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Income taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income taxes
Note 13 · Income taxes
The Company adopted ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” on a prospective basis beginning with the year ended December 31, 2025.
The following table presents required disclosure pursuant to ASU 2023-09 for the year ended December 31, 2025. The components of income taxes attributable to income (loss) from continuing operations were as follows:
HEI consolidated
Hawaiian Electric consolidated
Year ended December 31
20252025
(in thousands) 
US Income from continuing operations before income tax expense
$166,929 $220,588 
Current tax expense (benefit)
      US federal$44,092 $44,958 
      US state 7,186 10,317 
            Total current tax expense
$51,278 $55,275 
Deferred tax expense (benefit)
      US federal(13,533)(8,692)
      US federal deferred tax credits— — 
      US state2,903 2,450 
      US state deferred tax credits— — 
            Total deferred tax benefit
$(10,630)$(6,242)
Total income tax expense
      US federal$30,559 $36,266 
      US federal deferred tax credits— — 
      US state10,089 12,767 
      US state deferred tax credits— — 
            Total income tax expense
$40,648 $49,033 
The following table presents the required disclosures prior to our adoption of ASU 2023-09. The components of income taxes attributable to income (loss) from continuing operations for common stock were as follows:
HEI consolidatedHawaiian Electric consolidated
Years ended December 312024202320242023
(in thousands)  
Federal  
Current $13,220 $22,206 $34,216 $40,365 
Deferred(376,141)1,951 (373,316)(3,444)
Deferred tax credits, net
— 52 — 22 
 (362,921)24,209 (339,100)36,943 
State    
Current 2,009 2,924 7,864 9,367 
Deferred (110,050)7,401 (108,311)4,883 
Deferred tax credits, net
— — — — 
 (108,041)10,325 (100,447)14,250 
Total$(470,962)$34,534 $(439,547)$51,193 
A reconciliation of the amount of income taxes computed at the federal statutory rate to the amount provided in the consolidated statements of income after the adoption of ASU 2023-09 is as follows:
HEI consolidatedHawaiian Electric consolidated
Year ended December 31
20252025
Amount
Percentage
Amount
Percentage
($ in thousands)
 
US federal statutory income tax rate$35,055 21.0%$46,323 21.0%
State of Hawaii income taxes, net of federal effect
7,858 4.7%9,917 4.5%
Federal tax credits
Investment tax credits
5,221 3.2%— —%
Other federal tax credits
(87)(0.1%)(87)—%
Changes in valuation allowances(633)(0.4%)— —%
Nontaxable and nondeductible items1,549 0.9%553 0.3%
Changes in unrecognized tax benefits18 —%18 —%
Other Adjustments
Net deferred tax asset (liability) adjustment related to the Tax Act(5,565)(3.2%)(5,565)(2.6%)
Other(2,768)(1.7%)(2,126)(1.0%)
Total income taxes$40,648 24.4%$49,033 22.2%
A reconciliation of the amount of income taxes computed at the federal statutory rate to the amount provided in the consolidated statements of income for years prior to the adoption of ASU 2023-09 is as follows:
HEI consolidatedHawaiian Electric consolidated
Years ended December 312024202320242023
(in thousands)  
Amount at the federal statutory income tax rate $(376,235)$38,283 $(349,423)$51,899 
Increase (decrease) resulting from:    
State income taxes, net of federal income tax benefit
(85,483)7,989 (79,487)11,097 
Net deferred tax asset (liability) adjustment related to the Tax Act
(6,200)(7,316)(6,200)(7,316)
Tax credits, net
(2,987)(2,251)(2,987)(2,251)
Other, net (57)(2,171)(1,450)(2,236)
Total$(470,962)$34,534 $(439,547)$51,193 
Effective income tax rate (%)26.318.926.420.7
The tax effects of book and tax basis differences that give rise to deferred tax assets and liabilities were as follows:
HEI consolidatedHawaiian Electric consolidated
December 312025202420252024
(in thousands)  
Deferred tax assets  
Wildfire tort-related claims
$483,749 $483,749 $483,749 $483,749 
Regulatory liabilities, excluding amounts attributable to property, plant and equipment
73,204 76,765 73,204 76,765 
Lease liabilities
150,477 130,556 148,736 128,610 
Retirement benefits61,819 45,879 57,077 40,568 
Revenue taxes45,769 48,379 45,769 48,379 
Capital loss carryforward
66,068 66,430 — — 
Other1
36,015 35,827 23,384 22,387 
Total deferred income tax assets
917,101 887,585 831,919 800,458 
Valuation allowances
(73,118)(73,459)— — 
Total deferred income tax assets, net
843,983 814,126 831,919 800,458 
Deferred tax liabilities  
Property, plant and equipment related545,969 542,109 541,279 532,257 
Lease right-of-use assets
150,400 130,483 148,736 128,610 
Regulatory assets, excluding amounts attributable to property, plant and equipment
21,575 21,678 21,575 21,678 
Other 53,186 47,148 52,979 46,330 
Total deferred income tax liabilities
771,130 741,418 764,569 728,875 
Net deferred income tax asset (liability)
$72,853 $72,708 $67,350 $71,583 
