Twenty days into generally amiable regulatory hearings about NextEra Energy’s proposed $4.3 billion purchase of Hawaiian Electric Industries, the tone of the hearings has become decidedly less civil.
Among the numerous witnesses called for cross-examination by lawyers for NextEra and Hawaiian Electric in recent days, there were four former regulators who all suggested that the proposed deal does not, in its current form, offer enough benefits to Hawaii to merit approval by the Public Utilities Commission.
Collectively, the quartet of former regulators painted a picture of a utility that has some undeniable skills — some were more generous than others in their praise — but they criticized NextEra for the lack of solidity of its promises and questioned its alignment with the vision and goals of regulators who are working to steer Hawaii toward its long-term renewable energy goals.
Lawyers for the parties to the deal repeatedly sought to undermine such assertions, while also highlighting what they portray as the biased motives of many of the expert witnesses who have argued against the merger.
Nowhere was that more clear than in the counter-examination of Sierra Club witness Nathan Skop on Wednesday.
NextEra Energy spokesman Rob Gould commented that Skop can’t be seen as a credible witness.
“We’re really not surprised that Mr. Skop has shown up as a witness in this case and that he would take such a negative position on the merger, particularly given the level of hostility and bias he demonstrated against NextEra Energy and (Florida Power & Light) during his single term as a Florida public service commissioner.”
Before his four-year stint on Florida’s public utilities commission, Skop spent just over two years as an employee of NextEra Energy Resources, an affiliate of the larger company.
Skop asserted in written testimony, supported by his comments on the stand, that Florida Power & Light engaged in heavy-handed practices in dealing with regulators.
He was a member of of the regulatory commission that rejected a $1.3 billion rate increase by Florida Power & Light in 2010. In a series of events that he believes are related, Skop was not re-appointed to a second term the following year.
From his time on the commission in Florida, Skop said, it became clear that the company sometimes delays the delivery of key information until it is too late for regulators to properly assess the company’s actions.
And he warned of a propensity to over-promise benefits to customers and under-deliver on actual savings. His written testimony specifically asserts that Florida Power & Light promised at least $30 million in savings from the use of smart meters, but that the company didn’t come through with those benefits as planned.
In an interview after testifying, Skop said this is part of a “consistent pattern” on the part of the company.
A NextEra lawyer persistently sought to discredit Skop on the stand on an array of fronts, particularly by highlighting aspects of his complex history with NextEra, where he worked as a business manager from 2000 until 2002.
There is direct disagreement over the end of his time working for the company. Depending on who you talk to, he took a buyout or was fired. According to Gould, of NextEra, Skop “was involuntarily terminated.”
Various news reports from that time indicate that the Florida-based utility eliminated dozens of jobs between 2002 and 2004.
But arguments that he was fired appear to contradict the wording of a document, stamped “confidential,” that the Sierra Club filed in the merger case.
It is a Florida Power & Light severance offer to employees who “voluntarily” agree to the terms of the document. The agreement specifies that the company reserves the right to terminate employees if they don’t sign by a specified date and, in that case, they would not be guaranteed severance. Skop’s signature on the document is dated Sept. 30, 2002.
NextEra executives, asked about the document at the end of the hearing, didn’t question its authenticity, but they said that despite the wording, Skop was fired.
Such a representation of a document that explicitly states that participation in the severance plan “is entirely voluntary” casts an interesting light on one of NextEra’s commitment to regulators in Hawaii. The company has promised that if the merger deal goes through, it will not lay off any Hawaiian Electric employees for at least two years.
On the sidelines of the hearing at the end of the day, EarthJustice attorney Isaac Moriwake, who is representing the Sierra Club in the case, described NextEra’s account of Skop’s departure — as well as other elements of his cross-examination — as part of a “character assassination” effort.
Wednesday marked the last day of the hearing before a lengthy recess.
The hearing is slated to resume Feb. 29 for the cross-examination of at least a half-dozen additional witnesses.
Gould issued a statement as the hearing went into recess. It read in part:
“After having filed approximately 110,000 pages in response to 6000 questions over a period spanning more than one year, including 20 days of hearings that is being extended into March, we believe the facts are clear that our merger is without question in the public’s interest.”
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