Electric utility segment

9 Months Ended

Sep. 30, 2015

Electric utility subsidiary [Abstract]

Electric utility segment

Electric utility segment

Revenue taxes. The Utilities’ revenues include amounts for the recovery of various Hawaii state revenue taxes. Revenue taxes are generally recorded as an expense in the period the related revenues are recognized. However, the Utilities’ revenue tax payments to the taxing authorities in the period are based on the prior year’s billed revenues (in the case of public service company taxes and PUC fees) or on the current year’s cash collections from electric sales (in the case of franchise taxes). The Utilities included in the third quarters of 2015 and 2014 and the nine months ended September 30, 2015 and 2014 approximately $58 million, $74 million, $159 million and $203 million, respectively, of revenue taxes in “revenues” and in “taxes, other than income taxes” expense.

Recent tax developments. The Utilities adopted the safe harbor guidelines with respect to network (transmission and distribution) assets in 2011 and, in June 2013, the IRS released a revenue procedure relating to deductions for repairs of generation property, which provides some guidance (that is elective) for taxpayers that own steam or electric generation property. This guidance defines the relevant components of generation property to be used in determining whether such component expenditures should be deducted as repairs or capitalized and depreciated by taxpayers. The revenue procedure also provides an extrapolation methodology that could be used by taxpayers in determining deductions for prior years’ repairs without going back to the specific documentation of those years. The guidance does not provide specific methods for determining the repairs amount. Management has adopted a method consistent with this guidance in its 2014 tax return filed in September 2015.

Unconsolidated variable interest entities.

HECO Capital Trust III.  HECO Capital Trust III (Trust III) was created and exists for the exclusive purposes of (i) issuing in March 2004 2,000,0006.50% Cumulative Quarterly Income Preferred Securities, Series 2004 (2004 Trust Preferred Securities) ($50 million aggregate liquidation preference) to the public and trust common securities ($1.5 million aggregate liquidation preference) to Hawaiian Electric, (ii) investing the proceeds of these trust securities in 2004 Debentures issued by Hawaiian Electric in the principal amount of $31.5 million and issued by Hawaii Electric Light and Maui Electric each in the principal amount of $10 million, (iii) making distributions on these trust securities and (iv) engaging in only those other activities necessary or incidental thereto. The 2004 Trust Preferred Securities are mandatorily redeemable at the maturity of the underlying debt on March 18, 2034, which maturity may be extended to no later than March 18, 2053; and are currently redeemable at the issuer’s option without premium. The 2004 Debentures, together with the obligations of the Utilities under an expense agreement and Hawaiian Electric’s obligations under its trust guarantee and its guarantee of the obligations of Hawaii Electric Light and Maui Electric under their respective debentures, are the sole assets of Trust III. Taken together, Hawaiian Electric’s obligations under the Hawaiian Electric debentures, the Hawaiian Electric indenture, the subsidiary guarantees, the trust agreement, the expense agreement and trust guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of amounts due on the Trust Preferred Securities. Trust III has at all times been an unconsolidated subsidiary of Hawaiian Electric. Since Hawaiian Electric, as the holder of 100% of the trust common securities, does not absorb the majority of the variability of Trust III, Hawaiian Electric is not the primary beneficiary and does not consolidate Trust III in accordance with accounting rules on the consolidation of VIEs. Trust III’s balance sheets as of September 30, 2015 and December 31, 2014 each consisted of $51.5 million of 2004 Debentures; $50.0 million of 2004 Trust Preferred Securities; and $1.5 million of trust common securities. Trust III’s income statements for the nine months ended September 30, 2015 and 2014 each consisted of $2.5 million of interest income received from the 2004 Debentures; $2.4 million of distributions to holders of the Trust Preferred Securities; and $75,000 of common dividends on the trust common securities to Hawaiian Electric. As long as the 2004 Trust Preferred Securities are outstanding, Hawaiian Electric is not entitled to receive any funds from Trust III other than pro-rata distributions, subject to certain subordination provisions, on the trust common securities. In the event of a default by Hawaiian Electric in the performance of its obligations under the 2004 Debentures or under its Guarantees, or in the event any of the Utilities elect to defer payment of interest on any of their respective 2004 Debentures, then Hawaiian Electric will be subject to a number of restrictions, including a prohibition on the payment of dividends on its common stock.

Power purchase agreements.  As of September 30, 2015, the Utilities had six PPAs for firm capacity and other PPAs with smaller IPPs and Schedule Q providers (i.e., customers with cogeneration and/or small power production facilities with a capacity of 100 kilowatts or less who buy power from or sell power to the Utilities), none of which are currently required to be consolidated as VIEs. Purchases from all IPPs were as follows:

	Three months ended September 30				Nine months ended September 30
(in millions)	2015		2014		2015		2014
AES Hawaii	$	37	$	38	$	97	$	107
Kalaeloa	51		73		143		214
HEP	13		16		34		36
Hpower	18		18		50		50
Puna Geothermal Venture	8		10		22		36
Hawaiian Commercial & Sugar (HC&S)	2		2		7		50
Other IPPs	32		36		93		53
Total IPPs	$	161	$	193	$	446	$	546

In October 2015 the amended PPA between Maui Electric and HC&S became effective following PUC approval in September 2015. The amended PPA amends the pricing structure and rates for energy sold to Maui Electric, eliminates the capacity payment to HC&S, eliminates Maui Electric’s minimum purchase obligation, provides that Maui Electric may request up to 4 MW of scheduled energy during certain months, and be provided up to 16 MW of emergency power, and extends the term of the PPA from 2014 to 2017.

Some of the IPPs provided sufficient information for Hawaiian Electric to determine that the IPP was not a VIE, or was either a “business” or “governmental organization,” and thus excluded from the scope of accounting standards for VIEs. Other IPPs declined to provide the information necessary for Hawaiian Electric to determine the applicability of accounting standards for VIEs.

Since 2004, Hawaiian Electric has continued its efforts to obtain from the IPPs the information necessary to make the determinations required under accounting standards for VIEs. In each year from 2005 to 2014, the Utilities sent letters to the identified IPPs requesting the required information. All of these IPPs declined to provide the necessary information, except that Kalaeloa later agreed to provide the information pursuant to the amendments to its PPA (see below) and an entity owning a wind farm provided information as required under its PPA. Management has concluded that the consolidation of two entities owning wind farms was not required as Hawaii Electric Light and Maui Electric do not have variable interests in the entities because the PPAs do not require them to absorb any variability of the entities. If the requested information is ultimately received from the remaining IPPs, a possible outcome of future analyses of such information is the consolidation of one or more of such IPPs in the Consolidated Financial Statements. The consolidation of any significant IPP could have a material effect on the Consolidated Financial Statements, including the recognition of a significant amount of assets and liabilities and, if such a consolidated IPP were operating at a loss and had insufficient equity, the potential recognition of such losses. If the Utilities determine they are required to consolidate the financial statements of such an IPP and the consolidation has a material effect, the Utilities would retrospectively apply accounting standards for VIEs.

Kalaeloa Partners, L.P.  In October 1988, Hawaiian Electric entered into a PPA with Kalaeloa, subsequently approved by the PUC, which provided that Hawaiian Electric would purchase 180 megawatts (MW) of firm capacity for a period of 25 years beginning in May 1991. In October 2004, Hawaiian Electric and Kalaeloa entered into amendments to the PPA, subsequently approved by the PUC, which together effectively increased the firm capacity from 180 MW to 208 MW. The energy payments that Hawaiian Electric makes to Kalaeloa include: (1) a fuel component, with a fuel price adjustment based on the cost of low sulfur fuel oil, (2) a fuel additives cost component, and (3) a non-fuel component, with an adjustment based on changes in the Gross National Product Implicit Price Deflator. The capacity payments that Hawaiian Electric makes to Kalaeloa are fixed in accordance with the PPA. Kalaeloa also has a steam delivery cogeneration contract with another customer, the term of which coincides with the PPA. The facility has been certified by the Federal Energy Regulatory Commission as a Qualifying Facility under the Public Utility Regulatory Policies Act of 1978.

Hawaiian Electric and Kalaeloa are in negotiations to address the upcoming end of the PPA term in May 2016. The PPA will automatically extend on a month-to-month basis as long as the parties are still negotiating in good faith. The month-to-month term extensions shall end 60 days after either party notifies the other in writing that negotiations have terminated.

Pursuant to the current accounting standards for VIEs, Hawaiian Electric is deemed to have a variable interest in Kalaeloa by reason of the provisions of Hawaiian Electric’s PPA with Kalaeloa. However, management has concluded that Hawaiian Electric is not the primary beneficiary of Kalaeloa because Hawaiian Electric does not have the power to direct the activities that most significantly impact Kalaeloa’s economic performance nor the obligation to absorb Kalaeloa’s expected losses, if any, that could potentially be significant to Kalaeloa. Thus, Hawaiian Electric has not consolidated Kalaeloa in its consolidated financial statements. A significant factor affecting the level of expected losses Hawaiian Electric could potentially absorb is the fact that Hawaiian Electric’s exposure to fuel price variability is limited to the remaining term of the PPA as compared to the facility’s remaining useful life. Although Hawaiian Electric absorbs fuel price variability for the remaining term of the PPA, the PPA does not currently expose Hawaiian Electric to losses as the fuel and fuel related energy payments under the PPA have been approved by the PUC for recovery from customers through base electric rates and through Hawaiian Electric’s ECAC to the extent the fuel and fuel related energy payments are not included in base energy rates. As of September 30, 2015, Hawaiian Electric’s accounts payable to Kalaeloa amounted to $13 million.

