What Hawaiian Electric Industries, Inc. told the SEC could break it.

Hawaiian Electric generates most of its island power from imported petroleum, leaving it exposed to foreign-oil supply continuity rather than just price. The fragility was demonstrated in 2022 when its refiner/fuel supplier PAR Hawaii suspended purchases of Russian crude — which had accounted for at least 25% of Hawaii's supply — amid Russia-Ukraine sanctions, forcing the Utilities to secure backup fuel-supply contracts. Hawaii's petroleum prices track international crude markets and the Utilities carry no hedges against commodity price risk; price exposure is largely mitigated because fuel costs are passed through to ratepayers (the utility bears only 2%, capped at ~$3.7M/yr), so the binding risk is physical supply continuity for an isolated, import-dependent island grid. A distinctive imported-fuel concentration with demonstrated geopolitical disruption.

“On March 3, 2022, as part of economic sanctions amid the Russia-Ukraine war, PAR Hawaii announced that it was suspending all purchases of Russian crude oil, which accounts for at least 25% of Hawaii's supply.”

Following the December 2024 sale of American Savings Bank, HEI is a pure-play electric utility with one reportable segment, headquartered in Honolulu and serving only the Hawaiian Islands through Hawaiian Electric, Hawaii Electric Light and Maui Electric. This concentrates the company in a single state, a single regulator (the Hawaii PUC), and isolated island grids that cannot import power from neighboring systems, so a localized disaster, demand shock, or regulatory action has no geographic offset. The islands are acutely exposed to hurricanes, high winds and wildfires (e.g., the 2023 Maui windstorm and wildfires), which threaten both grid assets and the local economy that funds ratepayer bills. An extreme single-market geographic concentration.

“HEI is headquartered in Honolulu, Hawaii and has one reportable segment: Electric utility.”