 18
96
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 18
97
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 18
98
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 19
99
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 20
100
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 20
101
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 21
102
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 22
103
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 23
104
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 24
105
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 24
106
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 24
107
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 24
108
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
109
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
110
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
111
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
112
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
113
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
114
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
115
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
116
|
EXECUTION VERSION
Puna Geothermal Venture
|
|
ARTICLE 25
117
|
Company:
|
HAWAI'I ELECTRIC LIGHT COMPANY, INC.
|
||
|
|
|
|
|
By:
|
/s/ Alan M. Oshima
|
|
|
Name:
|
Alan M. Oshima
|
|
|
Its:
|
President & Chief Executive Officer
|
|
|
|
|
|
|
By:
|
/s/ Sharon M. Suzuki
|
|
|
Name:
|
Sharon M. Suzuki
|
|
|
Its:
|
President, Maui County & Hawaii Island Utilities
|
|
|
|
|
|
Seller:
|
PUNA GEOTHERMAL VENTURE
|
||||
|
|
|
|
|
|
|
By:
|
ORNI 8 LLC
|
|
||
|
|
Its General Partner
|
|
||
|
|
|
|
|
|
|
|
By
|
Ormat Nevada, Inc.
|
|
|
|
|
|
Its Sole Member
|
|
|
|
|
|
|
|
|
|
|
|
By
|
/s/ Connie Stechman
|
|
|
|
|
|
Connie Stechman
|
|
|
|
|
|
Its Assistant Secretary
|
|
|
|
|
|
|
|
|
By:
|
OrPuna, LLC
|
|
||
|
|
Its General Partner
|
|
||
|
|
|
|
|
|
|
|
By
|
Ormat Nevada, Inc.
|
|
|
|
|
|
Its Sole Member
|
|
|
|
|
|
|
|
|
|
|
|
By
|
/s/ Connie Stechman
|
|
|
|
|
|
Connie Stechman
|
|
|
|
|
|
Its Assistant Secretary
|
|
|
A-1
|
•
|
Two steam units – tagged OEC 41, 42, utilizing 530 kph of steam, and producing together 39MWgross power/35MW net OEC.
|
•
|
Two brine units – tagged OEC 31, 32, configured as ITLU (Integrated Two Level Units), and producing together 13MW gross power/11.5MW net OEC.
|
|
|
A-2
|
|
|
A-3
|
|
|
A-4
|
|
|
A-5
|
|
|
A-6
|
|
|
A-7
|
|
|
A-8
|
1.
|
The Facility.
|
a.
|
Single-Line Diagram, Relay List, Relay Settings and Trip Scheme. A preliminary single-line diagram, Interface Block Diagram, relay list, relay settings, and trip scheme of the Facility shall, after Seller has obtained prior written consent from Company, be attached to this Agreement on the Execution Date as Attachment E (Single-Line Diagram and Interface Block Diagram) and Attachment F (Relay List and Trip Scheme). The protection schemes and trip settings shall conform with the requirements of Section 3.2(A)(6) (Facility Protection and Control Equipment) and Section 4 (Protective Equipment) of Attachment Y (Operation and Maintenance of the Facility). A final single-line diagram, Interface Block Diagram, relay list, relay settings, and trip scheme of the Facility shall, after having obtained prior written consent from Company, be attached as labeled "Final" Attachment E (Single-Line Diagram and Interface Block Diagram) and “Final” Attachment F (Relay List and Trip Scheme) to this Agreement and made a part hereof on the Commercial Operation Date. After the Commercial Operation Date, no changes shall be made to the "Final" Attachment E (Single-Line Diagram and Interface Block Diagram) and “Final” Attachment F (Relay List and Trip Scheme) without the prior written consent of Seller and Company. The single-line diagrams shall expressly identify the Point of Interconnection of Facility to the Company System. Seller agrees that no material changes or additions to Facility as reflected in the final single-line diagram, Interface Block Diagram, relay list, relay settings, and trip scheme shall be made without Seller first having obtained prior written consent from Company. If any changes in or additions to the Facility, records and operating procedures are required by Company, Company shall specify such changes or additions to Seller in writing, and, except in the case of an emergency, Seller shall have the opportunity to review and comment upon any such changes or additions in advance.
|
b.
|
Certain Specifications for the Facility.
|
i.
|
Seller shall furnish, install, operate and maintain the Facility including breakers, relays, switches, synchronizing equipment, monitoring equipment and control and protective devices approved by Company as suitable for parallel operation of the Facility with the Company System. The Facility shall be accessible at all times to authorized Company personnel.
|
ii.
|
The Facility shall include:
|
|
|
B-1
|
(1)
|
Generation resources consist of four (4) OECs (Ormat Energy Converter) units which are designed to utilize the energy of geothermal steam or brine. Each OEC unit includes a synchronous generator that is driven by an organic turbine, air-cooled condenser, cycle pump and control system. The gathering system conveys steam and brine from the existing separator to the Facility. The steam and brine pass through the Facility OEC units and flow through the gathering system to the re-injection system which collects a mixture of the cooled brine and condensate that passed through the Facility and re-injects it into re-injection wells by the Facility’s re-injection pumps.
|
(2)
|
15 kV circuit breaker capable of five (5) cycle clearing and equipped with multi ratio current transformers (MRCTs) as shown in Attachment E with 2000:5 ratio and C200 accuracy class.
|
(3)
|
Three (3) Step up transformers, 16/22/31.25 MVA OA/OA/FA rating, Wye-grounded high voltage to Delta low voltage connected windings, with adequate high voltage taps to allow generator to export power at a power factor range indicated in Section 3(c) (Reactive Power Characteristics) of this Attachment B (Facility Owned by Seller)A. Transformer has phase and neutral multi-ratio current transformers for relay protection as indicated in
|
|
|
B-2
|
(4)
|
54 kV lightning arresters(3)mounted on the high voltage side of the step-up transformer.
|
(5)
|
Three (3) 69 kV circuit breaker with group operated visible disconnect switches (one per transformer).
|
(6)
|
Three (3) sets of 69 kV primary and backup metering devices (two meter sockets) to monitor each of the three (3) step-up transformers with one set of three element monitoring consisting of three (3) 69KV potential transformers (PTs) and three (3) 69 kV current transformers (CTs). All instrument transformers with metering class accuracy. Included but not limited to are potential fuse safety switches, current test-switches, and Form 9S meter sockets to enable sharing the instrument transformers for the primary and backup meters. Undervoltage relay to monitor and provide alarm back to the Company’s supervisory system for loss of metering potential. The meters will be provided by the Company.
|
(7)
|
Dial-up telephone line installed close to 69 kV metering cabinet to allow remote metering reading by the Company. The Seller will be responsible for the installation and maintenance cost of the telephone line. This telephone line may be shared with other existing telephone lines.
|
(8)
|
Fiberglass or stainless steel demarcation cabinet equipped with heater strips and terminal blocks terminate the Seller and Company interface signals. This demarcation cabinet is to be located along the fence line between the Seller and the Company switching station fence. This will allow faster installation and improve trouble shooting. Some of the interfaces provided by the Company to the Seller include the 69kV breaker current transformer outputs to be used for the Seller’s step up transformer differential relay protection, 120/240 volt station power (metered and paid by the Seller), trip contacts for the two 69 kV breakers located in Company’s switching station when the Seller’s relays detect a fault, etc. Some of the interfaces provided by the Seller to Company include trip contacts the for the Seller’s 13.8 kV breaker located in the Seller’s switching station, and inputs to the Company’s Remote Terminal Unit (“RTU”) including, at a minimum the following: net generating facility MW and MVAr (measured at the point of interconnection), generator gross MW and Mvar for Existing and New Facilities, upper MW limit for remote dispatch control (equal to Available Capacity), low MW limit for Remote dispatch Control, ramp rate under remote dispatch control, enable/disable status for remote dispatch control, meter loss of potential alarm, the Seller’s 13.8 kV breaker open/close status, and other control functions that need to be interfaced with the RTU, etc.
|
(9)
|
25 kV class cable with normal insulation or 15 kV class cable with 133% insulation required for reliable generator operation on the delta configured side of the step-up transformer. Additional insulation required to withstand
|
|
|
B-3
|
(10)
|
Protective relays at the Seller’s switching station. All relay settings to be stamped by the Seller’s State of Hawaii licensed electrical engineer. Relay setting to be implemented by the Seller’s licensed electrical contractor and verified by the Company. The relays are:
|
a.
|
Transformer differential relay to detect electrical faults within the step up transformer (device 87T) and step up transformer neutral ground overcurrent relay (device 50N/51N). These devices will trip the 69 kV breakers in the Seller’s switching station and the 13.8 kV breaker in the Seller’s switching station.
|
b.
|
Step up transformer neutral ground overcurrent relay (device 50N/51N)and transformer sudden pressure relay (device 63) to detect faults within the step up transformer and trip the 69 kV breakers in the Seller’s switching station and the 13.8 kV breaker in the Seller’s switching station.
|
c.
|
Phase overcurrent relays (3) on the low voltage side of the step-up transformer (device 50/51) to trip the 13.8 kV circuit breaker for faults below the low voltage bushing.
|
iii.
|
The Facility will comply with the following:
|
|
|
B-4
|
|
|
B-5
|
|
|
B-6
|
|
|
B-7
|
(H)
|
The Facility shall be equipped with a voice communication system capable of contact with the Company during a Company System outage.
|
(I)
|
Facility design and implementation shall be such as to avoid any single points of failure resulting in total loss of Facility power output.
|
(J)
|
Seller shall reserve space within the Site for possible future installation of Company-owned meteorological and/or air monitoring equipment (such as SODAR, irradiance monitors, SO2 or H2S monitors) and AC and DC source lines for such equipment. In the event Company decides to install such meteorological equipment: (i) Seller shall work with Company to determine an acceptable location for such equipment and any associated wiring, interface or other components; and (ii) Company shall pay for the needed equipment, and installation of such equipment, unless otherwise agreed to by the Parties. Company and Seller shall use commercially reasonable efforts to facilitate installation and minimize interference with the operation of the Facility.
|
(K)
|
The Facility shall, at a minimum, satisfy the wind load and seismic load requirements of the International Building Code and any more stringent requirements imposed under applicable Laws.
|
c.
|
Design Drawings, List of Equipment, Relay Settings and Fuse Selection. Seller shall provide to Company for its review the design drawings, a list of equipment to be installed at the Facility (including, but not necessarily limited to, items such as relays, breakers, and switches), relay settings and fuse selection for the Facility and Company shall have the right, but not the obligation, to specify the type of electrical equipment, the interconnection wiring, the type of protective relaying equipment, including, but not limited to, the control circuits connected to it and the disconnecting devices, and the settings that affect the reliability and safety of operation of Company's and Seller's interconnected system. Seller shall provide the relay settings, fuse selection, and AC/DC Schematic Trip Scheme (part of design
|
|
|
B-8
|
d.
|
Disconnect Device. Seller shall provide a manually operated disconnect device which provides a visible break to separate Facility from the Company System. Such disconnect device shall be lockable in the OPEN position and be readily accessible to Company personnel at all times.
|
e.
|
Other Equipment. Seller shall furnish, install and maintain in accordance with Company's requirements all conductors, service switches, fuses, meter sockets, and instrument transformer housing and mountings, switchboard meter test buses, meter panels and similar devices required for service connections and meter installations at the Site.
|
f.
|
Maintenance Plan. Seller shall maintain Seller Owned Interconnection Facilities in accordance with Good Engineering and Operating Practices
|
g.
|
Active Power Control Interface
|
i.
|
Seller shall provide and maintain in good working order all equipment, computers and software associated with the control system (the "Active Power Control Interface") necessary to interface the Facility active power controls with the Company System Operations Control Center for real power control of the Facility by the Company System Operator.
|
ii.
|
Company shall review and provide prior written approval of the design for the Active Power Control Interface to ensure compatibility with Company's
|
|
|
B-9
|
iii.
|
The Active Power Control Interface shall include, but not be limited to, a demarcation cabinet, ancillary equipment and software necessary for Seller to connect to Company's Telemetry and Control, located in Company's portion of the Facility switching station which shall provide the control signals to the Facility and send feedback status to the Company System Operations Control Center. The control type shall be analog output (set point) or raise/lower controls and will be established by the Company prior to final design approval.
|
iv.
|
The Active Power Control Interface shall also include provision for feedback points from the Facility indicating when active power target in MW for the Active Power Control signal(s). The Facility shall provide the MW target feedback to the Company SCADA system immediately upon receiving the respective control signal from the Company.
|
v.
|
Seller shall provide to the telemetry interface analogs for the gross production of the energy resource(s) at the Facility. Seller shall also provide the total net AC MW production at the Point(s) of Interconnection.
|
vi.
|
The Active Power Control Interface shall provide for remote control of the real-power output of the Facility by the Company at all times. If the Active Power Control Interface is unavailable or disabled, the Facility may not export electric energy to Company and the Facility shall be penalized according to the EAF and EFOR calculations in Attachment C, unless the Company, in its sole discretion, agrees on an alternate means of dispatch. If Seller fails to provide such remote control capability (whether temporarily or throughout the Term), then, notwithstanding any other provision of this Attachment B (Facility Owned by Seller), Company shall have the right to derate or disconnect the entire Facility during those periods that such control capability is not provided.
|
vii.
|
The rate at which the Facility changes net real power in response to the active power control shall not be less than the greater of 2 MW per minute or 10% of the Facility capacity per minute, and shall make available through agreed parameters, such faster ramp as the installed equipment can support. The Facility's Active Power Control Interface will be used by Company to control the rate at which electric energy is changed to achieve the active power target for load-following and regulation. The Facility will respond to the active power control request immediately with an echo of the set point and measurable change within the control cycle (presently 4 seconds) .
|
|
|
B-10
|
viii.
|
The Facility shall accept the following controls related to active power and frequency response to or from the Company centralized control system:
|
(1)
|
Real Power Setpoint from Company (based on the input to the Facility, from the Active Power Control Interface): The Facility output shall match this setting. This net output should be accurate within +/- 0.05 MW under normal non-disturbance frequency conditions. This setpoint will be modified as appropriate in the controls by the appropriate frequency response consistent with Section 1(g)(xi) (Active Power – Frequency Response (DROOP)), Section 1(g)(xii) (Dynamic Active Power – Frequency Performance).
|
(2)
|
From Company: Frequency Response Mode (DROOP, isochronous) state (where alternate modes of operation are required).
|
(3)
|
From Seller:
|
a.
|
Available Maximum Capacity: instantaneous limit for available energy, represents max level the Facility can produce under present conditions, resource and equipment availability. This is used as upper limit for Company Dispatch.
|
b.
|
Maximum Dispatchable Ramp Rate: Controlled ramp rate available for controlled changes in output.
|
c.
|
Minimum sustained limit: Minimum output level the facility can be reduced to continuously without delay (used as lower limit for Company Dispatch).
|
d.
|
If project has capability for isochronous control:
|
i.
|
Frequency Response Mode (DROOP, isochronous)
|
|
|
B-11
|
Description
|
Units
|
|
|
Set-Point (echo)
|
MW
|
Net Real Power Output
|
MW
|
Gross Real Power Output
|
MW
|
Available Maximum Capacity
|
MW
|
Minimum Sustained Limit (ECOMN)
|
MW
|
Minimum Transient Limit (LFCMN)
|
MW
|
Maximum Dispatchable Ramp Rate
|
MW/min
|
Active Power Control Interface Status
|
Remote/Local
|
Gross Reactive Power Output
|
MVAR
|
Voltage
|
kV
|
Minimum Sustained Limit (ECOMN)
|
MVars
|
[For facilities with alternate modes of frequency response] Indication of Frequency Response Mode
|
Droop/ ISOCH
|
ix.
|
Seller shall not override Company's active power controls without first obtaining specific approval to do so from the Company System Operator unless there is a system emergency. Disabling of the remote Active Power Control shall initiate telemetry notification to the Company.
|
|
|
B-12
|
x.
|
The requirements of the Active Power Control Interface may be modified as mutually agreed upon in writing by the Parties.
|
xi.
|
Active Power - Frequency Response (DROOP).
|
|
|
B-13
|
xii.
|
Dynamic Active Power-Frequency Performance.
|
|
|
B-14
|
xiii.
|
Isochronous / Black Start: The Facility will be capable of operating in a zero droop (isochronous) mode of operation. When in this mode of operation, the frequency droop characteristic will be configured as needed to keep system frequency at a target. In a black start configuration, the target shall be 60 Hz. If isochronous is specified while in operation, the target shall be initialized to the grid frequency and the target increased or decreased from the Company System through the control interface.
|
h.
|
[RESERVED]
|
i.
|
[RESERVED]
|
j.
|
Facility Security and Maintenance. Seller is responsible for securing the Facility. Seller shall have personnel available to respond to all calls related to security incidents and shall take commercially reasonable efforts to prevent any security incidents. Seller is also responsible for maintaining the facility, including vegetation management, to prevent security breaches. Seller shall comply with all commercially reasonable requests of Company to update security and/or maintenance if required to prevent security breaches.
|
k.
|
Demonstration of Facility. Company shall have the right at any time, other than during maintenance or other special conditions, communicated by Seller, to notify Seller in writing of Seller's failure, as observed by Company and set forth in such written notice, to meet the operational and performance standard requirements of this Attachment B (Facility Owned by Seller), and to require documentation or testing to verify compliance with such requirements. Upon receipt of such notice, Seller shall promptly investigate the matter, implement corrective action and provide to Company, within thirty (30) Days of such notice, a written report of both the results of such investigation and the corrective action taken by Seller; provided, that, if thirty (30) Days is not a reasonable time period to investigate the matter, implement corrective action and provide such written report, Seller shall complete the foregoing within such longer commercially reasonable period of time agreed to by the Parties in writing. If the Seller's report does not resolve the issue to Company's reasonable satisfaction, the Parties shall promptly commission a study to be performed by one of the engineering firms then included on the Qualified Independent Engineering Company from Attachment D (Consultants List-Qualified
|
|
|
B-15
|
2.
|
Operating Procedures. [NOTE: NUMERICAL SPECIFICATIONS IN THIS SECTION 2 MAY VARY DEPENDING ON THE SPECIFIC PROJECT AND THE RESULTS OF THE PROJECT SPECIFIC INTERCONNECTION REQUIREMENT STUDY.]
|
a.
|
Reviews of the Facility. Company may require periodic reviews of the Facility, maintenance records, available operating procedures and policies, and relay settings, and Seller shall implement changes Company deems necessary for parallel operation or to protect the Company System from damages resulting from the parallel operation of the Facility with the Company System.
|
b.
|
Separation. Seller must separate from Company System whenever requested to do so by the Company System Operator pursuant to Section 3.3(A) (Dispatch of Facility Power), Article 4 (Suspension or Reduction of Deliveries), Section 5 (Personnel and System Safety) of Attachment Y (Operation and Maintenance of the Facility), Good Engineering and Operating Practices and/or Section 3 (Performance Standards) of Attachment B (Facility Owned by Seller) of the Agreement.
|
c.
|
Seller Logs. Logs shall be kept by Seller for information on unit availability including reasons for planned and Forced Outages; circuit breaker trip operations, relay operations, including target initiation and other unusual events. Company shall have the right to review these logs, especially in analyzing system disturbances. Seller shall maintain such records for a period of not less than thirty-six (36) months.
|
|
|
B-16
|
d.
|
Reclosing. Under no circumstances shall Seller, when separated from the Company System for any reason, reclose into the Company System without first obtaining specific approval to do so from the Company System Operator.
|
e.
|
Critical Infrastructure Protection. Seller shall comply with the critical infrastructure protection requirements set forth in Section 1 (b)(iii)G of this Attachment B (Facility Owned by Seller).
|
f.
|
Allowed Operations. Facility shall be allowed to export energy to the Company System only when the [__________] circuit is in normal operating configuration served by breaker [______] at [____] Substation. [TO BE DETERMINED BY COMPANY BASED ON THE RESULTS AND REQUIREMENTS OF THE IRS]
|
g.
|
Operation of Synchronizing Breakers. Seller shall have the ability to trip and close its generator synchronizing breakers located at the Facility. Company will have trip control only and breaker status indication of the Facility generator synchronizing breakers. Seller shall notify Company of all operations of its generator synchronizing breaker in advance of such operation if practicable.
|
3.
|
Performance Standards. Seller shall operate the Facility in the following manner to provide power to Company in accordance with this Section 3 (Performance Standards) of this Attachment B (Facility Owned by Seller).
|
a.
|
Voltage/Reactive Power Requirements. Electricity generated by the Seller shall be delivered to the Company at the Point of Interconnection in the form of 3-phase, 60 hertz (nominal) alternating current at the normal operating voltage of 69 kV. The actual operating voltage will be determined by the Company.
|
b.
|
Reactive Power Control. Seller shall control its reactive power as required for the automatic voltage regulation control. Seller shall automatically regulate voltage at a point, the point of regulation, between the Seller’s generator terminal and the Point of Interconnection to be specified by Company, to within 0.5% of a voltage specified by the Company System Operator to the extent allowed by the. Facility reactive power capabilities as defined in Section 3(c) (Reactive Power Characteristics) of this Attachment B (Facility Owned by Seller). The Facility must be capable of automatically adjusting reactive control to maintain the bus voltage at the Point of Interconnection to meet the scheduled voltage set point target specified by the Company System Operator. The voltage target will be specified remotely by the Company System Operator via SCADA. The Facility’s voltage set point target must reflect the Company voltage set point target issued from SCADA, without delay. The generator should not normally operate on a fixed var or fixed power factor setting except during startup or shutdown or if agreed by Company. The voltage setpoint target, and present Facility minimum and maximum reactive
|
|
|
B-17
|
c.
|
Reactive Power Characteristics [THESE REQUIREMENTS MAY BE CHANGED BY COMPANY UPON COMPLETION OF THE IRS.]
|
i.
|
The Facility must be capable of automatically adjusting reactive control to maintain the bus voltage at the Point of Interconnection to meet the scheduled voltage set point target specified by the Company System Operator and be capable of supplying reactive power at 0.90 leading / .85 lagging power factor at all active power outputs down to zero active power as illustrated in the [generator capability] curve(s) attached to this Agreement as Exhibit B-2, which represents the Facility Composite Capability Curve(s). The voltage target will be specified remotely by the Company System Operator through the SCADA. The Facility's voltage set point target must reflect the Company voltage set point target controlled from SCADA, without delay. The Facility should not normally operate on a fixed var or fixed power factor unless agreed by Company. The voltage setpoint target and present Facility minimum and maximum reactive power limits based on the Facility Composite capability curve shall be provided to the Company through SCADA.
|
ii.
|
Company will not be obligated to purchase reactive power from Seller.
|
iii.
|
The Facility shall contain equipment able to continuously and actively control the output of reactive power under automatic voltage regulation control reacting to system voltage fluctuations. The response requirements are differentiated for large and small signal disturbance performance characteristics. Small signal disturbances are those that reflect normal variations under non-disturbance conditions, the continuous operation range for voltage ride through: 0.80 pu ≤ V ≤ 1.00 pu at the point of interconnection. Large disturbance is where the voltage at the point of interconnection falls outside the continuous operating range.
|
iv.
|
For small signal disturbances, reaction time between the step change in voltage and the reactive power change shall be less than 500 msec (no intentional time delay). The automatic voltage regulation response speed at the point of regulation shall be such that at least 90% of the initial voltage correction needed to reach the voltage control target will be achieved within 1 second following a step change. The percentage of rated reactive power output that the resource can exceed while reaching the settling band shall be less than five percent (5%).
|
v.
|
Large disturbances: Large disturbances are characterized by voltage falling outside of the continuous operating range. The Facility shall adhere to the following characteristics for large disturbances:
|
vi.
|
The response of each generating resource over its full operating range and for all expected grid conditions should be stable. The dynamic performance of
|
|
|
B-18
|
vii.
|
If the Facility does not operate in accordance with Section 3(c)(i) of this Attachment B (Facility Owned by Seller), Company may disconnect all or a part of Facility from Company System until Seller corrects its operation (such as by installing capacitors at Seller's expense).
|
d.
|
Ride Through. Ride-Through requires that the resource continues to operate and inject current within the "No Trip" zone of the voltage and frequency ride-through requirements.
|
i.
|
Voltage Ride Through - The Facility shall have under-voltage and over-voltage ride through capability. The Facility shall behave as follows during under-voltage disturbances and over-voltage disturbances (“V” is the voltage of any of the three phases at the Point of Interconnection). For alarm conditions the Facility should not disconnect from the Company System unless the Facility’s equipment is at risk of damage. This is necessary in order to coordinate with the existing Company System:
|
(1)
|
Undervoltage Ride-Through
|
V ≥ 0.80 pu
|
The Facility remains connected to the Company’s System in continuous operation.
