Umair Gaines
Hawaiian Electric provides electricity for 95% of residents in the State of Hawaii, across the islands of Oahu, Maui, Molokai, Lanai, and Hawaii Island. The company has a history dating back to 1891 and has played a key role in powering the growth of the Hawaiian Islands. In recent years, Hawaiian Electric has faced criticism for its high profits and executive pay, especially during the pandemic when many households struggled to pay their bills. The company has also been criticized for its slow progress in transitioning to renewable energy and its reliance on fossil fuels, despite committing to the state's goal of 100% renewable energy by 2045. While Hawaiian Electric has no control over fuel prices, its rates are designed so that it makes no profit on fuel, passing the cost directly to consumers.
| Characteristics | Values |
|---|---|
| Percentage of residents of Hawaii that Hawaiian Electric provides electricity for | 95% |
| Renewable energy percentage (as of 2024) | 36% |
| Total customers (as of 31/12/2024) | 472,536 |
| Renewable energy peak (as of 23/08/2024) | 71.6% |
| Renewable energy peak (as of 21/03/2024) | 80.4% |
| Annual revenue in 2020 | $169 million |
| Year established | 1891 |
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What You'll Learn
Hawaiian Electric provides electricity for 95% of Hawaii's residents
Hawaiian Electric has a long history in the region, dating back to its incorporation in 1891. Over the years, it has powered the growth of the Hawaiian Islands, with its electricity offering lighting up homes and businesses. The company has also expanded its services over time, adding ice and cold storage in 1901 and establishing service to the windward side of Oahu in 1914.
Today, Hawaiian Electric is committed to providing affordable, reliable, clean, and sustainable energy to its customers. The company has pledged support for the state's goal of achieving 100% renewable energy by 2045, one of the most ambitious clean energy targets in the country. This commitment to clean energy is reflected in Hawaiian Electric's efforts to add more renewable energy sources to its portfolio, including solar, wind, and geothermal power.
However, Hawaiian Electric has faced criticism for its handling of the transition to renewable energy. Some have argued that the company is not acting in the best interests of the climate or the community, but rather to maintain its own power and profits. There have also been concerns about the high cost of electricity for Hawaiian residents, with energy burden—the percentage of income spent on electricity—being significantly higher than the national average. Despite these challenges, Hawaiian Electric remains a pivotal provider of electricity for the vast majority of Hawaii's residents.
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The company recovers fuel costs through the ECRC
Hawaiian Electric provides electricity to 95% of residents in the State of Hawaii, across the islands of Oahu, Maui, Molokai, Lanai, and Hawaii Island. The company has been in operation since 1891 and has a long history of powering the Hawaiian Islands.
The company recovers fuel costs through the Energy Cost Recovery Clause (ECRC). The ECRC is a mechanism that allows Hawaiian Electric to pass on the costs of fuel and purchased energy to customers without making a profit on fuel. The ECRC revenues rise or fall monthly, reflecting the fluctuating price of fuel. This means that when fuel prices increase, the charges on customers' bills also go up, but when fuel prices decrease, those charges on the bill decrease as well.
The ECRC is a significant source of revenue for Hawaiian Electric, as shown in their cost control scorecards. The scorecards indicate that most of the company's revenues come from the ECRC due to the fluctuating fuel prices. However, it is important to note that Hawaiian Electric has no control over fuel prices and does not profit from the fuel cost adjustments.
The use of the ECRC ensures that Hawaiian Electric can recover the costs of providing electricity, which is essential for maintaining the financial stability of the company and ensuring a reliable supply of electricity for its customers. While energy costs can be a burden for households, with some spending a significant portion of their income on electricity, the ECRC structure aims to pass on the actual cost of fuel without adding profit margins.
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Hawaiian Electric has a history of profitable years
Hawaiian Electric has been providing electricity to Hawaii for over a century, and its history of profitability is well-documented. The company was established in 1891 and has since become an integral part of the state's energy landscape, powering the growth of the Hawaiian Islands and serving 95% of Hawaii's 1.4 million residents.
Over the years, Hawaiian Electric has had a strong financial performance, with a history of profitable years. In 2020, the company made headlines by achieving its highest annual earnings, surpassing $169 million. This success came despite the challenges posed by the pandemic, with many residential and commercial accounts delinquent on bills. The company's financial strength was further evident in its ability to provide bonuses to its top executives and maintain profitability without collecting overdue bills.
One of the key contributors to Hawaiian Electric's profitability is its commitment to cost control and revenue adjustment mechanisms. The company utilizes tools such as the Energy Cost Recovery Clause (ECRC) and the Purchased Power Adjustment Clause (PPAC) to manage fuel and energy costs, passing these costs directly to customers without profiting from fuel prices. This allows Hawaiian Electric to maintain profitability while adapting to fluctuating fuel prices.
