The fund is the start of what Gov. Josh Green described as a multi-part plan to compensate survivors and help them rebuild.

Families of those who died or were seriously injured in the Maui fires will be able to receive more than $1 million if they choose not to pursue wrongful death claims in court, Gov. Josh Green said Wednesday, unveiling a coalition between the state, Hawaiian Electric Co., Kamehameha Schools and Maui County to compensate victims.

Green described the $150 million Maui Recovery Fund as the first phase of a multi-part plan to compensate victims, rebuild homes and commercial properties for those who lost them and better manage the risks of wildfires for state and local governments, as well as the state’s power utilities.

The governor outlined only the broad contours of the Maui Recovery Fund and wider plan during his address, which marked the three-month anniversary of the Lahaina fire that killed 99 people, destroyed thousands of structures and cause an estimated $5 billion in property damage.

Accompanied by Attorney General Anne Lopez, Hawaii Gov. Josh Green discussed the establishment of a $150 million fund to compensate families of victims killed in the Lahaina wildfire. (David Croxford/Civil Beat/2023)

About 10 to 15 people who were seriously injured also are eligible, Green said. Although victims who get money will have to agree not to sue the parties paying into the fund, Green stressed the fund was about trying to do the right thing, not avoid liability.

“Participation in the Maui Recovery Fund will be completely voluntary, and the goal is to
get as much money as possible to affected families as quickly as possible — cutting out
delays and eliminating uncertainty,” Green said.

“Our message is clear — in Hawaii, during difficult times, we come together to help one
another, and right now we are coming together to help those who have suffered the
most,” he added. “Over time, the fund will also be used to help families in West Maui recover from the
disaster in other ways, including rebuilding homes they have lost.”

Among the questions Green could not answer after the speech was precisely how much money each victim will receive, although he said the amount would be “significantly more than $1 million per individual.” The governor also couldn’t say precisely when people can expect to be paid, although he said it would likely be in the second quarter of 2024.

Which additional partners will join the coalition and put more money into the fund also is unclear, although Green said he expects others to come aboard.

Fund Could Help Victims Avoid Long Delays

The Maui fires have spawned dozens of lawsuits naming Hawaiian Electric, Maui County and Kamehameha Schools, among others, as defendants. As a result, Hawaiian Electric’s stock price has tanked to a point that its potential liabilities exceed the company’s market value. Investor services have slashed the utility’s bond rating. And some analysts have said the company may need a significant restructuring, possibly through bankruptcy, to survive. Maui County faces similar financial uncertainties, as tax revenues from the former tourist hub of Lahaina have been wiped out at a time when the county faces an increased need for services.

Most lawsuits involve not death or injury claims, but claims from property owners who lost everything. That makes the current iteration of the Maui Recovery Fund far from a solution for the utility and county. But the story could be different for victims.

Establishing funds for wrongful death and property claims could allow victims to avoid the prolonged delays facing victims of Northern California wildfires between 2015 and 2018, including the Camp Fire, which killed 85 people and destroyed the town of Paradise.

Pacific Gas & Electric Co. faced criminal prosecution and civil suits stemming from the fires and, after filing for bankruptcy protection, agreed to pay victims $13.5 billion in damages. A fire victim trust fund was set up to manage payments, and as of Oct. 31, the Fire Victim Trust had paid out nearly $10.7 billion to more than 70,000 victims. But many victims are still waiting for relief.

Cathy Yanni, the fund’s trustee, said she understands the desire to get money to victims as soon as possible. She said she hopes the California fund will be able make its final payments sometime next year, which would mark five years since the final settlement date. 

“I want these people to get paid,” Yanni said. “Part of the trauma is not having finality.”

Mark Davis, a Honolulu trial lawyer who has sued Hawaiian Electric on behalf of fire victims, said the recovery fund could bring significant, much-needed relief and closure to many families. While some victims are likely to forge ahead with their lawsuits, many will likely accept the payouts, Davis said. Much will depend on how much victims will be able to receive and how quickly they can be paid, he said.

“It all depends on the size of the number,” Davis said. “Obviously for it two work, it has to be tempting enough both in the speed in which they can receive compensation and the amount of what they receive.”

Plan To Upgrade Utility Systems Is In The Works

Green also broadly described a later, ambitious phase including a widespread program to upgrade electric utility systems to make them less likely to be damaged by wildfires or to accidentally start the blazes. This effort, Green said, could be funded by charging electric customers a new fee, which would be used to pay off bonds used to raise money for the improvements.

Such securitization structures, which would need legislative and regulatory approval in Hawaii, are gaining popularity among utilities to cover a wide range of expenses without raising rates. 

Utility customers could be asked to pay a fee to help finance extensive upgrading of power utility grids statewide instead of facing rate increases, Gov. Josh Green said on Wednesday. (David Croxford/Civil Beat/2023)

Green could not say how much would be raised or whether the bonds would be paid off with fees from utility customers or some other source. Green did say that such bonds might resemble Hawaii’s Green Infrastructure Bonds, which finance a program designed to make renewable energy systems accessible to underserved ratepayers. A proposal for the securitization program will be part of an extensive package sent to the Legislature, Green said.

The announcement comes as Hawaiian Electric seeks permission to spend $190 million for numerous improvements meant to enhance the resiliency of its infrastructure to protect systems against impacts of increasingly severe weather in a time of climate change, including wildfires, hurricanes, tsunami and flooding. 

The company has secured $95 million from the federal government and expects to charge customers for rest of the work. Hawaiian Electric has estimated the total $190 million investment would cost the average residential customer  about $0.33 per month on Oahu, $0.86 on Hawaii Island and $0.71 on Maui. The federal money would likely cut those costs by half.

The company is awaiting approval by the Public Utilities Commission for the plan.

Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation.

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