Commitments and contingencies.

Fuel contracts.The Utilities have contractual agreements to purchase minimum quantities of fuel oil, diesel fuel and biodiesel for multi-year periods, some through October 2017. Fossil fuel prices are tied to the market prices of crude oil and petroleum products in the Far East and U.S. West Coast and the biodiesel price is tied to the market prices of animal fat feedstocks in the U.S. West Coast and U.S. Midwest.

On August 27, 2014, Chevron Products Company (Chevron) and Hawaiian Electric entered into a first amendment of their Low Sulfur Fuel Oil Supply Contract, which was approved by the PUC in March 2015. The Amendment reduces the price of fuel above certain volumes, allows for increases in the volume of fuel, and modifies the specification of certain petroleum products supplied under the contract. In addition, Chevron agreed to supply a blend of low sulfur fuel oil (LSFO) and diesel as soon as January 2016 (for supply through the end of the contract term, December 31, 2016) to help Hawaiian Electric meet more stringent Environmental Protection Agency (EPA) air emission requirements known as Mercury and Air Toxics Standards.

The Utilities are parties to amended contracts for the supply of industrial fuel oil and diesel fuels with Chevron and Hawaii Independent Energy, LLC (HIE), respectively, which were scheduled to end December 31, 2015. In August 2014, Chevron and the Utilities entered into a third amendment to the Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract, which amendment extended the term of the contract through December 31, 2016 and provided for automatic renewal for annual terms thereafter unless earlier terminated by either party. In February 2015, Hawaiian Electric executed a similar extension, through December 31, 2016, of the corresponding Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract with HIE.

In June 2015, the Utilities issued Requests for Proposals (RFP) for most of their fuel needs with supplies beginning in 2017 after the expiration of Chevron LSFO and Chevron/HIE Interisland contracts on December 31, 2016. Proposals were received in July 2015 and new contracts, which would be subject to PUC approval, are expected to be executed by December 31, 2015.

AES Hawaii, Inc. Under a PPA entered into in March 1988, as amended, for a period of 30 years beginning September 1992, Hawaiian Electric agreed to purchase 180 MW of firm capacity from AES Hawaii. In August 2012, Hawaiian Electric filed an application with the PUC seeking an exemption from the PUC’s Competitive Bidding Framework to negotiate an amendment to the PPA to purchase 186 MW of firm capacity, and amend the energy pricing formula in the PPA. The PUC approved the exemption in April 2013. However, Hawaiian Electric and AES Hawaii had not been able to reach agreement on an amendment. In June 2015, AES Hawaii filed an arbitration demand regarding a dispute about whether Hawaiian Electric was obligated to buy up to 9 MW of additional capacity based on a 1992 letter. Hawaiian Electric believes the claim asserted in the arbitration demand is without merit and has responded to the arbitration demand. In October 2015, AES Hawaii and Hawaiian Electric entered into a Settlement Agreement to stay the arbitration proceeding through February 15, 2016. The Settlement Agreement includes certain conditions precedent, which if satisfied will release the parties of the claims under the arbitration proceeding. Among the conditions precedent is the successful negotiation of an amendment to the existing purchase power agreement and PUC approval of such amendment.

On November 13, 2015, Hawaiian Electric entered into Amendment No. 3 to the PPA, subject to PUC approval. Amendment No. 3 has more favorable pricing which is passed on to customers, and among other things, provides (1) for an increase in firm capacity of up to 9 MW (the Additional Capacity) above the 180 MW capacity of the AES Hawaii facility, subject to a demonstration of such increased available capacity, (2) for the payment for the Additional Capacity to include a Priority Peak Capacity Charge, a Non-Peak Capacity Charge, a Priority Peak Energy Charge and a Non-Peak Energy Charge, and (3) that AES will make certain operational commitments to improve reliability, and Hawaiian Electric will pay a reliability bonus according to a schedule for reduced Full Plant Trips.

There are other conditions precedent, which are still required to be satisfied under the Settlement Agreement.

Liquefied natural gas. On May 31, 2015 the previous August 2014 agreement with Fortis BC Energy Inc. (Fortis) for liquefaction capacity for liquefied natural gas (LNG) was superseded with a liquefaction Heads of Agreement by and between FortisBC Holdings Inc. and Hawaiian Electric Company, Inc. The agreement, which is subject to Hawaii PUC approval, other regulatory approvals and permits, and other conditions precedent before it becomes effective, provides for LNG liquefaction capacity purchases of 700,000 tonnes per year for the first five years, 600,000 tonnes per year for the next five years, and 500,000 tonnes per year for the last ten years. Fortis must also obtain regulatory and other approvals for the agreement to become effective. The Fortis agreement is assignable and can be assigned to the selected bidder in the Utilities’ RFP for the supply of containerized LNG and will help ensure that liquefaction capacity is available at pricing that management believes will lower customer bills.

Utility projects.  Many public utility projects require PUC approval and various permits from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits can result in significantly increased project costs or even cancellation of projects. In the event a project does not proceed, or if it becomes probable the PUC will disallow cost recovery for all or part of a project, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income.

Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) Implementation Project. The Utilities submitted its Enterprise Information System Roadmap to the PUC in June 2014 and refiled an application for an ERP/EAM implementation project in July 2014 with an estimated cost of $82.4 million. The refiled application addressed the concerns raised by the PUC, in the initial application, regarding the benefits to customers of completing this project. The estimated cost of the project included the cost of ERP software that had been purchased and recorded as a deferred cost.

To address the Consumer Advocate’s positon that the proceeding should be stayed to determine if the project as proposed in the application is reasonable and necessary for future operations as an indirect NEE subsidiary, in May 2015, the Utilities filed a report describing the impact the pending merger with NEE would have on the scope, costs and benefits of the ERP/EAM project. The report indicated that the two viable courses of action for replacing its current system are Option A (to proceed with the project as initially scoped in the Application, and Option B (to move the Utilities to NEE’s existing ERP/EAM solutions). Option B is estimated to cost approximately $20.8 million less than Option A, but can only be pursued if the merger is approved. The Utilities requested the PUC to approve the commencement of work on Option B if the merger is approved; and in the alternative, Option A if the merger is not approved.

In October 2015, the PUC issued a D&O (1) finding that there is a need to replace the existing ERP/EAM system, and (2) deferring any ruling on whether it is reasonable and in the public interest for the Utilities to commence with the project under Options B or A.

In the D&O, the PUC denied the Utilities request to defer the cost for the ERP software purchased in 2012. As a result, the Utilities expensed the ERP software costs of $4.8 million in the third quarter of 2015.

The D&O requires the Utilities to file their bottom-up low-level benefits analysis for both Options A and B, and specified additional information required as part of the their Cost/Benefit Analysis, which will be due by April 8, 2016.

Management cannot predict the further outcome of this proceeding.

Schofield Generating Station Project. In August 2012, the PUC approved a waiver from the competitive bidding framework to allow Hawaiian Electric to negotiate with the U.S. Army for the construction of a 50 MW utility owned and operated firm, renewable and dispatchable generation facility at Schofield Barracks. In September 2015, the PUC approved Hawaiian Electric’s application to expend $167 million for the project. In approving the project, the PUC placed a cap of $167 million for the project, stated 90% of the cap is allowed for cost recovery through cost recovery mechanisms other than base rates, and stated the $167 million cap will be adjusted downward due to any reduction in the cost of the engine contract due to a reduction in the foreign exchange rate. Hawaiian Electric is required to take all necessary steps to lock in the lowest possible exchange rate. The generating station is now expected to be placed in service in the first quarter of 2018.

Environmental regulation.  The Utilities are subject to environmental laws and regulations that regulate the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous waste and toxic substances. In recent years, legislative, regulatory and governmental activities related to the environment, including proposals and rulemaking under the Clean Air Act and Clean Water Act (CWA), have increased significantly and management anticipates that such activity will continue.

On August 14, 2014, the EPA published in the Federal Register the final regulations required by section 316(b) of the CWA designed to protect aquatic organisms from adverse impacts associated with existing power plant cooling water intake structures. The regulations were effective October 14, 2014 and apply to the cooling water systems for the steam generating units at Hawaiian Electric’s power plants on the island of Oahu. The regulations prescribe a process, including a number of required site-specific studies, for states to develop facility-specific entrainment and impingement controls to be incorporated in each facility’s National Pollutant Discharge Elimination System permit. In the case of Hawaiian Electric’s power plants, there are a number of studies that have yet to be completed before Hawaiian Electric and the State of Hawaii Department of Health (DOH) can determine what entrainment or impingement controls, if any, might be necessary at the affected facilities to comply with the new 316(b) rule.