|
0.00 pu £ V < 0.80 pu
|
The Facility remains connected to the Company’s System and in continuous operation for a minimum of 600 milliseconds (while “V” remains in this range); the duration of the event is measured from the point at which the voltage drops below 0.80 pu. and ends when the voltage is at or above 0.80 pu.
|
|
|
B-19
|
(2)
|
Overvoltage Ride-Through
|
1.00 pu £ V < 1.10 pu
|
The Facility remains connected to the Company’s System and in continuous operation.
|
1.10 pu < V < 1.15 pu
|
The Facility remains connected to the Company’s System and in continuous operation no less than thirty (30) seconds; the duration of the event is measured from the point at which the voltage increases at or above 1.1 pu and ends when voltage is at or below 1.10 pu.
|
1.15 pu £ V
|
The Facility remains connected to the Company’s System and in continuous operation for as long as possible as allowed by the equipment operational limitations.
|
|
|
B-20
|
ii.
|
Transient Stability Ride-Through. The Facility shall be designed such that the transient stability of Company System is maintained for normally cleared and secondarily cleared faults. The Facility will be required to remain connected through anticipated rates of change of frequency [TO BE PROVIDED UPON COMPLETION OF IRS]
|
iii.
|
[RESERVED]
|
iv.
|
The Facility shall be capable of operating in isochronous (zero droop) or droop mode. The mode of operation will be at the request of the Company System Operator and shall be capable of changing modes of operation while online. Mode of operation will be controlled remotely by Company System Operator and indication of mode provided through telemetry.
|
v.
|
The dynamic response and tuning of the Facility unit controls is critical to the assessment of the system impact in the Interconnection Requirements Study. The actual dynamic response of the units will be tested during commissioning and reflected in the transient stability performance during under-frequency and over-frequency events.
|
vi.
|
Frequency Ride Through –
|
(1)
|
Performance during underfrequency events. The Facility is required to remain in continuous operation during and following under-frequency conditions as described below. During these conditions the Facility is to remain connected and continue exporting power (with export reflecting the appropriate proportional droop response). The Facility shall, at a minimum, behave as follows during an under-frequency disturbance (“f” is the system frequency at the Point of Interconnection):
|
f ≥ 57.0 Hz
|
The Facility remains connected to the Company’s System and in continuous operation. Export of power shall continue with output adjusted as appropriate for Facility droop response specified in Section 3g.ii
|
56.0 Hz < f < 57.0 Hz
|
The Facility remains connected to the Company’s System and in continuous operation for at least six (6) seconds per event. The duration of the event is from the point at which the frequency is below 57 Hz and ends when the
|
|
|
B-21
|
f < 56.0 Hz
|
The Facility remains connected to the Company’s System and in continuous operation for the duration allowed by the equipment operational limitations. The Facility may initiate and alarm immediately.
|
f ≤ 61.5 Hz
|
The Facility remains connected to the Company’s System and in continuous operation. Export of power shall continue with output adjusted as appropriate for Facility droop response specified in Section 3g.ii.
|
61.5 Hz < f < 63.0 Hz
|
The Facility remains connected to the Company’s System for at least ten (10) seconds. After ten seconds the Facility may initiate an alarm and export of power shall continue as modified by the droop response specified in Section 3.g.ii. for as long as allowed by the equipment operational limitations. The duration of condition is from the point at which the frequency is above 61.5 Hz and ends when the frequency is at or below 61.5 Hz.
|
f > 63 Hz
|
The Facility remains connected to the Company’s System for the duration allowed by the equipment operational limitations. The Facility may initiate an alarm immediately and export of power shall continue as modified by the droop response and high frequency ramp
|
|
|
B-22
|
vii.
|
During a frequency disturbance, the power export during steady-state conditions prior to the frequency disturbance shall not override the export in power droop during sustained off-normal frequency conditions. The export of power shall continue at the pre-disturbance export (nominal 60 Hz) as modified by the proportional droop response for off-normal frequencies, unless the dispatch is intentionally adjusted. Intentional adjustments to dispatch level during off-normal frequency conditions may be made locally by the facility personnel or remotely by Company through SCADA only as directed by the Company System Operator. In the event of an emergency, intentional adjustments to dispatch level during off-normal frequency conditions may be made locally by the facility personnel without the direction of the Company System Operator, but Company System Operator is to be notified of the action taken immediately.
|
viii.
|
The Facility will return to the output levels (relative to nominal sixty (60) Hz, as adjusted by droop) following the under or over frequency conditions, unless directed otherwise by the Company System Operator (or if intentionally adjusted by local or remote dispatch.)
|
ix.
|
Successive Faults - If the resource necessitates tripping to protect from the cumulative effects of those successive faults, in a period of time to ensure safety and equipment integrity, the constraint and time periods should be provided for inclusion in the interconnection study. For all cases, at a minimum, the ride-through requirements shall be met for two ride-through events within two seconds to allow for the Company's transmission automatic reclosing attempt. [Note - this requirement may be modified based on the results of the IRS.]
|
x.
|
Phase Angle Shift Ride Through - The Facility equipment shall ride through phase angle shift of up to 30 degrees. [Note – requirements will be confirmed upon completion of the IRS]
|
e.
|
Real Power Delivery.
|
i.
|
The Seller shall deliver the electricity contracted for under this Agreement to the Company’s System at the Point of Interconnection.
|
|
|
B-23
|
ii.
|
During the Term, Seller shall deliver to Company for Company Dispatch the entire Net Electric Energy Output of the Facility. The Company may take up to the entire Available Capacity, subject to the terms and conditions of this Agreement.
|
iii.
|
Refusal to comply with Company Dispatch shall result in an unreported derating, if the output is less than the dispatch request, from the time that such dispatch request was received until such time as Seller complies with such dispatch request.
|
iv.
|
The Facility may disable remote dispatch by Company for abnormal Facility operations such as equipment malfunctions, breakdowns, etc. The disabling of remote dispatch control by Seller shall be immediately indicated through a status provided to the Company through SCADA.
|
f.
|
Minimum Load Capability. The Facility shall allow for a minimum load capability under remote dispatch of twenty (20) MW. At the Company’s sole discretion as necessary due to system constraints, system balancing and frequency control, the Company may request the Facility to manually implement measures to temporarily operate at a Net Electrical Energy Output lower than twenty (20) MW.
|
g.
|
Harmonics Standards. Harmonic distortion at the Point of Interconnection caused by the Facility shall not exceed the limits stated in IEEE Standard 519-1992, or latest version “Recommended Practices and Requirements for Harmonic Control in Electrical Power Systems.” Seller shall be responsible for the installation of any necessary (controls or hardware to limit the voltage and current harmonics generated from the Facility to defined levels.
|
h.
|
Voltage Flicker. Any voltage flicker on the Company System caused by the Facility shall not exceed the limits stated in IEEE Standard 1453-2011, or latest version “Recommended Practice – Adoption of IEC 61000-4-15:2010, Electromagnetic compatibility (EMC) – Testing and measurement techniques – Flickermeter – Functional and design specifications.”
|
i.
|
[RESERVED].
|
j.
|
Inertia Constant. In recognition of the Company’s System’s stability concerns, the Facility turbine-generator trains shall each have an inertial constant (H constant) of five (5) MJ/MVA or higher. A lower value of H constant may be accepted by the Company if supported by a system stability study performed by the Company and
|
|
|
B-24
|
k.
|
Generator Excitation System. The excitation system for the generator shall be designed for the following capabilities and attributes:
|
i.
|
Ceiling Voltage. The excitation system ceiling voltage shall be four hundred 400 percent of rated main generator field voltage.
|
ii.
|
Response Ratio. The excitation system response ratio shall be three (3) or higher.
|
iii.
|
Excitation Source Immunity. The excitation source shall be immune to variations in system voltage as described under Section 3.a. (Voltage/Reactive Power Requirements).
|
iv.
|
Field Forcing Ability. The excitation system shall have field forcing ability.
|
v.
|
Rotating Regulator. The excitation system shall have a brushless rotating exciter with static voltage regulation.
|
vi.
|
Voltage/Reactive Power Requirements. The Facility shall have compound sources of power for its excitation system so that, in the event of a Company System fault, the Facility’s generator field does not collapse
|
l.
|
Short Circuit Ratio. The short circuit ratio shall be between 0.4 and 1 inclusive.
|
m.
|
Open Circuit Transient Field Time Constant. The open circuit transient field time constant shall be 9.159 seconds or less.
|
n.
|
Generator Step-Up Transformer(s) Impedance. The generator step-up transformer(s) impedance shall be between 7 percent and 9 percent, inclusive, on transformer OA rating.
|
o.
|
Control Systems and Auxiliary Equipment . The power source for control systems will be designed to be immune from system transients in accordance with Section 3.2(A)(6) (Facility Protection and Control Equipment) to meet the performance during under/over voltage and under/over frequency conditions pursuant to Section 3.e.ii., Section 3.g.vi., and Section 3.g.vii.of this Attachment B (Facility Owned by Seller).
|
p.
|
Cycling of Generating Units. The Company will not directly control Facility generating unit(s) shut down and startup. The cycling of units shall be under Facility control and will be as required to achieve the Company Dispatch subject
|
|
|
B-25
|
q.
|
Frequency Response. Seller shall comply with the requirements of Section 1(g)(xi) (Frequency Response (DROOP)), Section 1(g)(xii) (Dynamic Active Power – Frequency Performance), of this Attachment B (Facility Owned by Seller).
|
r.
|
Start-up Periods. The maximum time to full load under normal (non-emergency) system conditions shall be thirty (30) minutes when a generating unit has been off line for less than two (2) hours and two (2) hours for cold start-ups. When requested by Company under emergency conditions, Seller shall use commercially reasonable efforts to accelerate such start-up periods to the extent the Facility is capable of doing so within manufacturer’s specifications and warranties. The minimum time to full load under normal (non-emergency) system conditions shall be no more than fifty (50) minutes.
|
4.
|
Maintenance of Seller-Owned Interconnection Facilities.
|
a.
|
Seller must address any Disconnection Event (as defined below) according to the requirements of this Section 4 (Maintenance of Seller-Owned Interconnection Facilities) of Attachment B (Facility Owned by Seller). For the purposes of this Section 4 (Maintenance of Seller-Owned Interconnection Facilities), a "Disconnection Event" is the removal of [7.5 MW][or 100% of capacity for facilities with capacity less than 7.5 MW] or more from Company System and/or disconnection of the Facility from the Company's System (i) that is not the result of Company dispatch, frequency droop response, or isolation of the Facility resulting from designed protection fault clearing, and (ii) for which Company does not issue the written notice for failure to meet operational and performance requirements as set forth in Section 1(k) (Demonstration of Facility) of this Attachment B (Facility Owned by Seller). Company’s election to exercise its rights under Section 1(k) (Demonstration of Facility) shall not relieve Seller of its obligation to comply with the requirements of this Section 4 (Maintenance of Seller-Owned Interconnection Facilities) for any future Disconnection Event during the pendency of such election or thereafter.
|
b.
|
For every Disconnection Event from the Company System, Seller shall investigate the cause. Within three (3) Business Days, Seller shall provide, in writing to Company, an incident report that summarizes the sequence of events and probable cause.
|
c.
|
Within forty-five (45) Days of a Disconnection Event, Seller shall provide, in writing to Company, Seller's findings, data relied upon for such findings, and proposed actions to prevent reoccurrence of a Disconnection Event ("Proposed Actions"). Company may assist Seller in determining the causes of and
|
|
|
B-26
|
d.
|
In the event Seller and Company disagree as to
|
i.
|
whether a Disconnection Event occurred,
|
ii.
|
the sequence of events and/or probable cause of the Disconnection Event,
|
iii.
|
the Proposed Actions,
|
iv.
|
Company's Recommendations, and/or
|
v.
|
the time period to implement the Proposed Actions and/or Company's Recommendations, then the Parties shall follow the procedure set forth in Section 5 (Expedited Dispute Resolution) of this Attachment B (Facility Owned by Seller).
|
e.
|
Upon the fourth (4th) Disconnection Event (and each subsequent Disconnection Event) within any Contract Year, the Parties shall follow the procedures set forth in Section 4(a) and Section 4(d) of Attachment B (Facility Owned by Seller), to the extent applicable. If after following the procedures set forth in this Section 4 (Maintenance of Seller-Owned Interconnection Facilities) of Attachment B (Facility Owned by Seller), Seller and Company continue to have a disagreement as to:
|
i.
|
the probable cause of the Disconnection Event,
|
ii.
|
the Proposed Actions,
|
iii.
|
the Company's Recommendations, and/or
|
iv.
|
the time period to implement the Proposed Actions and/or the Company's Recommendations,
|
|
|
B-27
|
f.
|
The Consultants List attached hereto as Attachment D (Consultants List) contains the names of engineering firms which both Parties agree are fully qualified to perform the Study. At any time, except when a Study is being conducted, either Party may remove a particular consultant from the Consultants List by giving written notice of such removal to the other Party. However, neither Party may remove a name or names from the Consultants List without approval of the other Party if such removal would leave the list without any names. Intended deletions shall be effective upon receipt of notice by the other Party, provided that such deletions do not leave the Consultants List without any names. Proposed additions to the Consultants List shall automatically become effective thirty (30) Days after notice is received by the other Party unless written objection is made by such other Party within said thirty (30) Day period. By mutual agreement between the Parties, a new name or names may be added to the Consultants List at any time.
|
5.
|
Expedited Dispute Resolution. If there is a disagreement between Company and Seller regarding:
|
a.
|
whether a Disconnection Event occurred,
|
b.
|
the sequence of events and/or probable cause of the Disconnection Event,
|
c.
|
the Proposed Actions,
|
d.
|
the Company's Recommendations, and
|
e.
|
the time period to implement the Proposed Actions and/or the Company's Recommendations,
|
|
|
B-28
|
6.
|
Modeling.
|
a.
|
Seller’s Obligation to Provide Models. Within thirty (30) Days of Company's written request, but no later than the Commercial Operation Date, Seller shall provide detailed data regarding the design and location of the Facility, in a form reasonably satisfactory to Company, to allow the modeling of the Facility turbines and generators including any ancillary equipment within the Facility identified in the IRS, including, but not limited to, integrated and validated power flow and transient stability models (such as PSS/E models), a short circuit model (such as an ASPEN model), and an electro-magnetic transient model (such as a PSCAD model) of the turbines and generators and any additional equipment identified in the IRS as set forth above, applied assumptions, and pertinent data sets (each a "Required Model" and collectively, the "Required Models"). The Required Models are listed on Exhibit B-1 (Required Models) of this Attachment B (Facility Owned by Seller). Thereafter, during the Term, Seller shall provide working new and/or updates of any Required Model within thirty (30) Days of (i) Company's written request, or (ii) Seller obtaining knowledge or notice that any Required Model has been modified, updated or superseded..
|
b.
|
Remedies. If Company obtains the Required Models pursuant to Section 6.a (Seller’s Obligation to Provide Models) of this Attachment B (Facility Owned by Seller), and Company finds that the Seller-provided Required Models are incomplete or otherwise unusable, the Company shall notify the Seller of the Required Model issues in writing and Seller shall address the identified issues in writing within fifteen (15) Days of such notice. Failure to provide the new and/or updated Required Models or to remedy the identified issues with the Required Models within thirty (30) Days’ of such notice or if the Seller fails to respond to Company’s notice to address the Company identified issues within fifteen (15) Days’ notice, the Seller shall be liable to Company for Liquidated Damages in the amount of $500 per Day for each Day Seller fails to provide such remedies commencing from the date of Company’s initial notice of a breach of Section 6.a. (Seller’s Obligation to Provide Models) of Attachment B (Facility Owned by Seller). Failure to respond to Company’s notice and either provide the Required Models and/or remedy the identified issues with the Required Models within sixty (60) Days’ of Company’s initial notice of a breach of Section 6.a. (Seller’s Obligation to Provide Models) of Attachment B (Facility Owned by Seller) shall constitute an Event of Default pursuant to Section 8.1(A)(20) (Default by Seller) under the Agreement.
|
c.
|
Confidentiality Obligations. Company shall keep the Required Models confidential. Company shall restrict access to the Required Models to those employees,
|
|
|
B-29
|
7.
|
Testing Requirements.
|
a.
|
Testing Requirements. Once the Control System Acceptance Test has been successfully passed, Seller shall not replace and/or change the configuration of the Facility Control, inverter control settings and/or ancillary device controls, without prior written notice to Company. In the event of any such replacement and/or change, the relevant test(s) of the Control System Acceptance Test shall be redone and must be successfully passed before the replacement or altered equipment is allowed to be placed in normal operations. In the event that Company reasonably determines that such replacement and/or change of controls makes it inadvisable for the Facility to continue in normal operations without a further Control Systems Acceptance Test, the Facility shall be deemed to be in Seller-Attributable Non-Generation status until the new relevant tests of the Control System Acceptance Test have been successfully passed.
|
b.
|
Periodic Testing. Seller shall coordinate periodic testing of the Facility with Company to ensure that the Facility is meeting the performance standards specified under this Agreement.
|
8.
|
Operating Committee and Operating Procedures.
|
a.
|
Company and Seller shall each appoint one representative and one alternate representative to act as the operating committee in matters relating to the Parties' performance obligations under this Agreement and to develop operating arrangements for the generation, delivery and receipt of renewable energy from the Facility.
|
b.
|
The operating committee may develop mutually agreeable written operating procedures consistent with the requirements of this Agreement, to address matters such as day to day communications; key personnel; operations-center interface; metering, telemetering, telecommunications, and data acquisition procedures; operations and maintenance scheduling and reporting; reports; operations log; testing procedures; and such other matters as may be mutually agreed upon by the operating committee.
|
c.
|
The operating committee shall review the requirements for Active Power Control, the data collection and telemetry, and control system parameters from time to time
|
|
|
B-30
|
d.
|
The operating committee shall have authority to act in all technical and day-to-day operational matters relating to performance of this Agreement and to attempt to resolve potential disputes, provided, however, that except as explicitly provided herein, the operating committee shall have no authority to amend or waive any provision of this Agreement.
|
|
|
B-31
|
1.
|
Steady State and Dynamic Model Requirements and As-built Data to be provided by Seller. The expected steady state power flow and dynamic models will be provided by the Seller during the interconnection requirements study (IRS) process in the format compatible with the analytical tools used by Company (typically PSS/e). Depending upon Facility design, different representations may be required for steady state and dynamic simulations. Seller will work with Company to derive a complex equivalent model if it is required to meet IRS needs. The as-built data and models will be provided by Seller immediately upon commissioning with sufficient information to demonstrate that the as-built parameters match the model. Any changes to plant settings that affect its response and impact to the Company System are required to be studied prior to those changes taking effect. The modeling will include all necessary control settings such that the correct capabilities, flags, and settings can be represented in a base case. Where such parameters are settable according to this Agreement, the initial models will be configured with parameters mutually agreed with Company for the IRS analysis. This includes, but is not limited to:
|
•
|
Plant Type: Geothermal Converter (Steam Turbine) Dynamics
|
•
|
Synchronous Generator Active and Reactive Power Capability: For the individual generating units as well as the overall plant "composite capability curve" inclusive of any supplemental equipment or plant level controllers, shall be provided by Seller for performance purposes. That same curve will be used for accurately modeling the P-Q capability in power flow studies.
|
•
|
Individual Generator and Plant-Level Voltage Control Settings: Information on the individual generator exciter (voltage) as well as any control plant voltage controls applicable to ensure correct voltage control flags and set points are set accordingly in the software tools.
|
•
|
The voltage control set point at the POI is provided by the Company. Seller shall provide a description of the coordination of any plant-level shunt compensation (static or dynamic) to ensure it can be accurately represented in the power flow base case.
|
2.
|
Positive Sequence Stability Modeling. PSS/E model and equipment parameters for:
|
|
|
B-32
|
(A)
|
Generator Model
|
(A)
|
Exciter Model
|
(B)
|
Governor Model with steam flow controls (i.e. IEEE TGOV5)
|
3.
|
Short Circuit Modeling. Seller will provide appropriate and accurate models to Company to support short circuit studies. (typically, Aspen Oneliner)
|
4.
|
Electromagnetic Transient Modeling. Company will require an electromagnetic transient ("EMT") model for the Facility (typically PSCAD). Seller shall provide Company with an EMT model for the IRS and an updated EMT model after the Facility has been commissioned. These models are in addition to the positive sequence stability models required for interconnection-wide modeling purposes. In addition, Seller shall provide Company with evidence that the expected (and commissioned) EMT model reasonably matches the positive sequence dynamic models provided. This should include a benchmarking report provided by the Original Equipment Manufacturer.
|
|
|
B-33
|
|
|
B-34
|
|
|
B-35
|
•
|
(Derating Hours x Size of Reduction)/NMC. Note: Includes Planned Deratings (PD) during Reserve Shutdowns (RS).
|
•
|
(Derating Hours x Size of Reduction)/NMC. Note: Includes Unplanned Derating (D1, D2, D3, D4, DM) during Reserve Shutdowns (RS).
|
|
|
C-1
|
Month
|
Hrs/Mo
|
Hrs/Yr
|
|
January
|
744
|
8760*
|
* Add 24 hours during a leap year
|
February
|
672*
|
|
|
March
|
744
|
|
|
April
|
720
|
|
|
May
|
744
|
|
|
June
|
720
|
|
|
July
|
744
|
|
|
August
|
744
|
|
|
September
|
720
|
|
|
October
|
744
|
|
|
November
|
720
|
|
|
December
|
744
|
|
|
|
|
C-2
|
|
|
C-3
|
•
|
(Derating Hours x Size of Reduction)/NMC. Note: Includes Forced Deratings (D1, D2, D3) during Reserve Shutdowns (RS)
|
•
|
(Derating Hours x Size of Reduction)/NMC.
|
|
|
C-4
|
|
|
C-5
|
|
|
D-1
|
|
|
E-1
|
|
|
E-2
|
|
|
E-3
|
|
|
E-4
|
|
|
F-1
|
1.
|
Description of Company-Owned Interconnection Facilities.
|
a.
|
General. Company shall furnish or construct (or may have Seller furnish or construct, in whole or in part), own, operate and maintain all Interconnection Facilities required to interconnect Company System with Facility at 69,000 volts, up to the Point of Interconnection (collectively, the “Company-Owned Interconnection Facilities”).
|
b.
|
Site. Where any Company-Owned Interconnection Facilities are to be located on the Site, Seller shall provide, at no expense to Company, a location and access acceptable to Company for all such Company-Owned Interconnection Facilities, as well as an easement, license or right of entry to access such Company-Owned Interconnection Facilities. If power sources (120/240VAC) are required, Seller shall provide such sources, at no expense to Company.
|
c.
|
IRS. An IRS addressing Facility requirements was completed for the Project in accordance with the IRS Letter Agreement, and the results have been incorporated in Attachment B (Facility Owned by Seller) and this Attachment G (Company-Owned Interconnection Facilities) as appropriate.
|
d.
|
Seller Payment Obligations. Company-Owned Interconnection Facilities, for which Seller has agreed to pay, whether designed, engineered and constructed by Seller or Company, include [ADD LIST OF COMPANY-OWNED INTERCONNECTION FACILITIES THAT ARE REQUIRED PURSUANT TO THE RESULTS OF THE IRS. THE FOLLOWING IS AN EXAMPLE OF THE TYPES OF FACILITIES THAT COULD BE LISTED]:
|
i.
|
Substation additions and/or modifications of Company's existing structures as necessary. This would include but not be limited to protective relaying and setting changes;
|
ii.
|
Supervisory control and communications equipment (including but not limited to, SCADA/RTU, microwave, satellite, dedicated phone line(s) and/or any other acceptable communications means (determined by Company), fiber optics, copper cabling, installation of batteries and charger system, etc.);
|
iii.
|
Revenue Metering Package and the infrastructure associated with the Revenue Metering Package as provided in Section 13 (Metering) of Attachment Y (Operation and Maintenance of the Facility);
|
iv.
|
Any additional Interconnection Facilities needed to be installed as a result of final determination of Facility switching station site, final design of Facility to enable Company to complete the Interconnection Facilities and be compatible with Good Engineering and Operating Practices.
|
v.
|
If equipment that is not standard to Company is utilized, Seller shall, at the discretion of Company, provide adequate spares.
|
|
|
G-1
|
e.
|
Revisions to Costs. The list of Company-Owned Interconnection Facilities, and engineering and testing costs for Company-Owned Interconnection Facilities, for which Seller agrees to pay in accordance with this Attachment G (Company-Owned Interconnection Facilities), are subject to revision if (i) before approving this Agreement, the PUC approves a power purchase agreement for another non-Company owned electric generating facility (“Second NUG Contract”) to supply electric energy to Company using the same line to which Facility is to be connected or (ii) the line to which Facility is to be connected and/or the related transformer(s) need(s) to be upgraded and/or replaced as a result of this Agreement and a Second NUG Contract, and the PUC, in approving this Agreement, determines that Seller should pay for all or part of the cost of such upgrade and/or replacement.