Additionally, Hawaiian Electric has taken steps to diversify its energy sources and invest in renewable energy projects. While transitioning to clean energy can be challenging, the company has made progress toward its legally bound benchmarks for 100% renewable energy by 2045. By collaborating with partners like the U.S. Army and Clearway Energy Group, Hawaiian Electric has brought online fuel-flexible generating stations and grid-scale solar power projects, contributing to both profitability and sustainability.
In summary, Hawaiian Electric has a long history of profitable years, navigating challenges, and adapting to the changing energy landscape. The company's commitment to cost control, revenue adjustments, and the transition to renewable energy sources has positioned it for continued success and a more sustainable future. As Hawaiian Electric moves forward, it remains focused on providing affordable, reliable, and clean energy to power Hawaii's families and businesses.
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The Sierra Club of Hawaiʻi has criticised the company
Hawaiian Electric provides electricity to 95% of residents in the State of Hawaii, including Oahu, Maui, Molokai, Lanai, and Hawaii Island. The company has been criticised by the Sierra Club of Hawaiʻi, an organisation that works to advance climate solutions, act for justice, and protect Hawaiʻi's natural resources.
The Sierra Club of Hawaiʻi has taken issue with several of Hawaiian Electric's practices and their impact on the environment. Firstly, the club has criticised Hawaiian Electric's reliance on non-renewable energy sources, such as oil, diesel, and biodiesel, which make up a significant portion of the company's generation capacity. As of 2024, the renewable energy percentage was reported to be 36%, with a renewable peak of 80.4% in March and 41.1% in August. While Hawaiian Electric has been adding renewable energy sources to its portfolio, the Sierra Club advocates for a faster transition away from fossil fuels to protect Hawaiʻi's natural environment and mitigate the impacts of climate change.
In addition to their concerns about energy sources, the Sierra Club of Hawaiʻi has also criticised Hawaiian Electric's handling of cost control measures. The club has questioned the company's recovery of fuel and energy costs through mechanisms like the Energy Cost Recovery Clause (ECRC) and the Purchased Power Adjustment Clause (PPAC). While Hawaiian Electric states that it has no control over fuel prices and does not profit from fluctuations, the Sierra Club argues that these cost recovery methods can burden customers with higher bills. They advocate for greater transparency and fairness in how these costs are managed and passed on to consumers.
The Sierra Club of Hawaiʻi has also taken legal action on issues beyond Hawaiian Electric's operations. In 2023, the club sued the state of Hawaii after Governor Josh Green issued an emergency declaration streamlining housing construction to address the housing shortage. The club attributed the housing shortage to "decades of profiteering" by developers rather than a lack of supply. This action sparked mixed reactions, with some native Hawaiians disagreeing with the club's stance and supporting the development of the Thirty Meter Telescope on Mauna Kea.
The Sierra Club of Hawaiʻi continues to advocate for a healthy, resilient, and equitable future for the state. With a focus on protecting public health, natural resources, and mitigating climate change, the club actively involves its 27,000+ members and supporters in statewide and county-based issues.
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Hawaiian Electric is committed to clean energy sources
Hawaiian Electric is the main electricity provider in Hawaii, serving 95% of the state's 1.4 million residents. The company has a long history in the state, dating back to 1891, and has played a significant role in the development of the Hawaiian Islands.
Over the years, Hawaiian Electric has sought to empower its customers and communities by providing affordable, reliable, and sustainable energy. The company has committed to clean energy sources and is working towards the state's ambitious goal of 100% renewable energy by 2045. This target, set in 2015, is the most aggressive clean energy goal in the country.
Hawaiian Electric has taken steps towards this goal by investing in renewable energy projects and collaborating with other organizations. For example, in 2019, they partnered with Clearway Energy Group to bring online three grid-scale solar power projects totaling 110 megawatts (MW). Additionally, they have established programs like the Energy Scout load-control program, which had 6,000 residential customers enrolled as of 2005.
However, Hawaiian Electric has faced criticism for not acting quickly enough to transition to clean energy sources. Some have accused the company of prioritizing profits over the community and the climate. In 2020, the company made $169 million, its highest annual earnings, while struggling to make progress towards its renewable energy goals.
Despite the challenges, Hawaiian Electric remains committed to clean energy sources and continues to seek local renewable energy options to power Hawaii's families and businesses for generations to come. The company's progress can be tracked through its clean energy projects, and it remains dedicated to meeting the state's renewable energy targets.
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Frequently asked questions
Hawaiian Electric provides electricity for 95% of residents of the State of Hawaii on Oahu, Maui, Molokai, Lanai, and Hawaii Island.
The renewable energy percentage as of 2024 was 36% (based on generation). The renewable energy percentage as of 2025 is 41.1%.
Most of Hawaiian Electric's revenue comes from the ECRC.
Energy burden, the percentage of income spent on electricity, is considered "high" at 6% and "severe" at 10%.
As of 2016, about 15 percent of all residential and commercial electric customers have PV systems.