On February 16, 2012, the Federal Register published the EPA’s final rule establishing the EPA’s National Emission Standards for Hazardous Air Pollutants for fossil-fuel fired steam electrical generating units (EGUs). The final rule, known as the Mercury and Air Toxics Standards (MATS), applies to the 14 EGUs at Hawaiian Electric’s power plants. MATS establishes the Maximum Achievable Control Technology standards for the control of hazardous air pollutants emissions from new and existing EGUs. Based on a review of the final rule and the benefits and costs of alternative compliance strategies, Hawaiian Electric has selected a MATS compliance strategy based on switching to lower emission fuels. The use of lower emission fuels will provide for MATS compliance at lower overall costs and avoid the reduction in operational flexibility imposed by emissions control equipment. Hawaiian Electric requested and received a one-year extension, resulting in a MATS compliance date of April 16, 2016. Hawaiian Electric submitted to the EPA a Petition for Reconsideration and Stay dated April 16, 2012, which asked the EPA to revise an emissions standard for non-continental oil-fired EGUs on the grounds that the promulgated standard was incorrectly derived. On April 21, 2015, the EPA denied Hawaiian Electric's Petition. Hawaiian Electric appealed the EPA’s denial of the Petition. On June 29, 2015, the U.S. Supreme Court found that the EPA’s determination that it was appropriate and “necessary” to regulate hazardous air pollutants from power plants was flawed because the EPA did not take the costs of compliance into account. The Supreme Court sent the MATS rule case back to the D.C. Circuit Court of Appeals for further proceedings. The likely timeframe for action by the Circuit Court is December 2015. Pending action by the Circuit Court, Hawaiian Electric will continue with its plan to comply with the MATS requirements by April 16, 2016.

On February 6, 2013, the EPA issued a guidance document titled “Next Steps for Area Designations and Implementation of the Sulfur Dioxide National Ambient Air Quality Standard,” which outlines a process that will provide the states additional flexibility and time for their development of one-hour sulfur dioxide (SO₂) National Ambient Air Quality Standard (NAAQS) implementation plans. In August 2015, the EPA published the final data requirements rule for states to characterize their air quality in relation to the one-hour SO₂ NAAQS. Under this rule, the EPA expects to designate areas as attaining, or not attaining, the one-hour SO₂ NAAQS in December 2017 or December 2020, depending on whether the area was characterized through modeling or monitoring. Hawaiian Electric will work with the DOH in implementing the one-hour SO₂ NAAQS and in developing cost-effective strategies for NAAQS compliance, if needed.

Depending upon the rules and guidance developed for compliance with the more stringent NAAQS, the Utilities may be required to incur material capital expenditures and other compliance costs, but such amounts and their timing are not determinable at this time. Additionally, the combined effects of the CWA 316(b) regulations, the MATS rule and the more stringent NAAQS may contribute to a decision to retire or deactivate certain generating units earlier than anticipated.

Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, periodically encounter petroleum or other chemical releases into the environment associated with current or previous operations. The Utilities report and take action on these releases when and as required by applicable law and regulations. The Utilities believe the costs of responding to such releases identified to date will not have a material adverse effect, individually or in the aggregate, on Hawaiian Electric’s consolidated results of operations, financial condition or liquidity.

Potential Clean Air Act Enforcement. On July 1, 2013, Hawaii Electric Light and Maui Electric received a letter from the U.S. Department of Justice (DOJ) asserting potential violations of the Prevention of Significant Deterioration and Title V requirements of the Clean Air Act involving the Hill and Kahului Power Plants. The parties are continuing to negotiate toward a resolution of the DOJ’s claims. As part of the ongoing negotiations, the DOJ proposed in November 2014 entering into a consent decree pursuant to which the Utilities would install certain pollution controls and pay a penalty. The Utilities are currently reviewing the proposal, but are unable to estimate the amount or effect of a consent decree, if any, at this time.

Former Molokai Electric Company generation site.  In 1989, Maui Electric acquired by merger Molokai Electric Company. Molokai Electric Company had sold its former generation site (Site) in 1983, but continued to operate at the Site under a lease until 1985. The EPA has since performed Brownfield assessments of the Site that identified environmental impacts in the subsurface. Although Maui Electric never operated at the Site and operations there had stopped four years before the merger, in discussions with the EPA and the DOH, Maui Electric agreed to undertake additional investigations at the Site and an adjacent parcel that Molokai Electric Company had used for equipment storage (the Adjacent Parcel) to determine the extent of impacts of subsurface contaminants. A 2011 assessment by a Maui Electric contractor of the Adjacent Parcel identified environmental impacts, including elevated polychlorinated biphenyls (PCBs) in the subsurface soils. In cooperation with the DOH and EPA, Maui Electric is further investigating the Site and the Adjacent Parcel to determine the extent of impacts of PCBs, residual fuel oils, and other subsurface contaminants. Maui Electric has a reserve balance of $3.6 million as of September 30, 2015 for the additional investigation and estimated cleanup costs at the Site and the Adjacent Parcel; however, final costs of remediation will depend on the results of continued investigation. The final site investigation plan was submitted to the DOH and EPA in December 2014 for their approval. The DOH formally approved the investigation plan on September 14, 2015. The EPA determined that their formal approval is not required until the next phase of work that determines cleanup actions for the site. Sampling of the site per the investigation plan will proceed after securing required permits and access agreements.

Pearl Harbor sediment study. In July 2014, the U.S. Navy notified Hawaiian Electric of the Navy’s determination that Hawaiian Electric is responsible for cleanup of PCB contamination in sediment in the area offshore of the Waiau Power Plant. The Navy has also requested that Hawaiian Electric reimburse the costs incurred by the Navy to date to investigate the area, and is asking Hawaiian Electric to engage in negotiations regarding the financing and undertaking of future response actions to address the sediment contamination offshore from the Waiau Power Plant. The extent of the contamination, the appropriate remedial measures to address it, and Hawaiian Electric’s potential responsibility for any associated costs, including any past costs incurred by the Navy, have not yet been determined. The Navy has completed a remedial investigation and a feasibility study (FS) for the remediation of contaminated sediment at several locations in Pearl Harbor. The Navy’s study identified elevated levels of PCBs in the sediment in East Loch of Pearl Harbor, offshore from the Waiau Power Plant. The Navy issued its Final FS Report on June 29, 2015. The Navy has indicated that additional data collection is necessary and will be conducted as part of the remedial design, and that the results will be used to finalize the remediation plan and to better define the areas where remediation is necessary to reduce the potential environmental risks. Hawaiian Electric has requested to participate with the Navy in the preparation of the remedial design for the contaminated sediment offshore from the Waiau Power Plant, and in particular in the development of the work plan for additional data collection, and refinement of the environmental risk analysis, the final remedy, and the response costs for the offshore area. To date, Hawaiian Electric’s role in the development of the remedial design and response costs is uncertain.

On March 23, 2015, Hawaiian Electric received a letter from the EPA requesting that Hawaiian Electric submit a work plan to assess potential sources and extent of PCB contamination onshore at the Waiau Power Plant. Hawaiian Electric submitted a sampling and analysis work plan to the EPA and the DOH. The extent of the onshore contamination, the appropriate remedial measures to address it, and any associated costs have not yet been determined.

In December 2014, Hawaiian Electric recorded a reserve of $0.8 million for investigation of certain onshore areas at the Waiau Power Plant that may have, in the past, contributed to the PCB contamination in the offshore sediment and for ongoing review and assessment of the Navy’s remediation plan for the offshore sediment. The final remediation costs will depend on the results of the onshore investigation and assessment of potential source control requirements, as well as the further investigation of contaminated sediment offshore from the Waiau Power Plant.

Hawaiian Electric has also conducted a search for other potential sources of sediment contamination in the Waiau area that are unrelated to electric power generation at its Waiau Power Plant. Hawaiian Electric has identified a potential source east of the plant: a former Naval Reserve (a Formerly Used Defense Site (FUDS)) where a used drum storage area, a waste oil burning pit, and an oil/water separator were operated by the Navy from the 1940s until approximately 1962. This FUDS is located on the property currently occupied by the City and County (C&C) of Honolulu’s Neal S. Blaisdell Park. To further assess this former Naval Reserve site, Hawaiian Electric has requested environmental investigation reports, environmental data, and permits for this property and the adjacent Waimalu Stream (e.g., dredging permits and related environmental impact assessments and studies) from several federal and state agencies, as well as the C&C of Honolulu. The contribution of PCBs to sediment contamination in East Loch from this potential source has not yet been determined.

Global climate change and greenhouse gas emissions reduction.  National and international concerns about climate change and the contribution of greenhouse gas (GHG) emissions (including carbon dioxide emissions from the combustion of fossil fuels) to climate change have led to action by the State and to federal legislative and regulatory proposals to reduce GHG emissions.

In July 2007, Act 234, which requires a statewide reduction of GHG emissions by January 1, 2020 to levels at or below the statewide GHG emission levels in 1990, became law in Hawaii. On June 20, 2014, the Governor signed the final regulations required to implement Act 234 (i.e., the final GHG rule), which went into effect on June 30, 2014. In general, pursuant to Act 234 and corresponding regulations, affected sources that have the potential to emit GHGs in excess of established thresholds are required to reduce GHG emissions by 16% below 2010 emission levels by 2020. In accordance with the GHG rule, the Utilities submitted their Emissions Reduction Plan to the DOH on June 30, 2015. Hawaiian Electric, Maui Electric, and Hawaii Electric Light have a total of 11 facilities affected by the state GHG rule. Hawaiian Electric made use of the partnering provisions in the DOH GHG rule to prepare a single Emissions Reduction Plan that covers all 11 of the Utilities’ affected facilities, and has committed to a 16% reduction in GHG emissions company-wide. Pursuant to the State’s GHG rule, the DOH will incorporate the proposed facility-specific GHG emission limits into each facility’s covered source permit based on the 2020 levels specified in Hawaiian Electric’s approved Emissions Reduction Plan. The GHG rule also requires affected sources to pay an annual fee that is based on tons per year of GHG emissions starting on the effective date of the regulations. The fee for the Utilities is estimated to be approximately $0.5 million annually. The State GHG is aligned with the federal “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule” (GHG Tailoring Rule, see below) and creates new thresholds for GHG emissions from new and existing stationary source facilities. The latest assessment of the proposed federal and final state GHG rules is that the continued growth in renewable power generation will significantly reduce the compliance costs and risk for the Utilities.

