Hawaiian Electric Industries CEO Connie Lau made it clear during her closing speech Thursday at the Maui Energy Conference that the company will continue to pursue liquefied natural gas as a “bridge fuel.”
Moments earlier she highlighted how “amazingly aligned” virtually everyone seems to be in terms of the end goal of getting off imported oil and transforming the energy landscape.
Lau acknowledged that people may disagree over how Hawaii gets there — and the pace. A temporary shift to LNG is definitely one of the areas in which there’s disagreement, particularly over the necessary infrastructure costs and concerns over the “fracking” process that is used to produce some natural gas.
Her remarks closed the conference with the same tone and focus that HECO President Alan Oshima and NextEra Energy Hawaii President Eric Gleason had opened it with the previous day. It was a message of hope, of improving customer relationship and assuaging fears over NextEra’s purchase of HECO.
When she and NextEra CEO Jim Robo jointly announced their $4.3 billion deal in December, the expectation was that it would close within a year. But the new head of the Public Utilities Commission, Randy Iwase, has since said that the regulatory process will likely take 18 months.
A critical player in that review is the state Division of Consumer Advocate, headed by Jeff Ono, who is tasked with fighting on behalf of the public in cases before the PUC.
Speaking at the conference less than two hours before Lau, Ono raised some of the preliminary concerns he has with the merger.
The benefits that NextEra and Hawaiian Electric are touting just offer the “status quo,” he said.
“They’re not giving us anything better than what’s already been put on the table,” Ono said.
He wants to see NextEra attach dollar figures to the benefits it is highlighting, such as better access to capital. NextEra officials should be able to look at the various energy initiatives that have already been mapped out and say how much money they will be able to save Hawaii customers.
Many of the assurances the companies have provided come with contingencies. Ono highlighted some of those, including one he found buried in the 45th footnote of their application to the PUC.
He’s worried there is a loophole in NextEra’s promise to not ask the PUC to raise rates for at least four years, for instance.
Ono said he also plans to advocate for quantified benefits without contingencies, something his office successfully did when billionaire Oracle founder Larry Ellison bought Lanai. That purchase included utilities on the island and through negotiations Ono was able to get Ellison to provide $10 million in upgrades to wastewater facilities and other utility infrastructure.
The Consumer Advocate also has his eye on the “local advisory board” that NextEra and Hawaiian Electric have said would be created if the deal goes through. Ono said that board will be meaningless if it’s stacked with Hawaiian Electric executives, for instance.
Lau said Hawaiian Electric Industries — which owns Hawaiian Electric Co. on Oahu, Maui Electric Co. and Hawaiian Electric and Light Co. on the Big Island — is “anxious to play its part.”
She wants to build on the success Hawaii has had in solar energy, although she acknowledged it hasn’t always gone as smoothly as hoped. Still, she said Hawaii leads the country, with 12 percent of Hawaiian Electric customers powered by the sun compared to the national average of 0.5 percent.
Lau sees batteries to store solar power as the way Hawaii should go from here and expects costs to fall just as photovoltaic panels have.
“If storage is going to happen anywhere, it’s going to happen first in Hawaii,” she said.
Lau heaped praise on Hawaii’s Energy Excelerator, a program within a nonprofit that funds demonstration projects for about 15 clean-engery startups each year. She said it’s one of many resources the state can rely on to help make the eventual goal of 100 percent renewable energy power.
“As we seek to move towards these very aggressive and cutting edge goals, it is exciting to us to have a partner that has such resources and such commitment to that same vision of clean energy for America,” she said, referring to NextEra.
Lau said she hesitated to speak at this year’s conference, recognizing how controversial Hawaiian Electric has been. But she said she ultimately decided it is incumbent upon her and other utility leaders to speak up publicly.
“It really is time for us to engage,” Lau said.
Hawaiian Electric problems aside, her compensation alone has been a sore point among customers who see her wealth growing while they are struggling to pay their electric bills, which are generally the highest in the nation.
Lau stands to gain $10.7 million if the merger with NextEra goes through. That’s on top of the $5.6 million she made in 2014, up from $3.8 million the prior year but still below the $5.8 million she earned in 2012.
Her earnings pale in comparison though to Robo, who earned $12.2 million in 2014, up from $10.4 million the prior year at NextEra, a far larger company.
The Maui Energy Conference wraps up Friday with field trips to Kaheawa Wind Farm and a smart-grid demonstration project.