Hawaiian Electric Industries, Inc. (HE): Marketing Mix Analysis [Dec-2025 Updated]

You're trying to make sense of Hawaiian Electric Industries, Inc. (HE) right now-late 2025-and frankly, it's a utility operating under a microscope after the 2023 disaster. As an analyst who's tracked complex regulated entities for two decades, I can tell you the 4Ps here aren't about marketing widgets; they're about managing a regulated monopoly that serves 95% of the population while simultaneously trying to fund massive grid hardening and face down a pending rate case, perhaps seeking a 7% residential increase. This breakdown cuts through the regulatory filings and investor noise to give you the clear, hard look at their Product, Place, Promotion, and Price strategies that you need to understand their true risk and recovery path. Dive in below for the precise map.

Hawaiian Electric Industries, Inc. (HE) - Marketing Mix: Product

You're looking at the core offering of Hawaiian Electric Industries, Inc. (HE), which is fundamentally the delivery of reliable electricity and, until recently, financial services. The product is the service itself-powering the islands.

The regulated electric utility service component covers a significant portion of the state. Hawaiian Electric provides electricity for 95% of residents of the State of Hawaii across Oahu, Maui, Molokai, Lanai, and Hawaii Island. The service territory spans 5,815 square miles, serving an estimated population of 1.4 million people. As of 12/31/2024, the total customer count stood at 472,536. This is a massive, essential service; there's no substituting it in the near term.

Here's a breakdown of the customer base by island group as of 2/15/2025 data:

• O'ahu customers: 310,336
• Hawaii Island customers: 90,522
• Maui County customers (Maui, Molokai & Lanai): 71,678

The physical product involves the entire infrastructure for transmission, distribution, and generation of electricity. As of 2/15/2025, the total firm generation capacity across the islands totaled 1516.50 MW. The generation mix relies heavily on traditional sources alongside growing renewables.

The utility is actively focused on grid modernization and hardening infrastructure. The Hawaiian Electric Companies input a US$205 million grid modernization plan to integrate renewables. This strategy, part of the Integrated Grid Plan filed with the Public Utilities Commission (PUC), aims to achieve net zero carbon emissions and use 100% renewable resources by 2045. Grid modernization incorporates communications and information technologies to better manage power flow.

The integration of renewable energy is a key product evolution. Hawaiian Electric achieved a 36% consolidated Renewable Portfolio Standard (RPS) in 2024, accelerating progress toward the 40% milestone set for 2030. This 36% figure represents the percentage of electricity generated by renewable resources across Oahu, Hawaii Island, and Maui County. This was an 8% surge in renewable energy on the grid from 2023.

The renewable energy product is sourced from both utility-scale projects and customer-sited resources. As of the latest data, customer-sited renewable capacity reached 662 MW, with shared solar at 4.298 MW. New private rooftop solar installations in 2024 totaled 61 MW. About 43% of single-family homes served by Hawaiian Electric have rooftop solar. The company is on track to exceed the forecasted cumulative distributed solar capacity of 1,186 MW by 2030.

Specific renewable capacity additions contributing to the product offering include:

• Ho'ohana Solar I (52 MW with 208 MWh BESS) expected to achieve commercial operations in 2025.
• AES Kūihelani Solar (60 MW with 240 MWh BESS) added in May 2024.
• Kūpono Solar (42 MW with 168 MWh BESS) added in June 2024.
• AES West O'ahu Solar (12.5 MW with 50 MWh BESS) added in March 2024.
• Approximate stand-alone storage capacity is 185 MW (565 MWh storage only).

Regarding the financial services product, Hawaiian Electric Industries, Inc. (HEI) completed the sale of a majority stake in American Savings Bank (ASB) on December 31, 2024. HEI sold 90.1% of the common stock to independent investors for an aggregate cash consideration of $405 million, valuing the bank at $450 million. HEI retained a 9.9% non-controlling interest. ASB, Hawaii's third-largest bank, holds total assets of $9.3 billion. HEI intends to use the proceeds to reduce holding company debt.

Hawaiian Electric Industries, Inc. (HE) - Marketing Mix: Place

Place, or distribution, for Hawaiian Electric Industries, Inc. involves the physical delivery of electricity across its regulated service areas. This is a geographically constrained operation, meaning the distribution strategy is inherently localized and capital-intensive.

Service territory spans five major Hawaiian islands: Oahu, Maui, Hawaii, Lanai, and Molokai. Operations are highly localized, serving approximately 480,000 electric customers. The distribution network is subject to unique geographical and environmental challenges, which directly dictate infrastructure investment and maintenance strategies.

