HAWAIIAN ELECTRIC INDUSTRIES INCHE
HAWAIIAN ELECTRIC INDUSTRIES INC Revenue Disclosure
Note 10 · Revenues | ||
Revenue from contracts with customers. The revenues subject to ASC Topic 606 include the Utilities’ electric energy sales revenue as further described below.
Electric utilities.
Electric energy sales. Electric energy sales represent revenues from the generation and transmission of electricity to customers under tariffs approved by the PUC. Transaction pricing for electricity is determined and approved by the PUC for each rate class and includes revenues from the base electric charges, which are composed of (1) the customer, demand, energy, and minimum charges, and (2) the power factor, service voltage, and other adjustments as provided in each rate and rate rider schedule. Electric energy sales also represent contract rate charge from the generation and transmission of electricity to the Army. The monthly pricing is recalculated on an annual basis based on actual costs, approved by the Army.
The Utilities satisfy performance obligations of electric energy sales over time, i.e., the Utilities generate and transfer control of the electricity over time as the customer simultaneously receives and consumes the benefits provided by the Utilities’ performance. Payments from customers are generally due within 30 days from the end of the billing period. As electric bills to customers reflect the amount that corresponds directly with the value of the Utilities’ performance to date, the Utilities have elected to use the right to invoice practical expedient, which entitles them to recognize revenue in the amount they have the right to invoice.
The Utilities’ revenues include amounts for recovery of various Hawaii state revenue taxes. Revenue taxes are generally recorded as an expense in the year the related revenues are recognized. For 2025, 2024 and 2023, the Utilities’ revenues include recovery of revenue taxes of approximately $273 million, $285 million and $291 million, respectively, which amounts are in “Taxes, other than income taxes” expense. However, the Utilities pay revenue taxes to the taxing authorities based on (1) the prior year’s billed revenues (in the case of public service company taxes and PUC fees) in the current year or (2) the current year’s cash collections from electric sales (in the case of franchise taxes) after year end. As of December 31, 2025 and 2024, the Utilities had recorded $169 million and $178 million, respectively, in “Taxes accrued, including revenue taxes” on the Utilities’ consolidated balance sheet for amounts previously collected from customers or accrued for public service company taxes and PUC fees, net of amounts paid to the taxing authorities. Such amounts will be used to pay public service company taxes and PUC fees owed for the following year.
All Other.
All Other sales. Other sales primarily consist of revenues from the generation and sale of renewable energy at fixed contractual prices per kWh to customers under power purchase agreements by Pacific Current subsidiaries. The performance obligation is satisfied over time as renewable energy is generated and control is transferred to the customer that simultaneously receives and consumes the benefits provided. Payments from customers are generally due within 30 days from the end of the billing period. The bill to customers reflects the amount that corresponds directly with the value of performance to date. Pacific Current has elected to use the right to invoice practical expedient, which entitles it to recognize revenue in the amount they have the right to invoice.
Revenues from other sources. Revenues from other sources not subject to ASC Topic 606 are accounted for as follows:
Electric utilities.
Regulatory revenues. Regulatory revenues primarily consist of revenues from the decoupling mechanism and cost recovery surcharges.
Decoupling mechanism - Under the current decoupling mechanism, the Utilities are allowed to recover or obligated to refund the difference between actual revenue and the target revenue as determined by the PUC, collect annual revenue adjustment mechanism (ARA) and exceptional project recovery mechanism revenues, and recover or refund performance incentive mechanism penalties or rewards. These adjustments will be reflected in tariffs in future periods. Under the PBR framework, the accrued RBA revenues as of the preceding September 30 balance and the annual ARA amount are billed from January 1 through December 31 of each year, which is within 24 months following the end of the year in which they are recorded as required by the accounting standard for alternative revenue programs (see “Regulatory proceedings” in Note 4).
Cost recovery surcharges - For the timely recovery of additional costs incurred, and reconciliation of costs and expenses included in tariffed rates, the Utilities recognize revenues under surcharge mechanisms approved by the PUC. These will be reflected in tariffs in future periods (e.g., ECRC and PPAC).
Since revenue adjustments discussed above resulted from either agreements with the PUC or change in tax law, rather than contracts with customers, they are not subject to the scope of ASC Topic 606. Also, see Notes 1, 4 and 13 of the Consolidated Financial Statements. The Utilities have elected to present these revenue adjustments on a gross basis, which results in the amounts being billed to customers presented in revenues from contracts with customers and the amortization of the related regulatory asset/liability as revenues from other sources. Depending on whether the previous deferral balance being amortized was a regulatory asset or regulatory liability, and depending on the size and direction of the current year deferral of surcharges and/or refunds to customers, it could result in negative regulatory revenue during the year.
Utility pole attachment fees. These fees primarily represent revenues from third-party companies for their access to and shared use of Utilities-owned poles through licensing agreements. As the shared portion of the utility pole is functionally dependent on the rest of the structure, no distinct goods appear to exist. Therefore, these fees are not subject to the scope of ASC Topic 606, but recognized in accordance with ASC Topic 610, Other Income.
Army privatization extraordinary O&M (EOM) fees. The monthly EOM fee provides the recovery of the incremental extraordinary O&M costs not covered under the standard utility services. The nature of the work related to transitional period revenue and monthly EOM fees do not represent the Utilities’ ongoing major or central operations (i.e., generating, and transmission and distribution of electricity) and is provided specifically for the arrangement between the Utilities and the Army. Therefore, these revenues are not subject to the scope of ASC Topic 606, but recognized in accordance with ASC Topic 610, Other Income.
