CONDITIONS FOR THE MERGER AND CORPORATE RESTRUCTURING

HEI Exhibit 10.1

CONDITIONS FOR THE MERGER AND CORPORATE RESTRUCTURING

OF HAWAIIAN ELECTRIC COMPANY, INC.

THIS AGREEMENT, made as of the 23rd day of September, 1982, by and between HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation, whose principal place of business and executive offices are located at 900 Richards Street, Honolulu, Hawaii 96813 (“Industries” hereinafter), and PUBLIC UTILITIES COMMISSION, DEPARTMENT OF BUDGET AND FINANCE, STATE OF HAWAII, whose address is 1164 Bishop Street, Suite 900, Honolulu, Hawaii 96813 ( “Commission” hereinafter),

WITNESSETH THAT:

WHEREAS, Hawaiian Electric Company, Inc. (“HECO” hereinafter), a public utility under the jurisdiction of the Commission, has filed an Application seeking approval for Industries to own all of the issued and outstanding common stock of HECO, Docket No. 4337; and

WHEREAS, Industries will become the holding company of HECO and will not be subject to the jurisdiction of the Commission except through the investigative powers of the Commission; and

WHEREAS, Hawaii Revised Statutes, Sections 269-17, 269-17.5, 269-19 and 417-11 require the Commission’s prior approval for the issuance of public utility securities, ownership of more than 25 per cent of utility common stock by any one person, and mergers by public utilities; and

WHEREAS, it appears reasonable, as a prerequisite to our approval, to impose certain conditions to the merger

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and corporate restructuring so that the public welfare and HECO’s operations and financial integrity are both protected; and

WHEREAS, the Commission by Decision and Order No. 7070 has approved HECO’s and Industries’ Application for the merger and restructuring, subject, however, to certain conditions specified in Decision and Order Nos. 7070, 7153 and 7203 and to this Agreement being executed by the authorized officers of Industries;

NOW, THEREFORE, the parties hereto agree as follows:

1.     Hawaiian Electric Industries, Inc., its successors and assigns, including all subsidiaries in which Hawaiian Electric Industries, Inc., or its subsidiaries have a substantial interest, now existing or to be acquired or created in the future, hereinafter collectively called “Industries”, shall furnish to the Public Utilities Commission, State of Hawaii, hereinafter called “Commission”, any and all records, books or documents of every nature and kind when requested in writing by the Commission. The information requested of Industries by the Commission shall relate to information that is necessary to fulfill the statutory responsibilities of the Commission. Industries shall also provide the same information requested by the Commission to the Public Utilities Division, Department of Commerce and Consumer Affairs, State of Hawaii (“Consumer Advocate” herein). The Consumer Advocate shall utilize the procedures set forth in Section 269-54(d), Hawaii Revised Statutes, when it requests such information from Industries.

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2.    Industries, when requested in writing or in open hearing, shall voluntarily have any employee, officer, director or agent of Industries appear before the Commission for the purpose of testifying before the Commission.

3.    The Commission shall have the right to investigate any matter, activity or transaction between Hawaiian Electric Company, Inc., and its subsidiaries, hereinafter collectively called “Utility Corporation”, and Industries. For purposes of investigation, the Commission shall have the right to enter the premises of Industries during normal working hours and to review any and all records, books or documents of every nature and kind which relate to the investigation or inquiry.

4.     Industries shall furnish to the Commission and the Consumer Advocate the following: (1) quarterly and annual financial statements in reasonable detail; (2) annual consolidated financial statements, in reasonable detail, certified by independent certified public accountants; and (3) consolidating statements involved in the preparation of the financial statements together with an explanation of the nature of intercompany transactions and the basis of any allocations made.

5.     The Commission and the Consumer Advocate shall have the right to review any intercompany charges and allocations of common expenses between the Utility Corporation and Industries. Such allocations shall include, but not be limited to:

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Any intercompany charges and allocations not deemed proper for ratemaking and quality of service purposes may be disregarded by the Commission in determining allowable expenses, revenues, rate base and rate of return for the Utility Corporation.

6.    Any plant or property carried on the books of the Utility Corporation shall be subject to review by the Commission for determination of its qualification as being “used or useful” in utility operation. The Commission may exclude from the rate base any assets determined to be non-utility in nature, so long as any related income and expenses are excluded from earnings in determining rate of return.

7.    The Commission shall continue to have full authority over the Utility Corporation’s issuance of securities. Normally the Commission will not approve the issuance of any securities which would result in long-term debt being more than 60%, or common equity being less than 35% of the Utility Corporation’s capitalization. For this

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purpose, short-term bank loans utilized for interim financing