|
f.
|
Review of the Listing and Costs. If the Commercial Operation Date is not achieved within twelve (12) months of the Effective Date or thirty (30) months from the Execution Date, whichever is less, the listing of the Company-Owned Interconnection Facilities required in this Agreement and the cost-estimates for such Company-Owned Interconnection Facilities are subject to review and revision. Such revision may include, but not be limited to, such items as reconductoring an existing transmission or distribution line, construction of a new line, increase transformer capacity, and alternative relay specifications. In addition, such review and revision may require that the Company re-perform or update the IRS at the Seller’s expense.
|
g.
|
Responsibilities of Seller and Company. The general responsibilities of Seller and Company for the design, procurement, installation, programming/testing, and maintenance/ownership of equipment at the Facility and the Company-Owned Interconnection Facilities is specified in Matrix E-1 (Substation Responsibilities) and Matrix E-2 (Telecom Responsibilities). [DRAFTING NOTE: MATRIXES WILL BE UPDATED FOLLOWING COMPLETION OF IRS.]
|
2.
|
Construction and Support Services by Seller.
|
a.
|
Construction and Support Services By Seller.
|
i.
|
Seller and/or its Third Party consultants or contractors (collectively, “Contractors”) will design, engineer, construct, test and place in service, at Seller's expense:
|
(1)
|
The items identified in Matrix E-1 (Substation Responsibilities) and Matrix E-2 (Telecom Responsibilities) as being the responsibility of Seller to construct; and
|
(2)
|
[ANY OTHER COMPANY-OWNED INTERCONNECTION FACILITIES TO BE CONSTRUCTED BY SELLER]. [NOTE: SUBPARTS "1" AND "2" BETWEEN THEM SHOULD GENERALLY INCLUDE A SUBSET OF THE LIST IN SECTION 1(d) ABOVE]
|
ii.
|
Seller shall provide the necessary support for the Company's 69 kV overhead line extension work, which may include, but not limited to:
|
|
|
G-2
|
(1)
|
Furnish surveyed topographical drawing including contour lines of project areas and beyond as needed in State Plane coordinates with overlay of the Facility and Company pole line route(s) indicating pole locations and anchors in CADD format acceptable to Company.
|
(2)
|
Staking of Company proposed poles and anchors by surveyor.
|
(3)
|
Graded access roads including gravel if required by Company to provide sufficient vehicle access to Company poles and anchors by Company trucks and cranes.
|
(4)
|
Graded level pads to provide vehicle working areas around all Company poles and anchors.
|
(5)
|
Grading of the areas beneath the Company's overhead lines as needed to provide required ground clearance.
|
(6)
|
Grubbing and clearing of vegetation within Company's easement area or as required.
|
b.
|
Coordination of Construction. Prior to Seller engaging the Contractors, Seller shall obtain Company's written approval, which approval shall not be unreasonably withheld. Prior to Seller and/or its Contractors first starting to work on the construction plans for Company-Owned Interconnection Facilities to be constructed by Seller (and/or its Contractors), such as the civil, structural, and construction drawings, specifications to vendors, vendor approved final drawings and materials lists (collectively, the “Plans”), Seller and/or its Contractors shall meet with Company to discuss the construction of such Company-Owned Interconnection Facilities, including but not limited to subjects concerning coordination of construction milestone dates, agreement on areas of interface design, and Company's design/drawing layout and symbols standards, equipment specifications and construction specifications and standards. Company will provide the design and specifications information so Seller can incorporate such information in its bid documents.
|
c.
|
Plans. No later than sixty (60) Days before Seller and/or its Contractors first start to order materials and equipment for Company-Owned Interconnection Facilities to be constructed by Seller and/or its Contractors, Seller shall provide Company with the Plans. The Plans for Company-Owned Interconnection Facilities to be constructed by Seller (and/or its Contractors) shall comply with (i) all applicable Laws; (ii) Company's design/drawing layout and symbol standards, equipment specifications, and construction specifications and standards; and (iii) Good Engineering and Operating Practices (collectively, the “Standards”).
|
d.
|
Company’s Review of the Plans. Unless otherwise agreed to by the Parties, Company shall have thirty (30) Days following receipt of the Plans for it to review and comment on the Plans, and verify in writing to Seller that the Plans comply with the Standards, which verification shall not be unreasonably withheld. If Company reasonably determines that the Plans are not in accordance with the Standards, then it may request in writing a response from Seller to its comments and Seller shall respond in writing within thirty (30) Days of such request by providing (i) its justification for why its Plans conform to the Standards or (ii)
|
|
|
G-3
|
e.
|
Company Inspection. Construction work will be subject to Company inspections to ensure that construction is done in accordance with the Standards. Company inspectors will be allowed access to the construction sites for inspections and to monitor construction work. The inspector shall have the authority to work with the appropriate construction supervisor to stop any work that does not meet the Standards. All equipment and materials used in Company-Owned Interconnection Facilities to be constructed by Seller and/or its Contractors shall meet the Standards.
|
f.
|
Acceptance Test Procedures.
|
i.
|
Seller acknowledges that: (aa) Company has multiple on-going projects with other developers as well as its own capital improvement projects; (bb) Company has limited resources to provide engineering oversight (such as review of plans) to such projects and to participate in the testing of such projects; (cc) in order for Company to accommodate such oversight and testing, it is necessary for Company to sequentially allocate its resources for each project a year or more in advance; (dd) the result is a queue of such projects that reflects the scheduling commitments of Company's resources to conduct such oversight and to participate in such testing; (ee) if a project is behind the schedule on which Company's resources have been scheduled for the oversight of such project, or if a project is not ready for testing at the time Company's resources have been scheduled for the testing of such project, or if a project does not complete testing within the period for which Company's resources have been scheduled for such testing, the progress of projects later in the queue may be adversely affected; (ff) the Test Ready Deadline that is set forth in Attachment K-1 (Seller's Conditions Precedent and Company Milestones) reflects the scheduling commitment of Company's resources to (i) conduct the oversight necessary to facilitate Seller's achievement of that Test Ready Deadline, (ii) commence the Acceptance Test on the Acceptance Testing Milestone Date that is set forth in Attachment K-1 (Seller's Conditions Precedent and Company Milestones) and (iii) thereafter participate in the Control System Acceptance Test; and (gg) the Project will lose its place in the queue and will be assigned a new Acceptance Testing Milestone Date for commencement of the Acceptance Test that will be behind the other projects then in the queue if (i) the Seller fails to satisfy any of the conditions precedent set forth in Section 2(f)(ii) of this Attachment G (Company-Owned Interconnection Facilities) within the time period specified therein for the task in question or, if no time period is specified therein, by the Test Ready Deadline, (ii) the Seller fails to satisfy any of the Seller's Conditions Precedent set forth in Attachment K-1 (Seller's Conditions Precedent and Company Milestones) and/or (iii)
|
|
|
G-4
|
ii.
|
The Conduct of the Acceptance Test is subject to the satisfaction of the following conditions precedent within the time period specified below for the task in question or, if no time period is specified, by the Test Ready Deadline that is set forth in Attachment K-1 (Seller's Conditions Precedent and Company Milestones):
|
(1)
|
Final Single-Line Drawing, and notes, has received Company's written consent pursuant to Section 1(a)(i) (Single-Line Drawing, Interface Block Diagram, Relay List, Relay Settings and Trip Scheme) of Attachment B (Facility Owned by Seller) to this Agreement.
|
(2)
|
Final Relay List and Trip Scheme have received Company's written consent pursuant to Section 1(a)(i) (Single-Line Drawing, Interface Block Diagram, Relay List, Relay Settings and Trip Scheme) of Attachment B (Facility Owned by Seller) to this Agreement.
|
(3)
|
Final Interface Block Diagram has received Company consent pursuant to Section 1(a)(i) (Single-Line Drawing, Interface Block Diagram, Relay List, Relay Settings and Trip Scheme) of Attachment B (Facility Owned by Seller) to this Agreement
|
(4)
|
Final Control System Telemetry and Control List has received Company consent.
|
(5)
|
Final phasor measurement unit (PMU) devices, if applicable, have received Company consent.
|
(6)
|
Control system design and tunable parameters reviewed and mutually agreed upon as needed to meet the Company requirements in accordance with Attachment B (Facility Owned by Seller) Performance Standards.
|
(7)
|
Agreement on Active Power Control Interface.
|
(8)
|
No later than 14 Days prior to commencement of the Acceptance Test:
|
a.
|
Seller shall have certified to Company that Seller-Owned Interconnection Facilities have been installed and commissioned and such certification has not, prior to the commencement of the Acceptance Test, been subsequently challenged by Company on the basis of on-site observations made by the Company's representatives following the walk-through to be conducted pursuant to Section 2(f)(iii) of this Attachment G (Company-Owned Interconnection Facilities).
|
b.
|
Seller shall have certified to Company that any Company-Owned Interconnection Facilities built by Seller (and/or its
|
|
|
G-5
|
(9)
|
Any Company-Owned Interconnection Facilities not built by or on behalf of Seller have been installed and commissioned.
|
(10)
|
No later than 7 Days prior to the commencement of the Acceptance Test, Seller and Company shall have participated in walk-through of fully constructed Interconnection Facilities.
|
(11)
|
Redlined as-built drawings of the Seller-Owned Interconnection Facilities and any of the Company-Owned Interconnection Facilities built by Seller (and/or its Contractors) shall have been provided to Company.
|
(12)
|
Continuous power is being supplied to Company's protection and SCADA equipment.
|
(13)
|
Not less than four (4) weeks prior to the commencement of the Acceptance Test, the high speed communication lines required under this Agreement have been commissioned and are ready for use.
|
(14)
|
Not less than two (2) weeks prior to the commencement of the Acceptance Test, Seller and Company have participated in an on-Site Acceptance Test coordination meeting.
|
iii.
|
Seller shall provide Company with at least fourteen (14) Days advance written notice of the commencement of the Acceptance Test. The Acceptance Test will be conducted on Business Days during normal business hours and may take a minimum of 30 Days to complete. No electric energy will be delivered from Seller to Company during the Acceptance Test. No later than thirty (30) Days prior to conducting the Acceptance Test, Company and Seller shall agree on a written protocol setting out the detailed procedure and criteria for passing the Acceptance Test. Attachment N (Acceptance Test General Criteria) provides general criteria to be included in the written protocol for the Acceptance Test. At the time that Seller provides its 14-Day notice of the Acceptance Test to Company, Seller shall concurrently schedule a site walk-through of the Facility with Company to occur no later than seven (7) Days prior to the Acceptance Test. Seller's 14-Day notice to Company of the Acceptance Test shall constitute its certification that (i) the completion of the installation and commissioning of the Seller-Owned Interconnection Facilities and the Company-Owned Interconnection Facilities built by Seller (and/or its Contractors) and (ii) a walk-through by Company shall
|
|
|
G-6
|
iv.
|
Company will be present when the Acceptance Test is conducted, and Seller shall promptly correct any deficiencies identified during the Acceptance Test. Seller will be responsible for the cost of Company personnel (and/or Company contractors) performing the duties (such as reviewing the Plans and reviewing the construction) necessary for Company-Owned Interconnection Facilities to be constructed by Seller (and/or its Contractors). If Company (i) does not make any inspection or test, (ii) does not discover defective workmanship, materials or equipment, or (iii) accepts Company-Owned Interconnection Facilities (that were constructed by Seller and or its Contractors), such action or inaction shall not relieve Seller from its obligation to do and complete the work in accordance with the Plans approved by Company.
|
g.
|
As-Built Drawings. Within thirty (30) Days of the completion of construction of the Company-Owned Interconnection Facilities to be constructed by Seller (and/or its Contractors) and the acceptance of same by Company, Seller shall provide for Company review a set of the proposed as-built drawings. Within thirty (30) Days of Company's receipt of the proposed as-built drawings, Company shall provide Seller with either (i) its comments on the proposed as-built drawings or (ii) notice of acceptance of the proposed as-built drawings as final as-built drawings. If Company provides comments on the proposed as-built drawings, Seller shall incorporate such comments into a final set of as-built drawings and
|
|
|
G-7
|
h.
|
Commercial Operation Date Deadline. Construction of the Interconnection Facilities shall be completed and the Interconnection Facilities shall be demonstrated to operate in accordance with the requirements of this Attachment G and this Agreement by the Commercial Operation Date Deadline. In the event that Seller fails to complete the Interconnection Facilities by the Commercial Operation Date Deadline, and fails to comply with Section 5.1(G) (Commencement of Capacity Charge Payments), the Company shall have no obligation to make such Capacity Charge payments until such work is completed and the conditions of Article 5 (Rates for Purchase) are satisfied.
|
3.
|
Seller Payment to Company for Company-Owned Interconnection Facilities and Review of Facility.
|
a.
|
Seller Payment to Company.
|
i.
|
Seller shall pay the Total Estimated Interconnection Cost which is comprised of the estimated costs of (aa) acquiring, constructing and installing the Company-Owned Interconnection Facilities to be designed, engineered and constructed by Company, (bb) the engineering and design work (including but not limited to Company, affiliated Company and contracted engineering and design work) associated with (i) the application process for the PUC Approval Order, (ii) developing such Company-Owned Interconnection Facilities and (iii) reviewing and specifying those portions of Facility which allow interconnected operations as such are described in Attachment B (Facility Owned by Seller) and Attachment Y (Operation and Maintenance of the Facility) (collectively, the "Engineering and Design Work"), and (cc) conducting the Interconnection Acceptance Test, the Generator Acceptance Test, and Control System Acceptance Test. The Total Actual Interconnection Cost (the actual cost of items (aa) through (cc) are the “Total Interconnection Cost.”
|
ii.
|
Summary List of Company-Owned Interconnection Facilities and Related Services to be designed, engineered and constructed by Company:
|
iii.
|
The following summarizes the Total Estimated Interconnection Cost of the Company-Owned Interconnection Facilities to be designed, engineered and constructed by Company:
|
|
|
G-8
|
b.
|
Total Estimated Interconnection Costs. The Total Estimated Interconnection Cost, which, except as otherwise provided herein, is non-refundable, shall be paid in accordance with the following schedule:
|
i.
|
Initial Payment: Prior to the execution of the Interconnection Requirements Amendment, Seller has paid $___,000.00 to Company;
|
ii.
|
Engineering and Design Work Payment: Within thirty (30) Days after the execution of the Interconnection Requirements Amendment, the total estimated costs related to the Engineering and Design Work are due and payable by Seller to Company;
|
iii.
|
Procurement and Construction Payment: Upon the earlier of (y) 30 Days after the Effective Date or (z) [INSERT CALENDAR DATE BY WHICH EQUIPMENT MUST BE ORDERED TO MEET CONSTRUCTION SCHEDULE], the difference between the portion of the Total Estimated Interconnection Cost paid to date and the Total Estimated Interconnection Cost is due and payable by Seller to Company.
|
c.
|
True-Up. The final accounting shall take place within one hundred twenty (120) Days of the first to occur of (i) the Commercial Operation Date, (ii) the date this Agreement is declared null and void under either Section 2.2(D) (Interconnection Requirements Study), Section 2.2(E) (Prior to Effective Date), or Section 2.2(F) (Time Periods for PUC Submittal Date and PUC Approval), or (iii) the date this Agreement is terminated, whichever occurs first. Company shall be entitled to an extension for a commercially reasonable amount of time to complete the final accounting if a delay in such completion is caused by Seller’s delay or a failure of Seller to respond to Company's request regarding disposition of interconnection equipment and materials. Upon completion of the final accounting, Company shall deliver to Seller an invoice for payment of the amount, if any, of the difference between the Total Estimated Interconnection Cost paid to date and the Total Actual Interconnection Cost, which is the final accounting of the Total Interconnection Costs. Payment of such invoice shall be made within thirty (30) Days of receipt of such invoice from Company. If the Total Actual
|
|
|
G-9
|
d.
|
Audit Rights. Seller shall have the right for a period of one (1) year following receipt of the invoice: (i) upon reasonable prior notice, to audit the books and records of Company to the limited extent reasonably necessary to verify the basis for the amount (if any) by which the Total Actual Interconnection Cost invoiced to Seller exceeds the Total Estimated Interconnection Cost, and (ii) to dispute the amount of any such excess. Seller shall not have the right to audit any other financial records of Company. Company shall make such information available during normal business hours at its offices in Hawaii. Seller shall pay Company’s reasonable actual, verifiable costs for such audits, including allocated overhead.
|
e.
|
Ownership. All Company-Owned Interconnection Facilities including those portions, if any, provided, or provided and constructed, by Seller shall be the property of Company.
|
4.
|
Ongoing Operation and Maintenance Charges.
|
a.
|
Prior to the Transfer Date. Seller shall operate and maintain, at its sole cost and expense, Company-Owned Interconnection Facilities that it or its Contractors constructed, if any, prior to the Transfer Date.
|
b.
|
On or After the Transfer Date. On and after the Transfer Date, Company shall own, operate and maintain Company-Owned Interconnection Facilities.
|
c.
|
Monthly Bill. Company shall bill Seller monthly for any costs incurred in operating, maintaining and replacing (to the extent not covered by insurance) Company-Owned Interconnection Facilities. Company's costs will be determined on the basis of, but not limited to, direct payroll, material costs, applicable overhead at the time incurred, consulting fees and applicable taxes. Seller shall, within thirty (30) Days after the billing date, reimburse Company for such monthly billed operation and maintenance charges.
|
5.
|
Relocation of Company-Owned Interconnection Facilities.
|
a.
|
In the event that the Land Rights include a relocation clause and such clause is exercised or if Company-Owned Interconnection Facilities must be relocated for any other reason not caused by Company, Seller shall bear the cost of such relocation. Prior to the relocation of the Company-Owned Interconnection Facilities Company shall invoice Seller for the total estimated cost of relocating the Company-Owned Interconnection Facilities (the "Total Estimated Relocation Cost"). Seller shall, within thirty (30) Days after the invoice date, pay to Company the Total Estimated Relocation Cost.
|
b.
|
Once the relocation of the Company-Owned Interconnection Facilities is complete, Company shall conduct a final accounting of all costs related thereto. Within thirty (30) Days of the final accounting, which shall take place within one hundred and twenty (120) Days of completion of the relocation of Company-Owned Interconnection Facilities, Seller shall remit to Company the difference
|
|
|
G-10
|
6.
|
Guarantee for Interconnection Costs.
|
a.
|
Standby Letter of Credit. To ensure payment by Seller of all costs and expenses incurred by Company (i) in excess of the Total Estimated Interconnection Cost paid in connection with the Company-Owned Interconnection Facilities to be provided and/or constructed by Company described in Section 3 (Seller Payment to Company for Company-Owned Interconnection Facilities and Review of Facility) of this Attachment G (Company-Owned Interconnection Facilities), and (ii) if applicable, in excess of the Total Estimated Relocation Costs paid in connection with the relocation of the Company-Owned Interconnection Facilities as provided in Section 5 (Relocation of Company-Owned Interconnection Facilities), Seller shall obtain an Irrevocable Standby Letter of Credit with no Documentary Requirement (“Standby Letter of Credit”), in accordance with the requirements of Section 6(b) (Requirements of the Standby Letter of Credit) of this Attachment G (Company-Owned Interconnection Facilities), wherein Company shall receive payment from the bank upon request by Company.
|
b.
|
Requirements of the Standby Letter of Credit. The Standby Letter of Credit shall be (i) in an amount not less than twenty-five percent (25%) of the Total Estimated Interconnection Cost or Total Estimated Relocation Cost, as applicable, and (ii) in substantially in the form attached to this Agreement as Attachment M (Form of Standby Letter of Credit) from a bank or other financial institution located in the United States with a credit rating of "A-" or better. If the rating (as measured by Standard & Poors) of the bank or financial institution issuing the Standby Letter of Credit falls below A-, Company may require Seller to replace the Standby Letter of Credit with a Standby Letter of Credit from another bank or financial institution located in the United States with a credit rating of "A-" or better. In connection with the construction of the Company-Owned Interconnection Facilities, the Standby Letter of Credit shall be effective from the earlier of (aa) thirty (30) Days following the Effective Date, or (bb) the date that Seller requests Company to order equipment or commence construction on Company-Owned Interconnection Facilities. In connection with the relocation of the Company-Owned Interconnection Facilities, if applicable, the Standby Letter of Credit shall be effective within thirty (30) Days after Seller receives the invoice from Company for the Total Estimated Relocation Cost as set forth in Section 5 (Relocation of Company-Owned Interconnection Facilities) of this Attachment G (Company-Owned Interconnection Facilities). The Standby Letter of Credit shall be in effect through the earlier of forty-five (45) Days after the final accounting or seventy-five (75) Days after the Agreement is terminated. Seller shall provide to Company within fourteen (14) Days of the date the Standby Letter of Credit is to
|
|
|
G-11
|
c.
|
Other Form of Security. Notwithstanding the foregoing, in lieu of a Standby Letter of Credit, Company may, at its sole discretion, agree in writing to accept such other form of security as Company deems to provide Company with protection equivalent to a Standby Letter of Credit.
|
7.
|
Land Restoration.
|
a.
|
Definition of “Land.” For the purposes of this Attachment G (Company-Owned Interconnection Facilities), “Land” means any portion of the Site and any other real property where any Company-Owned Interconnection Facilities are located.
|
b.
|
Removal of Interconnection Facilities. After termination of this Agreement or in the event this Agreement is declared null and void under either Section 2.2(D) (Interconnection Requirements Study), Section 2.2(E) (Prior to Effective Date), or Section 2.2(F) (Time Periods for PUC Submittal Date and PUC Approval), if requested by Company, Seller shall, at its sole cost and expense, remove (i) the Company-Owned Interconnection Facilities from the Land and (ii) the Seller-Owned Interconnection Facilities from the Land, and, in conjunction with such removal, shall develop and implement a program to recycle, to the fullest extent possible, or to otherwise properly dispose of, all such removed infrastructure; provided, however, that, Company may elect to remove all or part of the Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities from the Land because of operational concerns over the removal of such Interconnection Facilities, in which case Seller shall reimburse Company for its costs to remove such Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities. To the extent Seller is obligated to remove Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities, Seller shall complete such removal within ninety (90) Days of termination of this Agreement (or declaration that the Agreement is null and void under either Section 2.2(D) (Interconnection Requirements Study), Section 2.2(E) (Prior to Effective Date), or Section 2.2(F) (Time Periods for PUC Submittal Date and PUC Approval)), or as otherwise agreed to by both Parties in writing.
|
c.
|
Restoration of the Land. After the termination of this Agreement (or declaration that the Agreement is null and void under either Section 2.2(E) (Prior to Effective Date) or Section 2.2(F) (Time Periods for PUC Submittal Date and PUC Approval)), and removal of the Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities, as the case may be, Seller shall, at its sole cost and expense, restore the Land to its condition prior to construction of such Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities, as applicable. Land restoration shall be completed within ninety (90) Days of termination of this Agreement (or declaration that the Agreement is null and void under either Section 2.2(E) (Prior to Effective Date)
|
|
|
G-12
|
8.
|
Transfer of Ownership/Title.
|
a.
|
Transfer of Ownership and Title. On the Transfer Date, Seller shall transfer to Company all right, title and interest in and to Company-Owned Interconnection Facilities to the extent such facilities were designed and constructed by Seller and/or its Contractors together with (i) all applicable manufacturers' or Contractors' warranties which are assignable and (ii) all Land Rights necessary to operate and maintain Company-Owned Interconnection Facilities on and after the Transfer Date. Seller shall provide a written list of the manufacturers' and Contractors' warranties which will be assigned to Company and the expiration dates of such warranties no later than thirty (30) Days before the Transfer Date.
|
b.
|
No Liens or Encumbrances. Company's title to and ownership of Company-Owned Interconnection Facilities that were designed and constructed by Seller and/or its Contractors shall be free and clear of liens and encumbrances.
|
c.
|
Form of Documents. The transfers to be made to Company pursuant to this Section 8 (Transfer of Ownership/Title) of Attachment G (Company-Owned Interconnection Facilities) shall not require any further payment by Company. The form of the document to be used to convey title to the Company-Owned Interconnection Facilities that were designed and constructed by or on behalf of Seller shall be substantially in the form set forth in Attachment H (Form of Bill of Sale and Assignment). The form of the document(s) to be used to assign leases shall be substantially in the form set forth in Attachment I (Form of Assignment of Lease and Assumption). To the extent Land Rights other than leases are transferred to Company, appropriate modifications will be made to Attachment I (Form of Assignment of Lease and Assumption) to effectuate the transfer of such Land Rights.
|
9.
