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Ratings agency Moody’s (NYSE:MCO) Investors Service had earlier in the day downgraded its credit rating to junk status, the second such cut this week after S&P Global (NYSE:SPGI) Ratings as investors worried over any potential wildfire-related financial and legal challenges.
Hawaiian shares surged about 19% in volatile premarket trading after losing more than half of their value since the Aug. 8 wildfires that destroyed the coastal Maui town of Lahaina and killed at least 110 people.
The company did not clearly outline the purpose for which it was seeking expert advice. “Like any company in this situation would do, and as we do in the normal course of business, we are seeking advice from various experts,” it said in a filing.
The Honolulu-based company was slapped with class-action lawsuits alleging culpability for the fires, claiming that the utility failed to shut off power lines despite warnings that high winds might blow those lines down and spark wildfires.
Hawaiian said shutting out power was not part of its high-wind management protocol.
“Preemptive, short-notice power shutoffs have to be coordinated with first responders, and in Lahaina, electricity powers some of the pumps that provide the water needed for firefighting,” it said.The company said unlike in California, there was no precedent in Hawaii of applying an “inverse condemnation” to a private party like an investor-owned utility.
An “inverse condemnation” exposes California utilities to liabilities from wildfires regardless of their negligence, as long as their equipment is involved.
As of Thursday, about 1,900 customers in West Maui remained without electricity, Hawaiian said. It did not include around 2,600 homes and businesses that were destroyed, which represent less than 1% of its customers.
