Hawaiian Electric Industries, Inc.

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to HEI first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star, then the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I would now like to turn the conference over to Mateo Garcia, Director of Investor Relations. Please go ahead.

Thank you. Welcome, everyone, to HEI's first quarter 2026 earnings call. Joining me today are Scott Hsu, HEI President and CEO. Paul Ito, HEI and Hawaiian Electric Senior Vice President and CFO. Shelley Kimura, Hawaiian Electric President and CEO. and other members of senior management. Our earnings release and our presentation for this call 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. Today's presentation also includes references to non-GAAP financial measures, including those referred to as core items. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. We will take questions from institutional investors at the end of this call. Individual investors and others can reach out to Investor Relations. Now Scott Hsu will begin with his remarks.

Aloha kakou. Welcome everyone. For today's call, I'll start with an update on the Maui Wildfire Torch Settlement and discuss our progress on other key priorities. Paul Ito will walk through our financial results and then open it up for questions. Since the Maui wildfires in 2023, we've told you we would take the actions necessary to offer those who suffered loss an accelerated path to recovery and to regain the financial strength and stability of our enterprise. Resolving the Maui wildfire tort litigation was a fundamental step in this process. We came to key terms of a comprehensive settlement agreement in August of 2024 and signed on to a definitive settlement agreement shortly thereafter. Last month on April 10th, the final conditions of the settlement were satisfied when the last subrogation insurers withdrew their appeals. We then immediately made the first of our four annual $479 million payments as stipulated under the agreement. I'm grateful to all parties involved that we were able to work through an extremely complex and challenging process and begin compensating those who suffered loss. This marks a pivotal milestone for those who were impacted by the Maui wildfires and our hearts are with them as they continue on their journey of healing and recovery. While we've advanced the wildfire settlement agreement, we've worked in parallel to reduce wildfire risk across our communities as quickly as possible. Our utility teams continue to work with urgency toward reducing wildfire risk and strengthening the resilience of our grid. On April 13, we submitted our first update to our Wildfire Mitigation Plan, or WMP, to the Public Utilities Commission, which covers 2026 and 2027. In accordance with the PUC's approval of our WMP at the end of 2025, we'll continue to submit updated WMPs every other year starting in 2027, with each update covering a two-year period. This schedule will foster a predictable, deliberate approach toward planning and implementing our wildfire risk reduction measures. Proactive risk management and continuous improvement will continue to define our approach as we move forward. Turning to the next slide. Affordability is a core focus of ours, and affordability pressures have intensified given the recent increase in fuel prices across the globe. We've always been committed to supporting our communities during times of uncertainty, and we've displayed this commitment during the pandemic, the Maui wildfires, and in the current period of high oil prices. In early April, we told our customers to prepare for potential increases in energy costs in the coming months, driven by rising global oil prices linked to escalating geopolitical tension. We also wrote out new options to support our customers through this challenging time. Starting April 6, we began offering customers options that can smooth short-term billing spikes and provide additional financial flexibility. These include interest-free payment plans for up to six months and $50 bill credits to customers in areas that rely more heavily on diesel fuel generation, which has seen the largest increase in fuel costs. As we work to help customers through this higher cost period, we continue to advance strategies that systemically address household energy burden. This includes supporting electrification, rooftop solar, and EV adoption. all of which have contributed to an average household energy burden in Hawaii that is below the national average. We also believe we're well positioned as a company to navigate the impacts from the sharp rise in fuel costs. Paul will talk more about our strong liquidity position, but I'll note that our prudent balance sheet management ensures we're well prepared for the unexpected. Current global events highlight the importance of a diversified energy mix to limit the impact of geopolitical instability and price volatility. Reducing customer bill volatility is one of the many reasons we've supported adding renewable energy, such as solar plus storage, to our grids. Renewables not only contribute to our state's renewable energy and decarbonization goals, they also increase bill stability. Turning to the next slide, We're in a transitional year as we prepare for our expected reset of rates in 2027. On March 6, we submitted our rate rebasing requests jointly with Ulupono Initiative, an intervener in many of our PUC proceedings, and a working group party in performance-based regulation. This joint proposal advances an unprecedented stakeholder-driven, non-traditional approach to utility rate adjustment. The approach is consistent with the fundamental principles of PBR, which encourages innovation and the evolution of utility regulation. Our request prioritizes customer affordability while allowing the utility to undertake the investments and expenses that are critical to safety, reliability, and resilience. Our proposed rebasing would increase consolidated base rates by approximately 5.3%. phased in over two years to moderate customer impacts. This equates to an increase in the average customer bill of $8 to $12 in 2027 and an additional $2 to $3 in 2028, varying slightly by island. The requested increase could also help improve our return on equity, which we expect will continue to be impacted in this year of transition. As we prepare to enter our second multi-year rate period, Paul will discuss our expectations for 2026 in more detail. Performance incentive mechanisms, or PIMs, are also an essential element of PBR, and although development of PIMs for the second multi-year rate period has not yet been completed, our joint proposal recommends that a total of 200 basis points of PIMs be available. composed of 150 basis points of award potential and 50 basis points of penalty potential. Affordability is fundamental to our regulatory framework, and by the end of our current multi-year rate period, we'll have provided more than $100 million in revenue requirement reductions to customers. As we implement any approved rate rebasing in our second multi-year rate period, we'll continue working with our customers to provide options to address affordability pressures. Turning to an update on YAL. In late March, the PUC issued a decision and order approving our proposed YAL generating station repowering project, which had been selected in December 2023 after a competitive bidding process. This is a milestone approval, allowing us to move ahead with a critically important firm generation project that will enhance energy reliability and resilience for our customers. The Commission approved cost recovery through our Exceptional Project Recovery Mechanism, or EPRM, totaling $908 million. This amount includes the original estimated project cost of $847 million plus an adjustment for inflation. We do foresee project costs will exceed this amount since, as many of you know, there have been significant and unforeseeable cost increases that have impacted power generation projects worldwide over the two years since our original cost estimate. However, the Commission has confirmed that we may seek recovery above the currently approved amount in a future rate case or rate rebasing proceeding, which may be in 2031. Including the inflationary adjustment that will recover through the EPRM, The projected incremental amount we'll seek recovery for after the project is in service totals $247 million. At the end of April, following the PUC's approval, we executed contracts for the purchase of six gas turbines for the YL project to secure production slots and remove exposure to non-tariff price increases. In summary, we expect 2026 to be a year of transition now that we've reached the pivotal milestones of finalizing the tort litigation settlement and launching our alternative rate rebasing process. We're no longer navigating a crisis. We're strengthening our foundation while working to build a safer, more resilient future for the communities we serve. Our focus going forward will continue to be on the critical processes underway with key stakeholders, including the liability cap rulemaking, and rate rebasing processes underway with the Commission, and executing well on our YIL repowering project. We'll continue to be laser-focused on affordability and supporting our customers and communities, especially given fuel price impacts from the Iran conflict. I'll now turn the call over to Paul Ito to discuss our financial results.