Shares of Hawaiian Electric fell more than 20 percent today after reports that the utility is considering restructuring as it faces numerous high-end lawsuits for its role in Maui’s disastrous wildfires. The company’s stock is down more than 73 percent thus far in 2023.
According to a CNN report, shares plummeted to 13-year lows on Monday after a class-action suit alleged that the Maui fires were caused by powerlines toppeled by strong winds. In a lawsuit strikingly similar to the Pacific Power class-action suit in Oregon, plaintiffs want the power company to bear financial responsibility for the deaths and destruction resulting from the utility’s failure to de-energize its powerlines despite ample warning by fire officials and weather experts about approaching extreme winds and related volatile dangers.
“The past days have been devastating for Maui and all of Hawaii,” said Shelee Kimura, president and CEO of Hawaiian Electric. “We have seen human loss and devastation on a scale that’s difficult for our hearts and minds to process. Maui lost homes and businesses, places of worship and cherished historic places. My heart breaks over and over, alongside all of Hawaii, for the people, communities and aina of Maui.”
She added that the restoration efforts now under way are personal to the utility’s employees. “Hawaiian Electric will continue to be here in full force with hundreds of dedicated employees and partners from Maui, Oahu, Hawaii Island, Molokai, Lanai, and beyond. We are focused on restoring power to support our communities’ work to recover and build back.”
The lawsuit alleges that Hawaiian Electric Industries “chose not to deenergize their powerlines during the High Wind Watch and Red Flag Warning conditions for Maui before the Lahaina Fire started,” despite knowing the risks of igniting a fire in those conditions. At least two other lawsuits have already been filed against the company for its role in the fires that killed at least 111 people on the island and destroyed the town of Lahaina. That number is expected to rise, with as many as 1,000 people still missing.
PacifiCorp is requesting that customers pay its $90 million wildfire liability
In a filing last week with the Oregon Public Utility Commission, PacifiCorp requested that it be allowed to defer its liability debt and add those costs to customer rates in the future, according to a report by Oregon Public Broadcasting (OPB).
In the historic legal decision, a Multnomah County Circuit Court jury found PacifiCorp liable for around $90 million in damages to western Oregon residents who lost homes and property in wildfires started by powerlines after the utility company failed to shut down power despite multiple warnings about severe windstorms over the 2020 Labor Day holiday.
“The deferred accounting application enables PacifiCorp to preserve its ability to seek wildfire cost recovery in the future in the event the outcome could potentially impact the financial stability of the Company, which would result in higher costs to customers,” attorneys for PacifiCorp wrote.
“Pacificorp executives fail to act, and cause multiple fires that burn homes and special places across Oregon,” responded Ralph Bloemers, director of Fire Safe Communities for Green Oregon. “Based on eyewitness evidence, a jury found them grossly negligent and in reckless disregard of community safety. Apparently they want to keep paying dividends to their corporate shareholders while Oregonians pick up the tab. Will the Public Utility Commission be a toothless lapdog, or will it look out for Oregon’s best interests?”
On June 14 jurors found PacifiCorp must pay punitive damages that could amount to billions of dollars in the Echo Mountain Complex, Santiam Canyon, South Obenchain, and 242 fires. PacifiCorp said it was disappointed with the jury’s decision and that it plans to appeal.
The Labor Day fires were among the worst natural disasters in Oregon’s history. They killed nine people, burned more than 1,875 square miles (4,856 square kilometers) and destroyed upwards of 5,000 homes and other structures.
In 2019 California’s largest utility, Pacific Gas & Electric, went bankrupt after it paid out billions in lawsuits related to the deadly wildfires it caused.
In recent years, PG&E powerlines and faulty or maintenance-deferred equipment set off 31 wildfires that leveled entire towns and killed 113 people.
In 2020 PG&E pleaded guilty to more than 80 counts of manslaughter for its role in the 2018 Camp Fire, which destroyed the northern California town of Paradise.