1     As of December 31, 2025 and 2024, HEI consolidated has deferred tax assets of $2.0 million and $3.8 million, respectively, relating to the benefit of state tax credit carryforwards of $2.6 million and $5.2 million, respectively. These state tax credit carryforwards primarily relate to the West Loch PV project that do not expire.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. Based upon historical taxable income and projections for future taxable income, management believes it is more likely than not the Company and the Utilities will realize substantially all of the benefits of the deferred tax assets, excluding the capital loss from the sale of ASB. As of December 31, 2025 and 2024, valuation allowances for deferred tax benefits were $73.1 million and $73.5 million, respectively, recorded on HEI consolidated related to the capital loss from the sale of ASB and the book/tax difference in equity basis of retained ASB stock. Since capital losses can only be offset against capital gains, the Company believes that it is more likely than not that the tax benefit from ASB's capital loss will not be realized. This is due to the lack of expected capital gains and no tax strategies in place to generate capital gains before the loss expires. As a result, a valuation allowance was established. The Utilities are included in the consolidated federal
and Hawaii income tax returns of HEI and are subject to the provisions of HEI’s tax sharing agreement, which determines each subsidiary’s (or subgroup’s) income tax return liabilities and refunds on a standalone basis as if it filed a separate return (or subgroup consolidated return).
The following is a reconciliation of the Company’s liability for unrecognized tax benefits for 2025, 2024 and 2023.
HEI consolidatedHawaiian Electric consolidated
(in millions)202520242023202520242023
Unrecognized tax benefits, January 1$12.5 $27.7 $30.6 $5.2 $15.6 $11.7 
Additions based on tax positions taken during the year— 0.7 0.5 — — 0.3 
Reductions based on tax positions taken during the year— (0.1)— — — — 
Additions for tax positions of prior years0.2 1.5 3.8 0.2 1.5 3.7 
Reductions for tax positions of prior years(3.3)(4.6)(7.2)— (0.6)(0.1)
Lapses of statute of limitations— (1.9)— — (0.5)— 
Settlement— (10.8)— — (10.8)— 
Unrecognized tax benefits, December 31$9.4 $12.5 $27.7 $5.4 $5.2 $15.6 
The Company currently has no open Internal Revenue Service income tax audits. The Company was notified on January 12, 2026, that its Hawaii State income tax returns for tax years 2022 through 2024 were selected for audit.
At December 31, 2025 and 2024, there were $5.4 million and $5.2 million of unrecognized tax benefits, respectively, that, if recognized, would affect the Company’s and Utilities’ annual effective tax rate.
Based on information currently available, the Company and the Utilities believe these accruals have adequately provided for potential income tax issues with federal and state tax authorities, and that the ultimate resolution of tax issues for all open tax periods will not have a material adverse effect on its results of operations, financial condition or liquidity.
Tax years post 2021 remains open under Federal and Hawaii statues of limitations.
HEI consolidated. The Company recognizes interest accrued related to unrecognized tax benefits in “Interest expense, net” and penalties, if any, in operating expenses. In 2025, 2024 and 2023, the Company recognized approximately $0.8 million, $0.3 million and $1.3 million, respectively, in interest expense. The Company had $3.1 million and $2.3 million of interest accrued as of December 31, 2025 and 2024, respectively.
Hawaiian Electric consolidated. The Utilities recognize interest accrued related to unrecognized tax benefits in “Interest expense and other charges, net” and penalties, if any, in operating expenses. In 2025, 2024 and 2023, the Utilities recognized approximately $0.1 million, $0.3 million and $0.1 million in interest expense, respectively. The Utilities had $0.2 million and $0.1 million of interest accrued as of December 31, 2025 and 2024, respectively.
As of December 31, 2025, the disclosures above present the Company’s and the Utilities’ accruals for potential tax liabilities, which involve management’s judgment regarding the likelihood of the benefits being sustained under governmental review.
Tax developments. In 2025, federal tax legislation, commonly referred to as the One Big Beautiful Bill Act, which includes a broad range of tax reform provisions, was signed into law in the United States on July 4, 2025. The Company recognized the impacts of the 2025 provisions including the timing of deductions for research and experimentation costs. The Company will continue to assess the legislation’s impact on future reporting periods but the legislation is not expected to have a material impact on the Company’s financial statements.