Physical infrastructure includes power plants, substations, and over 6,000 miles of power lines. To be more precise based on recent filings, Hawaiian Electric owns and operates more than 9,800 miles of transmission and distribution lines across these five islands. Furthermore, the utility has sole ownership of about 50,000 poles, with the total number of poles jointly owned across all utilities in Hawaii being about 120,000. Approximately 43% of these lines are already underground, a significant capital deployment to enhance reliability.

The strategy for Place is heavily influenced by resilience needs. For instance, in Q3 2025, Hawaiian Electric Industries announced a successful debt issuance of approximately $500 million, with proceeds earmarked for critical investments to strengthen reliability and safety across the islands, directly impacting the distribution system's physical assets. This capital deployment is essential for managing the inherent risks of the island environment.

Here is a breakdown of customer distribution by island, based on end-of-2024 figures, which informs the localized service strategy:

The ongoing grid hardening efforts are a direct component of the Place strategy, ensuring the physical network can withstand severe weather. You can see the focus on physical asset replacement in recent mitigation updates:

• Replacing or upgrading over 3,000 wood poles as part of wildfire mitigation initiatives (as of Q2 2025).
• Replacing 36 miles of overhead copper conductor in targeted areas.
• Planning to install 36 miles of covered conductor over the next three years.
• Initiating undergrounding projects, starting with 2 miles in Lahina.

The utility's actual core Return on Equity (ROE) was reported at 7.2% for Q2 2025, compared to an allowed ROE of 9.5%, showing the financial constraints under which these massive physical infrastructure investments must be managed.

Hawaiian Electric Industries, Inc. (HE) - Marketing Mix: Promotion

Hawaiian Electric Industries, Inc. (HEI) and its subsidiary Hawaiian Electric focus promotional efforts heavily on mandated regulatory compliance, public safety imperatives, and strategic energy transition messaging, rather than traditional consumer advertising.

Primary communication channels for Hawaiian Electric Industries, Inc. are inherently tied to regulatory oversight. The enhanced Wildfire Safety Strategy (WSS) for 2025-2027 was filed with the Public Utilities Commission (PUC) on January 10, 2025, for review and acceptance. Furthermore, the utility proposes prospective changes to the Revenue Based Adjustment (RBA) Rate Adjustment via filings like Transmittal No. 25-02 (2025 Spring Revenue Report), filed March 31, 2025, with proposed tariff changes effective June 1, 2025.

Public safety campaigns are a critical component, directly tied to grid resilience following recent events. The 2025-2027 WSS has an estimated total cost of about $450 million, with $137 million budgeted specifically for work in 2025. This strategy promotes actions like the Public Safety Power Shutoff (PSPS) program, which serves as a last line of defense during hazardous weather. Specific mitigation work in 2024 included replacing and upgrading 3,558 fuses and 680 new lightning arresters, and installing 44 camera stations in elevated fire risk areas.

Customer outreach centers on driving participation in demand-side management and clean energy initiatives. The Program Participation scorecard tracks enrollment in Community-Based Renewable Energy (CBRE), Distributed Energy Resource (DER), and Demand Response (DR) programs against a target of 30% of total customers, a target which was exceeded on a consolidated basis in Q1 2024. The second Integrated Grid Planning (IGP) cycle, which guides resource needs and planning, is set to occur over three years, from 2025 through 2028. In May 2025, the Bring Your Own Device (BYOD) Level 1 program closed and was replaced by BYOD Plus.

Investor relations communications are frequent, addressing financial stability and operational progress. Hawaiian Electric Industries, Inc. (HEI) reported its third quarter 2025 financial results on November 7, 2025. For Q3 2025, consolidated core net income was $32.8 million, or $0.19 per share, compared to core income of $32.7 million, or $0.29 per share, in Q3 2024. The holding company core net loss for Q3 2025 was $6.8 million. As of the end of Q3 2025, the holding company had approximately $40 million in unrestricted cash on hand. The Board of Directors approved a $10 million quarterly dividend to HEI for Q3 2025.

Educational programs reinforce the state's long-term energy vision. Hawaiian Electric achieved a 36% consolidated Renewable Portfolio Standard (RPS) in 2024, marking an 8% surge in renewable energy on the grid from the previous year. This progress accelerates the state's goal of achieving 100% renewable energy by 2045. Governor Josh Green issued an Executive Order in January 2025 to accelerate the transition to 100% renewable electricity production in the counties of Hawai'i, Kaua'i, and Maui by 2035.

