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S&P changes outlooks of Hawaiian Electric, subsidiaries on regulatory reform

S&P Global Ratings on Feb. 20 revised the outlooks of Hawaiian Electric Industries Inc. and its subsidiaries, Hawaiian Electric Co. Inc., Hawaii Electric Light Co. Inc. and Maui Electric Co. Ltd., to positive from stable.

The outlook revision for Hawaiian Electric and its utilities reflect the potential of the performance-based regulation, which would reduce regulatory lag for the companies.

In 2019, the Hawaii Public Utilities Commission decided to remove Hawaiian Electric and its utilities from their triennial general rate schedules and institute five-year rate schedules instead.

This would result to regulatory predictability and cash flow stability, which would improve Hawaiian Electric's financial measures, the rating agency said in a report. Ratings also expects that Hawaiian Electric's funds from operations to debt to gradually improve to about 18%.

The issuer credit ratings of the companies were affirmed at BBB-.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.