Related-party transactions - HECO (Hawaiian Electric Company and Subsidiaries)

12 Months Ended

Dec. 31, 2011

Hawaiian Electric Company and Subsidiaries

Related-party transactions

13. Related-party transactions

HEI charged HECO and its subsidiaries $4.9 million, $5.0 million and $4.5 million for general management and administrative services in 2011, 2010 and 2009, respectively.  The amounts charged by HEI to its subsidiaries are allocated primarily on the basis of actual labor hours expended in providing such services.

HECO’s short-term borrowings from HEI fluctuate during the year, and totaled nil at December 31, 2011 and 2010.  The interest charged on short-term borrowings from HEI is based on the lower of HEI’s or HECO’s effective weighted average short-term external borrowing rate. If both HEI and HECO do not have short-term external borrowings, the interest is based on the average of the effective rate for 30-day dealer-placed commercial paper quoted by the Wall Street Journal.

Borrowings among HECO and its subsidiaries are eliminated in consolidation. Interest charged by HEI to HECO was de minimis in 2011, nil in 2010 and $0.2 million in 2009.