Revenue disaggregation. The following tables disaggregate revenues by major source, timing of revenue recognition, and segment:
| Year ended December 31, 2025 | ||||||||||||||||||||
| (in thousands) | Electric utility | Other | Total | |||||||||||||||||
| Revenues from contracts with customers | ||||||||||||||||||||
Electric energy sales - residential | $ | 992,367 | $ | — | $ | 992,367 | ||||||||||||||
Electric energy sales - commercial | 971,816 | — | 971,816 | |||||||||||||||||
Electric energy sales - large light and power | 1,079,522 | — | 1,079,522 | |||||||||||||||||
| Electric energy sales - other | 17,970 | — | 17,970 | |||||||||||||||||
| Other sales | — | 13,669 | 13,669 | |||||||||||||||||
| Total revenues from contracts with customers | 3,061,675 | 13,669 | 3,075,344 | |||||||||||||||||
| Revenues from other sources | ||||||||||||||||||||
| Regulatory revenue | (29,471) | — | (29,471) | |||||||||||||||||
| Other | 38,978 | 2,045 | 41,023 | |||||||||||||||||
| Total revenues from other sources | 9,507 | 2,045 | 11,552 | |||||||||||||||||
| Total revenues | $ | 3,071,182 | $ | 15,714 | $ | 3,086,896 | ||||||||||||||
| Timing of revenue recognition | ||||||||||||||||||||
Total revenues from contracts with customers - services/goods transferred over time | $ | 3,061,675 | $ | 13,669 | $ | 3,075,344 | ||||||||||||||
| Year ended December 31, 2024 | ||||||||||||||||||||
| (in thousands) | Electric utility | Other | Total | |||||||||||||||||
| Revenues from contracts with customers | ||||||||||||||||||||
Electric energy sales - residential | $ | 1,012,620 | $ | — | $ | 1,012,620 | ||||||||||||||
Electric energy sales - commercial | 1,013,189 | — | 1,013,189 | |||||||||||||||||
Electric energy sales - large light and power | 1,123,884 | — | 1,123,884 | |||||||||||||||||
| Electric energy sales - other | 18,682 | — | 18,682 | |||||||||||||||||
| Other sales | — | 11,923 | 11,923 | |||||||||||||||||
| Total revenues from contracts with customers | 3,168,375 | 11,923 | 3,180,298 | |||||||||||||||||
| Revenues from other sources | ||||||||||||||||||||
| Regulatory revenue | (2,566) | — | (2,566) | |||||||||||||||||
| Other | 40,891 | 1,227 | 42,118 | |||||||||||||||||
| Total revenues from other sources | 38,325 | 1,227 | 39,552 | |||||||||||||||||
| Total revenues | $ | 3,206,700 | $ | 13,150 | $ | 3,219,850 | ||||||||||||||
| Timing of revenue recognition | ||||||||||||||||||||
Total revenues from contracts with customers - services/goods transferred over time | $ | 3,168,375 | $ | 11,923 | $ | 3,180,298 | ||||||||||||||
| Year ended December 31, 2023 | ||||||||||||||||||||
| (in thousands) | Electric utility | Other | Total | |||||||||||||||||
| Revenues from contracts with customers | ||||||||||||||||||||
Electric energy sales - residential | $ | 1,026,321 | $ | — | $ | 1,026,321 | ||||||||||||||
Electric energy sales - commercial | 1,044,045 | — | 1,044,045 | |||||||||||||||||
Electric energy sales - large light and power | 1,141,128 | — | 1,141,128 | |||||||||||||||||
| Electric energy sales - other | 19,471 | — | 19,471 | |||||||||||||||||
| Other sales | — | 17,540 | 17,540 | |||||||||||||||||
| Total revenues from contracts with customers | 3,230,965 | 17,540 | 3,248,505 | |||||||||||||||||
| Revenues from other sources | ||||||||||||||||||||
| Regulatory revenue | 3,708 | — | 3,708 | |||||||||||||||||
| Other | 34,848 | 442 | 35,290 | |||||||||||||||||
| Total revenues from other sources | 38,556 | 442 | 38,998 | |||||||||||||||||
| Total revenues | $ | 3,269,521 | $ | 17,982 | $ | 3,287,503 | ||||||||||||||
| Timing of revenue recognition | ||||||||||||||||||||
Total revenues from contracts with customers - services/goods transferred over time | $ | 3,230,965 | $ | 17,540 | $ | 3,248,505 | ||||||||||||||
There are no material contract assets or liabilities associated with revenues from contracts with customers existing at December 31, 2025 and 2024. Accounts receivable and unbilled revenues related to contracts with customers represent an unconditional right to consideration since all performance obligations have been satisfied. These amounts are disclosed as “Accounts receivable and unbilled revenues, net” on HEI’s consolidated balance sheets and “Customer accounts receivable, net” and “Accrued unbilled revenues, net” on Hawaiian Electric’s consolidated balance sheets.
As of December 31, 2025, the Company had no material remaining performance obligations due to the nature of the Company’s contracts with its customers. For the Utilities, performance obligations are fulfilled as electricity is delivered to customers.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.