On September 22, 2009, the EPA issued its “Final Mandatory Reporting of Greenhouse Gases Rule,” which requires that sources emitting GHGs above certain threshold levels monitor and report their GHG emissions. Following these requirements, the Utilities have submitted the required reports for 2010 through 2013 to the EPA. In December 2009, the EPA made the finding that motor vehicle GHG emissions endanger public health or welfare. Since then, the EPA has also issued rules to address GHG emissions from stationary sources, like the Utilities’ EGUs.

As part of President Obama’s Climate Action Plan, the EPA has been directed to adopt GHG emission limits for new and existing EGUs. The EPA issued the final federal rule for GHG emission reductions from existing EGUs, also known as the Clean Power Plan, on August 3, 2015. The final federal GHG rule for existing EGUs sets interim state-wide emissions limits for the 48 contiguous states that must be met on average from 2022 through 2029; final limits will apply from 2030. The EPA did not issue final guidelines for Alaska, Hawaii, Puerto Rico, or Guam because the Best System of Emission Reduction established for the contiguous states is not appropriate for these locations. The EPA said it will work with the state and territorial governments for Alaska, Hawaii, Puerto Rico, and Guam and other stakeholders to gather additional information regarding the emissions reduction measures available in these jurisdictions, particularly with respect to renewable generation. Hawaiian Electric plans to participate in this process. Management’s latest assessment of the Clean Power Plan is that the continued growth of renewable power generation and the expected implementation of LNG by the Utilities in the future will significantly reduce the compliance costs and risk for the Utilities. To date, no timetable has been established by the EPA to develop GHG emission limits for Alaska, Hawaii, Puerto Rico, or Guam.

The Utilities have taken, and continue to identify opportunities to take, direct action to reduce GHG emissions from their operations, including, but not limited to, supporting DSM programs that foster energy efficiency, using renewable resources for energy production and purchasing power from IPPs generated by renewable resources, burning renewable biodiesel in Hawaiian Electric’s Campbell Industrial Park combustion turbine No. 1 (CIP CT-1), using biodiesel for startup and shutdown of selected Maui Electric generating units, and testing biofuel blends in other Hawaiian Electric and Maui Electric generating units. The Utilities are also working with the State of Hawaii and other entities to pursue the use of LNG as a cleaner and lower-cost fuel to replace, at least in part, the petroleum oil that would otherwise be used. Management is unable to evaluate the ultimate impact on the Utilities’ operations of more comprehensive GHG regulations that might be promulgated; however, the various initiatives that the Utilities are pursuing are likely to provide a sound basis for appropriately managing the Utilities’ carbon footprint and thereby meet both state and federal GHG reduction goals.

While the timing, extent and ultimate effects of climate change cannot be determined with any certainty, climate change is predicted to result in sea level rise. This effect could potentially result in impacts to coastal and other low-lying areas (where much of the Utilities’ electric infrastructure is sited), and result in increased flooding and storm damage due to heavy rainfall, increased rates of beach erosion, saltwater intrusion into freshwater aquifers and terrestrial ecosystems, and higher water tables in low-lying areas. The effects of climate change on the weather (for example, more intense or more frequent rain events, flooding, or hurricanes), sea levels, and freshwater availability and quality have the potential to materially adversely affect the results of operations, financial condition, and liquidity of the Utilities. For example, severe weather could cause significant harm to the Utilities’ physical facilities.

Asset retirement obligations.  Asset retirement obligations (AROs) represent legal obligations associated with the retirement of certain tangible long-lived assets, are measured as the present value of the projected costs for the future retirement of specific assets and are recognized in the period in which the liability is incurred if a reasonable estimate of fair value can be made. The Utilities’ recognition of AROs have no impact on their earnings. The cost of the AROs is recovered over the life of the asset through depreciation. AROs recognized by the Utilities relate to obligations to retire plant and equipment, including removal of asbestos and other hazardous materials.

Hawaiian Electric has recorded estimated AROs related to removing retired generating units at its Honolulu and Waiau power plants. These removal projects are ongoing, with significant activity and expenditures occurring in 2014 in partial settlement of these liabilities. Both removal projects are expected to continue through 2015.

Changes to the ARO liability included in “Other liabilities” on Hawaiian Electric’s balance sheet were as follows:

	Nine months ended September 30
(in thousands)	2015			2014
Balance, beginning of period	$	29,419		$	43,106
Accretion expense	18			816
Liabilities incurred	—			—
Liabilities settled	(2,349		)	(11,338		)
Revisions in estimated cash flows	—			—
Balance, end of period	$	27,088		$	32,584

Decoupling.In 2010, the PUC issued an order approving decoupling, which was implemented by Hawaiian Electric on March 1, 2011, by Hawaii Electric Light on April 9, 2012 and by Maui Electric on May 4, 2012. Decoupling is a regulatory model that is intended to facilitate meeting the State of Hawaii’s goals to transition to a clean energy economy and achieve an aggressive renewable portfolio standard. The decoupling model implemented in Hawaii delinks revenues from sales and includes annual rate adjustments for certain other operation and maintenance (O&M) expenses and rate base changes. The decoupling mechanism has three components: (1) a sales decoupling component via a revenue balancing account (RBA), (2) a revenue escalation component via a RAM and (3) an earnings sharing mechanism, which would provide for a reduction of revenues between rate cases in the event the utility exceeds the return on average common equity (ROACE) allowed in its most recent rate case. Decoupling provides for more timely cost recovery and earning on investments, and has resulted in an improvement in the Utilities’ under-earning situation that had existed prior to the implementation of decoupling.

On May 31, 2013, as provided for in its original order issued in 2010 approving decoupling and citing three years of implementation experience for Hawaiian Electric, the PUC opened an investigative docket to review whether the decoupling mechanisms are functioning as intended, are fair to the Utilities and their ratepayers, and are in the public interest. The PUC affirmed its support for the continuation of the sales decoupling (RBA) mechanism and stated its interest in evaluating the RAM to ensure it provides the appropriate balance of risks, costs, incentives and performance requirements, as well as administrative efficiency, and whether the current interest rate applied to the outstanding RBA balance is reasonable. In October 2013, the PUC issued orders that bifurcated the proceeding (into Schedule A and Schedule B issues).

On February 7, 2014, the PUC issued a decision and order (D&O) on the Schedule A issues, which made certain modifications to the decoupling mechanism. Specifically, the D&O required:

• An adjustment to the Rate Base RAM Adjustment to include 90% of the amount of the current RAM Period Rate Base RAM Adjustment that exceeds the Rate Base RAM Adjustment from the prior year, to be effective with the Utilities’ 2014 decoupling filing.

• Effective March 1, 2014, the interest rate to be applied on the outstanding RBA balances to be the short term debt rate used in each Utilities last rate case (ranging from 1.25% to 3.25%), instead of the 6% that had been previously approved.

As required, the Utilities have made available to the public, on the Utilities’ websites, performance metrics identified by the PUC. The Utilities are updating the performance metrics on a quarterly basis.

On March 31, 2015, the PUC issued an Order (the March Order) related to the Schedule B portion of the proceeding to make certain further modifications to the decoupling mechanism, and to establish a briefing schedule with respect to certain issues in the proceeding. The March Order modified the RAM portion of the decoupling mechanism to be capped at the lesser of the RAM Revenue Adjustment as currently determined (adjusted to eliminate the 90% limitation on the current RAM Period Rate Base RAM adjustment that was ordered in the Schedule A portion of the proceeding) and a RAM Revenue Adjustment calculated based on the cumulative annual compounded increase in Gross Domestic Product Price Index (GDPPI) applied to the 2014 annualized target revenues (adjusted for certain items specified in the Order). The 2014 annualized target revenues represent the target revenues from the last rate case, and RAM revenues, offset by earnings sharing credits, if any, allowed under the decoupling mechanism through the 2014 decoupling filing. The Utilities may apply to the PUC for approval of recovery of revenues for Major Projects (including related baseline projects grouped together for consideration as Major Projects) through the RAM above the RAM cap or outside of the RAM through the Renewable Energy Infrastructure Program (REIP) surcharge or other adjustment mechanism. The RAM was amended on an interim basis pending the outcome of the PUC’s review of the Utilities’ Power Supply Improvement Plans. The triennial rate case cycle required under the decoupling mechanism continues to serve as the maximum period between the filing of general rate cases, and the amendments to the RAM do not limit or dilute the ordinary opportunities for the Utilities to seek rate relief according to conventional/traditional ratemaking procedures.

