ISI: HECO Reaches Settlement Agreement

According to a research report published today by ISI, Hawaiian Electric Industries, Inc. (NYSE: HE) has reached a settlement agreement with the Consumer Advocate and Depart of Defense to recover costs associated with the East Oahu Transmission Project (EOTP).

In the report, ISI commented, “. If approved, it would preclude a prudency audit mandated by the PUC and instead HECO would take a one-time $6mm after-tax charge in 4Q11, whilst starting to collect annual interim revenue of $5mm effective 3/1/12 on incremental rate base of ~$31mm. HECO has only been recording the debt portion of AFUDC for this project. The company has two more projects where reasonableness of cost audits have been ordered – a 110MW combustion turbine, placed in service in ‘09, and a Customer Information System (CIS), to be implemented in '12.”

ISI maintains its Hold rating and $26 PT on Hawaiian Electric, which closed yesterday at $26.11.