Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Note 9 · Leases

The Company leases certain real estate and equipment for various terms under long-term lease agreements. The agreements expire at various dates through 2054 and provide for renewal options up to 10 years. The periods associated with the renewal options are excluded for the purpose of determining the lease term unless the exercise of the renewal option is reasonably certain. In the normal course of business, it is expected that many of these agreements will be replaced by similar agreements. Certain real estate leases require the Company to pay for operating expenses such as common area maintenance, real estate taxes and insurance, which are recognized as variable lease expense when incurred and are not included in the measurement of the lease liability. The Company elected the short-term lease recognition exemption for all of its leases that qualify, and accordingly, does not recognize lease liabilities and ROU assets for all leases that have lease terms that are 12 months or less. The amounts related to short-term leases are not material. The Company elected the practical expedient to not separate lease and non-lease components for its real estate and equipment and fossil fuel and renewable energy PPAs and to separate lease components from non-lease components for renewable energy plus battery storage PPAs.

The Utilities contract with independent power producers to supply energy under long-term power purchase agreements. Certain PPAs are treated as operating leases under the lease standard because the Company elected the practical expedient package under which prior conclusions about lease identification were not reassessed. The fixed capacity payments under the PPAs are included in the lease liability, while the variable lease payments (e.g., payments based on kWh) are excluded from the lease liability. Several as-available PPAs have variable-only payment terms based on production. For PPAs with no minimum lease payments, the Utilities do not recognize any lease liabilities or ROU assets, and the related costs are reported as variable lease costs.

The Utilities’ lease payments for each operating lease agreement were discounted using its estimated unsecured borrowing rates for the appropriate term, increased for the estimated impact of collateral, which is an increase of approximately 500 basis points.

The Utilities account for the battery portion of renewable energy plus storage and energy storage PPAs as leases at their commencement dates. As of December 31, 2024, the Utilities recognized additional finance lease liabilities with corresponding

ROU assets of $104.9 million, including AES West Oahu Solar, AES Kuihelani Solar and Kupono Solar project that began commercial operations during the year. The timing of the Utilities’ recognition of the expense conforms to ratemaking treatment for the Utilities’ recovery of the cost of electricity and is included in purchased power for the interest and amortization of financing leases related to PPAs. Any material differences between expense recognition and timing of payments are deferred as a regulatory asset or liability in order to match what is being recovered for ratemaking purposes.

Amounts related to the Company’s total lease cost and cash flows arising from lease transactions are as follows:

	HEI consolidated									Hawaiian Electric consolidated
Year ended December 31, 2024	Other leases			PPAs classified as leases			Total			Other leases			PPAs classified as leases			Total
(dollars in thousands)
Operating lease cost	$	13,736		$	4,163		$	17,899		$	12,821		$	4,163		$	16,984
Variable lease cost	5,378			222,189			227,567			5,191			222,189			227,380
Sublease income	(3,280)			—			(3,280)			(3,280)			—			(3,280)
Total operating lease cost	$	15,834		$	226,352		$	242,186		$	14,732		$	226,352		$	241,084
Finance lease costs:
Amortization of right-of-use assets	$	574		$	19,498		$	20,072		$	—		$	19,498		$	19,498
Interest on lease liabilities	33			32,344			32,377			—			32,344			32,344
Total finance lease cost	$	607		$	51,842		$	52,449		$	—		$	51,842		$	51,842
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,604		$	3,871		$	19,475		$	14,739		$	3,871		$	18,610
Operating cash flows from finance leases	33			30,939			30,972			—			30,939			30,939
Financing cash flows from finance leases	559			4,119			4,678			—			4,119			4,119
Weighted-average remaining lease term (in years):
Operating leases	8.2			3.0			7.2			6.4			3.0			5.6
Finance leases	3.7			19.9			19.9			—			19.9			19.9
Weighted-average discount rate:
Operating leases	3.08		%	8.78		%	4.11		%	2.95		%	8.78		%	4.21		%
Finance leases	2.23		%	8.50		%	8.49		%	—			8.50		%	8.50		%

