HEI Business Model Canvas

Operate, maintain, and dispatch generation, transmission, and distribution assets across islanded systems, coordinating unit commitment and grid reconfigurations to meet demand while minimizing fuel cost. Balance reliability, safety, and affordability under island constraints, guided by Hawaii’s 100% RPS by 2045. Integrate renewables and storage to preserve frequency and inertia, and execute standardized outage-management and rapid restoration protocols.

Source, contract and interconnect new renewables and batteries via competitive RFPs and targeted self-build to fill capacity gaps, executing PPAs where cost-effective. Conduct system impact and curtailment mitigation studies to optimize dispatch and reduce losses. Align procurement and construction schedules to meet Hawaii's 100% RPS by 2045 (as of 2024).

Regulated utility franchises granting exclusive service territories on Oahu (≈1.02M residents in 2024), Maui County (≈173k) and Hawaii Island (≈214k) are core HEI assets, underpinning captive customer bases and predictable load. These franchises enable regulatory recovery via periodic rate cases and trackers (fuel/IRP and grid modernization), while long-lived plant and distribution assets support stable investment recovery and predictable returns.

Owned plants, substations, distribution lines and battery systems provide HEI with control to deliver reliable service across its territories. Assets span utility-scale renewable projects, legacy thermal units and expanding microgrid nodes to support islanded operation. Ongoing upgrades raise capacity and resilience to meet Hawaii law requiring 100% renewable electricity by 2045. Robust asset management and O&M teams preserve performance as U.S. utility battery capacity surpassed 6 GW by end-2023.

HEI, serving roughly 95% of Hawaii residents, delivers dependable power while accelerating renewables and storage to help meet Hawaii’s statutory 100% renewable electricity target by 2045. The company prioritizes resilience upgrades to better withstand storms and wildfire risks across island grids. HEI publishes transparent transition plans and timelines, including its Integrated Resource Plan and public progress reports, to track emissions reductions and system modernization.

HEI offers regulated, stable pricing with targeted affordability options covering lower-income tiers and bill credits; time-based rates and incentives (shown to lower customer bills 5–15%) encourage off-peak use. Energy efficiency and demand response programs reduce consumption and peak stress, improving system reliability. Clear, proactive communication and transparent billing cut surprise charges and increase customer satisfaction.

Provide essential utility service under tariffed terms set by the Hawaii Public Utilities Commission, with Hawaii average residential rates near $0.45/kWh in 2024. Transparent billing and published service standards build customer trust and regulatory compliance. Proactive notifications for outages and planned projects reduce disruption and improve satisfaction. Clear escalation paths for disputes are defined in service agreements and PUC rules.

Energy coaches, webinars and online tools guide efficiency and DER adoption, supporting deployment as US cumulative solar capacity exceeded 150 GW by 2023. Banking advisors coordinate financial planning and credit options to lower upfront costs and improve affordability. Multilingual materials reach roughly 22% of US residents who speak a language other than English at home. Targeted outreach in pilots has increased program enrollment and uptake.

Customer portals and apps deliver account management, real-time usage data and applications, with HEI's banking-style app enabling mobile deposits and payments; push alerts notify outages and fraud. Self-service features cut contact center calls—industry studies show digital channels can reduce inquiries by up to 40%—while 2024 mobile banking adoption surpassed 70% among consumers, boosting engagement and cost savings.

Call centers handle service requests and billing issues, managing high-volume interactions—in 2024 they processed over 300 million customer contacts across HEI channels. Physical bank branches and select utility walk-in sites provide in-person support for transactions and verification, with about 40% of complex cases escalated from phone to branch. Appointments are used for complex cases to reduce wait times and ensure specialist availability. Accessibility features (TTY, large-print forms, ramps, multilingual agents) are included to meet regulatory requirements.

Residential households are HEI core utility customers across islands with diverse incomes, pursuing rooftop solar, batteries and rising EV uptake as Hawaii targets 100% renewable electricity by 2045. Customers demand affordability, reliability and simple digital billing/energy apps. Banking needs span deposits and mortgages; US mortgage debt outstanding stood near $13.5 trillion in 2024 while homeownership hovers around 65%.

Commercial and industrial customers—businesses, resorts, retail and light industry with high loads—require high reliability, tight power quality and tailored rate structures. As of 2024 US commercial plus industrial sectors account for roughly 40% of electricity consumption (EIA 2024). These customers are actively pursuing PPAs, demand response and resilience solutions, with banking services focused on treasury and credit facilities to underwrite projects.

Capital expenditures prioritize large investments in grid modernization, storage, and resilience, driven in part by the Bipartisan Infrastructure Law’s $65 billion power-sector funding to accelerate renewables interconnections and system upgrades.

Renewable interconnections and system upgrades comprise the majority of utility capex, while ongoing IT and cybersecurity upgrades align with global security spending estimated at about $188 billion in 2024.

Retail operations include branch refurbishments and ATM investments for ASB to maintain customer access and digital-first service models.

Fuel and purchased power costs cover remaining thermal fuels and PPA payments; hedging programs and long‑term contracts are used to manage price volatility. HEI’s shift to renewables increases the share of fixed‑price PPAs, reducing exposure to volatile fuel markets. With Hawaii’s 100% RPS by 2045 guiding strategy, fuel risk is expected to decline over time. Cost mix now trends from commodity fuel to contracted capacity and energy.

Regulated electricity sales generate HEI revenues from residential (≈37% of retail sales), commercial (≈36%) and public customers, with 2024 U.S. average residential retail price near 16.7¢/kWh driving baseline tariff receipts. Decoupling and fuel or infrastructure riders accelerate cost recovery between rate cases, while performance mechanisms (penalties/rewards) can add or subtract several percentage points of allowed return. Demand-side impacts from efficiency and DERs are managed through targeted rate design, demand charges, and lost revenue adjustments to preserve revenue sufficiency.

Purchased power and integration fees recover PPA pass-through costs and target utility margin on dispatchable contracts while HEI, which serves roughly 450,000 customers, bills interconnection study and upgrade fees to cover network impacts and capital upgrades. Study fees typically fund engineering/queue processing and upgrades charged as capital contributions. Structured storage contracts (capacity, energy, ancillary services) create recurring revenue streams and support third-party resource integration.