Hawaiian Electric refutes Maui lawsuit allegations on wildfire cause, stocks soar.
Hawaiian Electric’s Shares Soar as Company Denies Responsibility for Maui Wildfires
Hawaiian Electric’s shares skyrocketed by nearly 40 percent on Monday following the company’s statement that it was not to blame for the devastating wildfires in Maui. The electric utility asserted that its power lines had been shut down for hours prior to the deadliest blaze that ravaged the island.
Last week, Maui County filed a lawsuit against Hawaiian Electric, accusing the utility of negligently failing to cut off power, thus causing the fires that destroyed the coastal town of Lahaina and tragically claimed the lives of over 114 people.
While Hawaiian Electric admitted that its power lines were responsible for the initial fire in Lahaina, it emphasized that a separate fire, which started later in the afternoon, engulfed the town and could not be contained by the county’s fire department.
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“We were surprised and disappointed that the County of Maui rushed to court even before completing its own investigation,” stated CEO Shelee Kimura.
Since the wildfires on August 8, Hawaiian Electric’s shares have experienced significant volatility. On Monday, they were trading at $13.51 after multiple trading halts. Despite the rally, the shares remain more than 60 percent lower since the wildfires began.
The utility firmly asserted that its power lines in West Maui had been deactivated for over six hours before the afternoon wildfires erupted in the area. It labeled the lawsuit filed by Maui County as ”factually and legally irresponsible.”
“If HECO [Hawaiian Electric Co] possesses information regarding a second ignition source, it should present that evidence promptly. Ultimately, HECO bears the responsibility to de-energize, maintain its equipment and systems properly, and ensure that downed power lines are not re-energized,” stated John Fiske, an attorney representing Maui County in the lawsuit.
As investors fear the potential for bankruptcy, Hawaiian Electric is striving to defend itself, with the outcome hinging on its legal arguments. Raymond James analyst Pavel Molchanov commented, “Ultimately, this will need to be resolved in court rather than solely through press releases.”
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