In August 2023, the town of Lahaina in Maui County, Hawaii, was devastated by deadly wildfires. Now, Maui County is taking legal action against Hawaiian Electric, seeking damages for the loss of more than 100 lives and billions of dollars in property.
The news of the lawsuit caused Hawaiian Electric’s stock to drop by 6% in extended trading. In response, the electric utility announced that it would suspend its quarterly dividend to allocate funds for rebuilding and restoring power in the aftermath of the fires.
Maui County alleges that Hawaiian Electric negligently maintained energized powerlines despite receiving a warning from the National Weather Service about the heightened fire risk due to high winds from Hurricane Dora and drought conditions.
A mobile phone photo captured the destruction caused by the wildfires in Lahaina.
According to Hawaiian Electric, 30 utility poles were knocked down in West Maui on the day the fires began. The county’s lawsuit claims that these powerlines ignited the fast-moving and destructive Lahaina Fire, resulting in the complete destruction of homes, businesses, churches, schools, and cultural sites.
To learn more, you can download the lawsuit here.
Maui County argues that the death and destruction could have been prevented if Hawaiian Electric had shut off the power. The estimated cost to rebuild Lahaina exceeds $5 billion, according to the Federal Emergency Management Agency.
This lawsuit is part of a series of legal actions against Hawaiian Electric seeking compensation for the catastrophic wildfires. Fitch downgraded the company’s credit rating to junk status, citing potential liability of $3.8 billion. This situation parallels the bankruptcy filing of Pacific Gas & Electric in California in 2019, which also faced massive liability from wildfires.
Moody’s estimates that the economic losses caused by the Maui wildfires amount to approximately $6 billion.
In August 2023, U.S. President Joe Biden arrived in Maui, Hawaii, to assess the damage caused by the wildfires.
Furthermore, Maui County highlights that its hazard mitigation plan in 2020 had identified western Maui as a high-risk area for wildfires. Hawaiian Electric was aware of this risk and requested $190 million in 2022 from the state public utilities commission to strengthen its power grid.
The county argues that despite this, Hawaiian Electric used wooden utility poles on Maui which are more prone to decay. The county alleges that many of these poles were severely damaged due to advanced decay, contributing to their failure during the high winds.
Additionally, the county claims that Hawaiian Electric’s overhead transmission lines lacked technology to mitigate fire risks.
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