In making the modifications to the RAM Adjustment, the PUC stated the changes are designed to provide the PUC with control of and prior regulatory review over substantial additions to baseline projects between rate cases. The modifications do not deprive the Utilities of the opportunity to recover any prudently incurred expenditure or limit orderly recovery for necessary expanded capital programs.

The RBA, which is the sales decoupling component, was retained by the PUC in its March Order, and the PUC made no change in the authorized return on common equity. The PUC stated that performance-based ratemaking is not adopted at this time.

In accordance with the March Order, the Utilities and the Consumer Advocate filed on June 15, 2015, their Joint Proposed Modified REIP Framework/Standards and Guidelines regarding the eligibility of projects for cost recovery above the RAM Cap through the REIP surcharge. On the same date, the Utilities filed their proposed standards and guidelines on the eligibility of projects for cost recovery through the RAM above the RAM cap. On June 30, 2015, the Consumer Advocate filed comments on this proposal, and the County of Hawai‘i filed comments on both the REIP and the RAM above the RAM Cap proposals. On October 26, 2015, Hawaiian Electric filed an application to recover the revenue requirements associated with 2015 net plant additions in the amount of $40.3 million and other associated costs for its Underground Cable Program and the 138kV Transmission and 46kV Sub-Transmission Structures Major Baseline Projects through the RAM above the 2015 RAM Cap. On October 30, 2015, Maui Electric filed an application to recover the revenue requirements associated with 2015 net plant additions in the amount of $4.3 million and other associated costs for its transmission and distribution and generation plant reliability Major Baseline Project through the RAM above the 2015 RAM Cap.

On May 28, 2015, the PUC issued an Order (the May Order) related to the Utilities’ revised annual decoupling filing for tariffed rates submitted on April 15, 2015. The May Order ruled on the specific matters identified by the PUC in its information requests and by the Consumer Advocate in its Statement of Position. As a result of the May Order, on June 3, 2015, the Utilities filed revised tariff rates reflecting a reduction to the RAM portion of the tariff filing. The revision was made primarily to adjust the RAM to reflect reduced operations and maintenance expenses associated with the Utilities’ change in estimate related to the allocation of indirect costs implemented in 2014, and to exclude the GDPPI factor on the depreciation expense portion for the calculation of the 2015 RAM Cap. The May Order also requires a one-time adjustment to customers for the impact of bonus tax depreciation enacted in December 2014 on the RAM revenues used for the 2014 tariff filing.

The revised 2015 annual incremental RAM revenues for the Utilities amounts to $11.1 million compared to the $26.2 million filed on April 15, 2015 and the $31.6 million filed on March 31, 2015 based on the methodology prior to its modification in the March Order. The tariffed rates, which became effective on June 8, 2015, also include the collection or refund of the accrued RBA balance and associated revenue taxes as of December 31, 2014 and any accrued earnings sharing mechanism credits. The net refund to be provided by the three Utilities under the revised tariffs amounts to $0.4 million, compared to a collection of $14.7 million under the tariffs filed on April 15, 2015. Below is a summary of the 2015 incremental impact by company.

($ in millions)	Hawaiian Electric			Hawaii Electric Light		Maui Electric
Annual incremental RAM adjusted revenues	$	8.1		$	1.5	$	1.5
Annual change in accrued earnings sharing credits to be refunded	$	—		$	—	$	(0.1	)
Annual change in accrued RBA balance as of December 31, 2014 (and associated revenue taxes) to be collected	$	(9.2	)	$	0.1	$	(2.2	)
Net annual incremental amount to be collected under the tariffs	$	(1.1	)	$	1.5	$	(0.8	)
Impact on typical residential customer monthly bill (in dollars) *	$	(0.09	)	$	0.88	$	(0.13	)

Note: Columns may not foot due to rounding

* Based on a 500 kilowatthour (KWH) bill for Hawaiian Electric, Maui Electric, and Hawaii Electric Light. The bill impact for Lanai and Molokai customers is a decrease of $0.11, based on a 400 KWH bill.

As required by the March Order, the Parties filed initial and reply briefs related to the following issues: (1) whether, and if so, how the conventional performance incentive mechanisms proposed in this proceeding should be refined and implemented in this docket; (2) what are the appropriate steps, processes and timing for determining measures to improve the efficiency and effectiveness of the general rate case filing and review process; and (3) what are the appropriate steps, processes, and timing to further consider the merits of the proposed changes to the ECAC identified in this proceeding. In identifying the issue on possible changes to the ECAC, the PUC stated that changes to the ECAC should be made with great care to avoid unintended consequences.

The May Order indicates the PUC will review the change in estimate related to the allocation of indirect costs in a separate docket, and that the change will remain subject to adjustment pending the outcome of the review. Management cannot predict the outcome of this review or the further outcome of this proceeding or the ultimate impact of the proceeding on the results of operation of the Utilities or the net financial impact on the Utilities and HEI.

Potential impact of lava flows.In June 2014, lava from the Kilauea Volcano on the island of Hawaii began flowing toward the town of Pahoa. Hawaii Electric Light monitored utility property and equipment near the affected areas and protected that property and equipment to the extent possible (e.g., building barriers around poles). In March 2015 Hawaii Electric Light filed an application with the PUC requesting approval to defer costs incurred to monitor, prepare for, respond to, and take other actions necessary in connection with the June 2014 Kilauea lava flow such that Hawaii Electric Light can request PUC approval to recover those costs in a future rate case. A PUC decision is pending.

April 2014 regulatory orders. In April 2014, the PUC issued four orders that collectively address certain key policy, resource planning and operational issues for the Utilities. The four orders are as follows:

Integrated Resource Planning. The PUC did not accept the Utilities’ Integrated Resource Plan and Action Plans submission, and, in lieu of an approved plan, has commenced other initiatives to enable resource planning. The PUC directed each of Hawaiian Electric and Maui Electric to file within 120 days its respective Power Supply Improvement Plans (PSIPs), and the PSIPs were filed in August 2014. The PUC also provided its inclinations on the future of Hawaii’s electric utilities in an exhibit to the order. The exhibit provides the PUC’s perspectives on the vision, business strategies and regulatory policy changes required to align the Utilities’ business model with customers’ interests and the state’s public policy goals.

Reliability Standards Working Group. The PUC ordered the Utilities (and in some cases the Kauai Island Utility Cooperative) to take timely actions intended to lower energy costs, improve system reliability and address emerging challenges to integrate additional renewable energy. In addition to the PSIPs mentioned above, the PUC ordered certain filing requirements, which include the following:

• Distributed Generation Interconnection Plan - the Utilities’ Plan was filed in August 2014.

• Plan to implement an on-going distribution circuit monitoring program to measure real-time voltage and other power quality parameters - the Utilities’ Plan was filed in June 2014.

• Action Plan for improving efficiencies in the interconnection requirements studies - the Utilities’ Plan was filed in May 2014.

• The Utilities are to file monthly reports providing details about interconnection requirements studies.

• Integrated interconnection queue for each distribution circuit for each island grid - the Utilities’ integrated interconnection queue plan was filed in August 2014 and the integrated interconnection queues were implemented in January 2015.

The PUC also stated it would be opening new dockets to address (1) reliability standards, (2) the technical, economic and policy issues associated with distributed energy resources (see “Distributed Energy Resources (DER) Investigative Proceeding” below) and (3) the Hawaii electricity reliability administrator, which is a third party position which the legislature has authorized the PUC to create by contract to provide support for the PUC in developing and periodically updating local grid reliability standards and procedures and interconnection requirements and overseeing grid access and operation.

Policy Statement and Order Regarding Demand Response Programs. The PUC provided guidance concerning the objectives and goals for demand response programs, and ordered the Utilities to develop an integrated Demand Response Portfolio Plan that will enhance system operations and reduce costs to customers. The Utilities’ Plan was filed in July 2014. In August 2014, the PUC invited public comment on the Utilities’ Plan. The Utilities submitted status updates in October 2014 and March 2015. On July 28, 2015, the PUC issued an order appointing a special advisor to guide, monitor, and review the Utility’s Plan design and implementation.

Maui Electric Company 2012 Test Year Rate Case. The PUC acknowledged the extensive analyses provided by Maui Electric in its System Improvement and Curtailment Reduction Plan (SICRP) filed in September 2013. The PUC stated that it is encouraged by the changes in Maui Electric’s operations that have led to a significant reduction in the curtailment of renewables, but stated that Maui Electric has not set forth a clearly defined path that addresses integration and curtailment of additional renewables. The PUC directed Maui Electric to present a PSIP to address present and future system operations so as to not only reduce curtailment, but to optimize the operation of its system for its customers’ benefit. The Maui Electric PSIP was filed in August 2014, and is currently being reviewed by the PUC in a new docket along with the Hawaiian Electric and Hawaii Electric Light PSIPs. Maui Electric filed its second annual SICRP status update in September 2015.

Review of PSIPs. Collectively, the PUC’s April 2014 resource planning orders confirm the energy policy and operational priorities that will guide the Utilities’ strategies and plans going forward.

PSIPs for Hawaiian Electric, Maui Electric and Hawaii Electric Light were filed in August 2014. The PSIPs each include a tactical plan to transform how electric utility services will be offered to meet customer needs and produce higher levels of renewable energy. Each plan contains a diversified mix of technologies, including significant distributed and utility‑scale renewable resources, that is expected to result, on a consolidated basis, in over 65% of the Utilities’ energy being produced from renewable resources by 2030. Under these plans, the Utilities will support sustainable growth of rooftop solar, expand use of energy storage systems, empower customers by developing smart grids, offer new products and services to customers (e.g., community solar, microgrids and voluntary “demand response” programs), switch from high-priced oil to lower cost liquefied natural gas, retire higher-cost, less efficient existing oil-based steam generators, and lower full service residential customer bills in real dollars.

