NextEra’s multibillion-dollar acquisition of Hawaiian Electric is not only the biggest deal we’ve ever had; it’s a test of how well we can adapt to offshore investment in our economy.
It’s the New Year, a season for new ideas, directions and resolutions. There are many changes in the air. We need to take stock of our 2015 opportunities and make them work for us.
We have had changes in energy and energy leadership. Hawaii has a new governor, a new CEO at Hawaiian Electric and a new director at the state Department of Business, Economic Development and Tourism. We are awaiting appointments in the Public Utilities Commission and the Office of the Consumer Advocate.
Even without the NextEra deal, these changes will have a huge effect on our energy initiative. With the deal, the effect will be transformative, regardless of whether it closes. Things will never be as they were; we’ve already crossed the Rubicon.
NextEra owns Florida Power & Light and is one of the largest utilities in the country. If properly managed, this deal could give us a new chapter in clean energy and patch up our fragmentation.
The need to manage offshore investments has always been important to our state. Sure, we’ve sold tons of real estate, but we haven’t done very well at other investments, such as Superferry. We’ve often had difficulty in dealing with big projects. We need to do better going forward.
In a time when U.S. utilities are consolidating, it should be no surprise that Hawaiian Electric is in play. Being open to offshore investments is more critical now in the wake of U.S. Sen. Dan Inouye’s death, and we need to be akamai. We’ve often burned ourselves with Wall Street, and we can’t afford either hubris or complacency.
Some say we circle the wagons because we don’t have the confidence to deal with offshore capital investments, so we do bad deals and lose good ones. We must learn to differentiate, engage and manage them as business opportunities.
The buyer and seller have presumably done their diligence, and they have entered into an agreement. Now it’s up to the PUC to find that that transaction is in the public interest. We must trust the PUC to do the right thing; for now the Legislature should not be involved.
The first order of business is to ready the PUC for the task. Gov. David Ige must either reappoint Mina Morita or appoint a new commissioner and a chairman as soon as possible. The State must also allow new PUC positions to stem the departure of staff and expertise from the commission.
In the docket to approve the deal, the PUC can approve, disapprove or approve with conditions. In doing so, the PUC should treat the matter as new business, avoid old enmities and recognize the long-term consequences of its actions.
A free-for-all at the PUC, where knee-jerk naysayers set the agenda, won’t be productive. The PUC should work to move the docket along; the sooner it is decided, the better it will be for the initiative. Delay is not good management.
It’s not a time for micromanagement, but rather for listening and sharing ideas. Nobody is going to take a deal that doesn’t make business sense or that doesn’t close within a reasonable time.
If the deal fails because of delay, disapproval or disagreeable conditions, we’ll be back where we were. NextEra’s tech, expertise and capital will no longer be on the table. We’ll be left to reach our goals without it, or possibly with another acquiring utility on terms less appealing.
Everything in the interim will be affected by the pending deal. Since actions taken in that period could affect the terms of the deal, the initiative will be in a kind of suspense until the PUC rules.
NextEra is a major American utility. It brings tech, expertise and capital to the table and is contemplating improvement of our statewide systems with smart grid connectivity, storage, utility scale renewables and nonrenewables, and know-how to make these things happen.
So if we’d rather return to what we didn’t like before, we’d better have a very good reason.
This is a test of our process, our officials and our state. Let’s do smart management of this opportunity. Let’s learn from the ghost of Christmas past and improve our energy future.
Want to know more about energy in Hawaii? Come to the Hawaii Energy Policy Forum’s Legislative Briefing at 1:30 p.m. Jan. 16 at the Capitol Auditorium. It’s open to the public, free, and there is no need to register.
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Jay Fidell, a longtime business lawyer, founded ThinkTech Hawaii, a digital media company that reports on Hawaii’s tech and energy sectors of the economy. Reach him at fidell@lava.net.