	HEI consolidated									Hawaiian Electric consolidated
Year ended December 31, 2023	Other leases			PPAs classified as leases			Total			Other leases			PPAs classified as leases			Total
(dollars in thousands)
Operating lease cost	$	16,853		$	4,071		$	20,924		$	15,947		$	4,071		$	20,018
Variable lease cost	5,813			202,556			208,369			5,605			202,556			208,161
Sublease income	(3,031)			—			(3,031)			(3,031)			—			(3,031)
Total operating lease cost	$	19,635		$	206,627		$	226,262		$	18,521		$	206,627		$	225,148
Finance lease costs:
Amortization of right-of-use assets	$	390		$	5,591		$	5,981		$	—		$	5,591		$	5,591
Interest on lease liabilities	32			6,350			6,382			—			6,350			6,350
Total finance lease cost	$	422		$	11,941		$	12,363		$	—		$	11,941		$	11,941
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	18,560		$	4,071		$	22,631		$	17,729		$	4,071		$	21,800
Operating cash flows from finance leases	32			6,350			6,382			—			6,350			6,350
Financing cash flows from finance leases	391			3,128			3,519			—			3,128			3,128
Weighted-average remaining lease term (in years):
Operating leases	8.3			4.0			7.5			6.8			4.0			6.3
Finance leases	1.5			20.1			20.0			—			20.1			20.1
Weighted-average discount rate:
Operating leases	3.03		%	3.50		%	3.11		%	2.92		%	3.50		%	3.03		%
Finance leases	3.77		%	8.18		%	8.18		%	—			8.18		%	8.18		%

The following table summarizes the maturity of our operating lease liabilities as of December 31, 2024:

	HEI consolidated						Hawaiian Electric consolidated
(in millions)	Other leases		PPAs classified as leases		Total		Other leases		PPAs classified as leases		Total
2025	$	13	$	5	$	18	$	12	$	5	$	17
2026	13		5		18		12		5		17
2027	7		5		12		6		5		11
2028	5		—		5		5		—		5
2029	5		—		5		5		—		5
Thereafter	24		—		24		16		—		16
Total lease payments	67		15		82		56		15		71
Less: Imputed interest	(9)		(2)		(11)		(5)		(2)		(7)
Total present value of lease payments1	$	58	$	13	$	71	$	51	$	13	$	64

1The fixed capacity payment related to the existing PPA with PGV, which will expire on December 31, 2027, is included as a lease liability as of December 31, 2024. The annual capacity payment based on the most recent accepted output is approximately $5.2 million for 2025. The lease liability will be remeasured when PGV ramps back up to the original contracted firm capacity.

The following table summarizes the maturity of our finance lease liabilities for PPAs as of December 31, 2024:

	HEI consolidated		Hawaiian Electric consolidated
(in millions)	PPAs classified as leases		PPAs classified as leases
2025	$	45	$	45
2026	45		45
2027	45		45
2028	45		45
2029	45		45
Thereafter	672		672
Total lease payments	897		897
Less: Imputed interest	(462)		(462)
Total present value of lease payments	$	435	$	435

Note: Other finance leases are not material.

Leases

Note 9 · Leases

The Company leases certain real estate and equipment for various terms under long-term lease agreements. The agreements expire at various dates through 2054 and provide for renewal options up to 10 years. The periods associated with the renewal options are excluded for the purpose of determining the lease term unless the exercise of the renewal option is reasonably certain. In the normal course of business, it is expected that many of these agreements will be replaced by similar agreements. Certain real estate leases require the Company to pay for operating expenses such as common area maintenance, real estate taxes and insurance, which are recognized as variable lease expense when incurred and are not included in the measurement of the lease liability. The Company elected the short-term lease recognition exemption for all of its leases that qualify, and accordingly, does not recognize lease liabilities and ROU assets for all leases that have lease terms that are 12 months or less. The amounts related to short-term leases are not material. The Company elected the practical expedient to not separate lease and non-lease components for its real estate and equipment and fossil fuel and renewable energy PPAs and to separate lease components from non-lease components for renewable energy plus battery storage PPAs.

The Utilities contract with independent power producers to supply energy under long-term power purchase agreements. Certain PPAs are treated as operating leases under the lease standard because the Company elected the practical expedient package under which prior conclusions about lease identification were not reassessed. The fixed capacity payments under the PPAs are included in the lease liability, while the variable lease payments (e.g., payments based on kWh) are excluded from the lease liability. Several as-available PPAs have variable-only payment terms based on production. For PPAs with no minimum lease payments, the Utilities do not recognize any lease liabilities or ROU assets, and the related costs are reported as variable lease costs.