|
Governmental Approvals for Any Company-Owned Interconnection Facilities Constructed by Seller or by Company. Seller shall obtain at its sole cost and expense all Governmental Approvals necessary to the construction, ownership, operation and maintenance of the Company-Owned Interconnection Facilities, as provided in Section 12.1(B). For all other Governmental Approvals necessary for the Company-Owned Interconnection Facilities, Seller shall provide these prior to the Transfer Date. On or before the Transfer Date, Seller shall provide Company with (i) copies of all such Governmental Approvals obtained by Seller regarding the construction, ownership, operation and maintenance of Company-Owned Interconnection Facilities that Seller and/or its Contractors constructed and (ii) documentation regarding the satisfaction of any condition or requirement set forth in any Governmental Approvals for Company-Owned Interconnection Facilities or that such Governmental Approvals have otherwise have been closed with the issuing Governmental Authority.
|
|
|
G-13
|
10.
|
Land Rights. Seller shall obtain at its sole cost and expense all Land Rights that are required to construct, own, operate and maintain the Company-Owned Interconnection Facilities as provided in Section 12.1(B). Without limitation to the preceding sentence, Seller shall pay all surveying and mapping costs, appraisal fees, document preparation fees, recording fees or other costs. Seller shall use commercially reasonable efforts to obtain on behalf of the Company perpetual Land Rights for the Company-Owned Interconnection Facilities. Such Land Rights shall contain terms and conditions which are acceptable to Company and the documents setting forth the Land Rights shall be provided in advance of execution to Company for its review and approval and shall be recorded if required by Company. Following the Execution Date, Seller shall provide as part of the Monthly Progress Report the status of negotiations with landowner(s) regarding the Land Rights. Notwithstanding the foregoing, Company shall have the right in its sole discretion, at any time upon notice to Seller, to communicate directly with the landowner(s) and/or participate in the negotiations with landowner(s) for the Land Rights. For so long as Seller has the right under this Agreement to sell electric energy to Company, Seller shall pay for any rents and other payments due under such Land Rights that are associated with Company-Owned Interconnection Facilities.
|
11.
|
Contracts for Company-Owned Interconnection Facilities. For all contracts entered into by or on behalf of Seller for Company-Owned Interconnection Facilities to be designed, engineered and constructed, in whole or in part, by or on behalf of Seller, the following shall apply: (i) Company shall be made an intended third-party beneficiary of such contracts; and (ii) Company shall be provided with copies of such executed contracts, including the commercial terms.
|
|
|
G-14
|
|
|
H-1
|
____________________________,
a __________________________
By________________________
Name _____________________
Its________________________
“Transferor”
|
______________________________, a Hawaii corporation
By ____________________________ Name _________________________ Its ____________________________ By____________________________ Name _________________________ Its____________________________ “Transferee” |
|
|
|
|
H-2
|
|
|
H-3
|
|
|
H-4
|
|
|
I-1
|
|
|
I-2
|
|
|
I-3
|
|
|
I-4
|
|
|
I-5
|
|
|
I-6
|
|
|
I-7
|
|
|
J-1
|
|
|
J-2
|
Guaranteed Project
Milestone Date
|
Description of Each Guaranteed Project Milestone
|
|
|
[SPECIFY DATE CERTAIN]
|
Construction Financing Milestone: Provide Company with documentation reasonably satisfactory to Company evidencing (i) the closing on financing for the Facility including ability to draw on funds by [insert same date certain as in left column] or (ii) the financial capability to construct the Facility ("Construction Financing Closing Milestone").
|
[SPECIFY DATE CERTAIN]
|
Permit Application Filing Milestone: Provide Company with documentation reasonably satisfactory to Company evidencing the filing by or on behalf of Seller of the following applications for Governmental Approvals required for the ownership, construction, operation and maintenance of the Facility: County Plan Approval
|
January 1, 2022, or 18 months from receipt of the PUC Approval Order, whichever is later
|
Commercial Operation Date Deadline.
|
|
|
K-1
|
Reporting Milestone Date
|
Description of Each Reporting Milestone
|
|
|
|
|
[Date]
|
Seller shall provide Company with a copy of the executed Facility equipment, engineering, procurement and construction ("EPC") or other general contractor agreements.
|
[Date]
|
Seller shall provide Company with copies of executed purchase orders/contracts for the delivery of Facility generators.
|
[Date]
|
Building Permit: Seller or Seller's EPC contractor shall obtain building permit.
|
[Date]
|
Construction Start Date (defined as the start of civil work on Site).
|
[Date]
|
Seller shall have laid the foundation for all Facility buildings, generating facilities and step-up transformer facilities.
|
[Date]
|
All generators for the Facility shall have been installed at the Site.
|
|
|
[Date]
|
The step-up transformer shall have been installed at the Site.
|
|
|
L-1
|
|
|
M-1
|
|
|
M-2
|
|
|
M-3
|
1.
|
Seller Tests of the Facility.
|
a.
|
Acceptance Test. The Seller shall conduct the following “Acceptance Tests” in the sequence listed in this Section 1.a. which demonstrate to Company’s satisfaction that the Seller is capable of complying with the requirements of Attachment B (Facility Owned by Seller) and other requirements of this Agreement.
|
i.
|
Interconnection Acceptance Test. The Facility’s compliance with the applicable standards in Attachment B (Facility Owned by Seller) and other criteria specified in accordance with Attachment G (Company-Owned Interconnection Facilities) shall be determined by the results of the Interconnection Acceptance Test developed in accordance with this Attachment N (Acceptance Test General Criteria). The Interconnection Acceptance Test shall be conducted within thirty (30) Days of completion of the Interconnection Facilities.
|
ii.
|
Generator Acceptance Test. The Facility’s compliance with the applicable performance standards in Section 3 (Performance Standards) of Attachment B (Facility Owned by Seller) and any other criteria specified in accordance with Attachment BB (Generator Acceptance Test General Criteria) shall be determined by the results of the Generator Acceptance Test developed in accordance with Attachment BB (Generator Acceptance Test General Criteria). The Generator Acceptance Test shall be conducted within ten (10) Days of successful completion of the Interconnection Acceptance Test.
|
iii.
|
Control System Acceptance Test. The Control System Acceptance Test(s) shall be conducted on the centralized control system of the Facility as each generator is designated by Seller to be ready to generate and deliver electric energy to Company, before that generator is included in Facility. No later than thirty (30) Days prior to conducting the Control System Acceptance Test, Company and Seller shall agree on a written protocol setting out the detailed procedure and criteria for passing the Control System Acceptance Test. Attachment O (Control System Acceptance Test Criteria) provides general criteria to be included in the written protocol for the Control System Acceptance Test. The Control System Acceptance Test will be conducted on
|
|
|
N-1
|
b.
|
Capacity Test. After successful completion of the Acceptance Tests in Section 1.a. of this Attachment N (Acceptance Test General Criteria), Seller shall be permitted to conduct the Capacity Test pursuant to Section 5.1(D) (Capacity Test) in accordance with the procedures set forth in Attachment W (Capacity Test Procedures).
|
2.
|
Acceptance Test General Criteria
|
a.
|
Interconnection.
|
i.
|
A visual inspection of all Interconnection equipment and verification of as-built drawings.
|
ii.
|
Phase rotation testing to verify proper phase connections.
|
iii.
|
Based on manufacturer’s specification, test the local operation of the Facility’s generator breaker(s) and inter-tie breaker(s), and other breaker(s) which connect the Facility equipment to Company System – must open and close locally using the local controls remotely from Company's SCADA. Test and ensure that the status shown via SCADA is the same as the actual physical status in the field.
|
iv.
|
Relay test engineers to connect equipment and simulate certain inputs to test and ensure that the protection schemes such as any under/over frequency and under/over voltage protection or the Direct Transfer Trip operate as designed. (For example, a fault condition may be simulated to confirm that the breaker
|
|
|
N-2
|
v.
|
All 69 kV breaker disconnects and other high voltage switches will be inspected to ensure they are properly aligned and operated manually or automatically (if designed).
|
vi.
|
Step-Up Transformer Enclosure(s) inspections – The Step-Up Transformer Enclosure(s) may be inspected to test and ensure that the equipment that Seller has installed is installed and operating correctly based upon agreed to design. Wiring may be field verified on a sample basis against the wiring diagrams to ensure that the installed equipment is wired properly. The grounding mat at the Step-Up Transformer Enclosure(s) may be tested to make sure there is adequate grounding of equipment.
|
vii.
|
Communication testing – Communication System testing to occur to ensure correct operation. Detailed scope of testing will be agreed by Company and Seller to reflect installed systems and communication paths that tie the Facility to Company’s communications system.
|
viii.
|
Various contingency scenarios to be tested to ensure adequate operation, including testing contingencies such as loss of communications, and fault simulations to ensure that the Facility’s 69 kV breakers, if any, open as they are designed to open. (Back up relay testing)
|
ix.
|
Metering section inspection; verification of metering PTs, CTs, and cabinet and the installation of the two Company meters.
|
b.
|
Telephone Communication.
|
i.
|
Test to confirm Company has a direct line to the Facility control room at all times and that it is programmed correctly.
|
ii.
|
Test to confirm that the Facility operators can sufficiently reach Company System Operator.
|
iii.
|
Verification of dial-up telephone connection for 69 kV metering cabinet.
|
c.
|
Drawings, Documentation and Equipment Warranties.
|
i.
|
Electronic and three (3) hard copies of all Switchyard construction drawings, specifications, calibrations, and settings including as-built drawings.
|
ii.
|
Equipment operating and maintenance manuals, spare parts lists, commissioning notes, as-built equipment settings, and other information related to the switchyard equipment.
|
|
|
N-3
|
iii.
|
Contractor construction warranties and equipment warranties.
|
iv.
|
Phase rotation testing to verify proper phase connections.
|
v.
|
Switching Station inspections – The Switching Station may be inspected to test and ensure that the equipment that Seller has installed is installed and operating correctly based upon agreed‑to design. Wiring may be field verified on a sample basis against the wiring diagrams to ensure that the installed equipment is wired properly. The grounding mat at the Switching Station may be tested to make sure there is adequate grounding of equipment.
|
vi.
|
If agreed by the Parties in writing, some requirements may be postponed to the Control Systems Acceptance Test.
|
|
|
N-4
|
1.
|
The Acceptance Test for the Facility will be conducted, following installation of the Facility. The Acceptance Test procedures will be in accordance with criteria set forth herein. The Acceptance Test shall be performed in accordance with Good Engineering and Operating Practices and demonstrate to Company’s satisfaction that the Facility and the interconnection portion of the Facility, including Company-Owned Interconnection Facilities, have met the provisions of Article 8 (Company Dispatch) and Section 3 (Performance Standards) of Attachment B (Facility Owned by Seller).
|
2.
|
Acceptance Test procedures will be developed by Company for the Seller's review at least sixty (60) Days in advance of performing the tests based on the date provided by Company.
|
3.
|
Conditions Precedent. The following conditions precedent must be satisfied prior to conducting the Control System Acceptance Test:
|
a.
|
Successful completion of the Acceptance Test.
|
b.
|
Facility has been successfully energized.
|
c.
|
All of the Facility's generators (as applicable) have been fully commissioned.
|
d.
|
The control system computer has been programmed for normal operations.
|
e.
|
All equipment that is relied upon for normal operations (including ancillary devices such as capacitors/inductors, energy storage device, statcom, etc.) shall have been commissioned and be operating within normal parameters.
|
4.
|
Facility Energy Equipment. In the event that all or any portion of the Facility's energy equipment is not available for the duration of the Control System Acceptance Test, the Control System Acceptance Test will have to be re-run from the beginning unless Seller demonstrates to the satisfaction of the Company that the test results attained are consistent with the results that would have been attained if all of the equipment had been available for the duration of the test.
|
5.
|
Procedures. The Control System Acceptance Test will be conducted on Business Days during normal working hours on a mutually agreed upon schedule. No Control System Acceptance Test will be scheduled during the final twenty-one (21) Days of a calendar year. No later than thirty (30) Days prior to conducting the Control System Acceptance
|
|
|
O-1
|
6.
|
The procedures will include, but not be limited to, demonstration of the functional requirements of the Facility defined in Article 8 (Company Dispatch) and Section 3 (Performance Standards) of Attachment B (Facility Owned by Seller) such as, but not limited to:
|
a.
|
Interconnection equipment and communications to support remote monitoring of the Facility and control of Facility breakers
|
b.
|
Droop characteristic and change of frequency control / response modes (if applicable)
|
c.
|
Real power delivery under remote Company Dispatch, Active Power Dispatch. For facilities with directly controlled storage, the storage will be operated to perform at least two full charging/discharging cycles.
|
d.
|
Accurate provision of limits for Minimum and Maximum Dispatch (Power Possible, Minimum Load Capability)
|
e.
|
Ramp rates for controlled actions
|
f.
|
Control of Facility breakers
|
g.
|
Voltage regulation
|
7.
|
Testing of primary and redundant communications between Company System Operator and Facility Operator
|
|
|
O-2
|
8.
|
The actual dynamic response of the Facility equipment will be confirmed to allow Company transient stability model to reflect the as-left conditions of the unit. During the commissioning the following will be required:
|
a.
|
A final review by Company engineers of the equipment installed to control the operation and protect the plant will be needed upon installation and prior to the start of commercial operation.
|
b.
|
The review will include off-line tuning and testing results of the excitation and governor control and/or control system and the IEEE block diagram utilized for the PSS/E dynamics program.
|
c.
|
During the commissioning of the actual Facility, equipment system testing will be conducted to ensure that similar, well damped, expected responses will be produced by the facility. The as-left parameters obtained from real and reactive local response tuning will be determined for use in the Company planning model. The Seller will provide an estimate of the earliest date for the Acceptance Test at least ninety (90) Days before the date.
|
9.
|
The Acceptance Test procedures for the Facility will be mutually agreed upon between Seller and Company prior to conducting the test.
|
10.
|
When the Facility is ready for the Acceptance Test, Seller shall notify Company at least seven (7) Days prior to the test and shall coordinate with Company. Seller shall perform and Company shall monitor such test no earlier than seven (7) Days from Company’s receipt of such notice.
|
11.
|
The Control Acceptance Test is to be successfully completed prior to the Commercial Operation Date.
|
1.
|
SCADA Test to verify the status and analog telemetry, and if the remote controls between the Company's centralized control system and the Facility are working properly end-to-end.
|
2.
|
Dispatch Test to verify if the Facility's active power limit controls and the Active Power Control Interface with the Company's centralized control system are working properly. The Test is generally conducted by setting different active power setpoints and limits and observing the proper dispatch at the appropriate ramp rate limiting of the Facility's real power output.
|
|
|
O-3
|
3.
|
Control Test for Voltage Regulation to verify the Facility can properly perform automatic voltage regulation as defined in this Agreement. Test is generally conducted by making small adjustments of the voltage setpoint and verifying by observation that the Facility regulates the voltage at the point of regulation to the setpoint by delivering/receiving reactive power to/from the Company System to maintain the applicable setpoint according to the reactive power control and the reactive amount requirements of Section 3(a) (Reactive Power Control) and Section 3(b) (Reactive Power Characteristics) of Attachment B (Facility Owned by Seller) to this Agreement.
|
4.
|
Frequency Response Test to verify the Facility provides a frequency droop response as defined in this Agreement. Test is generally conducted by making adjustments of the frequency reference setting and verifying by observation that the Facility responds per droop and deadband settings, and appropriately modifies the Company issued Dispatch
|
1.
|
The monitoring test requires the Facility to operate as it would in normal operations under Company Dispatch for fourteen (14) continuous days.
|
2.
|
The performance of the Facility during the period of the successfully completed monitoring test is evaluated for, e.g., voltage regulation, frequency response, dispatch control, operating limits and ramp rate performance, to verify the performance meets the requirements of this Agreement according to the criteria set forth in the testing procedures. Certain requirements, such as disturbance ride-through requirements, cannot be adequately tested without actual grid disturbances. These requirements will be confirmed following a grid event based on operational data, which may be after the completion of the Acceptance Test. The Parties understand and agree that a successful completion of the test does not constitute a waiver of any of the performance standards of Seller, all of which are hereby reserved, and shall not alleviate Seller from any of its obligations under the Agreement, in particular, as required in Article 8 (Company Dispatch) and the Performance Standards in Section 3 (Performance Standards) of Attachment B (Facility Owned by Seller).
|
|
|
O-4
|
1.
|
Company's Right of First Negotiation Prior to End of the Term.
|
(a)
|
Right of First Negotiation. Commencing as of the Commercial Operations Date, should Seller desire to sell, transfer or dispose of its right, title, or interest in the Facility, in whole or in part, including a Change in Control (as defined below), then, other than through an "Exempt Sale" (as defined below):
|
(i)
|
Seller shall first offer to sell such interest to Company by providing Company with written notice of the same (the "Offer Notice"), which notice shall identify the proposed purchase price for such interest (including a description of any consideration other than cash that will be accepted) (the "Offer Price") and any other material terms of the intended transaction, and Company may, but shall not be obligated to, purchase such interest at the Offer Price and upon the other material terms and conditions specified in the Offer Notice, and in accordance with the terms and conditions of this Attachment P (Sale of Facility by Seller). Seller shall provide to Company as part of the Offer Notice, information in its possession regarding the Facility to allow Company to conduct due diligence on the potential purchase, including, but not limited to information on the operational status of the Facility and its components, and the amount of debt or other material Seller obligations remaining with respect to the Facility (the Offer Notice and due diligence information on the Facility are collectively referred to as, the "Offer Materials"). Within five (5) Days of Company's receipt of the Offer Materials, if Company believes the due diligence information is incomplete, Company shall specify in writing the additional information Company requires to conduct its due diligence. The date on which Company receives the Offer Materials from Seller is referred to hereinafter as the "Offer Date."
|
(ii)
|
If Company desires to purchase such interest, Company shall indicate so by delivering to Seller a binding, written offer to purchase such interest at the Offer Price and on the terms and conditions specified in the Offer Notice within thirty (30) Days of the Offer Date (an "Acceptance Notice"). In the event Company timely delivers an Acceptance Notice, Seller shall sell and transfer to Company the interest substantially on the terms and conditions contained in the Offer Notice consistent with this Attachment P (Sale of Facility by Seller) and in accordance with definitive documentation to be entered into between Seller and Company. The Parties shall have sixty (60) Days from the Company's Acceptance Notice,
|
|
|
P-1
|
(iii)
|
Seller shall not solicit any offers for the sale of such interest to any other party during the Right of First Negotiation Period unless, during that period, Company provides Seller with written notice that Company no longer desires to purchase such interest, whereupon negotiations shall terminate.
|
(iv)
|
In the event that (A) Company fails to timely deliver an Acceptance Notice, (B) Company delivers a notice to Seller that it no longer desires to purchase the interest, or (C) the Parties are not able to execute a purchase and sale agreement within the Right of First Negotiation Period set forth in Section 1(a)(ii) of this Attachment P (Sale of Facility by Seller), Seller may for a period of two hundred seventy (270) Days following the event specified in subsection (A), (B) or (C) above, commence solicitation of offers and negotiations from and with other parties for the sale of such interest. If the interest is not transferred to a purchaser or purchasers for any reason within the two hundred seventy (270) Day period, the interest may only be transferred by again complying with the procedures set forth in this Section 1(a) (Right of First Negotiation) of Attachment P (Sale of Facility by Seller); provided, however, if Seller and the prospective purchaser have entered into definitive agreement(s) for the sale of the interest that was reasonably expected to close within such two hundred seventy (270) Day period and such agreement(s) remain in full force and effect between Seller and such prospective purchaser and are subject to conditions precedent that are expected to be satisfied within a reasonable period, the two hundred seventy (270) Day period shall be extended as to such agreement(s) and such prospective purchaser for up to one hundred eighty (180) additional Days or, if sooner, until such date that such agreement(s) have been terminated, cancelled or otherwise become no longer in full force and effect.
|
(v)
|
After expiration of the Right of First Negotiation Period, Company will not be precluded from providing offers or proposals to Seller along with other prospective purchasers in accordance with any offer or bid procedures established by Seller in its discretion.
|
(b)
|
Change in Ownership Interests and Control of Seller. Commencing as of the Commercial Operations Date, the Right of First Negotiation shall also be triggered by a transfer or sale of an ownership interest in Seller (whether in a single transaction or a series of related or unrelated transactions) following which
|
|
|
P-2
|
(c)
|
Exempt Sales. Exempt Sales shall not trigger a Right of First Negotiation and shall not require the consent of Company. As used herein, "Exempt Sales" means: (i) a change in ownership of the Facility or equity interests in Seller resulting from the direct or indirect transfer or assignment by or of Seller in connection with financing or refinancing of the Facility ("Financing Purposes"), including, without limitation, any exercise of rights or remedies (including foreclosure) with respect to Seller's right, title, or interest in the Facility or equity interests in Seller undertaken by any financing party in accordance with applicable financing documents, and including, without limitation, (x) a sale and leaseback of the Facility, (y) an inverted lease, (z) a sale or transfer of equity in Seller to facilitate a tax credit financing (including any partnership "flip" transaction), (ii) a disposition of equipment in the ordinary course of operating and maintaining the Facility, (iii) a sale that does not result in a Change in Control, and (iv) a sale or transfer of any interest in Seller or the Facility to one or more companies directly or indirectly controlling, controlled by or under common control with Seller.
|
(d)
|
Seller's Right to Transfer. The provisions of this Section 1(d) (Seller's Right to Transfer) shall apply (i) from the Execution Date through the Commercial Operations Date and (ii) from the Commercial Operations Date in the event that Company does not consummate a purchase pursuant to its exercise of the Right of First Negotiation in accordance with the terms and conditions of this Attachment P (Sale of Facility by Seller). In such circumstances, Seller shall, subject to the prior written consent of Company, which consent shall not be unreasonably withheld, conditioned or delayed, have the right to transfer or sell the Facility to any person or entity which proposes to acquire the Facility with the intent to continue the operation of the Facility in accordance with the provisions of this Agreement pursuant to an assignment of this Agreement. Company shall consent to the assignment of this Agreement to such prospective purchaser upon receiving documentation from Seller establishing, to Company's reasonable satisfaction, that the assignee (i) has a tangible net worth of $100,000,000 or a credit rating of "BBB-" or better and has the ability to perform its financial obligations hereunder (or provides a guaranty from an entity that meets this description) in a manner consistent with the terms and conditions of this Agreement; and (ii) has experience in the ownership and at least five (5) years of experience in the
|
|
|
P-3
|
(e)
|
Purchase and Sale Agreement and PUC Approval. In the event that Company exercises its Right of First Negotiation under Section 1(a) (Right of First Negotiation) of this Attachment P (Sale of Facility by Seller) and the Parties conclude a purchase and sale agreement, such agreement shall contain, at a minimum, the terms set forth in Section 4 (Purchase and Sale Agreement) of this Attachment P (Sale of Facility by Seller), and such agreement shall be subject to PUC Approval as provided in Section 5 (PUC Approval) of this Attachment P (Sale of Facility by Seller).
|
(f)
|
Right of First Refusal. In the event the Parties fail to agree upon a sale of the Facility or an interest in the Facility to Company prior to the expiration of the Right of First Negotiation Period, the provisions of this Section 1(f) (Right of First Refusal) of this Attachment P (Sale of Facility by Seller)shall apply if (i) Seller thereafter offers to sell the Facility to a third party for less than (as applicable) the final amount Company had offered to purchase the Facility or (ii) an ownership interest in the Facility that would result in a Change in Control is offered for sale to a third party that is less than the proportionate share of (as applicable) the final amount Company had offered to purchase the Facility. (By way of example, if the final amount offered by Company to purchase the Facility was $100, and the ownership interest being offered for sale is 75%, the "proportionate share" is $75, such that an offer to sell such ownership interest for less than $75 would trigger this Section 1(f) (Right of First Refusal) of this Attachment P (Sale of Facility by Seller).) Seller shall notify Company in writing of an offer that triggers this Section 1(f) (Right of First Refusal) of this Attachment P (Sale of Facility by Seller) and Company shall have the right to purchase the Facility for the amount of such offer on similar terms and conditions consistent with this Attachment P (Sale of Facility by Seller) and subject to PUC Approval; provided, that Company shall have one (1) month in which to notify Seller of its intent to exercise this right. If the offer of which Seller notifies Company as aforesaid is an offer to sell the Facility, Company shall have the right to purchase the Facility for the amount of such offer on similar terms and conditions. If the offer of which Seller notifies Company as aforesaid is an offer to sell an ownership interest that could result in a Change in Control, Company shall have the right to purchase the Facility by a price that is proportionate to the amount at which such ownership interest was offered on the terms and conditions to be negotiated by the Parties on the basis of Section 4 (Purchase and Sale
|
|
|
P-4
|
2.
|
Company's Right of First Negotiation to Purchase at End of Term.
