Clean energy advocates, solar trade groups and community organizations are asking Hawaii regulators to hold off on approving NextEra Energy’s acquisition of Hawaiian Electric Industries until there are firm plans in place outlining the state’s energy strategy.

About half of the 12 groups go so far as to urge regulators to open up the sale of HEI to other bidders.

The groups filed two petitions with the Public Utilities Commission on Wednesday outlining their concerns.

NextEra, based in Juno Beach, Florida, announced last month that it was buying HEI in a $4.3 billion deal. HEI owns the electric utilities that serve Oahu, the Big Island and Maui County, as well as American Savings Bank. Under the NextEra deal, American Savings Bank would be split off into an independent company.

The merger must still be approved by several regulatory agencies, including the PUC, which must determine that it’s in the public’s interest.

hei heco hawaiian electric7. photograph by PF Bentley.

A HECO power plant.

PF Bentley/Civil Beat

Both HECO and NextEra representatives told Civil Beat that they oppose any delay in PUC proceedings. NextEra spokesman Rob Gould said that it would only postpone benefits that the company believes it can bring to Hawaii customers, including lower rates and a faster adoption of renewable energy. NextEra also says it can operate the utilities more efficiently.

“It is important to recognize that delaying the review of this transaction would delay the significant benefits this transaction will bring to Hawaiian Electric’s customers and communities, and that is not in the best interest of Hawaii,” Gould said by email. “We further believe that the work that is ongoing by so many to achieve a cleaner, more affordable energy future for Hawaii can and should continue while the PUC reviews our proposed combination.”

He declined to comment further on the petitions, noting that company officials had yet to review them.

Hawaii’s Energy Outlook in Disarray

The Hawaii Solar Energy Association, Alliance for Solar Choice, Hawaii PV Coalition, Blue Planet Foundation and Hawaii Sierra Club filed a petition with the PUC arguing that commissioners need to first rule on energy plans that Hawaiian Electric Co., and its neighbor island subsidiaries — Maui Electric Co. and Hawaii Electric and Light Co. on the Big Island — filed with the commission in August before taking up a review of the NextEra deal.

The plans have a tortured history. The planning process, which began in 2012, was led by HECO and included input from a diverse 68-member task force that included representatives of the energy sector, government and community. Some task force members criticized the process, outlined by the PUC, as being chaotic and the resulting plans that HECO submitted in 2013 were ultimately rejected by the commission in April 2014. Commissioners called the plans, totaling more than 2,000 pages “excessively ambiguous” and the analysis “fundamentally flawed,” and ordered HECO to redo them.

HECO’s new plans, spanning five reports and totaling 2,731 pages, were submitted to the PUC five months ago.

“As clean energy stakeholders, we share the joint interest in making sure we complete planning for Hawaii’s energy future now.” — Jeff Mikulina, executive director, Blue Planet Foundation

The petition urges the PUC to rule on the plans first and ensure that HECO’s energy roadmap is aligned with customer interests and public policy goals before taking up the NextEra deal.

“Our purpose is to make sure the horse is in front of the cart,” Jeff Mikulina, executive director of Blue Planet Foundation, a Honolulu-based clean energy advocacy organization, said in a prepared statement. “As clean energy stakeholders, we share the joint interest in making sure we complete planning for Hawaii’s energy future now. We don’t want to put the discussions on the back-burner and then have to start over after the merger proceeding is finished.”

The groups say they are not taking a position for or against the HEI sale.

HECO’s proposed energy plans have been particularly controversial to the solar industry, which has argued they are hostile to rooftop solar installations.

Currently, solar customers pay about $18 a month to remain connected to HECO’s electric grids, which ensures continuous power to their homes. The utility is proposing increasing that to $55 for current solar customers and $71 for future customers on Oahu, with similar increases proposed for the neighbor islands.

HECO is also looking to charge solar customers a one-time fee for connecting their solar systems and reduce the amount per kilowatt hour that the utility pays customers for their solar power that is fed into the grid. 

The sale of HEI to NextEra has further enflamed the solar industry’s concerns because of the company’s track record of discouraging rooftop solar in Florida, where it operates Florida Power & Light Co., a utility that serves 4.7 million customers.

NextEra officials have said that they will work to encourage more rooftop solar in Hawaii.

Second Petition: Put HEI Up for Bid

Separately on Wednesday, Life of the Land, Big Island Community Coalition, Puna Pono Alliance, Friends of Lanai, Community Alliance on Prisons, Ka Lei Maile Alii Hawaiian Civic Club and I Aloha Molokai filed a similar petition urging the PUC to clarify Hawaii’s energy needs first and create a merger policy that defines “public interest.” Local residents Lynn Hamilton and Richard Mayer joined the petition.

The community groups represent a broad array of interests, including organizations that have opposed wind farms on Molokai and Lanai and geothermal development on the Big Island, as well as community advocacy organizations that have pushed for the development of sustainable resources.

After defining the state’s energy needs, commissioners should then invite companies to compete to purchase the electric utilities, the petitioners argue.

“It is important to recognize that delaying the review of this transaction would delay the significant benefits this transaction will bring to Hawaiian Electric’s customers and communities, and that is not in the best interest of Hawaii.” —Rob Gould, NextEra spokesman

“NextEra’s proposed ‘merger’ with HECO may be the best thing that ever happened to Hawaii, it may be the worst thing that ever happened to Hawaii, or the results could lie somewhere in the middle,” the groups write in their petition. “But there is no way to know, unless the commission determines, methodically, objectively, and calmly — undistracted by timing pressures, financial pressures, political pressures, or any pressures other than the pressure of serving the state’s long-term interests — what are Hawaii’s needs, what types of companies are appropriate to serve those needs; and then of those types of companies, which specific companies will perform best.”

The petitions reflect the myriad stakeholders and complex interests that have emerged in recent years as Hawaii moves forward on aggressive goals to tap local sources of renewable energy and curb its dependence on imported oil. They also reflect the emergence of pockets of resistance to the NextEra deal, which was initially met largely with curiosity.

HEI and NextEra have a December deadline to close the deal, though their merger agreement includes a potential six-month extension of time in case there are regulatory delays. If either party backs out of the sale, it will have to pay the other $90 million, according to company filings with the U.S. Securities and Exchange Commission.

In addition to the PUC, the deal must also be approved by shareholders, the Federal Energy Regulatory Commission and the Federal Communications Commission.


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