Here's a quick look at some key metrics related to the utility's operational and financial communications for 2025:

The utility communicates its grid hardening efforts through these filings and updates. For instance, in 2024, 2,124 wood poles were replaced and upgraded, and more than 23 miles of older overhead lines were replaced with more resilient lines.

Customer engagement also involves specific program updates communicated via newsletters. For example, a newsletter was issued to solar contractors on May 1, 2025, regarding the release of the BYOD Plus program.

• Primary communication channel: Regulatory filings with the PUC.
• Key safety campaign focus: Wildfire risk reduction via WSS.
• Customer outreach goal: Exceeded 30% participation target in Q1 2024.
• Energy goal: 100% renewable energy targeted by 2045.
• Investor updates: Quarterly earnings calls held throughout 2025.

Hawaiian Electric Industries, Inc. (HE) - Marketing Mix: Price

You're looking at the core mechanism that translates Hawaiian Electric Industries, Inc.'s (HEI) operational costs and capital investments into customer bills. For a regulated utility like Hawaiian Electric Company, Inc., price isn't set by simple market forces; it's a highly structured calculation.

Rate Setting Mechanism: Regulated Return on Rate Base

The foundation of pricing for Hawaiian Electric Company, Inc. is the regulated rate-of-return model, which centers on the Rate Base. This Rate Base represents the value of property and investments the utility is permitted to earn a specified return on, provided those assets are deemed 'used and useful' in providing service to current ratepayers. This contrasts with Performance-Based Regulation (PBR), which ties earnings more directly to performance benchmarks rather than just capital expenditure growth. The first five-year PBR period (2021-2026) saw HECO earn between 0.68% to 1.49% less than its authorized return on equity.

Pricing determination is a formal process involving the Public Utilities Commission (PUC). The utility must file applications to recover prudently incurred costs and earn a return. The PUC oversees this to ensure rates allow recovery without generating excess profits. The current PBR plan is concluding its fifth year, and the PUC is actively reviewing the process for establishing the next plan, which involves 'Re-basing,' or recalculating the utility's Rate Base, effective January 1, 2027.

Fuel Cost Adjustments: Direct Pass-Through Volatility

Fuel Cost Adjustments (FCAC) are a direct pass-through mechanism, meaning fluctuations in fuel prices immediately impact the monthly bill, defintely affecting customer affordability. These are reflected in the Energy Cost Recovery Factor (ECRC).

Here are recent ECRC figures for a typical residential customer consuming 500 kWh:

To mitigate this volatility, an amended fuel supply contract for Oahu, approved by the PUC in June 2025, is estimated to reduce annual fuel costs by $31 million and lower typical residential bills by an estimated $2.77 per month (for 500 kWh).

Rate Case Outlook and Base Rate Components

While the specific 7% average residential rate increase request you mentioned isn't explicitly detailed in the latest filings, the expectation is that revenue requirements will increase as the utility moves into the next regulatory period. The base rates, effective July 1, 2025 (superseding January 1, 2019 rates), show the structural cost components:

• Customer charge (1-phase Residential Schedule 'R'): $14.02 per month.
• Energy charge (First 350 kWhr, Schedule 'R'): $0.347795 per kWhr.
• Energy charge (All kWhr, General Service 'G'): $0.328212 per kWhr.
• Green Infrastructure Fee (All bills): $1.45 per month.

Financial Stability and Cost of Capital Influence

The financial fallout from the 2023 events heavily impacts the cost of capital embedded in future rates. The company's credit profile was downgraded to sub-investment grade following the Maui wildfires, leading to higher borrowing costs.

As of Q2 2025, Hawaiian Electric Industries (HEI) exhibited significant leverage:

• Debt-to-Equity Ratio: 220.12.
• Interest Coverage Ratio: 2.08 (Operating Income of $54 million divided by Interest Expense of $26 million).

To manage this, HEI has been actively raising capital, which carries a higher interest rate due to the perceived risk. In September 2025, HEI priced a $500 million aggregate principal amount of 6.000% Senior Notes due 2033. This debt management is critical as the company faces significant liquidity pressures, including $1.92 billion in settlement obligations over four years, with $479 million in annual payments starting in Q4 2025. Standard & Poor's recently upgraded HEI's long-term issuer credit rating to \'B+\' from \'B-\', signaling some improved confidence.

Capital expenditure forecasts for 2025 are approximately $400 million, rising to $550 million to $700 million in 2026.