In November 2015, the PUC issued an order in the proceeding to review the PSIPs filed. The order provided observations and concerns on the PSIPs submitted and requires the Utilities to review and submit a Proposed Revision Plan by November 25, 2015. The PUC ordered the Proposed Revision Plan to include a schedule and a work plan to supplement, amend and update the PSIPs in order to address the PUC’s observations and concerns. The Proposed Revision Plan would need to include an Interim PSIP Update filing by February 15, 2016 and updated PSIPs by April 1, 2016. The parties and participants will file comments on the Utilities Proposed Revision Plan by January 15, 2016, after which the PUC will provide further guidance regarding the substance and course of the proceeding.

Distributed Energy Resources (DER) Investigative Proceeding. In March 2015, the PUC issued an order to address DER issues.

On June 29, 2015, the Utilities submitted their final Statement of Position in the DER proceeding, which included:

(1) new pricing provisions for future rooftop photovoltaic (PV) systems,

(2) technical standards for advanced inverters,

(3) new options for customers including battery-equipped rooftop PV systems,

(4) a pilot time-of-use rate,

(5) an improved method of calculating the amount of rooftop PV that can be safely installed, and

(6) a streamlined and standardized PV application process.

On October 12, 2005, the PUC issued a D&O establishing DER reforms that: (1) promote rapid adoption of the next generation of solar PV and other distributed energy technologies; (2) encourage more competitive pricing of distributed energy resource systems; (3) lower overall energy supply costs for all customers; and (4) help to manage DER in terms of each island’s limited grid capacity.

The D&O approved a customer self-supply tariff and a customer grid supply tariff to govern customer generators connected to the Utilities’ systems. These tariffs replace the Net Energy Metering (NEM) program.

The D&O ordered the Utilities, among other things, (a) to collaborate with inverter manufacturers to develop a test plan by December 15, 2015 for the highest priority advanced inverter functions that are not UL certified and (b) to complete the circuit-level hosting capacity analysis for all islands in the Utilities’ service territories by December 10, 2015. The DER Phase 2 of this docket will begin in November 2015 and will focus on further developing competitive markets for distributed energy resources, including storage.

On October 21, 2015, The Alliance for Solar Choice, LLC filed a complaint in Hawaii state court seeking an order enjoining the PUC from implementing the D&O and declaring that the D&O be reversed, modified, and/or remanded to the PUC for further proceedings.

Consolidating financial information. Hawaiian Electric is not required to provide separate financial statements or other disclosures concerning Hawaii Electric Light and Maui Electric to holders of the 2004 Debentures issued by Hawaii Electric Light and Maui Electric to Trust III since all of their voting capital stock is owned, and their obligations with respect to these securities have been fully and unconditionally guaranteed, on a subordinated basis, by Hawaiian Electric. Consolidating information is provided below for Hawaiian Electric and each of its subsidiaries for the periods ended and as of the dates indicated.

Hawaiian Electric also unconditionally guarantees Hawaii Electric Light’s and Maui Electric’s obligations (a) to the State of Hawaii for the repayment of principal and interest on Special Purpose Revenue Bonds issued for the benefit of Hawaii Electric Light and Maui Electric, (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder and (c) relating to the trust preferred securities of Trust III. Hawaiian Electric is also obligated, after the satisfaction of its obligations on its own preferred stock, to make dividend, redemption and liquidation payments on Hawaii Electric Light’s and Maui Electric’s preferred stock if the respective subsidiary is unable to make such payments.

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Income

Three months ended September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Revenues	$	463,394		89,817		94,941		—	(25	)	$	648,127
Expenses
Fuel oil	142,194			17,208		36,231		—	—		195,633
Purchased power	119,302			26,713		14,503		—	—		160,518
Other operation and maintenance	69,621			18,936		15,096		—	—		103,653
Depreciation	29,389			9,313		5,654		—	—		44,356
Taxes, other than income taxes	43,923			8,455		8,932		—	—		61,310
Total expenses	404,429			80,625		80,416		—	—		565,470
Operating income	58,965			9,192		14,525		—	(25	)	82,657
Allowance for equity funds used during construction	1,714			148		195		—	—		2,057
Equity in earnings of subsidiaries	11,858			—		—		—	(11,858	)	—
Interest expense and other charges, net	(11,468		)	(2,674	)	(2,440	)	—	25		(16,557		)
Allowance for borrowed funds used during construction	605			53		79		—	—		737
Income before income taxes	61,674			6,719		12,359		—	(11,858	)	68,894
Income taxes	18,398			2,397		4,595		—	—		25,390
Net income	43,276			4,322		7,764		—	(11,858	)	43,504
Preferred stock dividends of subsidiaries	—			133		95		—	—		228
Net income attributable to Hawaiian Electric	43,276			4,189		7,669		—	(11,858	)	43,276
Preferred stock dividends of Hawaiian Electric	270			—		—		—	—		270
Net income for common stock	$	43,006		4,189		7,669		—	(11,858	)	$	43,006

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Comprehensive Income

Three months ended September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Net income for common stock	$	43,006		4,189		7,669		—	(11,858	)	$	43,006
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits	5,095			682		626		—	(1,308	)	5,095
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes	(5,091		)	(683	)	(627	)	—	1,310		(5,091		)
Other comprehensive income (loss), net of taxes	4			(1	)	(1	)	—	2		4
Comprehensive income attributable to common shareholder	$	43,010		4,188		7,668		—	(11,856	)	$	43,010

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Income

Three months ended September 30, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Revenues	$	579,777		111,154		112,656		—	(22	)	$	803,565
Expenses
Fuel oil	229,068			29,555		50,809		—	—		309,432
Purchased power	142,121			34,166		16,595		—	—		192,882
Other operation and maintenance	71,584			19,837		16,892		—	—		108,313
Depreciation	27,302			8,975		5,317		—	—		41,594
Taxes, other than income taxes	54,412			10,607		10,169		—	—		75,188
Total expenses	524,487			103,140		99,782		—	—		727,409
Operating income	55,290			8,014		12,874		—	(22	)	76,156
Allowance for equity funds used during construction	1,668			142		127		—	—		1,937
Equity in earnings of subsidiaries	9,800			—		—		—	(9,800	)	—
Interest expense and other charges, net	(11,196		)	(2,811	)	(2,429	)	—	22		(16,414		)
Allowance for borrowed funds used during construction	634			54		52		—	—		740
Income before income taxes	56,196			5,399		10,624		—	(9,800	)	62,419
Income taxes	17,047			1,965		4,030		—	—		23,042
Net income	39,149			3,434		6,594		—	(9,800	)	39,377
Preferred stock dividends of subsidiaries	—			133		95		—	—		228
Net income attributable to Hawaiian Electric	39,149			3,301		6,499		—	(9,800	)	39,149
Preferred stock dividends of Hawaiian Electric	270			—		—		—	—		270
Net income for common stock	$	38,879		3,301		6,499		—	(9,800	)	$	38,879

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Comprehensive Income

Three months ended September 30, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Net incomefor common stock	$	38,879		3,301		6,499		—	(9,800	)	$	38,879
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits	2,552			317		272		—	(589	)	2,552
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes	(2,542		)	(319	)	(272	)	—	591		(2,542		)
Other comprehensive income (loss), net of taxes	10			(2	)	—		—	2		10
Comprehensive income attributable to common shareholder	$	38,889		3,299		6,499		—	(9,798	)	$	38,889

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Income

Nine months ended September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Revenues	$	1,254,142		261,604		264,057		—	(71	)	$	1,779,732
Expenses
Fuel oil	364,875			56,834		96,961		—	—		518,670
Purchased power	329,922			73,161		42,726		—	—		445,809
Other operation and maintenance	206,133			51,493		48,893		—	—		306,519
Depreciation	88,167			27,938		16,735		—	—		132,840
Taxes, other than income taxes	119,603			24,783		25,054		—	—		169,440
Total expenses	1,108,700			234,209		230,369		—	—		1,573,278
Operating income	145,442			27,395		33,688		—	(71	)	206,454
Allowance for equity funds used during construction	4,418			458		490		—	—		5,366
Equity in earnings of subsidiaries	29,174			—		—		—	(29,174	)	—
Interest expense and other charges, net	(33,996		)	(7,946	)	(7,299	)	—	71		(49,170		)
Allowance for borrowed funds used during construction	1,557			164		197		—	—		1,918
Income before income taxes	146,595			20,071		27,076		—	(29,174	)	164,568
Income taxes	43,064			7,210		10,077		—	—		60,351
Net income	103,531			12,861		16,999		—	(29,174	)	104,217
Preferred stock dividends of subsidiaries	—			400		286		—	—		686
Net income attributable to Hawaiian Electric	103,531			12,461		16,713		—	(29,174	)	103,531
Preferred stock dividends of Hawaiian Electric	810			—		—		—	—		810
Net income for common stock	$	102,721		12,461		16,713		—	(29,174	)	$	102,721