|
(a)
|
Option of Exclusive Negotiation Period. Company shall have the option of an exclusive negotiation period to negotiate a purchase of the Facility on the last Day of the Term, and all rights of Seller therein or relating thereto. Company shall indicate its preliminary interest in exercising the option for exclusive negotiation by delivering to Seller a notice of its preliminary interest not less than two (2) years prior to the last Day of the Term. If Company fails to deliver such notice by such date, Company's option shall terminate.
|
(b)
|
Negotiations. Once Company has given such notice of preliminary interest to Seller, for a period not to exceed three (3) months, Company shall have the exclusive right to negotiate in good faith with Seller, the terms of a purchase and sale agreement pursuant to which Company may purchase the Facility, which purchase and sale agreement shall include, without limitation, the terms set forth in Section 4 (Purchase and Sale Agreement) of this Attachment P (Sale of Facility by Seller) and a price equal to the Offer Price as presented by Seller in accordance with the procedures identified in Section 1(a)(i) through (v) of this Attachment P (Sale of Facility by Seller). The Parties may agree in writing to extend this period for negotiations. (Such period, as extended as aforesaid, is referred to herein as the "Exclusive Negotiation Period.") Seller shall not solicit any offers or negotiate the terms for the sale of the Facility with any other entity during the Exclusive Negotiation Period, unless, during the Exclusive Negotiation Period, Company gives written notice that such negotiations are terminated.
|
(c)
|
Purchase and Sale Agreement and PUC Approval. In the event that Company exercises its right of exclusive negotiation under Section 2(a) (Option of Exclusive Negotiation Period) of this Attachment P (Sale of Facility by Seller) and the Parties conclude a purchase and sale agreement pursuant to Section 2(b) (Negotiations) of this Attachment P (Sale of Facility by Seller), such agreement shall contain, at a minimum, the terms set forth in Section 4 (Purchase and Sale Agreement) of this Attachment P (Sale of Facility by Seller), and such agreement shall be subject to PUC Approval as provided in Section 5 (PUC Approval) of this Attachment P (Sale of Facility by Seller).
|
(d)
|
Right of First Refusal. In the event the Parties fail to agree upon a sale of the Facility to Company prior to the expiration of the Exclusive Negotiation Period provided in Section 2(b) (Negotiations) of this Attachment P (Sale of Facility by Seller), and Seller thereafter offers to sell the Facility to a third party for less than the final amount Company had offered to purchase the Facility, Seller shall notify
|
|
|
P-5
|
3.
|
Procedure to Determine Fair Market Value of the Facility.
|
(a)
|
If the Parties have agreed to effectuate a sale of the Facility pursuant to Section 3.2(I)(5) (Consolidation) and are unable to agree on the fair market value of the Facility, each of Company and Seller shall engage the services of an independent appraiser experienced in appraising power generation assets similar to the Facility to determine separately the fair market value of the Facility. Subject to the appraisers' execution and delivery to Seller of a suitable confidentiality agreement in form reasonably acceptable to Seller, Seller shall provide both appraisers full access to the books, records and other information related to the Facility required to conduct such appraisal. Company shall pay all reasonable fees and costs of both appraisers, subject to Section 3(c) of this Attachment P (Sale of Facility by Seller). Each of Company and Seller shall use reasonable efforts to cause its appraisal to be completed within two (2) months following the engagement of the independent appraisers. If for any reason (other than failure by Seller to provide full access to Company's appraiser) one of the appraisals is not completed within such two (2) month period, the results of the other, completed appraisal shall be deemed to be the Appraised Fair Market Value of the Facility. Each Party may provide to both appraisers (with copies to each other) a list of factors which the Parties suggest be taken into consideration when the appraisers generate their appraisals.
|
(b)
|
Company and Seller shall exchange the results of their respective appraisals when completed and, in connection therewith, the Parties and their appraisers shall confer in an attempt to agree upon the fair market value of the Facility.
|
(c)
|
If, within thirty (30) Days after completion of both appraisals, the Parties cannot agree on a fair market value for the Facility, within ten (10) Days thereafter, the first two appraisers shall by mutual consent choose a third independent appraiser. If the first two appraisers fail to agree upon a third appraiser, such appointment shall be made by DPR upon application of either Party. The Parties shall direct the third appraiser (i) to select one of the appraisals generated by the first two appraisers as the Appraised Fair Market Value of the Facility (without compromise, aka "baseball" arbitration), and (ii) to complete his or her work within one month following his or her retention. If the third appraiser selects the appraisal originally generated by Seller's appraiser, Company shall pay the fees and costs of the third appraiser. If the third appraiser selects the appraisal
|
|
|
P-6
|
(d)
|
The "Appraised Fair Market Value of the Facility" means the fair market value determined by appraisal pursuant to Section 3(a) or Section 3(c) of this Attachment P (Sale of Facility by Seller) as applicable.
|
4.
|
Purchase and Sale Agreement. The purchase and sale agreement ("PSA") concluded by the Parties pursuant to this Attachment P (Sale of Facility by Seller) (as applicable) shall contain, among other provisions, the following:
|
(a)
|
Seller shall, as of the closing of the sale, convey title to the Facility consistent with the state of title in existence as of the date of execution of the PSA, including all rights of Seller in the Facility or relating thereto, free and clear of all liens, claims, encumbrances, or rights of others, except any Permitted Lien;
|
(b)
|
To the extent assignable or transferrable, Seller shall assign or transfer to Company all of Seller's interest in all Project Documents and Governmental Approvals that are then in effect and that are utilized for the operation or maintenance of the Facility;
|
(c)
|
Seller shall execute and deliver to Company such deeds, bills of sale, assignments and other documentation as Company may reasonably request to convey title to the Facility consistent with the state of title in existence as of the date of execution of the PSA, free from all liens, claims, encumbrances, or rights of others, except any Permitted Lien;
|
(d)
|
Seller shall cause all liens on the Facility for monies owed (including liens arising from Financing Documents), and any liens in favor of Seller's affiliates, to be released prior to closing on the sale of the Facility to Company;
|
(e)
|
Seller shall warrant, as of the date of the closing of the sale of the Facility to Company, title to the Facility consistent with the state of title in existence as of the date of execution of the PSA, is free and clear of all other liens, claims, encumbrances and rights of others, except any Permitted Lien;
|
(f)
|
Company shall have no liability for damages (including without limitation, any development and/or investment losses, liabilities or damages, and other liabilities to third parties) incurred by Seller on account of Company's purchase of the Facility, nor any other obligation to Seller except for the purchase price, and Seller shall indemnify Company against any such losses, liabilities or damages;
|
(g)
|
Company shall assume all of Seller's obligations with respect to the Facility accruing from and after the date of closing on the sale of the Facility to Company, including (i) to the extent assignable, all Permits held by, for, or related to the
|
|
|
P-7
|
(h)
|
Seller shall indemnify Company against all of Seller's obligations with respect to the Facility accruing through the date of closing the sale of the Facility to Company, and Company shall indemnify Seller against all of Company's obligations with respect to the Facility accruing from and after the date of closing on the sale of the Facility to Company;
|
(i)
|
Unless otherwise agreed to by the Parties, Seller makes no representations or warranties with respect to the condition of the Facility, and Company shall purchase the Facility on an as-is basis;
|
(j)
|
Seller shall warrant that, except as disclosed to and approved by Company in writing at least thirty (30) Days prior to the date of closing on the sale of the Facility to Company, the Facility has been operated by Seller in conformity with all Laws;
|
(k)
|
Seller shall warrant that Seller provided full access to Company and each appraiser in connection with the procedure to determine fair market value provided in Section 3 (Procedure to Determine Fair Market Value of the Facility) of this Attachment P (Sale of Facility by Seller);
|
(l)
|
If applicable, Seller's lease of the Site from Company will terminate and Seller will relinquish all rights, privileges and obligations relating to such lease; and
|
(m)
|
Seller shall maintain the Facility in accordance with Good Engineering and Operating Practices between appraisal and the closing date.
|
|
|
P-8
|
5.
|
PUC Approval. Any purchase and sale agreement related to the Facility entered into by the Parties is subject to approval by the PUC and the Parties' respective obligations thereunder are conditioned upon receipt of such approval, except as specifically provided otherwise therein.
|
(a)
|
Company shall submit the purchase and sale agreement to the PUC for approval within thirty (30) Days after execution by both Parties, but Company does not extend any assurances that PUC approval will be obtained. Seller will provide reasonable cooperation to expedite obtaining an approval order from the PUC, including providing information requested by the PUC and parties to the PUC proceeding in which approval is being sought. Seller understands that lack of cooperation may result in Company's inability to file an application with the PUC and/or failure to receive PUC approval. Unless otherwise agreed to in writing by the Parties, neither Company nor Seller shall seek reconsideration, appeal, or other administrative or judicial review of any unfavorable PUC order. The Parties agree that neither Party has control over whether or not a PUC approval order will be issued and each Party hereby assumes any and all risk arising from, or relating in any way to, the inability to obtain a satisfactory PUC order and hereby releases the other Party from any and all claims relating thereto.
|
(b)
|
Seller shall seek participation without intervention in the PUC docket for approval of the purchase and sale agreement pursuant to applicable rules and orders of the PUC. The scope of Seller's participation shall be determined by the PUC. However, Seller expressly agrees to seek participation for the limited purpose and only to the extent necessary to assist the PUC in making an informed decision regarding the approval of the purchase and sale agreement. If the Seller chooses not to seek participation in the docket, then Seller expressly agrees and knowingly waives the right to claim, before the PUC, in any court, arbitration or other proceeding, that the information submitted and the application requesting the PUC approval are insufficient to meet Company's burden of justifying that the terms of the purchase and sale agreement are just and reasonable and in the public interest, or otherwise deficient in any manner for purposes of supporting the PUC's approval of the purchase and sale agreement. Seller shall not seek in the docket and Company shall not disclose any confidential information to Seller that would provide Seller with an unfair business advantage or would otherwise harm the position of others with respect to their ability to compete on equal and fair terms.
|
(c)
|
In order to constitute an approval order from the PUC under this Section 5 (PUC Approval) of this Attachment P (Sale of Facility by Seller), the order must approve the purchase and sale agreement, Company's funding arrangements and Company's acquisition of the Facility, shall not contain any terms and conditions
|
|
|
P-9
|
(d)
|
The Final Non-Appealable Order from the PUC must be obtained within six (6) months of the submission of the purchase and sale agreement to the PUC, or any extension of such period as agreed by the Parties in writing within ten (10) Days of the expiration of the six (6) month period; provided, however, that if the purchase and sale agreement governs a sale of the Facility executed pursuant to Section 3.2(I)(5) (Consolidation) of this Agreement, the Final Non-Appealable Order must be obtained within twelve (12) months of the submission of the purchase and agreement to the PUC, or any extension of such period as agreed by the Parties in writing within ten (10) Days of the expiration of the twelve (12) month period. The term "Final Non-appealable Order from the PUC" means an Approval Order from the PUC (i) that is not subject to appeal to any Circuit Court of the State of Hawaii, Intermediate Court of Appeals of the State of Hawaii, or the Supreme Court of the State of Hawaii, because the period permitted for such an appeal has passed without the filing of notice of such an appeal, or (ii) that was affirmed on appeal to any Circuit Court of the State of Hawaii, Intermediate Court of Appeals of the State of Hawaii, or the Supreme Court of the State of Hawaii, or was affirmed upon further appeal or appellate process, and that is not subject to further appeal, because the jurisdictional time permitted for such an appeal and/or further appellate process such as a motion for reconsideration or an application for writ of certiorari has passed without the filing of notice of such an appeal or the filing for further appellate process. Such Final Non-Appealable Order from the PUC shall constitute and be referred to as "PUC Approval" for purposes of this Attachment P (Sale of Facility by Seller).
|
(e)
|
If a Final Non-Appealable Order from the PUC has not been obtained prior to the deadline provided in Section 5(b) of this Attachment P (Sale of Facility by Seller), either Party may give written notice to the other Party that it does not wish to proceed further with a sale of the Facility to Company.
|
(f)
|
If the Final Non-appealable Order from the PUC does not satisfy the conditions set forth in Section 5(a) of this Attachment P (Sale of Facility by Seller), either (i) the Parties may agree to renegotiate and submit a revised purchase and sale agreement to the PUC, or (ii) either Party may give written notice to the other Party that it does not wish to proceed further with a sale of the Facility to Company.
|
6.
|
Make Whole Amount. For purposes of Section 3.2(I)(5) (Consolidation), the "Make Whole Amount" shall be equal to the sum of the following: (a) Seller's book value (including depreciation on a twenty-five (25) year straight line basis) of all actual verifiable costs of studies, designs, engineering, and construction of the Facility and all Interconnection Facilities (including any Company-Owned Interconnection Facilities paid for by Seller), including cancellation charges and other costs of unwinding
|
|
|
P-10
|
|
|
P-11
|
|
|
Q-1
|
Bodily Injury & Property Damage
|
$10,000,000 combined single limit per occurrence and $20,000,000 annual aggregate
|
|
|
R-1
|
|
|
R-2
|
|
|
R-3
|
|
|
S-1
|
1
|
Monthly Progress Report for _______________________, 20___
|
1.1.1.
|
[Insert Condition Precedents from Section 2.3(A) of the Agreement and Guaranteed Project Milestones from Attachment K and Reporting Milestones from Attachment L, if needed]
|
1.1.2.
|
Financing
|
1.1.3.
|
Development Governmental Approvals
|
1.1.4.
|
Land Rights for Company-Owned Interconnection Facilities
|
1.1.5.
|
Design and Engineering
|
1.1.6.
|
Major Equipment Procurement
|
1.1.7.
|
Construction
|
1.1.8.
|
Interconnection
|
1.1.9.
|
Startup Testing and Commissioning
|
1.1.10.
|
Site Control – COMPLETED
|
1.2
|
Major activities recently performed
|
1.2.1
|
[Insert Condition Precedents from Section 2.3(A) of the Agreement and Guaranteed Project Milestones from Attachment K and Reporting Milestones from Attachment L, if needed]
|
1.2.2
|
Financing
|
|
|
S-2
|
1.2.3
|
Development Government Approvals
|
1.2.4
|
Land Rights for Company-Owned Interconnection Facilities
|
1.2.5
|
Design and Engineering
|
1.2.6
|
Major Equipment Procurement
|
1.2.7
|
Construction
|
1.2.8
|
Interconnection
|
1.2.9
|
Startup Testing and Commissioning
|
1.3
|
Major activities expected during the current month
|
1.3.1
|
Construction Milestones
|
1.3.2
|
Financing
|
1.3.3
|
Government Approvals
|
1.3.4
|
Land Rights for Company-Owned Interconnection Facilities
|
1.3.5
|
Design and Engineering
|
1.3.6
|
Major Equipment procurement
|
1.3.7
|
Construction
|
1.3.8
|
Interconnection
|
1.3.9
|
Startup Testing and Commissioning
|
2
|
Project Development and Construction Schedule
|
|
|
S-3
|
3
|
Conditions Precedent and Milestones
|
3.1
|
Condition Precedent and Milestone schedule
|
Condition Precedent
|
Status
|
Remedial Action Plan (if missed)
|
Guaranteed/Reporting
|
|
|
Milestone
|
Status
|
Remedial Action Plan (if missed)
|
4
|
Financing
|
Activity
|
Completion Date
|
Authorization of Funds from Equity Partners and/or Investors
|
__/__/____ (expected / actual)
|
Ability to Draw upon such Funds for Design and/or Construction
|
__/__/____ (expected / actual)
|
|
|
S-4
|
5
|
Governmental Approvals
|
5.1
|
Environmental Permits
|
5.2
|
Governmental Approvals
|
5.3
|
Permit Notices received from EPC Contractor
|
6
|
Land Rights for the Company-Owned Interconnection Facilities
|
6.1
|
Table of Land Rights schedule for Company-Owned Interconnection Facilities
|
Activity
|
Completion Date
|
|
__/__/____ (expected / actual)
|
|
__/__/____ (expected / actual)
|
|
|
S-5
|
7
|
Design and Engineering
|
7.1
|
Design and engineering schedule
|
Name of EPC Contractor / Subcontractor
|
Activity
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
8
|
Major Equipment Procurement.
|
8.1
|
Major equipment to be procured
|
Equipment Description
|
Manufacturer
|
Delivery Date
(indicate whether expected or actual)
|
Installation Date
(indicate whether expected or actual)
|
|
|
__/__/____
(expected / actual)
|
__/__/____
(expected / actual)
|
|
|
__/__/____
(expected / actual)
|
__/__/____
(expected / actual)
|
Equipment Description
|
No. Ordered
|
No. Made
|
No. On‑Site
|
No. Installed
|
No. Tested
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
Construction
|
9.1
|
Construction activities
|
|
|
S-6
|
Activity
|
EPC Contractor / Subcontractor
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
9.2
|
EPC Contractor Monthly Construction Progress Report.
|
10
|
Interconnection
|
10.1
|
Interconnection activities
|
Activity
|
Name of EPC Contractor / Subcontractor
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
11
|
Startup Testing and Commissioning
|
11.1
|
Startup testing and commissioning activities
|
Activity
|
Name of EPC Contractor / Subcontractor
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
|
|
S-7
|
12
|
Safety and Health Reports
|
12.1
|
Accidents
|
12.2
|
Work stoppages
|
13
|
Certification
|
|
|
S-8
|
|
|
T-1
|
|
|
U-1
|
|
|
V-1
|
|
|
W-1
|
|
|
W-2
|
|
|
W-3
|
|
|
|
[ ] Unit Trip
|
Start Time
|
|
|
[ ] Test
|
End Time
|
|
|
[ ] Forced Outage
|
Duration (Hr/Min)
|
|
|
[ ] Failure to Start
|
Derating (MW)
|
|
|
[ ] Risk Condition
|
|
|
|
[ ] Force Majeure
|
|
|
|
[ ] Other
|
|
|
|
[ ] Maintenance Derating
[ ] Forced Derating
[ ] Maintenance Outage
[ ] Scheduled Outage
[ ] Trip Due to Grid Fault
[ ] Trip Due to Frequency Excursions
[ ] Trip Due to Voltage Excursions
|
|
|
X-1
|
|
|
X-2
|
i.
|
monitor and control both the capacity and the energy output of the Facility consistent with this Agreement;
|
a.
|
as required for the Company System Operator to dispatch the Facility as specified and approved by Company;
|
b.
|
for telemetry of electrical quantities such as gross MW, gross MVAR, net MW, net MVAR, power factors, voltages and currents and other quantities as identified by Company;
|
c.
|
monitor and control equipment such as circuit breakers and switches and other equipment as identified by Company.
|
|
|
Y-1
|
d.
|
Provide alarms for abnormal conditions.
|
|
|
Y-2
|
|
|
Y-3
|
|
|
Y-4
|
|
|
Y-5
|
|
|
Y-6
|
|
|
Y-7
|
|
|
Y-8
|
|
|
Z-1
|
2.
|
Renewable Portfolio Standards. Pursuant to Section 2.1(G) of the Agreement, Seller shall develop Seller’s RFP Modifications Proposal in the event that as a result of any RPS Amendment, the electric energy delivered from the Facility should no longer qualify as “renewable electrical energy”.
|
|
|
AA-1
|
3.
|
Seller’s RPS Modifications Proposal. Upon receipt of Seller's RPS Modifications Proposal, Company will evaluate Seller's RPS Modifications Proposal. Seller shall assist Company in performing such evaluation as and to the extent reasonably requested by Company (including, but not limited to, providing such additional information as Company may reasonably request and participating in meetings with Company as Company may reasonably request).
|
4.
|
RPS Modifications Document. If, following Company's evaluation of Seller's RPS Modifications Proposal, Company desires to consider the implementation by Seller of the changes recommended in Seller's RPS Modifications Proposal, Company shall provide Seller with written notice to that effect, such notice to be issued to Seller within one hundred eighty (180) Days of receipt of Seller's RPS Modifications Proposal, and Company and Seller shall proceed to negotiate in good faith a document setting forth the specific changes to the Agreement that are necessary to implement such RPS Modifications Proposal (the "RPS Modifications Document"). A decision by Company to initiate negotiations with Seller as aforesaid shall not constitute an acceptance by Company of any of the details set forth in Seller's RPS Modifications Proposal, including but not limited to the RPS Modifications and the RPS Pricing Impact. Any adjustment to the Energy Charge and Capacity Charge pursuant to such RPS Modifications Document shall be limited to the RPS Pricing Impact. The time periods set forth in such RPS Modifications Document as to the effective date for the RPS Modifications shall be measured from the date the PUC order with respect to such RPS Modifications becomes non-appealable as provided in Section 6 (PUC RPS Order) of this Attachment AA (Renewable Portfolio Standards) (“PUC RPS Order”).
|
5.
|
Failure to Reach Agreement. If Company and Seller are unable to agree upon and execute a RPS Modifications Document within one hundred eighty (180) Days of Company's written notice to Seller pursuant to Section 4 (RPS Modifications Document) of this Attachment AA (Renewable Portfolio Standards), Company shall have the option of declaring the failure to reach agreement on and execute such Document to be a dispute and submit such dispute to an Independent Evaluator for the conduct of a determination pursuant to Section 9 (Dispute) of this Attachment AA (Renewable Portfolio Standards). Any decision of the Independent Evaluator, rendered as a result of such dispute shall include a form of a RPS Modifications Document as described in Section 4 (RPS Modifications Document) of this Attachment AA (Renewable Portfolio Standards).
|
6.
|
PUC RPS Order. No RPS Modifications Document shall constitute an amendment to the Agreement unless and until a PUC RPS Order issued with respect to such Document has become non-appealable. Once the condition of the preceding sentence has been satisfied, such RPS Modifications Document shall constitute an amendment to this Agreement. To be "non-appealable" under this Section 6 (PUC RPS Order), such PUC RPS Order shall be either (i) not subject to appeal to any Circuit Court of the State of Hawaii or the Supreme Court of the State of Hawaii, because the thirty (30) Day period (accounting for weekends and holidays as appropriate) permitted for such an appeal has passed without the filing of notice of such an appeal, or (ii) affirmed on appeal to any Circuit Court of
|
|
|
AA-2
|
7.
|
Company’s Rights. The rights granted to Company under Section 4 (RPS Modifications Document) of this Attachment AA (Renewable Portfolio Standards) and Section 5 (Failure to Reach Agreement) of this Attachment AA (Renewable Portfolio Standards) above are exclusive to Company. Seller shall not have a right to initiate negotiations of a RPS Modifications Document or to initiate dispute resolution under Section 9 (Dispute) of this Attachment AA (Renewable Portfolio Standards), as a result of a failure to agree upon and execute any RPS Modifications Document.
|
8.
|
Limited Purpose. This Attachment AA (Renewable Portfolio Standards) is intended to specifically address the implementation of reasonable measures to cause the electric energy delivered from the Facility to come within the revised definition of "renewable electrical energy" under any RPS Amendment and is not intended for either Party to provide a means for renegotiating any other terms of the Agreement. Revisions to the Agreement in accordance with the provisions of this Attachment AA (Renewable Portfolio Standards) are not intended to increase Seller's risk of non-performance or default.
|
9.
|
Dispute. If Company decides to declare a dispute as a result of the failure to reach agreement and execute a RPS Modifications Document pursuant to Section 5 (Failure to Reach Agreement) of this Attachment AA (Renewable Portfolio Standards), it shall provide written notice to that effect to Seller. Within twenty (20) Days of delivery of such notice Seller and Company shall agree upon an Independent Evaluator to resolve the dispute regarding a RPS Modifications Document. The Independent Evaluator shall be reasonably qualified and expert in renewable energy power generation, matters relating to the Performance Standards, financing, and power purchase agreements. If the Parties are unable to agree upon an Independent Evaluator within such twenty (20)-Day period, Company shall apply to the PUC for the appointment of an Independent Evaluator. If an Independent Observer retained under the Competitive Bidding Framework is qualified and willing and available to serve as Independent Evaluator, the PUC shall appoint one of the persons or entities qualified to serve as an Independent Observer to be the Independent Evaluator; if not, the PUC shall appoint another qualified person or entity to serve as Independent Evaluator. In its application, Company shall ask the PUC to appoint an Independent Evaluator within thirty (30) Days of the application.
|
|
|
AA-3
|
(a)
|
Promptly upon appointment, the Independent Evaluator shall request the Parties to address the following matters within the next fifteen (15) days:
|
(b)
|
Within ninety (90) Days of appointment, the Independent Evaluator shall render a decision unless the Independent Evaluator determines it needs to have additional time, not to exceed forty-five (45) Days, to render a decision.
|
(c)
|
The Parties shall assist the Independent Evaluator throughout the process of preparing its review, including making key personnel and records available to the Independent Evaluator, but neither Party shall be entitled to participate in any meetings with personnel of the other Party or review of the other Party's records. However, the Independent Evaluator will have the right to conduct meetings, hearings or oral arguments in which both Parties are represented. The Parties may meet with each other during the review process to explore means of resolving the matter on mutually acceptable terms.
