Hawaiian Electric Industries: Cost of Capital Untouched, Timing Slips Past the New Rate Period

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Hawaiian Electric Industries: Cost of Capital Untouched, Timing Slips Past the New Rate Period

n track were approved now; revenue Jun-25 Aug-25Prem./(Disc.)Oct-25vs RegulatedDec-25Electric PeersFeb-26 Apr-26Average -21.5%Jun-26

.

requirement, effective date, and Phase 6 incentives remain the stock's real drivers. Source: Bloomberg, Jefferies analysis.

Re-rating has run on settlement progress, not regulated earnings repair. First $479m settlement

payment went out in April from previously raised funds; three remaining through 2029 draw debt

or convertible debt for the second and a mix of capital thereafter. 1Q26 core EPS of $0.18 fell from

$0.23 a year earlier as higher O&M, interest, and depreciation more than offset revenues.

The adoption headline still overstates what was decided. The $170m is an ask, now litigated

through island hearings, discovery, and a waivable hearing where parties press affordability, legal,

and causation challenges. Striking the reservation of rights binds the utilities to the examined result

(reconsideration or appeal aside), so the downside tail is a smaller approved number, not a reversion

to a rate case. Composition outweighs the total: a cut to the GDPPI true-up ($83.2m) is the direct Julien Dumoulin-Smith * | Equity Analyst

EPS hit; a cut to the steam depreciation step ($44.8m) is credit negative but earnings light. +1 (281) 774-2066 | jds@jefferies.com

Paul Zimbardo * | Equity Analyst

Timing is the price of this order, and it lands on FY27E. The schedule sets a Track 1 D&O in mid- +1 (212) 778-8497 | pzimbardo@jefferies.com

to late April 2027, roughly four months after the January 1, 2027, start of the new rate period, with Jamieson Ward, CFA * | Equity Analyst

no interim D&O and no ruling on retroactivity.