The Federal Energy Regulatory Commission approved the sale of Hawaiian Electric Industries Inc. to NextEra Energy Inc., a step experts said was expected.
The two companies announced the approval Monday. The federal endorsement "represents a significant step toward the completion of our merger," said Jim Robo, chairman and chief executive officer of NextEra Energy.
The sale also must be approved by HEI shareholders and the Hawaii Public Utilities Commission, which could be the most difficult endorsement to get.
FERC has a history of approving most utility mergers, said James Van Nostrand, associate professor at West Virginia University and director of the Center for Energy and Sustainable Development in the WVU College of Law.
"It is not a very rigorous standard, and I’ve never been familiar with FERC ever turning down one of these things," Van Nostrand said. "It’s one of the boxes you have to check off."
"FERC approval was expected," added Jeff Ono, the Hawaii Consumer Advocate.
PUC Chairman Randy Iwase said the federal approval will not have an effect on the state’s review process.
"We have our own independent process," said Iwase, who hopes to make a decision on the sale within 18 months.
Ono said the federal approval was based on different criteria from what the PUC uses. A main focus for FERC approval is to evaluate whether a level of competition in one geographic area would be affected by a utility’s change of ownership, Ono said.
"It does not diminish the approval of the Hawaii PUC," Ono said. "Nor does it impair the ability of the PUC to regulate the company. It doesn’t provide any type of precedent."
Juno Beach, Fla.-based NextEra Energy and HEI — which owns Hawaiian Electric Co., Maui Electric Co. and Hawaii Electric Light — announced NextEra’s plans to purchase HEI for $4.3 billion in December.
"Through our partnership, we will apply our combined expertise and resources to deliver significant savings and value to Hawaiian Electric customers," Robo said in a news release Monday. "We will continue to work closely with our partners at Hawaiian Electric in pursuing the remaining necessary approvals to complete the merger and begin to deliver the more affordable clean energy future we all want for Hawaii."
Connie Lau, HEI’s president and chief executive officer, said in the news release, "We are pleased with this substantial progress on our proposed merger. Hawaiian Electric is gaining a partner that is the world’s largest generator of renewable energy from the wind and sun, with a commitment to supporting rooftop solar in Hawaii and a proven track record of lowering electric bills. This approval provides further momentum toward ultimately delivering that substantial value to our customers and communities."