|
(d)
|
The following standards shall be applied by the Independent Evaluator in rendering his or her decision: (i) if it is not technically or operationally feasible for Seller to implement reasonable measures required to cause the electric energy delivered from the Facility to come within such revised definition of "renewable electrical energy" under the RPS Amendment in question, the Independent Evaluator shall determine that the Agreement shall not be amended to comply with such changes in RPS (unless the Parties agree otherwise); (ii) if it is technically or operationally feasible for Seller to implement reasonable measures required to cause the electric energy delivered from the Facility to come within such revised definition of "renewable electrical energy" under RPS, the Independent Evaluator shall incorporate such required changes into a RPS Modifications Document including (aa) Seller's RPS Modifications, (bb) pricing terms that incorporate the RPS Pricing Impact, and (cc) contract terms and
|
|
|
AA-4
|
(e)
|
The fees and costs of the Independent Evaluator shall be paid by Company up to the first $30,000 of such fees and costs; above those amounts, the Party that is not the prevailing Party shall be responsible for any such fees and costs; provided, if neither Party is the prevailing Party, then the fees and costs of the Independent Evaluator above $30,000, shall be borne equally by the Parties. The Independent Evaluator in rendering his or her decision shall also state which Party prevailed over the other Party, or that neither Party prevailed over the other.
|
|
|
AA-5
|
1.
|
The actual dynamic response of the unit(s) will be confirmed to allow Company transient stability model to reflect the as-left conditions of the unit. To achieve this, the Generator Acceptance Test shall include the following:
|
a.
|
A final review by Company engineers of the equipment installed to control the operation and protect the plant will be needed upon installation and prior to the start of commercial operation.
|
b.
|
The review will include off-line tuning and testing results of the excitation and governor control system and the IEEE block diagram utilized for the PSS/E dynamics program.
|
i.
|
During the commissioning of the actual unit, governor and excitation system testing (typically impulse and step function tests) will be conducted to ensure that similar, well damped, expected responses will be produced by the project. Test results shall be compared to the provided models’ performance and the comparison shall be reported to the Company (Model Benchmarking).
|
ii.
|
The as-left parameters obtained from governor and exciter tuning and any recommended changes to the provided models will be provided for use in the Company planning model.
|
2.
|
The Generator Acceptance Test shall include but not be limited to tests to verify the following Performance Requirements at the Generating Unit(s):
|
a.
|
Section 3.a. (Voltage/Reactive Power Requirements) Test that the Generator(s) is able to regulate terminal voltage and meet the reactive power capabilities of the Generator Capability Curve(s). Test Voltage Ride-through.
|
b.
|
Section 3.g. (Frequency Requirements). Test that the Generator(s) Droop Characteristic and Ride-throughs.
|
|
|
BB-1
|
c.
|
Section 3.j. (Harmonics Standards). Ensure Generator(s) output harmonic content is within limits.
|
d.
|
Section 3.m. (Inertia Constant).
|
e.
|
Section 3.o. (Short Circuit Ratio).
|
f.
|
Section 3.p. (Open Circuit Transient Field Time Constant).
|
g.
|
Section 3.n.ii. (Response Ratio)
|
h.
|
Section 3.n.i. (Ceiling Voltage).
|
i.
|
Section 3.n.iii. (Excitation Source Immunity).
|
j.
|
Section 3.n.iv. (Field Forcing Ability).
|
k.
|
Section 3.s. (Cycling of the Generating Units).
|
l.
|
Section 3.t. (Start-up Periods).
|
m.
|
Section 3.d (Ramp Rates)
|
|
|
BB-2
|
(in thousands,
except per share amounts)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||
Net income for common stock
|
|
$
|
217,882
|
|
|
$
|
201,774
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
Weighted-average number of common shares outstanding
|
|
108,949
|
|
|
108,855
|
|
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|||||
Adjusted weighted-average number of common shares outstanding
|
|
109,407
|
|
|
109,146
|
|
|
108,933
|
|
|
108,309
|
|
|
106,721
|
|
|||||
Basic earnings per common share
|
|
$
|
2.00
|
|
|
$
|
1.85
|
|
|
$
|
1.52
|
|
|
$
|
2.30
|
|
|
$
|
1.50
|
|
Diluted earnings per common share
|
|
$
|
1.99
|
|
|
$
|
1.85
|
|
|
$
|
1.52
|
|
|
$
|
2.29
|
|
|
$
|
1.50
|
|
(1)
|
I have reviewed this report on Form 10-K for the year ended December 31, 2019 of Hawaiian Electric Industries, Inc. (“registrant”);
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2020
|
|
|
/s/ Constance H. Lau
|
|
Constance H. Lau
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2019 of Hawaiian Electric Industries, Inc. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2020
|
|
|
/s/ Gregory C. Hazelton
|
|
Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer
|
|
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2019 of Hawaiian Electric Company, Inc. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2020
|
|
|
/s/ Scott W. H. Seu
|
|
Scott W. H. Seu
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2019 of Hawaiian Electric Company, Inc. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2020
|
|
|
/s/ Tayne S. Y. Sekimura
|
|
Tayne S. Y. Sekimura
|
|
Senior Vice President and Chief Financial Officer
|
(1)
|
The Report complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; as amended, and
|
(2)
|
The consolidated information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of HEI and its subsidiaries as of, and for, the periods presented in this report.
|
/s/ Constance H. Lau
|
|
Constance H. Lau
|
|
President and Chief Executive Officer
|
|
/s/ Gregory C. Hazelton
|
|
Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(1)
|
The Hawaiian Electric Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; as amended, and
|
(2)
|
The Hawaiian Electric information contained in the Hawaiian Electric Report fairly presents, in all material respects, the financial condition and results of operations of Hawaiian Electric and its subsidiaries as of, and for, the periods presented in this report.
|
/s/ Scott W. H. Seu
|
|
Scott W. H. Seu
|
|
President and Chief Executive Officer
|
|
/s/ Tayne S. Y. Sekimura
|
|
Tayne S. Y. Sekimura
|
|
Senior Vice President and Chief Financial Officer
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Business experience for last 5 years and prior positions
with Hawaiian Electric and its affiliates |
Scott W. H. Seu
|
54
|
Hawaiian Electric President and Chief Executive Officer since 2/20
Hawaiian Electric Director since 2/20
· Hawaiian Electric Senior Vice President, Public Affairs, 1/17-2/20
· Hawaiian Electric Vice President, System Operation, 5/14 to 1/17
· Hawaiian Electric Vice President, Energy Resources and Operations, 1/13 to 5/14
· Hawaiian Electric Vice President, Energy Resources, 8/10 to 12/12
· Hawaiian Electric Manager, Resource Acquisition Department, 3/09 to 8/10
· Hawaiian Electric Manager, Energy Projects Department, 5/04 to 3/09
· Hawaiian Electric Manager, Customer Installations Department, 1/03 to 5/04
· Hawaiian Electric Manager, Environmental Department, 4/98 to 12/02
· Hawaiian Electric Principal Environmental Scientist, 1/97 to 4/98
· Hawaiian Electric Senior Environmental Scientist, 5/96 to 12/96
· Hawaiian Electric Environmental Scientist, 8/93 to 5/96
|
Jimmy D. Alberts
|
59
|
Hawaiian Electric Senior Vice President, Business Development & Strategic Planning since 2/19
· Hawaiian Electric Senior Vice President, Customer Service, 8/12 to 2/19
· Prior to joining the Company: Kansas City Power & Light, Vice President – Customer Service, 2007-12
|
Colton K. Ching
|
52
|
Hawaiian Electric Senior Vice President, Planning & Technology since 1/17
· Hawaiian Electric Vice President, Energy Delivery, 1/13 to 1/17
· Hawaiian Electric Vice President, Systems Operation & Planning, 8/10 to 12/12
· Hawaiian Electric Manager, Corporate Planning Department, 8/08 to 8/10
· Hawaiian Electric Director, Strategic Initiatives, 12/06 to 8/08
· Hawaiian Electric Director, Transmission Planning Division, 2/05 to 12/06
· Hawaiian Electric Senior Planning Engineer, 4/00 to 2/05
· Hawaiian Electric Electric Engineer II, 9/96 to 4/00
· Hawaiian Electric Designer II, 1/94 to 9/96
· Hawaiian Electric Designer I, 1/91 to 1/94
|
Ronald R. Cox
|
63
|
Hawaiian Electric Senior Vice President, Operations since 1/17
· Hawaiian Electric Vice President, Power Supply, 8/11 to 1/17
· Hawaiian Electric Vice President, Generation & Fuels, 8/10 to 7/11
· Hawaiian Electric Manager, Energy Solutions, 3/09 to 8/10
· Hawaiian Electric Manager, Power Supply Services Department, 1/07 to 3/09
· Hawaiian Electric Manager, Operations Strategic Planning, 11/05 to 1/07
|
Shelee M. T. Kimura
|
46
|
Hawaiian Electric Senior Vice President, Customer Service since 2/19
· Hawaiian Electric Senior Vice President, Business Development & Strategic Planning, 1/17 to 2/19
· Hawaiian Electric Vice President, Corporate Planning & Business Development, 5/14 to 1/17
· HEI Manager, Investor Relations & Strategic Planning, 11/09 to 5/14
· HEI Director, Corporate Finance and Investments, 8/04 to 10/09
|
Name
|
Age
|
Business experience for last 5 years and prior positions
with Hawaiian Electric and its affiliates |
Tayne S. Y. Sekimura
|
57
|
Hawaiian Electric Senior Vice President and Chief Financial Officer since 9/09
· Hawaiian Electric Senior Vice President, Finance and Administration, 2/08 to 9/09 · Hawaiian Electric Financial Vice President, 10/04 to 2/08 · Hawaiian Electric Assistant Financial Vice President, 8/04 to 10/04 · Hawaiian Electric Director, Corporate & Property Accounting, 2/01 to 8/04 · Hawaiian Electric Director, Internal Audit, 7/97 to 2/01 · Hawaiian Electric Capital Budgets Administrator, 5/93 to 7/97 · Hawaiian Electric Capital Budgets Supervisor, 10/92 to 5/93 · Hawaiian Electric Auditor (internal), 5/91 to 10/92 |
Sharon M. Suzuki
|
61
|
President, Maui County and Hawaii Island Utilities since 2/19
· Maui Electric President, 5/12 to 2/19
· Maui Electric CIS Project Resource Manager, 8/11 to 5/12
· Maui Electric Manager, Renewable Energy Services, 3/08 to 5/12 · Maui Electric Manager, Customer Service, 5/04 to 3/08 · Hawaiian Electric Director, Customer Account Services, 8/02 to 5/04 · Hawaiian Electric Residential Energy Efficiency Program Manager, 5/00 to 8/02 · Hawaiian Electric Commercial and Industrial Energy Efficiency Program
Manager, 6/96 to 5/00
· Hawaiian Electric Demand-Side Management Analyst, 7/92 to 6/96 |
•
|
Chief Marketing Officer, Square, Inc., 2015 to 2019
|
•
|
Chief Marketing Officer, Visa, Inc, 2012 - 2014
|
•
|
Executive management, leadership and strategic planning skills from his prior service as Chief Marketing Officer for Square, Inc., where he was responsible for driving brand leadership, customer acquisition, overall product and business growth, as well as from his 10 years as a senior executive for Visa, Inc., where he was responsible for transforming Visa's marketing organization and overseeing key strategic initiatives which included global campaigns.
|
•
|
Extensive finance and investment expertise gained through his positions at Visa, Inc., where he set overall investment strategy and directed investment of a budget of over $800 million across more than 70 markets, including emerging markets.
|
•
|
Substantial experience working across a range of industries, including financial services, technology and energy gained from his over 30 years in the marketing industry, including serving as President of JWT San Francisco (marketing and communications agency).
|
•
|
Skilled business leader who has built and led high-performing organizations from start-up to establishing regional as well as global markets, including founding a successful full-service advertising agency that focused on emerging digital brands.
|
•
|
President and Chief Executive Officer, Zephyr Insurance Company, Inc. (hurricane insurance provider in Hawaii), 4/2018 to present
|
•
|
Chief Consumer Officer, Hawaii Medical Service Association (leading health insurer in Hawaii), 2011 to 6/2017
|
•
|
Executive management, leadership and strategic planning skills developed over three decades as a businessperson and lawyer, and currently as President and Chief Executive Officer of Zephyr Insurance Company.
|
•
|
Business, regulatory, financial stewardship and legal experience from his prior roles as Chief Consumer Officer of HMSA, President and Chief Executive Officer of the Bishop Museum, Chief Operating Officer for the Estate of Samuel Mills Damon (former private trust with assets valued at over $900 million prior to its dissolution), Chairperson of the Hawaii State Board of Land and Natural Resources, Director of the Hawaii State Department of Land and Natural Resources and Vice President and General Counsel at Amfac Property Development Corp.
|
•
|
Corporate governance knowledge and familiarity with financial oversight and fiduciary responsibilities from his prior experience overseeing the HMSA Internal Audit department, as a director for The Gas Company LLC (now Hawaii Gas) and his current service as a trustee of the Parker Ranch Foundation Trust (charitable trust with assets valued at over $350 million), as a director and Audit Committee Chair for Parker Ranch, Inc. (largest ranch in Hawaii with significant real estate assets), as a director and Audit Committee member for Grove Farm Company, Inc. (privately-held community and real estate development firm operating on the island of Kauai) and on the board of Kualoa Ranch, Inc. (private ranch in Hawaii offering tours and activity packages to the public).
|
•
|
Chairman and Chief Executive Officer, BlackSand Capital, LLC (real estate investment firm), since 1/2020, Managing Partner, since 2010
|
•
|
President and CEO, Kobayashi Group, LLC, 2001-10, and Partner, since 2001
|
•
|
From his leadership of BlackSand Capital, LLC and Kobayashi Group, LLC, Hawaii-based real estate investment and development firms he co-founded, he has extensive experience in private equity investment, real estate acquisitions, project origination, procurement of construction and permanent debt facilities and subordinate/mezzanine financing, in addition to planning, financing and leading large real estate development projects and experience with executive management, marketing and government relations.
|
•
|
Organizational governance and financial oversight experience from his current service as a trustee for mutual funds (Hawaiian Tax Free Trusts, from the Aquila Group of Funds) and as a current or past director of several non-profit organizations, including the Shane Victorino Foundation, Inspire the Keiki Foundation, East-West Center Foundation and GIFT Foundation of Hawaii, which he co-founded.
|
•
|
President and CEO, Hawaiian Electric, since February 2020
|
•
|
Senior Vice President, Public Affairs, Hawaiian Electric, January 2017 - February 2020
|
•
|
Vice President, System Operation, Hawaiian Electric, May 2014 - January 2017
|
•
|
Vice President, Energy Resources and Operations, Hawaiian Electric, January 2013 - May 2014
|
•
|
Vice President, Energy Resources, Hawaiian Electric, August 2010 to December 2012
|
•
|
Manager, Resource Acquisition Department, Hawaiian Electric, March 2009 - August 2010
|
•
|
Manager, Energy Projects Department, Hawaiian Electric, May 2004 - March 2009
|
•
|
Manager, Customer Installations Department, Hawaiian Electric, January 2003 - May 2004
|
•
|
Manager, Environmental Department, Hawaiian Electric, April 1998 - December 2002
|
•
|
Principal Environmental Scientist, Hawaiian Electric, January 1997 - April 1998
|
•
|
Senior Environmental Scientist, Hawaiian Electric, May 1996 - December 1996
|
•
|
Environmental Scientist, Hawaiian Electric, August 1993 - May 1996
|
•
|
Deep understanding of Hawaiian Electric from his myriad of roles spanning over 27 years and including the areas of environmental management, customer programs, renewable energy development, system operations and community engagement.
|
•
|
Significant experience engaging with and understanding the needs of the utility’s diverse set of stakeholders, having overseen the company's regulatory, government and community affairs, and corporate relations departments as Senior Vice President, Public Affairs, and having led departments responsible for customer installations, renewable energy procurement and environmental management.
|
•
|
Key leader on resilience and cybersecurity issues, focusing on relationships with key stakeholders, such as the military, and federal, state and local public agencies.
|
•
|
Extensive utility operational expertise having served in leadership roles for utility resource acquisition, energy resources and system operations.
|
•
|
Senior Fellow, Hawaii Community Foundation (statewide charitable foundation), July 2017 - December 2018
|
•
|
CEO, Hawaii Community Foundation, Jan 2016 to June 2017
|
•
|
President and CEO, Hawaii Community Foundation, 1998-2015
|
•
|
Director 1993-2019 and Nominating and Corporate Governance Committee Chair (2004-2019), HEI (parent company of Hawaiian Electric)
|
•
|
Executive management experience with responsibility for overseeing more than $500 million in charitable assets through his leadership of the Hawaii Community Foundation.
|
•
|
Proficiency in risk assessment, strategic planning and organizational leadership as well as marketing and public relations from his current position at the Hawaii Community Foundation and his prior experience as Vice President and Executive Director of the Asia/Pacific Region for The Nature Conservancy and as Founder, Managing Partner and Director of Sunrise Capital Inc.
|
•
|
Knowledge of corporate and nonprofit governance issues gained from his prior service as a director for Grove Farm Company, Inc. and the Independent Sector, his current service on the boards of Feeding America, the Stupski Foundation, the Hawaii Leadership Forum, Elemental Excelerator and the Center for Effective Philanthropy, and through publishing articles and lecturing on governance of tax-exempt organizations.
|
•
|
Extensive experience in conservation/environmental matters in Hawaii and Asia Pacific Region.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
|
2019
|
||
Hawaiian Electric Director
|
$
|
45,000
|
|
Hawaiian Electric Audit & Risk Committee Chair
|
15,000
|
|
|
Hawaiian Electric Audit & Risk Committee Member
|
7,500
|
|
|
Hawaiian Electric Non-Voting Representative to HEI Compensation Committee
|
10,000
|
|
|
Hawaiian Electric Non-Voting Representative to HEI Nominating and Corporate Governance Committee
|
10,000
|
|
Name
|
Fees Earned or
Paid in Cash
($) (1)
|
|
Stock
Awards
($) (2)
|
|
Total
($)
|
|||
Kevin M. Burke
|
49,883
|
|
|
55,000
|
|
|
104,883
|
|
Richard J. Dahl (3)
|
2,617
|
|
|
—
|
|
|
2,617
|
|
Timothy E. Johns, Chairman, Audit & Risk Committee
|
61,671
|
|
|
55,000
|
|
|
116,671
|
|
Micah A. Kane (3)
|
30,673
|
|
|
12,958
|
|
|
43,631
|
|
Bert A. Kobayashi, Jr.
|
51,511
|
|
|
55,000
|
|
|
106,511
|
|
Kelvin H. Taketa (3)
|
29,299
|
|
|
55,000
|
|
|
84,299
|
|
Jeffrey N. Watanabe (3)
|
—
|
|
|
—
|
|
|
—
|
|
1.
|
Represents cash retainers for board and committee service (as detailed in the chart below).
|
2.
|
Represents an HEI stock award in the value of $55,000, as described above under “Stock Awards.” These equity grants were made on June 28, 2019.
|
3.
|
Messrs. Dahl, Kane, Taketa and Watanabe also served on the HEI Board for all or part of 2019. Information concerning their compensation for such service will be set forth in HEI's 2020 Proxy Statement.
|
Name
|
Hawaiian Electric Board ($) (1)
|
|
Hawaiian Electric Audit
Committee ($) |
|
Hawaiian Electric Nonvoting Representative to HEI Compensation Committee ($)
|
|
Hawaiian Electric Nonvoting Representative to HEI Nominating and Corporate Governance Committee ($)
|
|
Total Fees Earned
or Paid in
Cash ($)
|
|||||
Kevin M. Burke
|
45,000
|
|
|
4,883
|
|
|
—
|
|
|
—
|
|
|
49,883
|
|
Richard J. Dahl
|
—
|
|
|
2,617
|
|
|
—
|
|
|
—
|
|
|
2,617
|
|
Timothy E. Johns
|
45,000
|
|
|
15,000
|
|
|
—
|
|
|
1,671
|
|
|
61,671
|
|
Micah A. Kane
|
26,291
|
|
|
4,382
|
|
|
—
|
|
|
—
|
|
|
30,673
|
|
Bert A. Kobayashi, Jr.
|
45,000
|
|
|
—
|
|
|
6,511
|
|
|
—
|
|
|
51,511
|
|
Kelvin H. Taketa
|
29,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,299
|
|
Jeffrey N. Watanabe
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
1.
|
Represents $45,000 annual cash retainer for board service.
|
Name
|
Title
|
Alan M. Oshima*
|
Former Hawaiian Electric President and Chief Executive Officer (CEO)
|
Tayne S. Y. Sekimura
|
Hawaiian Electric Senior Vice President and Chief Financial Officer
|
Jimmy D. Alberts
|
Hawaiian Electric Senior Vice President, Business Development & Strategic Planning
|
Ronald R. Cox
|
Hawaiian Electric Senior Vice President, Operations
|
Susan A. Li**
|
Former Hawaiian Electric Senior Vice President, General Counsel, Chief Compliance & Administrative Officer & Corporate Secretary
|
*
|
Mr. Oshima completed the transition from his role as President and Chief Executive Officer to Senior Executive Advisor effective February 15, 2020.
|
**
|
Ms. Li retired effective February 20, 2020.
|
•
|
Pay should reflect Company performance, particularly over the long-term;
|
•
|
Compensation programs should align executives' interests with those of our shareholders, customers and employees;
|
•
|
Programs should be designed to attract, motivate and retain talented executives who can drive the Company’s success; and
|
•
|
The cost of programs should be reasonable while maintaining their purpose and benefit.
|
•
|
For 2019 annual incentive performance, the following metrics applied to all Hawaiian Electric named executive officers: Hawaiian Electric net income, operation and maintenance expense, customer satisfaction, reliability, safety and utility transformation, each on a consolidated basis.
|
•
|
Long-term incentives comprise a significant portion of each Hawaiian Electric named executive officer’s pay opportunity. For the three-year period that ended December 31, 2019, the Hawaiian Electric named executive officer performance metrics were Hawaiian Electric three-year average annual EPS growth, Hawaiian Electric three-year return on average common equity (ROACE) as a percentage of the ROACE allowed by the Hawaii Public Utilities Commission (PUC) for the period and HEI total shareholder return compared to the companies in the Edison Electric Institute (EEI) Index.
|
•
|
Engages in extensive deliberations in meetings held over several months;
|
•
|
Consults with its independent compensation consultant during and outside of meetings;
|
•
|
Focuses on Hawaiian Electric’s long-term strategy, and nearer-term goals to implement such strategy, in setting performance metrics and goals;
|
•
|
Reviews tally sheets for each named executive officer to understand how the elements of compensation relate to each other and to the compensation package as a whole (the tally sheets include fixed and variable compensation, minimal perquisites and change in pension value for current and past periods);
|
•
|
Examines data and analyses prepared by its independent compensation consultant concerning peer group selection, comparative compensation data and evolving best practices;
|
•
|
Reviews Hawaiian Electric performance and discusses assessments of the individual performance of senior members of management;
|
•
|
Analyzes the reasonableness of incentive payouts in light of the long-term benefits to all stakeholders;
|
•
|
Considers trends in payouts to determine whether incentive programs are working effectively; and
|
•
|
Reviews risk assessments conducted by the HEI and Hawaiian Electric Enterprise Risk Management functions to determine whether compensation programs and practices carry undue risk.
|
•
|
Financial performance objectives for the annual incentive program are linked to Board-approved budget guidelines, and nonfinancial measures (such as customer satisfaction, reliability and safety) are aligned with the interests of all Hawaiian Electric stakeholders.
|
•
|
An executive compensation recovery policy (clawback policy) permits recoupment of performance-based compensation paid to executives found personally responsible for fraud, gross negligence or intentional misconduct that causes a significant restatement of Hawaiian Electric’s financial statements.
|
•
|
Annual and long-term incentive awards are capped at maximum performance levels.
|
•
|
Financial opportunities under long-term incentives are greater than those under annual incentives, emphasizing the importance of long-term outcomes.
|
•
|
Share ownership and retention guidelines requiring named executive officers to hold certain amounts of HEI Common Stock ensure that Hawaiian Electric's named executive officers have a substantial personal stake in the long-term performance of Hawaiian Electric and HEI. The guidelines specific to the named executive officers are discussed in "Share ownership and retention are required throughout employment with the Company" below.
|
•
|
Long-term incentive payouts are 100% equity-based, so executives share in the same upside potential and downside risk as all HEI shareholders.
|
•
|
Annual grants of RSUs and long-term incentives vest over a period of years to encourage sustained performance and executive retention.
