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Hawaiian Electric Industries’ profit in the fourth quarter was up 5.1 percent, as the company rebounded from costs related to its failed sale to Florida-based NextEra Energy Inc.
Today the parent company of the state’s largest electric utility reported a profit of $44.6 million or 41 cents share, compared with its profit of $42.3 million or 39 cents a share for the same period in 2015. In the fourth quarter of 2015, HEI had a net expense of $2.2 million for its proposed sale to Florida-based NextEra. The Hawaii Public Utilities Commission killed the proposed sale in July.
HEI’s revenue for the quarter totaled $617 million, down a percent from $624 million in the fourth quarter of 2015.
For all of 2016, HEI’s profit was $248.3 million, or $2.29 per share, compared to $159.9 million or $1.50 a share for 2015. The 55 percent increase was largely due to $58.2 million HEI got from NextEra as part of a breakup fee and the related cancellation of a liquefied natural gas contract. HEI had $15.8 million in NextEra-related expenses in 2015.
The state PUC rejected NextEra’s purchase of HEI due to concerns about mainland control and doubts about NextEra’s commitment to the state’s renewable-energy goals. Hawaii law says the electricity HEI sells must come from 100 percent renewable sources by 2045.
In addition to a $90 million breakup fee NextEra paid to HEI, NextEra reimbursed HEI $5 million for transaction expenses.
Excluding the payment from NextEra, HEI’s core earnings in 2016 were $190.1 million, or $1.75 a share, up from $175.7 million, or $1.65 a share, in 2015.
HEI also announced today that James Ajello, HEI’s executive vice president and chief financial officer, will retire at the end of the first quarter of 2017. HEI named Gregory C. Hazelton, HEI’s Senior Vice President, Finance, as his successor.
HEI is the parent company of Hawaii’s largest electricity utility and American Savings Bank. HEI serves about 95 percent of Hawaii’s population through electrical utilities on Oahu, Maui, Molokai and Hawaii island. These utilities contributed $34.1 million in net income for HEI during the fourth quarter, up from $33.0 million a year earlier.
revenues continue to shrink and electricity usage is at an all-time low but heco continues to make profit thanks to decoupling. smart move, eh? but wait! rate hikes are still coming! heco is going to need to do a better job of explaining why they are needed. the puc continues to wisen up so it’s no longer the slam dunk it used to be. as oil prices slowly creep up and inevitably electric rates this will be an interesting battle in the near future.
before any rate hikes are granted the puc must do more to ensure heco is running a tight ship instead of asking for free handouts. if heco made the same effort in preparing their rate hike proposals to improving their daily operations they could trim a substantial amount off of what they’re asking for or maybe not ask for anything at all. now that the puc is slowly staffing up their open positions they must do more to hold heco accountable for recurring inefficiencies.
Public utility should be no profit
$90 million breakup fee NextEra paid to HEI, NextEra reimbursed HEI $5 million for transaction expenses. That’s where HEI fourth quater profits came from. HEI is going to jack up the rates this summer when we run the A/C and the fans.