S&P Upgrades Hawaiian Electric to 'BB-' on Wildfire Mitigation Progress

S&P Global Ratings upgraded Hawaiian Electric Industries Inc. and its subsidiaries to 'BB-' from 'B+' on Wednesday, signaling increased confidence in the utility's efforts to manage wildfire risks. The rating agency assigned a stable outlook to all entities, reflecting expectations of an improving financial profile.

Regulatory Support for Mitigation

The upgrade follows a key decision by the Hawaii Public Utilities Commission on June 25, 2026, which approved approximately $350 million in cost recovery for Hawaiian Electric's wildfire mitigation investments. According to the S&P announcement, these funds are expected to be spent over a three-year period. The commission had previously approved the company's overall wildfire mitigation strategy in December 2025.

S&P noted that Hawaiian Electric has taken concrete steps to reduce wildfire threats. These measures include:

• The implementation of a public safety power shutoff program, which began in July 2024.
• The installation of AI-enabled cameras and new weather stations for improved monitoring.
• An enhanced vegetation management program.
• A significant focus on grid hardening, which accounts for over 75% of the mitigation spending.

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Financial Outlook and Other Ratings

S&P projects that Hawaiian Electric's funds from operations (FFO) to debt ratio will be about 10.5% in 2026, before strengthening to consistently above 12% starting in 2027. The rating agency also highlighted that the company recently made its first of four payments, totaling approximately $479 million, related to claims from the 2023 Maui wildfire. This payment was pre-funded with an equity issuance in late 2024.

In its ratings action, S&P also affirmed its 'BB' rating on subsidiary Hawaiian Electric Co. Inc.'s (HECO) senior unsecured debt and maintained the 'B' rating on Hawaiian Electric Industries' commercial paper. However, it revised the recovery rating on HECO's senior unsecured debt to '2' from '1'.