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Comprehensive Income

Nine months ended September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Net income for common stock	$	102,721		12,461		16,713		—	(29,174	)	$	102,721
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits	15,285			2,046		1,878		—	(3,924	)	15,285
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes	(15,274		)	(2,050	)	(1,882	)	—	3,932		(15,274		)
Other comprehensive income (loss), net of taxes	11			(4	)	(4	)	—	8		11
Comprehensive income attributable to common shareholder	$	102,732		12,457		16,709		—	(29,166	)	$	102,732

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Income

Nine months ended September 30, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Revenues	$	1,623,223		319,629		319,265		—	(61	)	$	2,262,056
Expenses
Fuel oil	628,164			92,234		145,591		—	—		865,989
Purchased power	406,895			91,827		47,399		—	—		546,121
Other operation and maintenance	199,091			48,701		47,691		—	—		295,483
Depreciation	81,903			26,926		15,961		—	—		124,790
Taxes, other than income taxes	152,545			30,127		30,111		—	—		212,783
Total expenses	1,468,598			289,815		286,753		—	—		2,045,166
Operating income	154,625			29,814		32,512		—	(61	)	216,890
Allowance for equity funds used during construction	4,557			328		48		—	—		4,933
Equity in earnings of subsidiaries	28,576			—		—		—	(28,576	)	—
Interest expense and other charges, net	(33,236		)	(8,411	)	(7,403	)	—	61		(48,989		)
Allowance for borrowed funds used during construction	1,728			126		23		—	—		1,877
Income before income taxes	156,250			21,857		25,180		—	(28,576	)	174,711
Income taxes	46,911			8,149		9,626		—	—		64,686
Net income	109,339			13,708		15,554		—	(28,576	)	110,025
Preferred stock dividends of subsidiaries	—			400		286		—	—		686
Net income attributable to Hawaiian Electric	109,339			13,308		15,268		—	(28,576	)	109,339
Preferred stock dividends of Hawaiian Electric	810			—		—		—	—		810
Net income for common stock	$	108,529		13,308		15,268		—	(28,576	)	$	108,529

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Comprehensive Income

Nine months ended September 30, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Net incomefor common stock	$	108,529		13,308		15,268		—	(28,576	)	$	108,529
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits	7,659			953		817		—	(1,770	)	7,659
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes	(7,627		)	(955	)	(817	)	—	1,772		(7,627		)
Other comprehensive income (loss), net of taxes	32			(2	)	—		—	2		32
Comprehensive income attributable to common shareholder	$	108,561		13,306		15,268		—	(28,574	)	$	108,561

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Balance Sheet

September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consoli- dating adjustments		Hawaiian Electric Consolidated
Assets
Property, plant and equipment
Utility property, plant and equipment
Land	$	43,536		5,731		3,016		—	—		$	52,283
Plant and equipment	3,941,406			1,202,463		1,072,245		—	—		6,216,114
Less accumulated depreciation	(1,293,046		)	(491,606	)	(461,962	)	—	—		(2,246,614		)
Construction in progress	166,027			14,111		16,543		—	—		196,681
Utility property, plant and equipment, net	2,857,923			730,699		629,842		—	—		4,218,464
Nonutility property, plant and equipment, less accumulated depreciation	4,948			82		1,532		—	—		6,562
Total property, plant and equipment, net	2,862,871			730,781		631,374		—	—		4,225,026
Investment in wholly owned subsidiaries, at equity	548,907			—		—		—	(548,907	)	—
Current assets
Cash and cash equivalents	7,665			2,399		539		101	—		10,704
Advances to affiliates	12,000			—		2,500		—	(14,500	)	—
Customer accounts receivable, net	113,130			26,105		23,233		—	—		162,468
Accrued unbilled revenues, net	96,789			12,230		14,559		—	—		123,578
Other accounts receivable, net	12,538			1,168		1,770		—	(10,713	)	4,763
Fuel oil stock, at average cost	49,496			8,442		12,166		—	—		70,104
Materials and supplies, at average cost	33,913			8,279		16,781		—	—		58,973
Prepayments and other	34,555			3,957		8,630		—	(251	)	46,891
Regulatory assets	67,673			6,719		5,558		—	—		79,950
Total current assets	427,759			69,299		85,736		101	(25,464	)	557,431
Other long-term assets
Regulatory assets	612,347			106,581		99,070		—	—		817,998
Unamortized debt expense	5,171			1,312		1,103		—	—		7,586
Other	48,268			13,885		13,798		—	—		75,951
Total other long-term assets	665,786			121,778		113,971		—	—		901,535
Total assets	$	4,505,323		921,858		831,081		101	(574,371	)	$	5,683,992
Capitalization and liabilities
Capitalization
Common stock equity	$	1,717,064		286,788		262,018		101	(548,907	)	$	1,717,064
Cumulative preferred stock—not subject to mandatory redemption	22,293			7,000		5,000		—	—		34,293
Long-term debt, net	830,546			190,000		186,000		—	—		1,206,546
Total capitalization	2,569,903			483,788		453,018		101	(548,907	)	2,957,903
Current liabilities
Short-term borrowings from non-affiliates	94,995			—		—		—	—		94,995
Short-term borrowings from affiliate	2,500			12,000		—		—	(14,500	)	—
Accounts payable	93,654			16,128		14,997		—	—		124,779
Interest and preferred dividends payable	17,370			3,553		4,161		—	(6	)	25,078
Taxes accrued	134,076			30,252		29,498		—	(251	)	193,575
Regulatory liabilities	—			—		347		—	—		347
Other	58,392			11,063		16,702		—	(10,707	)	75,450
Total current liabilities	400,987			72,996		65,705		—	(25,464	)	514,224
Deferred credits and other liabilities
Deferred income taxes	444,261			91,571		89,276		—	314		625,422
Regulatory liabilities	248,068			83,194		30,642		—	—		361,904
Unamortized tax credits	53,491			15,258		14,899		—	—		83,648
Defined benefit pension and other postretirement benefit plans liability	430,838			66,632		72,872		—	(314	)	570,028
Other	47,720			13,647		13,829		—	—		75,196
Total deferred credits and other liabilities	1,224,378			270,302		221,518		—	—		1,716,198
Contributions in aid of construction	310,055			94,772		90,840		—	—		495,667
Total capitalization and liabilities	$	4,505,323		921,858		831,081		101	(574,371	)	$	5,683,992

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Balance Sheet

December 31, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consoli- dating adjustments		Hawaiian Electric Consolidated
Assets
Property, plant and equipment
Utility property, plant and equipment
Land	$	43,819		5,464		3,016		—	—		$	52,299
Plant and equipment	3,782,438			1,179,032		1,048,012		—	—		6,009,482
Less accumulated depreciation	(1,253,866		)	(473,933	)	(447,711	)	—	—		(2,175,510		)
Construction in progress	134,376			12,421		11,819		—	—		158,616
Utility property, plant and equipment, net	2,706,767			722,984		615,136		—	—		4,044,887
Nonutility property, plant and equipment, less accumulated depreciation	4,950			82		1,531		—	—		6,563
Total property, plant and equipment, net	2,711,717			723,066		616,667		—	—		4,051,450
Investment in wholly owned subsidiaries,at equity	538,639			—		—		—	(538,639	)	—
Current assets
Cash and cash equivalents	12,416			612		633		101	—		13,762
Advances to affiliates	16,100			—		—		—	(16,100	)	—
Customer accounts receivable, net	111,462			24,222		22,800		—	—		158,484
Accrued unbilled revenues, net	103,072			15,926		18,376		—	—		137,374
Other accounts receivable, net	9,980			981		2,246		—	(8,924	)	4,283
Fuel oil stock, at average cost	74,515			13,800		17,731		—	—		106,046
Materials and supplies, at average cost	33,154			6,664		17,432		—	—		57,250
Prepayments and other	44,680			8,611		13,567		—	(475	)	66,383
Regulatory assets	58,550			6,745		6,126		—	—		71,421
Total current assets	463,929			77,561		98,911		101	(25,499	)	615,003
Other long-term assets
Regulatory assets	623,784			107,454		102,788		—	(183	)	833,843
Unamortized debt expense	5,640			1,438		1,245		—	—		8,323
Other	53,106			15,366		13,366		—	—		81,838
Total other long-term assets	682,530			124,258		117,399		—	(183	)	924,004
Total assets	$	4,396,815		924,885		832,977		101	(564,321	)	$	5,590,457
Capitalization and liabilities
Capitalization
Common stock equity	$	1,682,144		281,846		256,692		101	(538,639	)	$	1,682,144
Cumulative preferred stock—not subject to mandatory redemption	22,293			7,000		5,000		—	—		34,293
Long-term debt, net	830,546			190,000		186,000		—	—		1,206,546
Total capitalization	2,534,983			478,846		447,692		101	(538,639	)	2,922,983
Current liabilities
Short-term borrowings from affiliate	—			10,500		5,600		—	(16,100	)	—
Accounts payable	122,433			23,728		17,773		—	—		163,934
Interest and preferred dividends payable	15,407			3,989		2,931		—	(11	)	22,316
Taxes accrued	176,339			37,548		36,807		—	(292	)	250,402
Regulatory liabilities	191			—		441		—	—		632
Other	48,282			9,866		16,094		—	(9,096	)	65,146
Total current liabilities	362,652			85,631		79,646		—	(25,499	)	502,430
Deferred credits and other liabilities
Deferred income taxes	429,515			90,119		83,238		—	—		602,872
Regulatory liabilities	236,727			77,707		29,966		—	(183	)	344,217
Unamortized tax credits	49,865			14,902		14,725		—	—		79,492
Defined benefit pension and other postretirement benefit plans liability	446,888			72,547		75,960		—	—		595,395
Other	52,446			10,658		13,532		—	—		76,636
Total deferred credits and other liabilities	1,215,441			265,933		217,421		—	(183	)	1,698,612
Contributions in aid of construction	283,739			94,475		88,218		—	—		466,432
Total capitalization and liabilities	$	4,396,815		924,885		832,977		101	(564,321	)	$	5,590,457

