Every time transparency takes a hit at otherwise open hearings to decide the fate of NextEra Energy’s $4.3 billion acquisition of Hawaiian Electric Industries, it stinks up the process.
That’s the perspective of Randy Iwase, the head of the Public Utilities Commission who is acting as a sort of lead judge in the three-day old hearing at Blaisdell Center.
“It is like walking into a bathroom after it’s been used. It’s going to smell. What can I do about it? Bring Glade in? I can’t spray the place,” Iwase explained to journalists near a Blaisdell bathroom at the end of the day. “It is going to smell. I understand that.”
Iwase was referring to the possibility that public hearings on an issue of great import to people in a state with the nation’s highest electricity rates might repeatedly go private to address legally sensitive issues.
His comments came after NextEra Energy Hawaii President Eric Gleason had just completed a long day on the stand fielding questions from the commission’s Chief Counsel Thomas Gorak, Consumer Advocate Jeff Ono and others.
That is when the legal team of Hawaii Gas, an intervenor in the case, signaled to the commission that it intended to raise questions with Gleason relating to one or more confidential documents when he returns to the stand Thursday.
It is like déjà vu all over again.
A day earlier the chairman of the commission reluctantly ordered out of the room everyone who had not signed a non-disclosure agreement so that questioners could refer to documents that Hawaiian Electric and NextEra have designated as “protected.”
“There’s nothing I can say that puts this in a good light.” — Public Utilities Commission Chair Randy Iwase
Media members were told to leave, and recording devices were turned off. Over the next 45 minutes, Hawaii Consumer Advocate Jeff Ono and legal representatives of Hawaii Gas, who sought the closed session, referred to confidential emails in their questioning of Hawaiian Electric Co. President and CEO Alan Oshima. No one present was allowed to say what subject matter they dealt with.
With the new Hawaii Gas request, that process risks repeating itself.
In fact, speaking to journalists after Wednesday’s session, Iwase confirmed that the evidentiary hearings could go behind closed doors over and over again, given that hundreds of documents have been designated as “restricted” or “confidential” by the parties in the merger. At least 10 more witnesses are expected to testify in the coming weeks, and theoretically any of them could face questioning in secrecy.
Iwase noted that protective orders apply to judicial and administrative proceedings, which enjoy an exemption from the Sunshine Law because this is only a quasi-judicial process. The purpose of the protective order, he explained, is to ensure that documents and communications aren’t disclosed to the public, causing harm to the parties concerned.
“There’s nothing I can say that puts this in a good light,” Iwase said.
“Restricted” documents could require another level of discretion given that even some intervening parties, like business competitors of Hawaiian Electric or NextEra, could be asked to step outside, Iwase said.
Regulators do have the right, the PUC chairman said, to remove protected designations if they are not legitimate, but the commission doesn’t have the capacity — given its other duties — to sift through hundreds of documents solely to assess that.
A document can’t be protected, Iwase clarified, “just because you are going to get embarrassed” by the contents.
Wednesday began and ended with Gleason on the stand, responding to wide-ranging queries.
Questioners sought with limited success to determine exactly how much wiggle room there is in NextEra’s promise to effectively reduce customers’ base rates by a total of $60 million over four years, whether Hawaiian Electric is capable of satisfying Hawaii’s ambitious 30-year renewable energy goals without NextEra, and which actions by the PUC might lead NextEra to cancel its proposed acquisition.
“My experience is that when the commission is disappointed, there are consequences.” — NextEra Energy Hawaii President Eric Gleason
Some of the most engaging exchanges related to whether a company based in Florida would be responsive to customers and regulators in Hawaii.
Gleason said that in a regulated industry, good faith is important, but the commission would retain many tools to enforce its will if it allows the merger to happen. “My experience is that when the commission is disappointed, there are consequences,” he said in response to a question from the PUC’s chief counsel.
At another point in his testimony, Gleason said, “We’re taking a leap of faith that Hawaii is a place where we’ll be fairly treated.”
At times questions seemed geared to highlight cultural differences between a large mainland business, and its top representative in the islands, and how business is conducted here.
At one point, the Consumer Advocate labored to suggest that while the head of NextEra Energy Hawaii has learned a lot about the islands, he hasn’t necessarily learned the right things.
Gleason, a legal resident of Florida, is not from Hawaii. But he said he came to the islands about three decades ago while serving in the military and has spent a great deal of time here on behalf of his company over the last five years.
He came in 2011 to assess whether it might make logistical and economic sense to install underwater cables that could transport electricity between islands. (He concluded that it is technically feasible between the islands of Oahu and Maui, but acknowledged nothing has moved forward on that front.)
Ono, the Consumer Advocate who grew up in the islands, noted that Gleason has used a large number of Hawaiian terms in his legal filings in this merger case.
“I would say (you used) more Hawaiian than I’ve ever learned in my lifetime,” Ono said to laughs in the hearing room.
The Consumer Advocate then asked Gleason if he knew the state motto. The NextEra executive said that he did, in both English and Hawaiian. On the Consumer Advocate’s suggestion, Gleason cited it — in Hawaiian.
“Very good, Mr. Gleason,” the Consumer Advocate said.
Then Ono tested Gleason’s Hawaiian a bit more, asking him to define the following five words, one by one: maka, ho’oku’i, kukui uila, piko, kahikuonalani.
Gleason eventually said he could not define any of them.
“Let me give you a hint,” Ono said. “Every kid in Hawaii knows that their piko is their belly button.”
“I would say (you used) more Hawaiian than I’ve ever learned in my lifetime.” — Consumer Advocate Jeff Ono
“Unfortunately,” Gleason said, “I am not one of them.”
For all of the suggestions that Gleason, and by extension his company, hasn’t inculcated the values of Hawaii, the NextEra executive pointed out earlier in his testimony that the electric utility in the islands isn’t as local as people often say.
“It has been a long time since (Hawaiian Electric) was a locally owned company,” said Gleason. The vast majority of the company’s shareholders live on the mainland.
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