Hawaiian Electric Industries, Inc.

Good afternoon and welcome to the Q1 2022 Hawaiian Electric Industries Inc. Earnings Conference Call. My name is Sam and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star followed by one on your telephone keypad. At this time, I'd now like to turn the call over to our host, Julie Smolenski, VP Investor Relations and Corporate Sustainability. Julie.

Thank you, Sam. Welcome, everyone, to HEI's first quarter 2022 earnings call. Joining me today are Scott Hsu, HEI President and CEO, Greg Hazelton, HEI Executive Vice President and CFO, Shelly Kimura, Hawaiian Electric President and CEO, Anne Teranishi, American Savings Bank President and CEO, and other members of senior management. Our press release and our presentation for this call are available in the investor relations section of our website. During today's call, we'll be using certain non-GAAP financial measures to describe our operating performance. Our presentation contains reconciliations of these measures to the equivalent GAAP measures. 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. Now Scott will begin with his remarks.

Aloha kākou. Greetings, everyone. Thank you for joining us today. We're pleased with our consolidated first quarter earnings, which represent a 7% increase over the prior year. Each of our businesses contributed to these solid results. The utility is executing well under the new performance-based regulation framework. While it had higher operations and maintenance expenses in the first quarter, those were offset by other items that Greg will address. and we're on track with our full year plan. The utility remains focused on delivering customer value while progressing ambitious climate change action goals. The bank's results reflect good execution in an improving banking environment. Earning asset yields are starting to improve with rising interest rates, credit quality remains solid as our state's economy strengthens, and the bank is managing expenses well amid its digital transformation. Our first quarter results also benefited from the sale of an investment in an electric vehicle charging company, EverCharge, that Pacific Current has partnered with to expand access to charging stations in Hawaii. The partnership with EverCharge will continue. Overall, the first quarter represents a strong start for 2022. Turning to the utility. During the first quarter, the utility worked hard to manage the impacts of inflation and supply chain pressures, including higher fuel prices, which are impacting our customers. These dynamics underscore the importance of our focus on affordability, efficiency, and providing customers options to manage their bills. Rising fuel costs also highlight the need to continue working together as a state to rapidly reduce our dependence on imported fossil fuels. Like the rest of the industry, we're seeing impacts to renewable energy and storage projects from inflationary conditions and supply chain and other challenges. While some projects have been delayed and some are no longer moving forward, we've also had successes, including the acceleration of the state's largest solar plus storage project, which is now set to come online in July, several months ahead of schedule. The challenging macroeconomic environment has led to opportunities to partner with stakeholders to identify solutions together. A great example is the O'ahu Power and Pass Coal Task Force established by the governor, which has brought together the parties involved in bringing projects to fruition to identify and address issues. Discussions are underway to create similar processes on other islands in the state. Such partnerships will be all the more important as we scale up efforts to meet our collective goals. In addition to the over 400 megawatts of energy and roughly 2.5 gigawatt hours of storage scheduled to come online by year end 2024, we're pursuing numerous additional procurements and programs to grow renewable energy, storage, and grid services resources on our systems. This includes eight shared solar RFPs representing more than 120 megawatts combined, and stage three RFPs for Hawaii Island, O'ahu, and Maui. which combined are seeking up to 980 gigawatt hours of energy and 800 megawatts of capacity, including firm renewable generation on O'ahu and Maui. We continue to advance grid services RFPs and distributed energy initiatives, including continued expansion of rooftop solar and additional incentives to add storage. We're working to scale up other key components of our renewable energy transition as well. including the expansion of phase one of our grid modernization program to full smart meter deployment. Electrification of transportation work continues progressing with broad support from stakeholders. Most recently, we launched our e-bus charging pilot to provide make-ready infrastructure for eligible bus operators. So far, PBR is providing a stable, more predictable regulatory framework to operate within as we transform our system. The process to develop additional PBR performance incentives is nearing conclusion. Hearings were held April 26 and 27, with post-hearing briefs this month. Turning to the bank, ASD continues to perform very well. It remains a high-quality bank with a low-risk profile, solid credit quality, and low-cost funding base. Rising interest rates and the improving Hawaii economy bode well in terms of bank profitability and loan growth opportunities. We're closely monitoring potential economic impacts posed by inflation, high fuel costs, and strained supply chains, but to date remain positive about Hawaii's overall economic picture. Given ASBA's asset-sensitive balance sheet, margin is expected to expand as interest rates continue to increase. ASBA is executing well on its digital transformation, successfully implementing large projects such as its new customer relationship management system, enabling it to deepen its customer relationships and continue delivering exceptional personalized service across digital and in-person platforms. Customer adoption of online and mobile options have enabled the bank to optimize its branch footprint to best meet customer needs. Now I'll hand the call over to Greg. who will be retiring from HEI July 1st to pursue another exciting opportunity. I'll comment further on that later. Now, Greg will review our financial results and outlook.