This publication has done an invaluable public service in presenting facts to its readers regarding the proposed takeover of the electrical utilities in three of the state’s four major counties.

The service is described as invaluable because it’s nearly impossible to measure the amount of money and resources the current owner of our utilities and their massive mainland suitors have devoted to gaining public support of the proposal.

The Public Utilities Commission, tasked with approving or rejecting the proposal, is immensely under-resourced to do its duty, let alone to counter a public relations campaign by a $20 billion dollar company.

PUC Chair Randy Iwase massages his brows during intervenor testimony. 5 feb 2016. photograph Cory Lum/Civil Beat
Public Utilities Commission Chairman Randy Iwase listens to testimony on the proposed NextEra-HEI merger this month. Cory Lum/Civil Beat

There has been a groundswell of public interest and engagement on this issue over the past year, with good, thorough information and media coverage increasing in step.

Late last year the major local news sources reported that the PUC chair Randy Iwase was “immune to pressure” from those interested in the merger’s approval, and there was wide coverage of Iwase’s questioning if NextEra “can be trusted” with Hawaiian Electric.

Most recently, a poll concluded that what support exists for the deal has eroded in the past year. So, what unique value will a NextEra takeover bring to the people of Hawaii?

At first glance, the benefit to the people of the sale of Hawaiian Electric Industries to another, larger investor-owned utility is supposedly the “cost of capital” or the investing power of the proposed new regime. It has frequently come up when “the experts” are discussing the advantages of a NextEra utility in Hawaii.

In my curiosity, it didn’t take long to see this point be convincingly undermined.

In light of the skepticism of another private company with profit as its motive taking over the monopoly that is the electrical utilities in Honolulu, Maui and Hawaii counties, much discussion has taken place around the subject of alternatives to the investor-owned utility model that HEI implements.

Recently the Honolulu City Council passed a resolution “Declaring the Council’s intent to consider all options regarding the provision of electric service, including the investigation of electric utility public ownership on the island of Oahu.”

The exploration of alternative utility business models is particularly appropriate for Hawaii because of the geographic disadvantage we have which prevents us from buying/selling electricity from neighboring utilities like on the continent.

Not to mention the fact that we have a living example in the Kauai Island Utility Cooperative.

How does the “cost of capital” for these alternatives compare to that of an investor-owned utility like NextEra?

One informed policymaker answered: “KIUCs initial testimony on the merger filed with the PUC suggests that public utilities can have cheaper access to capital than NextEra,­ they often don’t need to pay federal taxes, and through their national associations have access to the same scale of capital financing that a big IOU does.

“Most of all, public utilities don’t have a financial incentive to inflate infrastructure costs to begin with in order to make a profit, which NextEra does to pay its shareholders and executives at the expense of the ratepayers.”

I agree with PUC Chair Iwase in questioning if NextEra is to be trusted with Hawaiian Electric’s duty as a regulated, profit-­making monopoly providing an integral public service.

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