Maui Business

Gov. Ige, Mayor Arakawa Oppose HEI-NextEra Energy Merger

July 21, 2015, 4:36 PM HST
* Updated July 22, 6:24 AM
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State Senator David Ige. Courtesy photo.

Governor David Ige. Courtesy photo.

By Maui Now Staff

During a press conference held this afternoon, Gov. David Ige expressed the state’s opposition to the proposed NextEra Energy Inc. purchase of Hawaiian Electric Industries and is recommending the state Public Utilities Commission reject the deal as it is currently proposed.

Officials from the Office of Planning and the Department of Business, Economic Development and Tourism came out in opposition on Monday in their testimonies to the Public Utilities Commission.

NextEra Energy and Hawaiian Electric Industries proposed a $4.3 billion merger last December that would includes the assumption of $1.7 billion in HEI debt. The deal also calls for a spin off of ASB Hawaiʻi, the parent company of American Savings Bank, to HEI shareholders and establish it as an independent publicly traded company.

“Although I welcome capital investment in Hawai‘i with respect to energy, any merger or investment must align with the state’s 100 percent renewable energy goal,” Ige said. “The state respectfully opposes the merger in its current form because it fails to align with the state’s renewable energy goals.”

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The state’s goal is to utilize 100 percent renewable energy sources by 2045—a position that no other state in the country has taken. But the governor said he is not convinced NextEra is the company to get the state there.

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“We are committed to a 100 percent renewable future, standing alone among 50 states in the nation in that action,” Gov. Ige added. “We need an electric company that sees Hawai‘i as the center of its work and the opportunity we represent as one of the greatest moments in history for any utility. We have not seen that in this proposal.”

Gov. Ige said all of the consultants and state personnel independently reviewed the document, “and they all independently came to the same conclusion—that it’s in the state’s best interest to oppose the merger as proposed.”

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Concerns expressed included: “not a great fit” given the state’s energy goals, and a lack of confidence that NextEra has proven it could meet those goals, also citing that many questions posed to NextEra were “not responded to adequately.”

For example, Gov. Ige said one of the questions asked was what NextEra’s commitment to the state’s goal of 100% renewable.

“The response to that question was vague and noncommittal, to say the least,” Gov. Ige said.

Gov. Ige said this was an initial step in the process, and said there will be presentations and cross examinations of those testimonies. 

“Maui County and the other counties have all been talking about NextEra concerns for some time now and it is good to see that Gov. Ige has joined us,” said Mayor Alan Arakawa. “The state and counties must stand together on this issue. This sort of decision could affect Hawai‘i for generations to come and should not be taken lightly.

“This is exactly why Maui County has been looking at other options, such as starting our own municipal utility,” the mayor continued. “Kaua‘i County already does this and I know that Hawai‘i County is considering it as well. It might be time for the City and County of Honolulu to look into the municipal or co-op utility model, too.

“Most concerning to us is how NextEra seems to view renewable energy,” the mayor said. “While most local residents and businesses would like to expand the use of solar, wind and other renewable resources in our grid, NextEra seems more interested in wanting to control and limit their use. This is not a model that is good for the County of Maui or the State of Hawai‘i. Our utility should be more concerned about community benefits rather than profits and dividends.”

“We recognize that this proposed merger is a very important matter for our customers, our communities and the state at large,” said Alan Oshima, Hawaiian Electric Company president and CEO. “The PUC review is an ongoing process that provides an opportunity to address and answer questions or concerns. As more information is provided throughout this process, we feel strongly that others will also conclude that this partnership with NextEra Energy will result in significant benefits for our customers and for Hawai‘i’s leadership in clean energy.”

The state’s testimony can be found here. The two filings were made on behalf of the Hawai‘i State Energy Office and the Hawai‘i State Office of Planning.

LINKS

HEI Shareholders Approve Merger with NextEra Energy
HEI Urges Shareholders to Vote for Proposed NextEra Merger
NextEra & Hawaiian Electric to Host Meetings Starting April 7
NextEra Energy-Hawaiian Electric Industries Merger Approved 
Nextera Energy Enters $4.3 Billion Deal with Hawaiian Electric Industries

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