Honolulu Star-Advertiser

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Shed light on NextEra/HECO alliance

Officially NextEra remains an entity external to the workings of Hawaiian Electric Industries, the power utility it hopes to acquire. The Public Utilities Commission has the authority to sign off on the merger, but the agency has been hard-pressed to elicit the full information needed to make its decision.

But now it’s apparent that NextEra may be positioned more closely to HEI than previously assumed, and this suggests it ought to provide more information on its proposed future than has emerged to date.

Last week, the Florida-based company submitted a document to the commission, a notification that it will be helping Hawaiian Electric Companies, HEI subsidiaries, with the latest revision of their Power Supply Improvement Plans (PSIP).

These are documents outlining HECO’s renewable-energy plans over a 15-year period. The Oahu utility has had two previous versions of the required state plans rejected by the PUC, which found that they insufficiently changed HECO’s business model, among other criticisms.

It’s not unusual that the electric company would use an outside consultant, but the NextEra assist is distinct in that it is a pro bono service. Rob Gould, the Florida company’s spokesman, said HECO is not paying for the collaboration.

So it’s a reasonable conclusion that NextEra wants to help craft a plan that it would find workable to implement, should the merger go through. The reasonable conclusion is that the company believes the unpaid service to be a fairly safe investment, that it likes the odds that the $4.3 billion sale will be approved.

Still, the alliance set off alarm bells among some of those intervening in the merger case, signals that the PUC should heed. NextEra previously has responded to requests for further information about its planning by stating it was not possible to make or disclose detailed resource plans until after the merger is approved.

The fact that it is now immersed in doing such planning, the critics rightly observed, raises eyebrows.

Among those critics is Hawaii Gas; it’s a rival utility with HEI in proposals to scale up the import and distribution of liquefied natural gas. In addition to the PSIP, the collaboration also involves NextEra helping HEI with drafting its petroleum contracts, updating its emissions testing design and deciding on LNG sourcing. NextEra is already a key player in the LNG market.

Others pointing out the NextEra/HECO alliance in renewable energy planning include those intervening for environmental interests, such as the nonprofit organization Life of the Land. Henry Curtis, its executive director, said the PUC must decide whether NextEra’s acquisition would be better for the ratepayers than the status quo for the Hawaii- based HEI.

If the future according to NextEra and HEI essentially comprises the same plans, he correctly said, that will be hard to sort out.

Ultimately, the PUC is responsible for making two separate decisions. When evaluating the PSIP, the commission must call on HECO to explain how it would fulfill the plans, with or without NextEra in the driver’s seat.

And, just as critically, the agency must use the collaboration as the basis for seeking more information in the coming weeks. Hearings will resume Feb. 1 on the proposed merger, and before decisions are made, NextEra should be more forthcoming with details on what the public can expect from a power utility under its control.

Ratepayers should learn how the Florida company, with stated aspirations for further expansion and acquisions nationally, will serve this small captive market.

Will the current trendline toward dispersal of power generation among individual households and other small producers continue, or will renewable energy production become more centralized? How much will electric bills rise or fall, given the cost of modernizing the aging power grid?

Answering these questions and deciding on the merger will be more consequential to Hawaii consumers than any decisions the PUC is likely to make for the forseeable future.

10 responses to “Shed light on NextEra/HECO alliance”

  1. manakuke says:

    Financial power grab of a larger monopoly? That is what it sure appears to be.

    • allie says:

      I agree with SA: something stinks about both companies and their insiders who want to enrich themselves at the expense of all. Please allow the public to peek behind the curtain.

      • berrygood says:

        Does it really matter what the public sees? The rail is right out front with their waste and stupidity and it keeps rolling along. This deal is just about who’s palms get greased. It’s just a matter of time.

    • HawaiiBlogger says:

      If this acquisition by NextEra comes about….the citizens of Hawaii are going to pay and pay dearly for it. NextEra will “sweet talk” and say what ever is necessary (sounds like politicians doesn’t it)…to get what they want….CONTROL of a utility that serves Hawaii (including MECO and HELCO)….we’re going to be strapped with increases in our billings….as NextEra will “find a way” to increase the cost of our kW rates (they will feint and/or use deception without abandon)…regulator reasons, capital infusion requirements as dictated by the PUC or other regulators…yada, yada, yada….

      Remember, NextEra (and HECO) are counting on the rail system to bail out NextEra’s acquisition expense….installation of the electrical system for rail…underground from start to finish (can you imagine the enormity of this work?)….plus the electrical system to RUN rail —-this is up front costs that will put major money into NextEra’s coffers….enough to pay a huge sum back to them for the acquisition of HECO (MECO and HELCO)… and don’t SUPPLY of electricity after rail is up and running…..NextEra will make hand-over-fist on the income derived for electrical supply for rail….I hope the C&CH have the “smarts” (doubtful) to utilize HPower’s electrical generation for rail needs (bypass HECO or NextEra)….this will take a lot of imagination and hard work…but it is the answer to cutting / eliminating the electrical cost to run rail. Before this can happen….Covental and HECO need to be investigated to insure that the C&CH can acquire the electrons….we have been duped long enough on HPower anyway…BUT that is another story….HawaiiBlogger

  2. mcc says:

    Anyone who tries as hard as Nextera does, by trying to sweeten the pie as opposition grows, is very desperate and cannot be trusted. Everything they “give” now will be reflected with higher electric rates in the future.

  3. FARKWARD says:

    There is NO LIGHT at the end of this TUNNEL… You have to examine who are the REAL OWNERS of “NextEra”–THE PARENT…

  4. choyd says:

    Anyone who spends a lot of money on advertising you to buy something and then gets all testy when you ask really simple questions, probably means you shouldn’t buy the product.

  5. shanik says:

    Dear Advertiser Editorial Board,
    It would be great if you had some basic knowledge to avoid printing false claims. NextEra IS NOT a key player in the LNG market. They buy and sell a lot of pipeline gas but liquefying it and shipping it as LNG is a completely different market with different contract terms and pricing mechanisms. Would be great if you could do some proper research before printing false statements.

  6. mikethenovice says:

    Are we still recycling this half a story over and over again?

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