Utilities, especially in the U.S. West, are finally finding themselves in a financial bind — mostly of their own making. An Associated Press report published by KPTV News noted that updating, replacing, and even burying thousands of miles of powerlines is a time-consuming and expensive undertaking. But the utilities’ failure to do or even start that work in earnest years ago has put them at risk as wildfires have grown more destructive — and lawsuits over electrical equipment igniting wildfires have ballooned.
From one of the exhibits at trial
In Oregon the PUC is responsible for rate regulation of investor-owned electric utilities (Portland General Electric, Pacific Power, and Idaho Power), natural gas utilities (Avista, Cascade Natural, and NW Natural), landline phone service providers, and some water companies.
Because utilities produce profits for investors from customers, they often raise revenue for infrastructure upgrades by hiking rates. PG&E’s bankruptcy settlement with California wildfire victims totaled $13.5 billion. But only half that money was paid to victims in cash — the other half was paid out in PG&E stock, and that stock has since declined in value.
Oregon’s Citizens’ Utility Board, a nonprofit that advocates for utility customers at the state level, called it “outrageous” that PacifiCorp wants to pass its legal costs on to Oregonians.
“Customers pay the costs of prudent, reasonable, utility operations,” said Bob Jenks, the CUB executive director. “The court found that Pacific Power was reckless and grossly negligent, and included punitive damages meant to punish the company, not customers. Customers should not pay a dime of these costs.”
The state PUC would need to approve this request before PacifiCorp could defer the wildfire liability costs. The Citizens’ Utility Board said it intends to fight that approval. The final verdict in the class-action lawsuit is posted on our DOCUMENTS page.
A jury in Multnomah County Circuit Court in Portland, Oregon decided yesterday that the state’s second-largest electric utility PacifiCorp — which owns Pacific Power — must pay punitive damages for causing the horrific Labor Day wildfires in 2020 — in addition to the earlier verdict in a class-action suit for negligence. It’s expected to amount to billions of dollars. The jury on Monday awarded $73 million to 17 homeowners named as plaintiffs in the case, with damages for a broader class involving the owners of nearly 2,500 properties burned in the fires.
Beachie Creek Fire Sept. 2 2020 — Inciweb photo
PacifiCorp, owned by billionaire Warren Buffett’s Omaha, Nebraska-based investment conglomerate Berkshire Hathaway, said it would appeal, according to a report published by KEZI-TV News.
The jury determined yesterday that punitive damages were warranted because of the utility’s indifference to the safety of others — and to deter such conduct in the future. The 2020 fires were among the worst natural disasters in Oregon’s history, and burned more acres than had been burned in the previous 36 years combined.
September 9 update from Brian Gales’ NWIMT13 after the Beachie Creek ICP was overrun by fire. Originally listed at 469 acres, the fire grew overnight to 131,000 acres.Beachie Creek Fire
The fires roared down canyons in western Oregon, blown by east winds, hot temperatures, and other conditions perfect for autumn firestorms, killing nine people and burning more than 1,875 square miles (4,856 square kilometers), destroying upwards of 5,000 homes and other structures.
Plaintiffs alleged that PacifiCorp negligently failed to shut off power to its 600,000 customers during a severe windstorm, despite numerous warnings from top fire officials, which had prompted other utilities in the state to temporarily shut down power to prevent powerline-caused fires.
Utility crews in October 2020 — Inciweb photo
Doug Dixon, an attorney for the power company, told the jury that punitive damages were unwarranted. He claimed PacifiCorp was not indifferent to the threat of wildfire risk — despite testimony indicating otherwise during the trial. The company has invested hundreds of millions of dollars since the fires to upgrade equipment and expand weather stations and weather modeling. Dixon said the utility could face bankruptcy if punitive damages exceed its net worth of $10.7 billion.
The final verdict is posted on our DOCUMENTS page.
The FINAL VERDICT in the PacifiCorp trial
is now posted on our DOCUMENTS page.
The jury in Multnomah County Circuit Court in Portland found PacifiCorp liable for four of the devastating Labor Day 2020 fires that burned about 2,500 properties in western Oregon. The 12-person jury, according to a report by the Statesman Journal, determined that PacifiCorp (Pacific Power) was negligent for causing the Santiam, Echo Mountain, South Obenchain, and 242 fires after a 7-week class action trial. Pacific Power is Oregon’s second-largest utility.
