- Special Projects
On the one-year anniversary of the announcement that NextEra Energy intends to buy Hawaiian Electric Industries for $4.3 billion, the trial-like hearing at Blaisdell Center to decide the fate of the deal entered its fourth day amid talk of possible destabilizing effects for Hawaii.
A revolving slate of attorneys representing government administration, non-profit organizations and businesses — all, thus far, opposed to the acquisition — again took turns taking cracks at NextEra Energy Hawaii President Eric Gleason.
Many of their concerns involved jobs — those that intervening parties argued could be lost if Hawaiian Electric is bought, and those that could be gained by people who might not have Hawaii’s best interests in mind.
In acquisition deals like this, the Hawaii Office of Planning’s Terrance Revere asked Gleason, what categories of employees are at greatest risk of losing their jobs?
In response, Gleason brought up one merger he was a part of where the smaller company’s entire executive team’s positions were eliminated. But then he specified, “That is not going to be the case here. Everyone is protected.”
Revere made clear that he wasn’t interested in saving Hawaiian Electric’s leadership. “With all due respect … I don’t really care that much about the executives,” he said. “I’m talking more about secretaries, managers, engineers, (employees at) call centers — those type of people. What happens to them?”
Gleason said NextEra has promised no layoffs for at least two years. He noted that the two companies, separated by nearly 5,000 miles, have employees with distinctly different knowledge and skill sets. His point: There is not a lot of overlap in expertise.
NextEra has often been described as a particularly efficient — or, as its detractors say, aggressive — company, particularly when it comes to costs. And the Florida-based company has very limited experience with rooftop solar generation there.
The Hawaiian Electric Co., by contrast, oversees five different island grids, has integrated the largest percentage of renewable energy in the country and has by far the highest prices.
Such factors may help explain why Gleason said NextEra is “very comfortable,” with the moratorium on layoffs.
“We want the Hawaiian Electric team as part of our team,” he said.
The first four days of the hearing have included recurring questions about who might lead a NextEra-owned version of Hawaiian Electric.
Gleason has revealed that between three and five executives in Florida will likely move to Hawaii to be a part of the company’s executive team here. Testimony by Gleason and Hawaiian Electric Co. CEO and President Alan Oshima revealed that Jim Robo, chairman and CEO of NextEra Energy, has told them both they might be part of the company’s leadership in the islands.
Both men testified nothing is certain and the final decision resides with Robo in Florida.
Attorney David Minkin, speaking on behalf of the Hawaii Island Energy Cooperative, asked Gleason if he has been in touch with Robo this week.
Maybe by email, Gleason suggested, but not about the hearing.
Minkin asked whether Robo had communicated to Gleason in those messages about a possible job atop the company that will be created if the merger goes through.
“You know,” said Minkin, “that is an issue that is of great concern to people in Hawaii.”
Gleason responded, ““In our view it is not urgent that that question is resolved this week.”
Minkin wanted to know why no decisions have been made about the leadership of a NextEra-owned utility in Hawaii. After all, 12 months have passed since the deal was announced.
What else, Minkin asked, does NextEra need to learn about Hawaiian Electric and its team before deciding who the company needs to lead it?
“On important decisions like this,” Gleason replied, “to make it sooner than you need to make it, is not necessarily prudent action.”
Intervenor Henry Curtis, who heads Life of the Land, asked who else might be selected to join the executive team of the new company.
Gleason declined to share names, citing privacy concerns for those people, but he confirmed they are current NextEra executives.
The head of NextEra Energy Hawaii was also queried about his company’s commitment to the islands. NextEra, which initially faced accusations that it simply wanted to “flip” Hawaiian Electric, has promised to hold onto the company for at least a decade.
Asked about the origin of that promise, Gleason noted some critics were suggesting the acquisition wasn’t in the public interest, and then saying that Nextera isn’t dedicated to Hawaii for the long haul. So NextEra proposed the 10-year commitment, he said.
“We have no intention, other than to be here for many decades to come,” Gleason said.
Before declaring the hearing in recess until December 7, Public Utilities Chairman Randy Iwase, who is acting as a sort of lead judge, took measures to discourage additional closed-door sessions.
He called on any parties planning to cite one or more confidential documents to provide a memorandum in advance that will specify which protected or restricted documents they will use, why the document should or should not remain confidential, and why it is relevant to the hearing.
Parties that plan to refer to confidential documents in court must serve them to all other parties, so they can comment on them, if they wish.
The memoranda on those documents, which must be filed with the PUC by the end of Monday, must remain confidential because they address confidential documents, Iwase explained.
He noted that there was a previous deadline of Oct. 16 for parties seeking to remove protective orders on documents, but that no one filed such a request.
Iwase also encouraged lawyers to seek an agreement with NextEra and Hawaiian Electric to open up access to documents those companies have designated with varying levels of confidentiality.
The commission will also review documents to assess whether they should remain protected or restricted, and make them public if confidentiality isn’t merited.
Noting three additional requests for closed sessions since the first 45 minutes of secrecy on Tuesday, the head of the PUC said, “We did not anticipate this amount of requests, so we have to deal with it.”
“We’re going to look at it much more closely.”