A $120,000 report paid for by Hawaiian Electric Co. concluded that the local utility "could not have prevented" the Dec. 26 outage that cut off power to 294,000 of its customers on O'ahu.

The report's findings, if adopted by the state Public Utilities Commission, would likely mean that the company won't have to pay for any losses suffered by customers during the islandwide blackout.

In a 97-page report filed with the PUC yesterday, Power Engineers Inc. of Idaho reaffirmed HECO's earlier findings that multiple lightning strikes knocked out a major transmission line connecting the utility's Kahe and Waiau power plants in Leeward O'ahu.

The report also supported HECO's preliminary findings that the short circuit caused a severe drop in voltage that resulted in the shutdown of seven power generators at five different power plants nearly simultaneously.

"HECO could not have reasonably anticipated or prevented the damaging effects and instability caused by the lightning," the report said.

"The system operated appropriately under the circumstances."

State consumer advocate Catherine Awakuni said her office is reviewing the Power Engineers report and is conducting its own investigation into the outage. She said she plans to hire power experts Sega Inc. of Kansas to help conduct the state's study.

The Dec. 26 outage left most of Honolulu in the dark for more than 12 hours, disrupted traffic throughout the island and caused retailers to shut down early during one of the busiest shopping days of the year.

The outage drew international attention because President-elect Obama and his family were vacationing on the island at the time, and their beachfront home was left without power.

About 700 HECO customers have filed outage-related claims for losses ranging from spoiled food to damage to appliances and other electronic equipment.

HECO spokesman Darren Pai said the company will decide on the claims on a case-by-case basis pending the PUC's determination on the cause of the outage.

The PUC is not expected to complete its investigation until next year, HECO said.

About 1,400 local customers filed claims against HECO for the October 2006 islandwide outage, which was caused by earthquakes off the coast of the Big Island. None of those customers received any payments from HECO after the PUC found that the company acted reasonably during the outage.

In its report, Power Engineers made several recommendations that were largely technical in nature.

It said the utility should examine whether structures on the Kahe-Waiau transmission could be protected from future lighting strikes and recommended that HECO expand its employee training procedures by incorporating circumstances faced during the Dec. 26 outage.

The consultants also recommended that HECO continue its upgrades of its automatic generator control systems at its Kahe and Waiau power plants.

The company was making those upgrades before the Dec. 26 outage.

"Every major emergency presents different challenges, so we will be taking a close look at all of the these recommendations," said HECO Executive Vice President Robbie Alm.

"Our goal is to learn as much as possible from every incident and do the right things to improve."

Pai said HECO, and not its customers, will pay for the cost of the Power Engineers study. The $20,000 for a related study conducted by the Electric Power Research Institute of Palo Alto, Calif., also will be covered by the company, Pai said.

EPRI concluded that a lightning strike on the Kahe-Waiau transmission line was so powerful that it knocked out all three wires that make up the transmission line.

Such an event has only occurred twice on that transmission line in the past 48 years, EPRI said.