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Changes in Common Stock Equity

Nine months ended September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Balance, December 31, 2014	$	1,682,144		281,846		256,692		101	(538,639	)	$	1,682,144
Net income for common stock	102,721			12,461		16,713		—	(29,174	)	102,721
Other comprehensive income (loss), net of taxes	11			(4	)	(4	)	—	8		11
Common stock dividends	(67,804		)	(7,515	)	(11,382	)	—	18,897		(67,804		)
Common stock issuance expenses	(8		)	—		(1	)	—	1		(8		)
Balance, September 30, 2015	$	1,717,064		286,788		262,018		101	(548,907	)	$	1,717,064

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Changes in Common Stock Equity

Nine months ended September 30, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Balance, December 31, 2013	$	1,593,564		274,802		248,771		101	(523,674	)	$	1,593,564
Net income for common stock	108,529			13,308		15,268		—	(28,576	)	108,529
Other comprehensive income (loss), net of taxes	32			(2	)	—		—	2		32
Common stock dividends	(66,369		)	(8,720	)	(10,762	)	—	19,482		(66,369		)
Common stock issuance expenses	(5		)	—		—		—	—		(5		)
Balance, September 30, 2014	$	1,635,751		279,388		253,277		101	(532,766	)	$	1,635,751

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Cash Flows

Nine months ended September 30, 2015

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Cash flows from operating activities
Net income	$	103,531		12,861		16,999		—	(29,174	)	$	104,217
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(29,249		)	—		—		—	29,174		(75		)
Common stock dividends received from subsidiaries	18,972			—		—		—	(18,897	)	75
Depreciation of property, plant and equipment	88,167			27,938		16,735		—	—		132,840
Other amortization	5,409			2,055		2,363		—	—		9,827
Increase in deferred income taxes	46,493			907		10,497		—	314		58,211
Change in tax credits, net	3,680			372		195		—	—		4,247
Allowance for equity funds used during construction	(4,418		)	(458	)	(490	)	—	—		(5,366		)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	(4,226		)	(2,071	)	43		—	1,790		(4,464		)
Decrease in accrued unbilled revenues	6,283			3,696		3,817		—	—		13,796
Decrease in fuel oil stock	25,019			5,358		5,565		—	—		35,942
Decrease (increase) in materials and supplies	(759		)	(1,615	)	651		—	—		(1,723		)
Increase in regulatory assets	(19,138		)	(3,944	)	(376	)	—	—		(23,458		)
Decrease in accounts payable	(34,476		)	(4,070	)	(1,829	)	—	—		(40,375		)
Change in prepaid and accrued income and utility revenue taxes	(52,505		)	(2,276	)	(6,540	)	—	(314	)	(61,635		)
Increase in defined benefit pension and other postretirement benefit plans liability	—			—		331		—	—		331
Change in other assets and liabilities	(16,626		)	436		(2,824	)	—	(1,790	)	(20,804		)
Net cash provided by operating activities	136,157			39,189		45,137		—	(18,897	)	201,586
Cash flows from investing activities
Capital expenditures	(204,406		)	(34,048	)	(27,067	)	—	—		(265,521		)
Contributions in aid of construction	30,153			2,940		1,534		—	—		34,627
Other	583			124		71		—	—		778
Advances from affiliates	4,100			—		(2,500	)	—	(1,600	)	—
Net cash used in investing activities	(169,570		)	(30,984	)	(27,962	)	—	(1,600	)	(230,116		)
Cash flows from financing activities
Common stock dividends	(67,804		)	(7,515	)	(11,382	)	—	18,897		(67,804		)
Preferred stock dividends of Hawaiian Electric and subsidiaries	(810		)	(400	)	(286	)	—	—		(1,496		)
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less	97,495			1,500		(5,600	)	—	1,600		94,995
Other	(219		)	(3	)	(1	)	—	—		(223		)
Net cash provided by (used in) financing activities	28,662			(6,418	)	(17,269	)	—	20,497		25,472
Net increase (decrease) in cash and cash equivalents	(4,751		)	1,787		(94	)	—	—		(3,058		)
Cash and cash equivalents, beginning of period	12,416			612		633		101	—		13,762
Cash and cash equivalents, end of period	$	7,665		2,399		539		101	—		$	10,704

Hawaiian Electric Company, Inc. and Subsidiaries

Consolidating Statement of Cash Flows

Nine months ended September 30, 2014

(in thousands)	Hawaiian Electric			Hawaii Electric Light		Maui Electric		Other subsidiaries	Consolidating adjustments		Hawaiian Electric Consolidated
Cash flows from operating activities
Net income	$	109,339		13,708		15,554		—	(28,576	)	$	110,025
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(28,651		)	—		—		—	28,576		(75		)
Common stock dividends received from subsidiaries	19,557			—		—		—	(19,482	)	75
Depreciation of property, plant and equipment	81,903			26,926		15,961		—	—		124,790
Other amortization (1)	765			1,950		1,574		—	—		4,289
Increase in deferred income taxes	52,274			5,146		9,972		—	—		67,392
Change in tax credits, net	4,725			687		404		—	—		5,816
Allowance for equity funds used during construction	(4,557		)	(328	)	(48	)	—	—		(4,933		)
Change in cash overdraft	—			—		(1,038	)	—	—		(1,038		)
Changes in assets and liabilities:
Increase in accounts receivable	(17,540		)	(4,714	)	(442	)	—	2,965		(19,731		)
Decrease (increase) in accrued unbilled revenues	(554		)	626		899		—	—		971
Decrease in fuel oil stock	11,328			219		4,237		—	—		15,784
Decrease (increase) in materials and supplies	875			(987	)	(1,483	)	—	—		(1,595		)
Decrease (increase) in regulatory assets	(15,159		)	(2,594	)	222		—	—		(17,531		)
Decrease in accounts payable (2)	(52,684		)	(454	)	(142	)	—	—		(53,280		)
Change in prepaid and accrued income and utility revenue taxes	(18,131		)	(1,310	)	1,366		—	—		(18,075		)
Decrease in defined benefit pension and other postretirement benefit plans liability	(422		)	—		(326	)	—	—		(748		)
Change in other assets and liabilities (3)	(32,291		)	(4,040	)	(2,673	)	—	(2,965	)	(41,969		)
Net cash provided by operating activities	110,777			34,835		44,037		—	(19,482	)	170,167
Cash flows from investing activities
Capital expenditures (4)	(181,565		)	(34,565	)	(37,588	)	—	—		(253,718		)
Contributions in aid of construction	12,352			6,229		3,159		—	—		21,740
Other (5)	537			154		22		—	—		713
Advances from (to) affiliates	(4,961		)	1,000		—		—	3,961		—
Net cash used in investing activities	(173,637		)	(27,182	)	(34,407	)	—	3,961		(231,265		)
Cash flows from financing activities
Common stock dividends	(66,369		)	(8,720	)	(10,762	)	—	19,482		(66,369		)
Preferred stock dividends of Hawaiian Electric and subsidiaries	(810		)	(400	)	(286	)	—	—		(1,496		)
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less	83,987			1,000		3,961		—	(3,961	)	84,987
Other	(337		)	(50	)	(75	)	—	—		(462		)
Net cash provided by (used in) financing activities	16,471			(8,170	)	(7,162	)	—	15,521		16,660
Net increase (decrease) in cash and cash equivalents	(46,389		)	(517	)	2,468		—	—		(44,438		)
Cash and cash equivalents, beginning of period	61,245			1,326		153		101	—		62,825
Cash and cash equivalents, end of period	$	14,856		809		2,621		101	—		$	18,387

(1) Prior to revision, other amortization for Maui Electric and Hawaiian Electric Consolidated were $1,947 and $4,662, respectively.

(2) Prior to revision, decrease in accounts payable for Hawaiian Electric, Hawaii Electric Light, Maui Electric and Hawaiian Electric Consolidated, were $(70,916), $(1,807), $(5,170) and $(77,893), respectively.

(3) Prior to revision, changes in other assets and liabilities for Hawaiian Electric, Hawaii Electric Light, Maui Electric, Consolidating adjustments and Hawaiian Electric Consolidated were $(31,754), $(3,886), $(3,024), $(2,965) and $(41,629), respectively.

(4) Prior to revision, capital expenditures for Hawaiian Electric, Hawaii Electric Light, Maui Electric and Hawaiian Electric Consolidated, were $(163,333), $(33,212), $(32,560) and $(229,105), respectively.

(5) Prior to revision, cash flows from investing activities-other for Hawaiian Electric, Hawaii Electric Light, Maui Electric and Hawaiian Electric Consolidated, were nil.