The Utilities’ lease payments for each operating lease agreement were discounted using its estimated unsecured borrowing rates for the appropriate term, increased for the estimated impact of collateral, which is an increase of approximately 500 basis points.

The Utilities account for the battery portion of renewable energy plus storage and energy storage PPAs as leases at their commencement dates. As of December 31, 2024, the Utilities recognized additional finance lease liabilities with corresponding

ROU assets of $104.9 million, including AES West Oahu Solar, AES Kuihelani Solar and Kupono Solar project that began commercial operations during the year. The timing of the Utilities’ recognition of the expense conforms to ratemaking treatment for the Utilities’ recovery of the cost of electricity and is included in purchased power for the interest and amortization of financing leases related to PPAs. Any material differences between expense recognition and timing of payments are deferred as a regulatory asset or liability in order to match what is being recovered for ratemaking purposes.

Amounts related to the Company’s total lease cost and cash flows arising from lease transactions are as follows:

	HEI consolidated									Hawaiian Electric consolidated
Year ended December 31, 2024	Other leases			PPAs classified as leases			Total			Other leases			PPAs classified as leases			Total
(dollars in thousands)
Operating lease cost	$	13,736		$	4,163		$	17,899		$	12,821		$	4,163		$	16,984
Variable lease cost	5,378			222,189			227,567			5,191			222,189			227,380
Sublease income	(3,280)			—			(3,280)			(3,280)			—			(3,280)
Total operating lease cost	$	15,834		$	226,352		$	242,186		$	14,732		$	226,352		$	241,084
Finance lease costs:
Amortization of right-of-use assets	$	574		$	19,498		$	20,072		$	—		$	19,498		$	19,498
Interest on lease liabilities	33			32,344			32,377			—			32,344			32,344
Total finance lease cost	$	607		$	51,842		$	52,449		$	—		$	51,842		$	51,842
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,604		$	3,871		$	19,475		$	14,739		$	3,871		$	18,610
Operating cash flows from finance leases	33			30,939			30,972			—			30,939			30,939
Financing cash flows from finance leases	559			4,119			4,678			—			4,119			4,119
Weighted-average remaining lease term (in years):
Operating leases	8.2			3.0			7.2			6.4			3.0			5.6
Finance leases	3.7			19.9			19.9			—			19.9			19.9
Weighted-average discount rate:
Operating leases	3.08		%	8.78		%	4.11		%	2.95		%	8.78		%	4.21		%
Finance leases	2.23		%	8.50		%	8.49		%	—			8.50		%	8.50		%

	HEI consolidated									Hawaiian Electric consolidated
Year ended December 31, 2023	Other leases			PPAs classified as leases			Total			Other leases			PPAs classified as leases			Total
(dollars in thousands)
Operating lease cost	$	16,853		$	4,071		$	20,924		$	15,947		$	4,071		$	20,018
Variable lease cost	5,813			202,556			208,369			5,605			202,556			208,161
Sublease income	(3,031)			—			(3,031)			(3,031)			—			(3,031)
Total operating lease cost	$	19,635		$	206,627		$	226,262		$	18,521		$	206,627		$	225,148
Finance lease costs:
Amortization of right-of-use assets	$	390		$	5,591		$	5,981		$	—		$	5,591		$	5,591
Interest on lease liabilities	32			6,350			6,382			—			6,350			6,350
Total finance lease cost	$	422		$	11,941		$	12,363		$	—		$	11,941		$	11,941
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	18,560		$	4,071		$	22,631		$	17,729		$	4,071		$	21,800
Operating cash flows from finance leases	32			6,350			6,382			—			6,350			6,350
Financing cash flows from finance leases	391			3,128			3,519			—			3,128			3,128
Weighted-average remaining lease term (in years):
Operating leases	8.3			4.0			7.5			6.8			4.0			6.3
Finance leases	1.5			20.1			20.0			—			20.1			20.1
Weighted-average discount rate:
Operating leases	3.03		%	3.50		%	3.11		%	2.92		%	3.50		%	3.03		%
Finance leases	3.77		%	8.18		%	8.18		%	—			8.18		%	8.18		%

The following table summarizes the maturity of our operating lease liabilities as of December 31, 2024:

