Hawaiian Electric Industries, Inc.

Hello and welcome to the Q3 2021 Hawaiian Electric Industries Earnings Conference call. Following the presentation today, we will have a question and answer session. If you would like to register a question, please press start followed by the number one on your telephone keypads. I would now like to hand the conference over to Julie Smolenski, VP Investor Relations and Corporate Sustainability. So, Julie, please go ahead.

Thank you, Rika. Welcome, everyone, to Hawaiian Electric Industries' third quarter 2021 earnings call. Joining me today are Connie Lau, HEI President and CEO, Greg Hazleton, HEI Executive Vice President and CFO, Scott Hsu, Hawaiian Electric President and CEO and the incoming HEI President and CEO as of January 1st, Shelley Kimura, Hawaiian Electric Senior Vice President of Customer Service and Public Affairs, who is the incoming Hawaiian Electric president and CEO, also January 1st, and Tara Nishi, American Savings Bank president and CEO, and other members of senior management. Our press release and presentation are available in the investor relations section of our website. As a reminder, forward-looking statements will be made on today's call. Factors that could cause actual results to differ materially from expectations can be found in our presentation, our SEC filings, and in the Investor Relations section of our website. And now Connie will begin with her remarks.

Thanks, Julie. And aloha, everyone. Very good to have you on the call today. Mahalo. Thank you for joining us. HEI had a good third quarter with utility financial performance in line with our expectations and solid profitability at the bank. Third quarter consolidated net income was $63.4 million dollars, with EPS of 58 cents compared to $65 million and EPS of 59 cents in the same quarter last year. For the first nine months, our consolidated net income and EPS were up 30% compared to the same period last year. As we near the end of the year, we are increasing the bottom end of our earnings guidance range. Greg will discuss the drivers of our performance and our guidance shortly. First, let me provide an update on Hawaii's economy. While we saw a surge in COVID cases in the late summer from the Delta variant, our community handled it well, and cases and hospitalizations are now down dramatically. Given these improvements, Governor Ige recently welcomed tourists back to the islands, and on Oahu, restrictions have been loosened on events. 72% of residents are now fully vaccinated, and 82% have received at least one dose. Vaccination of children is also starting. A couple months ago, in its September forecast, UHERO, the University of Hawaii Economic Research Organization, estimated the state's economic recovery would see some delay due to Delta, and reduced its 2021 state GDP estimate to 3.5% instead of 4%. We've seen some signs of improvement since then, so we'll see how that plays out in UHERO's next update. Despite Delta, unemployment declined to 6.6% in September, the eighth month of improvement. Hawaii real estate values and activity have remained very strong, with O'ahu prices and sales volumes up compared to the prior year. Median housing prices on three of our four major islands now exceed $1 million. Overall, we see encouraging signs for Hawaii's economy. Turning to the utility, cost efficiencies continue to be a central focus. This benefits our customers and our company as we operate under performance-based regulation, or PBR. The third quarter was our first full quarter under the new PBR framework. We're on track to deliver on our commitment to provide $6.6 million in management audit savings this year. Those savings have been reflected in customer bills since June 1st, including $3 million in the third quarter and another $3 million to be delivered by year end. We continue to have good collaboration with stakeholders and regulators as we work to decarbonize our economy and deliver affordable, equitable, reliable, and resilient power for our customers. We're working with developers and communities to add more renewable and storage resources. The vast majority of Stage 1 and 2 projects continue to progress. We're monitoring supply chain impacts and working with developers to keep projects moving forward. Last month, we launched the third stage of our renewable procurement for Hawaii Island. Together with other members of the Governor's Powering Past Coal Task Force, we're working to ensure Commission-approved projects on Oahu successfully come online as we prepare for the retirement of Hawaii's only coal plant next fall. We're confident we'll have enough generation and adequate reserve margin to keep delivering reliable power when the coal plant shuts down. Customers and distributed energy resources play a major role in the clean energy effort. Even through the pandemic, DER adoption has remained on track for our decarbonization goals. Our grid services RFP process is also progressing. We have reviewed and shortlisted the bids with final selection expected this month followed by PPA negotiations. Adding grid services will help us leverage customer resources to provide additional options for our system. We're also progressing on electrification of transportation. Last week, we filed an application to expand public EV charging by adding 300 more public chargers across our service territories through 2030 including 150 fast chargers, and offering new rates to incentivize charging during the day when solar resources are abundant. Finally, the Commission opened a new process under PBR to consider potential additional performance mechanisms and has encouraged collaboration among the utility and stakeholders in that effort. Parties will spend the remainder of this year considering proposals to address outcome areas identified by the PUC. Now, I want to ask Scott Hsu, who is succeeding me in January, to discuss the utility's newly announced carbon reduction goal. Scott?