The Public Utilities Commission is required by law to conduct an investigation after a utility accident causing loss of life.

The Hawaii Public Utilities Commission generally hasn’t backed away from investigating Hawaiian Electric Industries’ power subsidiaries. 

When an earthquake on the Big Island caused much of Oahu and Maui to lose power in 2006, the PUC opened an investigation looking at causes beyond the earthquake, whether the outages could have been avoided and what penalties to impose on Hawaiian Electric. The PUC launched a similar investigation in 2008 after a thunderstorm caused an island-wide blackout on Oahu.

But the Maui wildfires are a different story. The PUC has been conspicuously passive since the August fires that killed at least 99 people, destroyed much of Lahaina, including its power distribution system, and spawned dozens of lawsuits blaming Hawaiian Electric for starting the fires. 

While other state and federal officials have stepped up to investigate aspects of the wildfires that destroyed much of Lahaina in August, utlity regulators have yet to begin an independent inquiry, which in some cases is required by law. (David Croxford/Civil Beat/2023)

Other government agencies have not hesitated. The federal Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating the cause of the fire. Hawaii Attorney General Anne Lopez has brought in the nonprofit Fire Safety Research Institute to assess how state and county agencies prepared for and responded to the Maui wildfires. Even Congress has gotten involved, with several committees calling on Hawaiian Electric, the PUC and the state to explain their actions in regard to the fires and their aftermath.

But Hawaii regulators have shown no sign they will take a hard look at the utility they’re supposed to regulate.

“I think it’s highly unusual that the PUC will not investigate this,” said Henry Curtis, executive director of the organization Life of the Land, who frequently intervenes in utility proceedings before the PUC. “It just seems totally out of character for the entire history of the commission.”

By focusing on the utility, the scope of a PUC investigation would differ from those of ATF and the AG, Curtis noted.

“Neither addresses how a utlity causes a fire or what a utility might do to prevent a fire,” Curtis said. “To address what the utility should be doing is solely the kuleana of the Public Utilities Commission.”

The three-person commission consists of Colin Yost, a lawyer and former solar company executive; Naomi Kuwaye, a lawyer and former Honolulu City Council aide, and Leodoloff Asuncion, a career government planner in charge of leading the commission as its chair. 

Yost, who previously received the Oregon Department of Justice’s Outstanding Service Award for leading the State of Oregon’s investigation and prosecution of western energy companies, including Enron, declined to comment when asked whether the commission planned to investigate the Maui fires.

Yost said it was important for the commission to speak with “one voice” and referred questions to PUC spokesman David Richmond, who said the commission wants to make sure all information is available before it begins its inquiry.

“It’s just a matter of timing,” he said. 

Henry Curtis, executive director of Life of the Land, said it’s “totally bizarre” that the Public Utilities Commission has delayed investigation the Lahaina fires and Hawaiian Electric’s responsibility in them. (David Croxford/Civil Beat/2023)

In some cases the law requires the commission to investigate accidents involving utilities. The commission’s stated mission is to “serve the public, by ensuring essential utility services are delivered to consumers in a safe, reliable, economical, and environmentally sound manner.” 

To that end, the PUC law gives the commission broad investigative authority, including the “power to examine into the condition of each public utility” and “the manner in which it is operated with reference to the safety or accommodation of the public.” The statute requires the commission to “investigate the causes of any accident which results in loss of life.”

Why the commission won’t investigate now, after a major disaster that led to nearly 100 deaths, perplexes observers like Curtis.

“They’ve had this power for 110 years,” he said. “They’ve investigated deaths on ferries and railroads. They’ve just done this forever. This just seems totally bizarre.”

Richmond, the PUC spokesman, insists the commission will act when it’s appropriate.

“Again it goes back to (that) it’s just a matter of time,” he said. “That’s the key: having all the information to be able to do a thorough investigation.”

Agency Has Focused On Renewable Energy Mandate

The PUC has been around for more than a century, but it’s only in the last few years that the agency has begun to discuss wildfires as a major risk. While the commission seems much more familiar with problems caused by hurricanes and earthquakes, wildfire mitigation hasn’t been on the board’s radar until recent years.

A decade ago, the major issues were costs of electricity and how to transition to more renewable sources like solar, said Hermina Morita, who served as the commission chair from 2011 to 2015. 

The commission articulated its vision for the utility in a 2014 document called “Commission’s Inclinations on the Future of Hawaii’s Electric Utilities,” which is still viewed as a touchstone for proponents of using renewables to produce electricity.

Nowhere does the document mention wildfire mitigation. The idea of managing vegetation to protect transmission systems arose as an issue in those days, Morita said. But the vegetation in question then was albizia, a fast-growing invasive tree, and not flammable grasses like the ones that fed the Maui fires. The problem involved albizia branches falling on power lines during storms, not causing fires, Morita said. 

“Vegetation management was becoming an issue but not specifically related to wildfires,” she said. 

Perhaps more important were risks associated with volcanic lava.

“Everyone was more concerned about volcanic eruptions than wildfires,” she said.

Morita’s successor, Randy Iwase, said the focus during his time as commission chair was to help implement Hawaii’s renewable energy policy. Signed into law by then-Gov. David Ige in 2015, the statute requires virtually all of the electricity sold in the state to be produced with renewable resources by 2045.

“That was the overarching document or mandate that was guiding us,” Iwase said. “We kept pushing to get renewables, get renewables, achieve the mandate.”

The commission had other regulated industries to oversee, as well, says Iwase, who served as chair from 2015 to 2019. 