|
•
|
Performance-based plans use a variety of financial metrics (e.g., net income, return on average common equity) and nonfinancial performance metrics (e.g., customer satisfaction, reliability and safety) that correlate with long-term value creation for all stakeholders and are impacted by management decisions.
|
•
|
The Hawaiian Electric Board and HEI Compensation Committee continuously monitor risks faced by the enterprise, including through management presentations at quarterly meetings and through periodic written reports from management.
|
Position
|
Value of Stock to be Owned
|
Hawaiian Electric President & CEO
|
2x base salary
|
Other Named Executive Officers
|
1x base salary
|
|
Base Salary1
($)
|
|
Performance-Based Annual Incentive
(Target Opportunity2 as % of Base Salary) |
|
Performance-Based Long-term Incentive
(Target Opportunity2 as % of Base Salary) |
|
Restricted Stock Units (Grant Value as % of Base Salary)
|
||||
Name
|
2018
|
2019
|
|
2018
|
2019
|
|
2018-20
|
2019-21
|
|
2018
|
2019
|
Alan M. Oshima
|
686,750
|
707,350
|
|
75
|
same
|
|
95
|
same
|
|
65
|
same
|
Tayne S. Y. Sekimura
|
361,133
|
371,983
|
|
50
|
same
|
|
50
|
same
|
|
35
|
same
|
Jimmy D. Alberts
|
277,350
|
285,617
|
|
45
|
same
|
|
45
|
same
|
|
35
|
same
|
Ronald R. Cox
|
276,750
|
285,517
|
|
30
|
45
|
|
30
|
45
|
|
20
|
35
|
Susan A. Li
|
285,017
|
300,733
|
|
45
|
same
|
|
45
|
same
|
|
35
|
same
|
1
|
For all named executive officers, base salary increases for 2018 became effective as of March 1, 2018 and base salary increases for 2019 became effective as of March 1, 2019. Accordingly, unless otherwise indicated, amounts referenced as 2018 and 2019 base salary are prorated amounts to include two months of 2017 and 2018 base salary, respectively, and ten months of 2018 and 2019 base salary, respectively.
|
2
|
The threshold and maximum opportunities are 0.5 times target and 2 times target, respectively.
|
2019 Annual Incentive Performance Metrics & Why We Use Them
|
Weight-
ing
|
Goals
|
|
||||
Threshold
|
Target
|
Maximum
|
Result
|
||||
Consolidated Net Income1 focuses on fundamental earnings
|
30%
|
$148.0M
|
$155.8M
|
$166.7M
|
$156.8M
|
||
Consolidated Operation and Maintenance Expense2 measures operational efficiency
|
15%
|
$473.1M
|
$462.6M
|
$452.2M
|
$475.7M
|
||
Consolidated Customer Satisfaction3 focuses on improving the customer experience through all points of contact with the utility
|
15%
|
Consolidated score of 70 in 2 of 4 quarters
|
Consolidated score of 70 in 3 of 4 quarters
|
Consolidated score of 70 in 4 of 4 quarters
|
Consolidated score of 70 in 3 of 4 quarters
|
||
Consolidated Reliability/System Average Interruption Duration Index (SAIDI)4 promotes system reliability for customers
|
5%
|
117.56 minutes
|
108.56 minutes
|
99.57 minutes
|
122.49 minutes
|
||
Consolidated Safety/Total Cases Incident Rate (TCIR)5 rewards improvements in workplace safety, promoting employee well-being and reducing expense
|
2%
|
1.37 TCIR
|
1.03 TCIR
|
0.92 TCIR
|
2.17 TCIR
|
||
Consolidated Safety/Severity Rate6 rewards improvements in workplace safety, promoting employee well-being and reducing expense
|
3%
|
18.53
|
16.00
|
13.46
|
24.19
|
||
Transformation Metrics7 promote achievement of utility transformation initiatives
|
30%
|
Threshold
|
Target
|
Maximum
|
Target
|
1
|
Consolidated Net Income represents Hawaiian Electric’s consolidated GAAP net income for 2019.
|
2
|
Consolidated Operation and Maintenance Expense represents non-fuel expenses of the consolidated utilities and excludes expenses covered by surcharges or otherwise neutral to net income.
|
3
|
Consolidated Customer Satisfaction is based on quarterly results of customer surveys conducted by an outside vendor.
|
4
|
Consolidated Reliability/SAIDI is measured by the average outage duration for each customer served, exclusive of catastrophic events and outages caused by independent power producers, over whose plant maintenance and reliability the utility has limited real-time control.
|
5
|
Consolidated Safety/TCIR is a standard measure of employee safety. TCIR equals the number of Occupational Safety and Health Administration recordable cases as of 12/31/19 × 200,000 productive hours divided by productive hours for the year. Lower TCIR scores reflect better safety performance.
|
6
|
Consolidated Safety/Severity Rate is a measure of the significance of the safety incidents a company experienced based on the number of lost work days incurred. Lost work days occur when an occupational injury or illness prevents an employee from working a full, assigned work shift. Severity rate is calculated by taking the number days away from work due to a work place injury (maximum of 180 days) multiplied by 200,000 and divided by number of hours worked by all employees.
|
7
|
Transformation Metrics focus on achievement of the utility’s transformation goals. For 2019, the Utility Transformation milestones focused on the areas of PSIP execution, electrification of transportation, stakeholder & community engagement, grid modernization implementation, integrated grid planning, one company initiative, regulatory/policy, pole infrastructure enterprise, resilience and leadership & workforce development. The Utility Transformation goal was achieved at target for 2019, meaning that all milestones were achieved.
|
Name
|
2019 Annual Incentive Payout
|
||
Alan M. Oshima
|
$
|
412,527
|
|
Tayne S. Y. Sekimura
|
144,627
|
|
|
Jimmy D. Alberts
|
99,908
|
|
|
Ronald R. Cox
|
99,874
|
|
|
Susan A. Li
|
105,196
|
|
1
|
Hawaiian Electric 3-year Average Annual Net Income Growth is calculated by taking the sum of each full calendar year's (2019, 2020 and 2021, respectively) net income percentage growth over the net income of the prior year and dividing that sum by 3.
|
2
|
3-year ROACE as a % of Allowed Return is Hawaiian Electric's consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for Hawaiian Electric, Maui Electric and Hawaii Electric Light as determined by the PUC for the same period.
|
3
|
HEI Relative TSR compares HEI’s TSR to that of the companies in the Edison Electric Institute (EEI) Index (see Appendix A). For LTIP purposes, TSR is the sum of the growth in price per share of HEI Common Stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period.
|
Name
|
2017-19 Target Opportunity*
(as % of Base Salary)
|
Alan M. Oshima
|
95%
|
Tayne S. Y. Sekimura
|
50%
|
Jimmy D. Alberts
|
45%
|
Ronald R. Cox
|
30%
|
Susan A. Li
|
45%
|
*
|
The threshold and maximum opportunities were 0.5 times target and 2 times target, respectively.
|
2017-19 Long-Term Incentive
|
|
Goals
|
|
||
Performance Metrics & Why We Use Them
|
Weighting
|
Threshold
|
Target
|
Maximum
|
Result
|
Hawaiian Electric 3-year Average Annual EPS Growth1 promotes shareholder value by focusing on EPS growth over a three-year period.
|
30%
|
1.0%
|
3.0%
|
5.0%
|
2.5%
|
3-year ROACE as a % of Allowed Return2 measures Hawaiian Electric’s performance in attaining the level of ROACE it is permitted to earn by its regulator. The focus on ROACE encourages improved return compared to the cost of capital.
|
50%
|
70%
|
80%
|
90%
|
79%
|
HEI Relative TSR3 compares the value created for HEI shareholders to that created by other investor-owned electric companies (EEI Index).
|
20%
|
30th
percentile |
50th
percentile |
75th
percentile |
64th
percentile |
1
|
Hawaiian Electric's 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2017, 2018 and 2019, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by three. For purposes of this goal, Hawaiian Electric EPS is calculated using Hawaiian Electric net income divided by weighted average HEI Common Stock outstanding. Non‑GAAP adjusted net income used in the computation of EPS growth differs from what is reported under GAAP because it excludes the impact of the unusual events in 2016 through 2019 described below under “Adjustments for unusual events - 2017‑19 LTIP.” For a reconciliation of the GAAP and non‑GAAP results, see “Reconciliation of GAAP to Non‑GAAP Measures: Incentive Compensation Adjustments” attached as Appendix B.
|
2
|
3-year ROACE as a % of Allowed Return is Hawaiian Electric's consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for Hawaiian Electric, Maui Electric and Hawaii Electric Light as determined by the PUC for the same period. Non‑GAAP adjusted net income used in the computation of ROACE differs from what is reported under GAAP because it excludes the impact of the unusual events in 2017 through 2019 described below under “Adjustments for unusual events - 2017‑19 LTIP.” For a reconciliation of the GAAP and non‑GAAP results, see “Reconciliation of GAAP to Non‑GAAP Measures: Incentive Compensation Adjustments” attached as Appendix B.
|
3
|
HEI Relative TSR compares HEI’s TSR to that of the companies in the Edison Electric Institute (EEI) Index. For LTIP purposes, TSR is the sum of the growth in price per share of HEI Common Stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period.
|
Name
|
Payout (Shares)
|
Dividend Equivalent (DE) Shares
|
Total (Payout plus DE Shares)
|
Alan M. Oshima
|
19,523
|
2,069
|
21,592
|
Tayne S. Y. Sekimura
|
5,495
|
582
|
6,077
|
Jimmy D. Alberts
|
3,798
|
403
|
4,201
|
Ronald R. Cox
|
2,539
|
269
|
2,808
|
Susan A. Li
|
3,905
|
414
|
4,319
|
•
|
Cash compensation earned for the applicable year is reported in the "Salary," "Nonequity Incentive Plan Compensation" and "All Other Compensation" columns (except see explanation in the paragraph below regarding the 2015-17 and 2016-18 LTIP awards).
|
•
|
The "Stock Awards" column reflects: (i) the opportunity to earn shares of HEI Common Stock under the 2017-19, 2018-20 and 2019-21 LTIP, respectively, if performance metrics are achieved and (ii) RSUs that vest over 2017-20, 2018-21 and 2019-22, respectively, and may be forfeited in whole or in part if the executive leaves before the vesting period ends.
|
•
|
Due to the disclosure timing differences between cash and equity‑based LTIP awards, the amounts in the Summary Compensation Table for 2017 and 2018 are notably higher than, and not comparable to, the reported amount for 2019, and are not reflective of 2017 and 2018 NEO target compensation. This is because LTIP awards made in 2015 and 2016 (settled in 2017 and 2018, respectively) were denominated in cash rather than in stock due to the NextEra merger that was pending when the applicable award opportunities were established. SEC rules require cash-denominated LTIP awards to be reported in the year settled, whereas equity-based awards are reported in the year in which they are granted. As a result, the 2017 and 2018 amounts in the table include both (i) cash settlement of LTIP awards granted in 2015 and 2016 (with respect to the 2015-2017 LTIP and 2016-2018 LTIP), and (ii) equity-based LTIP grants made in 2017 and 2018 (with respect to the 2017-2019 LTIP and 2018‑2020 LTIP).
|
Name and 2019
Principal Positions
|
Year
|
|
Salary
($) (1)
|
|
Stock
Awards
($) (2)
|
|
Nonequity
Incentive
Plan
Compen-
sation
($) (3)
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings ($) (4)
|
|
All Other
Compen-
sation
($) (5)
|
|
Total
Without
Change in
Pension
Value
($) (6)
|
|
Total ($)
|
|||||||
Alan M. Oshima
|
2019
|
|
707,350
|
|
|
1,143,849
|
|
|
412,527
|
|
|
165,887
|
|
|
14,160
|
|
|
2,277,886
|
|
|
2,443,773
|
|
Former President and Chief Executive Officer
|
2018
|
|
686,750
|
|
|
1,114,464
|
|
|
1,012,797
|
|
|
91,578
|
|
|
13,635
|
|
|
2,827,646
|
|
|
2,919,224
|
|
2017
|
|
655,583
|
|
|
1,071,359
|
|
|
847,170
|
|
|
187,506
|
|
|
13,230
|
|
|
2,587,342
|
|
|
2,774,848
|
|
|
Tayne S. Y. Sekimura
|
2019
|
|
371,983
|
|
|
319,518
|
|
|
144,627
|
|
|
755,908
|
|
|
—
|
|
|
836,128
|
|
|
1,592,036
|
|
Senior Vice President and Chief Financial Officer
|
2018
|
|
361,133
|
|
|
311,322
|
|
|
328,775
|
|
|
—
|
|
|
—
|
|
|
1,001,230
|
|
|
1,001,230
|
|
2017
|
|
350,583
|
|
|
304,319
|
|
|
270,156
|
|
|
560,716
|
|
|
—
|
|
|
925,058
|
|
|
1,485,774
|
|
|
Jimmy D. Alberts
|
2019
|
|
285,617
|
|
|
230,804
|
|
|
99,908
|
|
|
99,696
|
|
|
19,644
|
|
|
635,973
|
|
|
735,669
|
|
Senior Vice President, Business Development & Strategic Planning
|
2018
|
|
277,350
|
|
|
224,879
|
|
|
227,346
|
|
|
31,731
|
|
|
18,964
|
|
|
748,539
|
|
|
780,270
|
|
2017
|
|
269,283
|
|
|
219,776
|
|
|
198,052
|
|
|
68,705
|
|
|
18,214
|
|
|
705,325
|
|
|
774,030
|
|
|
Ronald R. Cox
|
2019
|
|
285,517
|
|
|
230,728
|
|
|
99,874
|
|
|
264,070
|
|
|
—
|
|
|
616,119
|
|
|
880,189
|
|
Senior Vice President,Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Susan A. Li
|
2019
|
|
300,733
|
|
|
243,020
|
|
|
105,196
|
|
|
406,458
|
|
|
—
|
|
|
648,949
|
|
|
1,055,407
|
|
Former Senior Vice President, General Counsel, Chief Compliance & Administrative Officer & Secretary
|
2018
|
|
285,017
|
|
|
231,101
|
|
|
233,650
|
|
|
—
|
|
|
—
|
|
|
749,768
|
|
|
749,768
|
|
2017
|
|
276,750
|
|
|
225,889
|
|
|
191,549
|
|
|
437,303
|
|
|
—
|
|
|
694,188
|
|
|
1,131,491
|
|
1.
|
Salary. This column represents cash base salary received for the year.
|
2.
|
Stock Awards. These amounts represent the aggregate grant date fair value of stock awards granted in the years shown computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). For 2017, 2018 and 2019, these amounts are composed of: (i) the opportunity (based on probable outcome of performance conditions (in this case, target) as of the grant date) to earn shares of HEI Common Stock in the future pursuant to the 2017-19, 2018-20 and 2019-21 LTIPs, respectively, if pre-established performance goals are achieved and (ii) RSUs vesting in installments over a four-year period. Since the 2015-17 and 2016-18 LTIPs are denominated in cash rather than in stock, in accordance with SEC rules, the cash payouts are reported in the "Nonequity Incentive Plan Compensation" column in this Summary Compensation Table for 2017 and 2018, respectively. See the 2019 Grants of Plan-Based Awards table below for the portion of the amount in the Stock Awards column above that is composed of 2019 grants of RSUs and performance award opportunities under the 2019-21 LTIP. Assuming achievement of the highest level of performance conditions, the maximum value of the performance awards payable in 2021 under the 2019-21 LTIP would be: Mr. Oshima $1,368,154; Ms. Sekimura $378,669; Mr. Alberts $261,676; Mr. Cox $261,601 and Ms. Li $275,527. For a discussion of the assumptions underlying the amounts set out for the RSUs and and 2019-21 LTIP, see Note 11 to the Consolidated Financial Statements in the Annual Report on Form 10-K to which this Exhibit 99.1 is attached.
|
3.
|
Nonequity Incentive Plan Compensation. These amounts represent cash payouts to named executive officers under the annual incentive plan, the Executive Incentive Compensation Plan (EICP), earned for the years shown. For 2017 and 2018, the amounts in this column also include the cash payout from the 2015-17 and 2016-18 LTIPs, respectively.
|
4.
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings. These amounts represent the change in present value of the accrued pension and executive death benefits from beginning of year to end of year for 2017, 2018 and 2019. These amounts are not current payments; pension and executive death benefits are only paid after retirement or death, as applicable. The amounts in this column depend heavily on changes in actuarial assumptions, such as discount rates, and also are impacted by years of service and age. In accordance with SEC rules, the negative change in value in 2018 for Ms. Sekimura and Ms. Li is shown as no change in the table above. For a further discussion of the applicable plans, see the 2019 Pension Benefits table and related notes below. No Hawaiian Electric named executive officer had above-market or preferential earnings on nonqualified deferred compensation for the periods covered in the table above.
|
5.
|
All Other Compensation. The following table summarizes the components of “All Other Compensation” with respect to 2019:
|
Name
|
Contributions to Defined Contribution
Plans ($)a
|
|
Other
($)b
|
|
Total All Other
Compensation
($)
|
|
Alan M. Oshima
|
8,400
|
|
5,760
|
|
14,160
|
|
Tayne S.Y. Sekimura*
|
—
|
|
—
|
|
—
|
|
Jimmy D. Alberts
|
8,400
|
|
11,244
|
|
19,644
|
|
Ronald R. Cox*
|
—
|
|
—
|
|
—
|
|
Susan A. Li*
|
—
|
|
—
|
|
—
|
|
a
|
Messrs. Oshima and Alberts received matching contributions to their accounts in the HEI 401(k) Plan up to the amount permitted based on eligible compensation ($280,000 in 2019).
|
b
|
Messrs. Oshima and Alberts received club membership dues. Mr. Alberts also had one more week of vacation than employees with similar length of service would usually receive.
|
*
|
The total value of perquisites and other personal benefits for Ms. Sekimura, Mr. Cox and Ms. Li was less than $10,000 for 2019 and is therefore not included in the table above.
|
6.
|
Total Without Change in Pension Value. Total Without Change in Pension Value represents total compensation as determined under SEC rules, minus the change in pension value and executive death benefits amount reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. We include this column because the magnitude of the change in pension value and death benefits in a given year is largely determined by actuarial assumptions, such as discount rates and mortality assumptions set by the Society of Actuaries, and does not reflect decisions made by the HEI Compensation Committee or Hawaiian Electric Board for that year or the actual benefit necessarily to be received by the recipient. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column and are not a substitute for the Total column.
|
|
|
|
Estimated Future Payouts
Under Nonequity Incentive
Plan Awards (1)
|
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards (2)
|
|
All Other
Stock Awards: Number of Shares
of Stock
or Units
(#) (3)
|
|
Grant Date Fair Value
of Stock
Awards
($) (4)
|
||||||||||||||||
Name
|
Grant
Date
|
|
Threshold ($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold (#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
||||||||||
Alan M. Oshima
|
2/14/19 EICP
|
|
265,256
|
|
|
530,513
|
|
|
1,061,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/14/19 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,917
|
|
|
17,834
|
|
|
35,668
|
|
|
—
|
|
|
684,078
|
|
|
2/14/19 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,202
|
|
|
459,771
|
|
Tayne S. Y. Sekimura
|
2/14/19 EICP
|
|
92,996
|
|
|
185,992
|
|
|
371,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/14/19 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,468
|
|
|
4,936
|
|
|
9,872
|
|
|
—
|
|
|
189,334
|
|
|
2/14/19 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,455
|
|
|
130,184
|
|
Jimmy D. Alberts
|
2/14/19 EICP
|
|
64,264
|
|
|
128,528
|
|
|
257,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/14/19 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,706
|
|
|
3,411
|
|
|
6,822
|
|
|
—
|
|
|
130,839
|
|
|
2/14/19 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,653
|
|
|
99,965
|
|
Ronald R. Cox
|
2/14/19 EICP
|
|
64,241
|
|
|
128,483
|
|
|
256,965
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/14/19 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,705
|
|
|
3,410
|
|
|
6,820
|
|
|
—
|
|
|
130,801
|
|
|
2/14/19 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,652
|
|
|
99,927
|
|
Susan A. Li
|
2/14/19 EICP
|
|
67,665
|
|
|
135,330
|
|
|
270,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/14/19 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,796
|
|
|
3,592
|
|
|
7,183
|
|
|
—
|
|
|
137,780
|
|
|
2/14/19 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,793
|
|
|
105,240
|
|
EICP
|
Executive Incentive Compensation Plan (annual incentive)
|
LTIP
|
Long-Term Incentive Plan (2019-21 period)
|
RSU
|
Restricted Stock Units
|
1.
|
Estimated Future Payouts Under Nonequity Incentive Plan Awards. Shows possible cash payouts under the 2019 EICP based on meeting performance goals set in February 2019 at threshold, target and maximum levels. Actual payouts for the 2019 EICP are reported in the 2019 Summary Compensation Table above.
|
2.
|
Estimated Future Payouts Under Equity Incentive Plan Awards. Represents number of shares of HEI Common Stock that may be issued under the 2019-21 LTIP based upon the achievement of performance goals set in February 2019 at threshold, target and maximum levels and vesting at the end of the three-year performance period. LTIP awards are forfeited for terminations of employment during the vesting period, except for terminations due to death, disability or retirement, which allow for pro-rata participation based upon completed months of service after a minimum number of months of service in the performance period. Dividend equivalent shares, not included in the chart, are compounded over the period at the actual dividend rate and are paid at the end of the performance period based on actual shares earned.
|
3.
|
All Other Stock Awards: Number of Shares of Stock or Units. Represents number of RSUs awarded in 2019 that will vest and be issued as unrestricted HEI Common Stock in four equal annual installments on the grant date anniversaries. Unvested awards are forfeited for terminations of employment during the vesting period, except for terminations due to death, disability or retirement, which allow for pro-rata vesting up to the date of termination. Receipt of RSU awards is generally subject to continued employment and expiration of the applicable vesting period. Dividend equivalent shares, not included in the chart, are compounded over the period at the actual dividend rate and are paid in HEI Common Stock on RSUs vesting in a given year.
|
4.
|
Grant Date Fair Value of Stock Awards. Grant date fair value for shares under the 2019-21 LTIP is estimated in accordance with the fair-value based measurement of accounting as described in FASB ASC Topic 718 based upon the probable (in this case, target) outcome of the performance conditions as of the grant date. For a discussion of the assumptions and methodologies used to calculate the amounts reported, see the discussion of performance awards contained in Note 11 (Share-based compensation) to the Consolidated Financial Statements in the 2019 Annual Report on Form 10-K. Grant date fair value for RSUs is based on the closing price of HEI Common Stock on the NYSE on the date of the grant of the award.
|
|
|
Stock Awards
|
|||||||||||
|
|
|
|
|
Equity Incentive Plan Awards
|
||||||||
|
|
|
Shares or Units of Stock That Have Not Vested (1)
|
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3)
|
|
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2)
|
||||||
Name
|
Grant Year
|
|
Number (#)
|
|
Market Value ($) (2)
|
|
|
||||||
Alan M. Oshima
|
2016
|
|
3,172
|
|
|
148,640
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
6,364
|
|
|
298,217
|
|
|
—
|
|
|
—
|
|
|
2018
|
|
9,815
|
|
|
459,931
|
|
|
38,253
|
|
|
1,792,536
|
|
|
2019
|
|
12,202
|
|
|
571,786
|
|
|
35,668
|
|
|
1,671,402
|
|
|
Total
|
|
31,553
|
|
|
1,478,574
|
|
|
73,921
|
|
|
3,463,938
|
|
Tayne S. Y. Sekimura
|
2016
|
|
1,000
|
|
|
46,860
|
|
|
—
|
|
|
—
|
|
2017
|
|
1,833
|
|
|
85,894
|
|
|
—
|
|
|
—
|
|
|
|
2018
|
|
2,779
|
|
|
130,224
|
|
|
10,587
|
|
|
496,107
|
|
|
2019
|
|
3,455
|
|
|
161,901
|
|
|
9,872
|
|
|
462,602
|
|
|
Total
|
|
9,067
|
|
|
424,879
|
|
|
20,459
|
|
|
958,709
|
|
Jimmy D. Alberts
|
2016
|
|
768
|
|
|
35,988
|
|
|
—
|
|
|
—
|
|
2017
|
|
1,407
|
|
|
65,932
|
|
|
—
|
|
|
—
|
|
|
|
2018
|
|
2,134
|
|
|
99,999
|
|
|
7,318
|
|
|
342,921
|
|
|
2019
|
|
2,653
|
|
|
124,320
|
|
|
6,822
|
|
|
319,679
|
|
|
Total
|
|
6,962
|
|
|
326,239
|
|
|
14,140
|
|
|
662,600
|
|
Ronald R. Cox
|
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2017
|
|
807
|
|
|
37,816
|
|
|
—
|
|
|
—
|
|
|
|
2018
|
|
1,217
|
|
|
57,029
|
|
|
4,868
|
|
|
228,114
|
|
|
2019
|
|
2,652
|
|
|
124,273
|
|
|
6,820
|
|
|
319,585
|
|
|
Total
|
|
4,676
|
|
|
219,118
|
|
|
11,688
|
|
|
547,699
|
|
Susan A. Li
|
2016
|
|
791
|
|
|
37,066
|
|
|
—
|
|
|
—
|
|
2017
|
|
1,447
|
|
|
67,806
|
|
|
—
|
|
|
—
|
|
|
|
2018
|
|
2,194
|
|
|
102,811
|
|
|
7,520
|
|
|
352,387
|
|
|
2019
|
|
2,793
|
|
|
130,880
|
|
|
7,183
|
|
|
336,595
|
|
|
Total
|
|
7,225
|
|
|
338,563
|
|
|
14,703
|
|
|
688,982
|
|
1.
|
Shares or Units of Stock That Have Not Vested. The remaining installments of the 2016 RSUs vested on February 5, 2020. Of the remaining installments of the 2017 RSUs, one installment vested on January 31, 2020 and the remainder will vest on January 31, 2021. Of the remaining installments of the 2018 RSUs, one installment vested on January 31, 2020 and the remainder will vest in equal annual installments on January 31, 2021 and 2022. For the 2019 RSUs, one installment vested on February 14, 2020 and the remainder will vest in equal annual installments on February 14, 2021, 2022 and 2023.
|
2.
|
Market Value. Market value is based upon the closing per‑share trading price of HEI Common Stock on the NYSE of $46.86 as of December 31, 2019.
|
3.
