It’s been 15 months since the Hawaii Public Utilities Commission first began reviewing whether Florida-based NextEra Energy should buy Hawaiian Electric Industries for $4.3 billion.

Almost 80,000 pages of documents have been filed by the two companies, state agencies, solar groups and environmental nonprofits.

A trial-like hearing wrapped up last month after 21 days of testimony and questioning among the two dozen parties involved in the case. Their final briefs are due May 2, the last documents the commission is expected to consider before issuing an order that could fundamentally change the energy landscape in Hawaii.

But another decision is looming, one that could have huge implications on the merger decision.

Hawaii Public Utilities Commissioner Michael Champley listens to the discussion during the Maui Energy Conference, March 17. His term ends June 30, and Gov. David Ige has to decide what to do about it.
Hawaii Public Utilities Commissioner Michael Champley at the Maui Energy Conference this month. His term ends June 30. Nathan Eagle/Civil Beat

Commissioner Michael Champley’s term ends June 30 and Gov. David Ige, who opposes the merger, will decide whether Champley stays or goes.

Champley told Civil Beat last week he’s prepared to stay until the merger is decided, even if the case extends beyond his term. 

“It’s the governor’s decision what he wants to do,” he said. “I stand ready to serve if asked.”

The governor can ask Champley to stay on in a holdover basis or even reappoint him to another six-year term.

Or he could name a new commissioner to take Champley’s place. 

“If there were another appointment before the work is done, it would appear to interject an element of politics that I don’t think is appropriate.” — State Sen. Roz Baker

But if Ige wants to appoint someone in time for Senate confirmation this legislative session, he’d need to submit a name by April 4.

For now, Ige isn’t talking.

“The governor cannot speculate on Mike Champley’s PUC term or the NextEra merger case at this time,” Jodi Leong, the governor’s spokeswoman, said in a statement this week. “Gov. Ige continues to look for the best people to fill all seats on the state’s boards and commissions.”

While the governor may not be talking about what might happen, plenty of other people are.

Longtime politicians and energy industry representatives involved in the NextEra case say keeping Champley on past his term is the most logical — and most likely — route for the governor to take.

What Makes The Most Sense?

Sen. Roz Baker chairs the Commerce, Consumer Protection and Health Committee, the first stop for a PUC nominee en route to confirmation by the full Senate. She said she’s already told the governor that she opposes replacing Champley as long as the NextEra case is pending.

“This is an important and critical decision,” Baker said. “It’s one that could clearly set the course for how things proceed in the energy field for a lot of years to come.”

The merger decision needs to be “thoughtful and objective,” she said, not based on political motivations.

The governor answers questions from the media following his speech.
Gov. David Ige refuses to say what he’ll do when Michael Champley’s PUC term expires. Cory Lum/Civil Beat

The governor has been steadfast in his opposition to the NextEra deal. He does not believe the public stands to benefit from the merger, at least not enough to justify losing local control of a 125-year-old company that powers Oahu, the Big Island, Maui, Lanai and Molokai.

Ige is also against importing liquefied natural gas, which he considers a  distraction from achieving the state’s goal of providing electricity entirely from renewable energy sources by 2045. Hawaiian Electric and NextEra want to use LNG as a bridge fuel.

Some observers speculate that Champley is in favor of the acquisition and that could tempt Ige to appoint someone else even though the political consequences could be huge.

“If there were another appointment before the work is done, it would appear to interject an element of politics that I don’t think is appropriate,” Baker said. “I have more faith and trust in the governor being level-headed and wanting to honor the appropriate processes.”

Willing To Keep Serving

Former Gov. Neil Abercrombie appointed Champley in 2011. He was a senior executive at a big electric and gas company in Michigan, DTE Energy, before moving to Maui with plans to retire. He was doing consulting work when Abercrombie asked him to serve.

Hawaii Public Utilities Commission Chair Randy Iwase listens to public testimony at McKinley HS on the proposed NextEra Energy/Hawaiian Electric Industries merger. 27 oct 2015. photograph Cory Lum/Civil Beat
PUC Chair Randy Iwase could be left to make a decision with just Commissioner Lorraine Akiba if no ruling is made before June 30, when Champley’s term expires. Cory Lum/Civil Beat

Hawaii law allows commissioners to continue serving on a holdover basis until a successor is nominated or appointed, but not beyond the end of the second regular legislative session following the expiration of the member’s term.

Holdovers are relatively common.

Mina Morita, another Abercrombie appointee, was PUC chair when Champley came on board. Her term was set to end June 30, 2014, but Abercrombie decided to hold her over.

She resigned in January 2015 after it became clear that first Abercrombie and then Ige wasn’t going to appoint her to a second term. Iwase took over where Morita left off.

“It’s the governor’s decision. I stand ready to serve if asked.” — Michael Champley, Public Utilities Commission member

Ige also has the power to make an interim appointment after the legislative session ends May 5, which would avoid the confirmation process altogether this year. If he’s going to stir the pot by choosing a new commissioner before a merger decision, that’s the more probable path.

A new commissioner could recuse himself or herself from the NextEra case, or come up to speed on it and be a deciding member, which would be outside of the governor’s control. A 4,686-page transcript of the evidentiary hearing is available, along with the other 80,000 pages filed in the docket. 

Not exactly light weekend reading.

If a new commissioner didn’t participate in the NextEra case, or if Champley’s seat was simply left open after his term ends, PUC Chair Randy Iwase and Commissioner Lorraine Akiba would be left to make the decision. It’s unclear what would happen if they didn’t agree.

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