	HEI consolidated						Hawaiian Electric consolidated
(in millions)	Other leases		PPAs classified as leases		Total		Other leases		PPAs classified as leases		Total
2025	$	13	$	5	$	18	$	12	$	5	$	17
2026	13		5		18		12		5		17
2027	7		5		12		6		5		11
2028	5		—		5		5		—		5
2029	5		—		5		5		—		5
Thereafter	24		—		24		16		—		16
Total lease payments	67		15		82		56		15		71
Less: Imputed interest	(9)		(2)		(11)		(5)		(2)		(7)
Total present value of lease payments1	$	58	$	13	$	71	$	51	$	13	$	64

1The fixed capacity payment related to the existing PPA with PGV, which will expire on December 31, 2027, is included as a lease liability as of December 31, 2024. The annual capacity payment based on the most recent accepted output is approximately $5.2 million for 2025. The lease liability will be remeasured when PGV ramps back up to the original contracted firm capacity.

The following table summarizes the maturity of our finance lease liabilities for PPAs as of December 31, 2024:

	HEI consolidated		Hawaiian Electric consolidated
(in millions)	PPAs classified as leases		PPAs classified as leases
2025	$	45	$	45
2026	45		45
2027	45		45
2028	45		45
2029	45		45
Thereafter	672		672
Total lease payments	897		897
Less: Imputed interest	(462)		(462)
Total present value of lease payments	$	435	$	435

Note: Other finance leases are not material.

Leases

Note 9 · Leases

The Company leases certain real estate and equipment for various terms under long-term lease agreements. The agreements expire at various dates through 2054 and provide for renewal options up to 10 years. The periods associated with the renewal options are excluded for the purpose of determining the lease term unless the exercise of the renewal option is reasonably certain. In the normal course of business, it is expected that many of these agreements will be replaced by similar agreements. Certain real estate leases require the Company to pay for operating expenses such as common area maintenance, real estate taxes and insurance, which are recognized as variable lease expense when incurred and are not included in the measurement of the lease liability. The Company elected the short-term lease recognition exemption for all of its leases that qualify, and accordingly, does not recognize lease liabilities and ROU assets for all leases that have lease terms that are 12 months or less. The amounts related to short-term leases are not material. The Company elected the practical expedient to not separate lease and non-lease components for its real estate and equipment and fossil fuel and renewable energy PPAs and to separate lease components from non-lease components for renewable energy plus battery storage PPAs.

The Utilities contract with independent power producers to supply energy under long-term power purchase agreements. Certain PPAs are treated as operating leases under the lease standard because the Company elected the practical expedient package under which prior conclusions about lease identification were not reassessed. The fixed capacity payments under the PPAs are included in the lease liability, while the variable lease payments (e.g., payments based on kWh) are excluded from the lease liability. Several as-available PPAs have variable-only payment terms based on production. For PPAs with no minimum lease payments, the Utilities do not recognize any lease liabilities or ROU assets, and the related costs are reported as variable lease costs.

The Utilities’ lease payments for each operating lease agreement were discounted using its estimated unsecured borrowing rates for the appropriate term, increased for the estimated impact of collateral, which is an increase of approximately 500 basis points.

The Utilities account for the battery portion of renewable energy plus storage and energy storage PPAs as leases at their commencement dates. As of December 31, 2024, the Utilities recognized additional finance lease liabilities with corresponding

ROU assets of $104.9 million, including AES West Oahu Solar, AES Kuihelani Solar and Kupono Solar project that began commercial operations during the year. The timing of the Utilities’ recognition of the expense conforms to ratemaking treatment for the Utilities’ recovery of the cost of electricity and is included in purchased power for the interest and amortization of financing leases related to PPAs. Any material differences between expense recognition and timing of payments are deferred as a regulatory asset or liability in order to match what is being recovered for ratemaking purposes.