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested. Represents number of shares of HEI Common Stock that would be issued under the 2018-20 and 2019-21 LTIPs if performance goals are met at the maximum level at the end of the respective three-year performance periods.
|
|
|
Stock Awards
|
|
||||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
|
|
||||
Alan M. Oshima
|
|
12,788
|
|
(1)
|
|
485,688
|
|
|
|
|
|
21,592
|
|
(2)
|
|
1,011,801
|
|
(3
|
)
|
Tayne S. Y. Sekimura
|
|
4,063
|
|
(1)
|
|
154,313
|
|
|
|
|
|
6,077
|
|
(2)
|
|
284,768
|
|
(3
|
)
|
Jimmy D. Alberts
|
|
3,123
|
|
(1)
|
|
118,612
|
|
|
|
|
|
4,201
|
|
(2)
|
|
196,859
|
|
(3
|
)
|
Ronald R. Cox
|
|
854
|
|
(1)
|
|
32,435
|
|
|
|
|
|
2,808
|
|
(2)
|
|
131,583
|
|
(3
|
)
|
Susan A. Li
|
|
3,124
|
|
(1)
|
|
118,649
|
|
|
|
|
|
4,319
|
|
(2)
|
|
202,388
|
|
(3
|
)
|
Name
|
|
Number of Shares Acquired on Vesting
|
|
Compounded Dividend Equivalents
|
|
Total Shares Acquired on Vesting
|
|||
Alan M. Oshima
|
|
11,723
|
|
|
1,065
|
|
|
12,788
|
|
Tayne S. Y. Sekimura
|
|
3,705
|
|
|
358
|
|
|
4,063
|
|
Jimmy D. Alberts
|
|
2,847
|
|
|
276
|
|
|
3,123
|
|
Ronald R. Cox
|
|
809
|
|
|
45
|
|
|
854
|
|
Susan A. Li
|
|
2,852
|
|
|
272
|
|
|
3,124
|
|
2.
|
Represents the number of shares acquired (and dividend equivalents paid in stock based on earned shares) upon vesting of performance share awards under the 2017-19 LTIP, which were payable in stock at the end of the performance period. Value realized on vesting includes dividend equivalents. The HEI Compensation Committee certified the achievement of the applicable performance measures on February 11, 2020.
|
Name
|
|
Number of Shares Acquired on Vesting
|
|
Compounded Dividend Equivalents
|
|
Total Shares Acquired on Vesting
|
|||
Alan M. Oshima
|
|
19,523
|
|
|
2,069
|
|
|
21,592
|
|
Tayne S. Y. Sekimura
|
|
5,495
|
|
|
582
|
|
|
6,077
|
|
Jimmy D. Alberts
|
|
3,798
|
|
|
403
|
|
|
4,201
|
|
Ronald R. Cox
|
|
2,539
|
|
|
269
|
|
|
2,808
|
|
Susan A. Li
|
|
3,905
|
|
|
414
|
|
|
4,319
|
|
3.
|
Represents vested 2017-19 LTIP shares at 2019 year-end closing price of HEI Common Stock of $46.86 per share on December 31, 2019. Actual settlement of the performance share awards under the 2017-19 LTIP occurred on February 14, 2020 (after the February 11, 2020 certification of the applicable performance results) based on the closing price of HEI Common Stock on the NYSE of $50.40 per share. The actual settlement amounts were: Mr. Oshima $1,088,237; Ms. Sekimura $306,281; Mr. Alberts $211,730; Mr. Cox $141,523 and Ms. Li $217,678.
|
Name
|
Plan Name
|
|
Number of
Years of Credited
Service (#)
|
|
Present Value of
Accumulated
Benefit ($) (4)
|
|
Payments During
the Last Fiscal
Year ($)
|
||
Alan M. Oshima
|
HEI Retirement Plan (1)
|
|
8.2
|
|
|
382,511
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
8.2
|
|
|
567,862
|
|
|
—
|
Tayne S. Y. Sekimura
|
HEI Retirement Plan (1)
|
|
28.6
|
|
|
2,909,020
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
28.6
|
|
|
912,184
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
184,938
|
|
|
—
|
Jimmy D. Alberts
|
HEI Retirement Plan (1)
|
|
7.3
|
|
|
366,410
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
7.3
|
|
|
4,232
|
|
|
—
|
Ronald R. Cox
|
HEI Retirement Plan (1)
|
|
14.1
|
|
|
1,372,436
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
14.1
|
|
|
14,178
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
106,808
|
|
|
—
|
Susan A. Li
|
HEI Retirement Plan (1)
|
|
29.8
|
|
|
3,081,489
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
29.8
|
|
|
139,889
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
157,887
|
|
|
—
|
1.
|
The HEI Retirement Plan is the standard retirement plan for HEI and Hawaiian Electric employees. Normal retirement benefits under the HEI Retirement Plan for management employees hired before May 1, 2011, including all of the named executive officers other than Messrs. Oshima and Alberts, are calculated based on a formula of 2.04% × Credited Service (maximum 67%) × Final Average Compensation (average monthly base salary for highest thirty-six consecutive months out of the last ten years). Credited service is generally the same as the years of service with HEI and other participating companies (Hawaiian Electric, Hawaii Electric Light and Maui Electric). Credited service is also provided for limited unused sick leave and for the period a vested participant is on long-term disability. The normal form of benefit is a joint and 50% survivor annuity for married participants and a single life annuity for unmarried participants. Actuarially equivalent optional forms of benefit are also available. Participants who qualify to receive retirement benefits immediately upon termination of employment may also elect a single sum distribution of up to $100,000 with the remaining benefit payable as an annuity. Single sum distributions are not eligible for early retirement subsidies, and so may not be as valuable as an annuity at early retirement. Retirement benefits are increased by an amount equal to approximately 1.4% of the initial benefit every twelve months following retirement. The plan provides benefits at early retirement (prior to age 65), normal retirement (age 65), deferred retirement (over age 65) and death. Subsidized early retirement benefits are available for participants who meet certain age and service requirements at ages 50-64. The accrued normal retirement benefit is reduced by an applicable percentage, which ranges from 30% for early retirement at age 50 with at least 15 years of service to 1% at age 59. Accrued benefits are not reduced for eligible employees who retire at age 60 and above. The early retirement subsidies are not available to employees who terminate employment with vested benefits but prior to satisfying the age and service requirements for the early retirement subsidies.
|
2.
|
As of December 31, 2019, all of the named executive officers were participants in the HEI Excess Pay Plan. Benefits under the HEI Excess Pay Plan are determined using the same formula as the HEI Retirement Plan, but are not subject to the Internal Revenue Code limits on the amount of annual compensation that can be used for calculating benefits under qualified retirement plans ($280,000 in 2019 as indexed for inflation) and on the amount of annual benefits that can be paid from qualified retirement plans (the lesser of $225,000 in 2019 as indexed for inflation, or the participant’s highest average compensation over three consecutive calendar years). Benefits payable under the HEI Excess Pay Plan are reduced by the benefit payable from the HEI Retirement Plan. Early retirement, death benefits and vesting provisions are similar to the HEI Retirement Plan.
|
3.
|
Ms. Sekimura, Mr. Cox and Ms. Li are covered by the Executive Death Benefit Plan of HEI and Participating Subsidiaries. The plan was amended effective September 9, 2009 to close participation to new participants and freeze the benefit for existing participants. Under the amendment, death benefits will be paid based on salaries as of September 9, 2009. The plan provides death benefits equal to two times the executive’s base salary as of September 9, 2009 if the executive dies while actively employed or, if disabled, dies prior to age 65, and one times the executive’s base salary as of September 9, 2009 if the executive dies following retirement. The amounts shown in the table above assume death following retirement. Death benefits are grossed up by the amount necessary to pay income taxes on the grossed up benefit amount as an equivalent to the tax exclusion for death benefits paid from a life insurance policy. Messrs. Oshima and Alberts were not employed by Hawaiian Electric at the time the plan was frozen and therefore are not entitled to any benefits under the plan.
|
4.
|
The present value of accumulated benefits for the Hawaiian Electric named executive officers included in the 2019 Pension Benefits table was determined based on the following:
|
a.
|
Discount Rate – The discount rate is the interest rate used to discount future benefit payments in order to reflect the time value of money. The discount rates used in the present value calculations are 3.61% for retirement benefits and 3.52% for executive death benefits as of December 31, 2019.
|
b.
|
Mortality Table – The PRI-2012 Mortality Table (separate male and female rates) with generational projection using scale MP-2019 from base year 2012 is used to discount future pension benefit payments in order to reflect the probability of survival to any given future date. For the calculation of the executive death benefit present values, the mortality table rates are multiplied by the death benefit to capture the death benefit payments assumed to occur at all future dates. Mortality is applied post-retirement only.
|
c.
|
Retirement Age – A Hawaiian Electric named executive officer included in the table is assumed to remain in active employment until, and assumed to retire at, the later of (a) the earliest age when unreduced pension benefits would be payable or (b) attained age as of December 31, 2019.
|
d.
|
Pre-Retirement Decrements – Pre-retirement decrements refer to events that could occur between the measurement date and the retirement age (such as withdrawal, early retirement and death) that would impact the present value of benefits. No pre-retirement decrements are assumed in the calculation of pension benefit table present values. Pre-retirement decrements are assumed for financial statement purposes.
|
e.
|
Unused Sick Leave – Each Hawaiian Electric named executive officer who participates in the HEI Retirement Plan is assumed to have accumulated 1,160 unused sick leave hours at retirement age.
|
Name
|
Executive
Contributions
in Last FY ($)1
|
|
Registrant
Contributions
in Last FY ($)
|
|
Aggregate
Earnings/(Losses)
in Last FY ($)
|
|
Aggregate
Withdrawals/
Distributions ($)
|
|
Aggregate
Balance at
Last FYE ($)2
|
|
Alan M. Oshima
|
—
|
|
—
|
|
169,264
|
|
—
|
|
852,954
|
|
Tayne S.Y. Sekimura
|
—
|
|
—
|
|
29,236
|
|
—
|
|
177,402
|
|
1.
|
Represents salary and incentive compensation deferrals under the HEI Deferred Compensation Plan, a contributory nonqualified deferred compensation plan implemented in 2011. The plan allows certain HEI and Hawaiian Electric executives to defer up to 100% of annual base salary in excess of the compensation limit set forth in Internal Revenue Code Section 401(a)(17) ($280,000 in 2019, as indexed for inflation) and up to 80% of any incentive compensation paid in cash. In 2019, there were no matching or other employer contributions under the plan. The deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a designated list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential and therefore are not included in the 2019 Summary Compensation Table above. The distribution of accounts from the plan is triggered by disability, death or separation from service (including retirement) and will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. A participant may elect to receive distributions triggered by separation from service in a lump sum or in substantially equal payments spread over a period not to exceed 15 years. Lump sum benefits are payable in the event of disability or death.
|
2.
|
Amounts in this column include contributions reported in the Summary Compensation Table for each year in which each executive listed above was a named executive officer.
|
Name/
Benefit Plan or Program
|
Retirement on 12/31/19
($) (1)
|
|
Termination due to death or disability
on 12/31/19 ($) (2)
|
|
Voluntary termination, termination for and without cause on
12/31/19
($) (3)
|
|
Termination after change in control on 12/31/19
($) (4)
|
||||
Alan M. Oshima
|
|
|
|
|
|
|
|
||||
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
924,548
|
|
|
924,548
|
|
|
—
|
|
|
1,817,115
|
|
Restricted Stock Units (7)
|
619,972
|
|
|
619,972
|
|
|
—
|
|
|
1,580,494
|
|
TOTAL
|
1,544,520
|
|
|
1,544,520
|
|
|
—
|
|
|
3,397,609
|
|
Tayne S. Y. Sekimura
|
|
|
|
|
|
|
|
||||
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
255,809
|
|
|
255,809
|
|
|
—
|
|
|
502,938
|
|
Restricted Stock Units (7)
|
181,367
|
|
|
181,367
|
|
|
—
|
|
|
454,589
|
|
TOTAL
|
437,176
|
|
|
437,176
|
|
|
—
|
|
|
957,527
|
|
Jimmy D. Alberts
|
|
|
|
|
|
|
|
||||
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
176,850
|
|
|
176,850
|
|
|
—
|
|
|
347,583
|
|
Restricted Stock Units (7)
|
139,259
|
|
|
139,259
|
|
|
—
|
|
|
349,059
|
|
TOTAL
|
316,109
|
|
|
316,109
|
|
|
—
|
|
|
696,642
|
|
Ronald R. Cox
|
|
|
|
|
|
|
|
||||
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
135,987
|
|
|
135,987
|
|
|
—
|
|
|
286,285
|
|
Restricted Stock Units (7)
|
70,510
|
|
|
70,510
|
|
|
—
|
|
|
230,739
|
|
TOTAL
|
206,497
|
|
|
206,497
|
|
|
—
|
|
|
517,024
|
|
Susan A. Li
|
|
|
|
|
|
|
|
||||
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
183,083
|
|
|
183,083
|
|
|
—
|
|
|
361,369
|
|
Restricted Stock Units (7)
|
143,995
|
|
|
143,995
|
|
|
—
|
|
|
362,134
|
|
TOTAL
|
327,078
|
|
|
327,078
|
|
|
—
|
|
|
723,503
|
|
1.
|
Retirement payments & benefits. All named executive officers were eligible for retirement as of December 31, 2019. In addition to the amounts shown in this column, retired executives are entitled to receive their vested retirement plan and deferred compensation benefits under all termination scenarios. See the 2019 Pension Benefits and 2019 Nonqualified Deferred Compensation tables above.
|
2.
|
Termination due to death or disability payments & benefits. All named executive officers were eligible for death or disability payments & benefits as of December 31, 2019.
|
3.
|
Voluntary termination payments & benefits. If a Hawaiian Electric named executive officer voluntarily terminates employment, he or she could lose any annual or long-term incentives based upon the HEI Compensation Committee’s right to amend, suspend or terminate any incentive award or any portion of it at any time. Voluntary termination results in the forfeiture of unvested RSUs and participation in incentive plans.
|
4.
|
Termination after change-in-control payments & benefits. None of the Hawaiian Electric named executive officers were party to a change-in-control agreement on December 31, 2019.
|
5.
|
Executive Incentive Compensation Plan (EICP). Excludes amounts payable under the 2019 EICP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2019. Upon death, disability or retirement, executives continue to participate in the EICP on a pro-rata basis if the executive has met applicable minimum service requirements, with a lump sum payment to be made by Hawaiian Electric if the applicable performance goals are achieved. The plan documents provide that in the event of a change in control as defined by the EIP, the EICP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, if there is no termination following a change in control, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the EICP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels).
|
6.
|
Long-Term Incentive Plan (LTIP). Excludes amounts payable under the 2017-19 LTIP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2019. Upon death, disability or retirement, executives continue to participate in each ongoing LTIP cycle on a pro-rata basis if the executive has met applicable minimum service requirements, with a lump sum payment to be made by Hawaiian Electric if performance goals are achieved. The amounts shown are at target for all applicable plan years, pro-rated based upon service through December 31, 2019; actual payouts will depend upon performance achieved at the end of the plan cycle. The plan documents provide that in the event of a change in control as defined by the EIP, the LTIP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, if there is no termination following a change in control, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels).
|
7.
|
Restricted Stock Units (RSUs) not granted under LTIP. Termination for or without cause results in the forfeiture of unvested RSUs not granted under LTIP. Termination due to death, disability or retirement results in pro-rata vesting of RSUs not granted under LTIP. The EIP provides that in the event of a change in control as defined by the EIP, either (i) the surviving or acquiring entity will assume all outstanding RSUs not granted under LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as defined by the EIP or (ii) to the extent the acquiring entity refuses to assume or substitute such awards, such awards shall become fully vested.
|
(1)
|
These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Despite the fact that these amounts are not paid, they are required to be taken into account for purposes of calculating total annual compensation for SEC reporting purposes. Pension values fluctuate over time, can rise or fall year-to-year and are dependent on many variables including market conditions, years of service, earnings, and actuarial assumptions such as discount rates.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Amount and Nature of Beneficial Ownership of HEI Common Stock
|
|||||||||||||
Name of Individual
or Group
|
Sole Voting or
Investment
Power
(1)
|
|
Shared Voting
or Investment
Power
(2)
|
|
Other
Beneficial
Ownership
(3)
|
|
Restricted
Stock Units
(4)
|
|
Total
(5)
|
|||||
Nonemployee directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin M. Burke
|
3,502
|
|
|
|
|
|
|
|
|
3,502
|
|
|||
Timothy E. Johns
|
44,325
|
|
|
|
|
|
|
|
|
44,325
|
|
|||
Bert A. Kobayashi, Jr.
|
5,647
|
|
|
|
|
|
|
|
|
5,647
|
|
|||
Kelvin H. Taketa
|
37,664
|
|
|
|
|
|
|
|
|
37,664
|
|
|||
Employee director and Named Executive Officer
|
|
|
|
|
|
|
|
|
|
|||||
Alan M. Oshima
|
20,742
|
|
|
57,315
|
|
|
|
|
2,298
|
|
|
80,355
|
|
|
Other Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|||||
Jimmy D. Alberts
|
24,607
|
|
|
|
|
|
|
593
|
|
|
25,200
|
|
||
Ronald R. Cox
|
3,603
|
|
|
|
|
|
|
428
|
|
|
4,031
|
|
||
Susan A. Li
|
18,042
|
|
|
|
|
|
|
|
|
18,042
|
|
|||
Tayne S. Y. Sekimura
|
57,105
|
|
|
|
|
|
|
773
|
|
|
57,878
|
|
||
All directors and executive officers as a group (13 persons)
|
257,094
|
|
|
58,487
|
|
|
465
|
|
|
5,619
|
|
|
321,665
|
|
(1)
|
Includes the following shares held as of February 14, 2020 in the form of stock units in the HEI Common Stock fund pursuant to the HEI Retirement Savings Plan: approximately 1,810 shares for Ms. Li; 1,179 shares for Ms. Sekimura; and 8,390 shares for all directors and executive officers as a group. The value of a unit is measured by the closing price of HEI Common Stock on the measurement date.
|
(2)
|
Includes (i) shares registered in name of the individual and spouse and/or (ii) shares registered in trust with the individual and spouse serving as co-trustees.
|
(3)
|
Shares owned by spouse, children or other relatives sharing the home of the director or officer in which the director or officer disclaims beneficial interest.
|
(4)
|
Includes the number of shares that the individuals named above had a right to acquire as of or within 60 days after February 14, 2020 pursuant to restricted stock units and related dividend equivalent rights thereon, including shares which retirement eligible individuals have a right to acquire upon retirement. These shares are included for purposes of calculating the percentage ownership of each individual named above and all directors and executive officers as a group as described in footnote (5) below, but are not deemed to be outstanding as to any other person.
|
(5)
|
As of February 14, 2020, the directors and executive officers of Hawaiian Electric as a group and each individual named above beneficially owned less than one percent of the record number of outstanding shares of HEI Common Stock as of that date and no shares were pledged as security.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ALLETTE, Inc.
|
IDACORP Inc.
|
Alliant Energy Corp.
|
MDU Resources Group Inc.
|
Ameren Corp.
|
MGE Energy Inc.
|
American Electric Power Co.
|
NextEra Energy Inc.
|
Avangrid
|
NiSource Inc.
|
Avista Corp.
|
Northwestern Corp.
|
Black Hills Corp.
|
OGE Energy Corp.
|
Centerpoint Energy Inc.
|
Otter Tail Corp.
|
CMS Energy Corp.
|
PG&E Corp.
|
Consolidated Edison Inc.
|
Pinnacle West Capital Corp.
|
Dominion Energy Inc.
|
PNM Resources Inc.
|
DTE Energy Co.
|
Portland General Electric
|
Duke Energy Corp.
|
PPL Corp.
|
Edison International
|
Public Service Enterprise Group Inc.
|
El Paso Electric Co.
|
Sempra Energy
|
Entergy Corp.
|
Southern Co.
|
Evergy, Inc.
|
Unitil Corp.
|
Eversource Energy
|
WEC Energy Group Inc.
|
Exelon Corp.
|
Xcel Energy Inc.
|
FirstEnergy Corp.
|
|
|
Years ended December 31
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
||||
UTILITY NET INCOME
|
|
|
|
|
||||||||
GAAP (as reported)
|
$
|
156.8
|
|
$
|
143.7
|
|
$
|
120.0
|
|
$
|
142.3
|
|
Excluding special items (after‑tax) for LTIP purposes only:
|
|
|
|
|
||||||||
Ongoing impacts relating to the termination of merger2
|
—
|
|
12.4
|
|
—
|
|
—
|
|
||||
Federal tax reform and related impacts3
|
—
|
|
(4.7
|
)
|
9.2
|
|
—
|
|
||||
Rate adjustment mechanism reversion to lagged method4
|
—
|
|
—
|
|
13.9
|
|
—
|
|
||||
Costs related to the terminated merger with NextEra Energy
|
—
|
|
—
|
|
—
|
|
0.1
|
|
||||
Costs related to the terminated LNG contract
|
—
|
|
—
|
|
—
|
|
2.1
|
|
||||
Non‑GAAP (adjusted) net income for 2017-19 LTIP purposes (EPS growth goal)
|
156.8
|
|
151.3
|
|
143.0
|
|
$
|
144.5
|
|
|||
Less: Rate adjustment mechanism reversion to lagged method4
|
|
|
(13.9
|
)
|
|
|||||||
Non‑GAAP (adjusted) net income for 2017-19 LTIP purposes (ROACE goal)
|
$
|
156.8
|
|
$
|
151.3
|
|
$
|
129.1
|
|
|
||
UTILITY RETURN ON AVERAGE COMMON EQUITY (%)
|
|
|
|
|
||||||||
Based on GAAP
|
7.8
|
|
7.6
|
|
6.6
|
|
|
|||||
Based on non‑GAAP (adjusted) for 2017‑19 LTIP purposes5
|
7.8
|
|
7.9
|
|
7.1
|
|
|
|||||
HAWAIIAN ELECTRIC CONSOLIDATED BASIC EARNINGS PER SHARE
|
|
|
|
|
||||||||
Based on GAAP Utility net income6
|
$
|
1.44
|
|
$
|
1.32
|
|
$
|
1.10
|
|
$
|
1.32
|
|
Based on non‑GAAP Utility net income (adjusted) for 2017‑19 LTIP purposes6
|
1.44
|
|
1.39
|
|
1.31
|
|
1.34
|
|
1
|
Accounting principles generally accepted in the United States of America
|
2
|
Primarily reflects certain expenses related to the termination of the proposed merger with NextEra Energy, including Hawaiian Electric's liquid natural gas (LNG) project costs and adjustments to test year revenue requirements for customer benefit adjustments in the Hawaiian Electric and Maui Electric rate case decisions
|
3
|
For 2017, primarily reflects the impacts of lower rates enacted by federal tax reform on the deferred tax net asset balances. For 2018, reflects various tax adjustments for tax reform and related impacts.
|
4
|
Reflects reversion of the rate adjustment mechanism (RAM) to the lagged method of revenue recognition
|
5
|
Calculated as non‑GAAP adjusted net income divided by average adjusted GAAP common equity
|
6
|
Calculated using Utility net income divided by HEI weighted average common shares
|