“In that time, nothing was glaring” concerning wildfires, he said. “Nothing was raised.”

Portrait of Jay Griffin fronting the Territorial Office Building
Former PUC Chairman Jay Griffin said wildfire risk was only starting to come onto the commission’s radar as an emerging risk when he took over as chairman in 2019 (Cory Lum/Civil Beat/2022)

Wildfires were emerging as major risks for utilities elsewhere at the time. 

In 2017, the Tubbs Fire in Northern California burned more than 36,000 acres in Sonoma and Napa counties, killed 22 people and destroyed more than 5,600 homes including 3,043 within the City of Santa Rosa, state officials reported. 

The California Department of Forestry and Fire Protection in 2019 determined that a private electrical system and not Pacific Gas & Electric Co. was responsible for starting the fire.

But the utility was found culpable for starting an even bigger fire a year later.

The Camp Fire in Butte County, California, burned for 17 days, destroyed more than 18,000 structures and killed 85 people, according to Cal Fire. Investigators found a faulty PG&E transmission line caused the fire. Facing massive liabilities, the utility filed for Chapter 11 bankruptcy protection in 2019. 

While disaster was unfolding in California, the risk of wildfires was barely a blip on Hawaii’s utility and regulatory radar. 

The risk of wildfires merited scant mention in Hawaiian Electric Industries’ 2018 annual report filed with the Securities and Exchange Commission. The company mentioned the risk of “catastrophic events such as earthquakes, tsunamis, hurricanes, fires, explosions, floods or other similar occurrences affecting the Utilities’ generating facilities or transmission and distribution systems.” 

Hawaiian Electric’s 2019 and 2020  annual reports made similar pro forma disclosures.

Jay Griffin, who succeeded Iwase as the PUC chairman in 2019, said that around the time he took over as chairman, wildfire risk was “coming on the radar as an emerging risk.”

But other issues, such as the risk of cyber attacks from Russia or China, were considered bigger problems based on likelihood of occurrence and magnitude of potential harm. 

“If anything, that is something we were briefed more heavily on,” he said of cyber risks.

An April 2020 study called the “Resilience Working Group Report for Integrated Grid Planning” seems to have been a watershed, Griffin said. 

Produced by a group of state and local government and Hawaiian Electric officials, the report discussed wide-ranging plans to strengthen Hawaiian Electric’s grids. They included things like hurricanes, winds and cyber attacks – and wildfires. Islands most vulnerable to fires were Oahu and Maui, the report said.

“The frequency and impacts of wildfires have increased recently,” the report noted. “This may be attributable in some parts of the islands to the decline of the sugarcane industry. Sugarcane enterprises historically managed wildfire risks on the islands, including responding to fires. However, today these areas present vast amounts of vegetation that can burn longer and with less ability and resources to control them.”

Sweeping Resiliency Plan Is In Limbo

Soon after, in 2021, the PUC started asking Hawaiian Electric about its wildfire mitigation efforts. In response, Hawaiian Electric identified West Maui — specifically the area from Maalaea to Kapalua — as a place that needed attention. Efforts to mitigate risks included setting up additional cameras and so-called smart fuses that could shut off power to downed lines “thus minimizing the intensity of sparks from line contact.”

But Hawaiian Electric and the PUC have been slow to implement more comprehensive programs. It took the utility two years to turn the “Resilience Working Group Report for Integrated Grid Planning” into a formal request to the PUC. In June 2022, Hawaiian Electric asked for permission to spend $190 million for a resiliency program including wildfire prevention and mitigation as one of nine items on the list.

The U.S. Department of Energy has approved $95 million for the program, but Hawaiian Electric’s request remains in limbo before the commission, despite Hawaiian Electric’s request that the commission expedite approval.

The PUC’s Richmond acknowledged the public also has wanted to know why the commission has delayed approval of the plan. He declined to speak about the request specifically because it is pending before the commission.

But generally, Richmond said, the approval process is time consuming, in part because it can affect costs to ratepayers for years.

HEI Hawaiian Electric Building3. 1 june 2016
A pillar of Hawaii’s business community whose stock was once considered a safe haven, Hawaiian Electric has suffered financially since the Aug. 8 wildfires and its stock has plummeted. (Cory Lum/Civil Beat/2016)

Hawaiian Electric is a powerful political force in the state, one of Hawaii’s oldest publicly traded corporations, and a long-time safe haven for risk averse local investors: a monopoly electric company charging customers the nation’s highest rates while rewarding investors with a reliable dividend.

But the investment has proven not so safe after all. Hawaiian Electric stock has plummeted since the fire; shares were trading at around $13.50 a share on Thursday, down from its 52-week high of more than $43. Investors stand to lose even more depending on what happens to the utility as investigations unfold.

But none that is influencing the PUC’s decision making, Richmond said. The regulators are focused solely on utility operations.

“Anything outside of it – that’s outside our kuleana,” he said.

What is clear is that the PUC and Hawaiian Electric both failed to heed the cautionary lessons of California’s Tubbs and Camp fires.

In 2020, the trade publication Utility Dive published an in-depth report on the California wildfires and the demise of PG&E. Titled “Wildfires pushed PG&E into bankruptcy. Should other utilities be worried?” the story began with a cautionary introduction, “Catastrophic wildfires, which can lead to billions of dollars in damages, present a unique financial risk that the utility sector will want to get ahead of, experts say.”

In Hawaii, the utility is still waiting for regulators to approve its plan.

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

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