Amounts related to the Company’s total lease cost and cash flows arising from lease transactions are as follows:

	HEI consolidated									Hawaiian Electric consolidated
Year ended December 31, 2024	Other leases			PPAs classified as leases			Total			Other leases			PPAs classified as leases			Total
(dollars in thousands)
Operating lease cost	$	13,736		$	4,163		$	17,899		$	12,821		$	4,163		$	16,984
Variable lease cost	5,378			222,189			227,567			5,191			222,189			227,380
Sublease income	(3,280)			—			(3,280)			(3,280)			—			(3,280)
Total operating lease cost	$	15,834		$	226,352		$	242,186		$	14,732		$	226,352		$	241,084
Finance lease costs:
Amortization of right-of-use assets	$	574		$	19,498		$	20,072		$	—		$	19,498		$	19,498
Interest on lease liabilities	33			32,344			32,377			—			32,344			32,344
Total finance lease cost	$	607		$	51,842		$	52,449		$	—		$	51,842		$	51,842
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,604		$	3,871		$	19,475		$	14,739		$	3,871		$	18,610
Operating cash flows from finance leases	33			30,939			30,972			—			30,939			30,939
Financing cash flows from finance leases	559			4,119			4,678			—			4,119			4,119
Weighted-average remaining lease term (in years):
Operating leases	8.2			3.0			7.2			6.4			3.0			5.6
Finance leases	3.7			19.9			19.9			—			19.9			19.9
Weighted-average discount rate:
Operating leases	3.08		%	8.78		%	4.11		%	2.95		%	8.78		%	4.21		%
Finance leases	2.23		%	8.50		%	8.49		%	—			8.50		%	8.50		%

	HEI consolidated									Hawaiian Electric consolidated
Year ended December 31, 2023	Other leases			PPAs classified as leases			Total			Other leases			PPAs classified as leases			Total
(dollars in thousands)
Operating lease cost	$	16,853		$	4,071		$	20,924		$	15,947		$	4,071		$	20,018
Variable lease cost	5,813			202,556			208,369			5,605			202,556			208,161
Sublease income	(3,031)			—			(3,031)			(3,031)			—			(3,031)
Total operating lease cost	$	19,635		$	206,627		$	226,262		$	18,521		$	206,627		$	225,148
Finance lease costs:
Amortization of right-of-use assets	$	390		$	5,591		$	5,981		$	—		$	5,591		$	5,591
Interest on lease liabilities	32			6,350			6,382			—			6,350			6,350
Total finance lease cost	$	422		$	11,941		$	12,363		$	—		$	11,941		$	11,941
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	18,560		$	4,071		$	22,631		$	17,729		$	4,071		$	21,800
Operating cash flows from finance leases	32			6,350			6,382			—			6,350			6,350
Financing cash flows from finance leases	391			3,128			3,519			—			3,128			3,128
Weighted-average remaining lease term (in years):
Operating leases	8.3			4.0			7.5			6.8			4.0			6.3
Finance leases	1.5			20.1			20.0			—			20.1			20.1
Weighted-average discount rate:
Operating leases	3.03		%	3.50		%	3.11		%	2.92		%	3.50		%	3.03		%
Finance leases	3.77		%	8.18		%	8.18		%	—			8.18		%	8.18		%

The following table summarizes the maturity of our operating lease liabilities as of December 31, 2024:

	HEI consolidated						Hawaiian Electric consolidated
(in millions)	Other leases		PPAs classified as leases		Total		Other leases		PPAs classified as leases		Total
2025	$	13	$	5	$	18	$	12	$	5	$	17
2026	13		5		18		12		5		17
2027	7		5		12		6		5		11
2028	5		—		5		5		—		5
2029	5		—		5		5		—		5
Thereafter	24		—		24		16		—		16
Total lease payments	67		15		82		56		15		71
Less: Imputed interest	(9)		(2)		(11)		(5)		(2)		(7)
Total present value of lease payments1	$	58	$	13	$	71	$	51	$	13	$	64

1The fixed capacity payment related to the existing PPA with PGV, which will expire on December 31, 2027, is included as a lease liability as of December 31, 2024. The annual capacity payment based on the most recent accepted output is approximately $5.2 million for 2025. The lease liability will be remeasured when PGV ramps back up to the original contracted firm capacity.

The following table summarizes the maturity of our finance lease liabilities for PPAs as of December 31, 2024:

	HEI consolidated		Hawaiian Electric consolidated
(in millions)	PPAs classified as leases		PPAs classified as leases
2025	$	45	$	45
2026	45		45
2027	45		45
2028	45		45
2029	45		45
Thereafter	672		672
Total lease payments	897		897
Less: Imputed interest	(462)		(462)
Total present value of lease payments	$	435	$	435

Note: Other finance leases are not material.