One of the Labor Day fires in 2020 — from an exhibit during the trial
The jury found that PacifiCorp was negligent to an entire class in the Santiam Canyon, Lincoln City, and southern Oregon areas. Lawyers argued that PacifiCorp’s power lines ignited numerous wildfires that burned thousands of homes during an extreme high wind event on Labor Day night of 2020.
“The trial revealed that PacifiCorp tried to cover up and destroy evidence of powerline-ignited fires in the Santiam Canyon,” said Sam Drevo, one of the plaintiffs, “including electrical fires in firefighter camps in Gates and Mill City, overwhelming firefighters, causing chaos and more loss.”
“I was shocked by how little the company’s top people claimed to remember,” Drevo said, “how they tried to pass the buck, and by how much evidence they admittedly destroyed after knowing their equipment started fires. They took zero responsibility, and they said they would do ‘nothing differently’ next time.”
Drevo said the Santiam Canyon will never be the same. “But I hope this verdict will help in the long-term healing and recovery of what took many lifetimes to build. I ask the State Fire Marshal and State Police to look into whether criminal charges are warranted for the destruction of evidence.”
OPB reported that jurors returned a nearly unanimous verdict today. After less than two days of deliberations, jurors found the company owes more than $71 million to the 17 plaintiffs in the case for losses related to the fires and emotional suffering. The jury also applied its liability finding to a larger class, including the owners of nearly 2,500 properties damaged in the fires, according to a report by the San Francisco Chronicle. That determination could push the cost for damages to more than $1 billion.
The jury said PacifiCorp was at fault because the utility did not proactively shut down power, though several other utilities did, in the face of fire weather warnings, predicted high winds, and many reports and calls about arcing power lines and burning trees on power lines. The utility also failed to clear or maintain trees and other vegetation that its employees knew was a fire hazard.
From one of the exhibits at trial
PacificCorp argued that there was limited evidence its power lines caused the fires in question, but attorneys for the plaintiffs demonstrated that PacifiCorp employees in many cases had destroyed or hidden evidence, and utility employees had repeatedly trespassed onto the fire area — still under investigation — to remove or repair equipment despite repeated orders by the IC and other fire managers to stay clear of the closed area.
Ralph Bloemers, the director of Fire Safe Communities at Green Oregon, was among the first to report and document electrical fires in the Santiam Canyon in testimony to the Oregon Senate. He said fires driven by east winds in western Oregon are nothing new. These fires are a clear sign, though, that Oregon utilities need to prepare for wildfires in all areas of Oregon — whether a high or low fire frequency landscape, heavily populated or not.
“Western Oregon has a long history of wind-driven fire events, and these east wind fires can be very big, covering vast areas, burning where we haven’t seen fires in our lifetimes,” Bloemers said. “But big fires are part of these landscapes, and are now being amplified by extended drought and increased wind as the climate changes.”
Because the jury found PacifiCorp negligent to entire classes, a second phase of the trial will allow people affected by the fires to claim damages, even if they were not involved as plaintiffs in this first phase.
OPB reported that Bob Jenks with the Oregon Citizens’ Utility Board, which represents the interests of ratepayers, said the utility could not reasonably pass on the costs from Monday’s verdict to its customers because the jury found the company was grossly negligent. He said it may be possible that customers will have to pay more in the future if PacifiCorp decides to spend more money on tree trimming and other wildfire mitigation efforts.
Still, he said, the verdict was a clear message.
“To me, this was a pretty harsh verdict against PacifiCorp,” Jenks said. “It’s clearly sending the message to companies that you can be held liable.”
Investigators have still not, more than two years later, completed final investigations into the causes of those historic 2020 fires.
“The past days have been devastating for Maui and all of Hawaii,” said Shelee Kimura, president and CEO of Hawaiian Electric. “We have seen human loss and devastation on a scale that’s difficult for our hearts and minds to process. Maui lost homes and businesses, places of worship and cherished historic places. My heart breaks over and over, alongside all of Hawaii, for the people, communities and aina of Maui.”
In 2019 California’s largest utility, 
