Now it’s up to the Public Utilities Commission.
Hawaiian Electric Industries shareholders narrowly approved the sale of the state’s largest electric utility to Florida-based NextEra Energy Inc. on Wednesday, leaving it to the state PUC to decide whether the acquisition will go forward.
WHAT’S NEXT?
» July 20: 29 selected intervenors, including government offices and environmental groups, file testimony with the Public Utilities Commission.
» August: HEI and NextEra respond to the intervenors.
» September to November: PUC holds public hearings.
» By June 3, 2016: PUC to make its decision.
» Up to 30 days later: PUC decision can be appealed.
Source: HEI
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The PUC has said it could rule as early as December or as late as June 2016 on the proposed $4.3 billion sale.
It took HEI two shareholder meetings and an extensive advertising campaign to win approval from the owners of 76 percent of its outstanding shares, just passing the 75 percent threshold required by Hawaii law.
“We are extremely pleased that our shareholders approved the way for the new future,” said Jeff Watanabe, HEI’s chairman of the board, at the meeting.
Shareholders also approved a compensation package that will pay HEI Chief Executive Officer Connie Lau $11.57 million if the sale is closed.
HEI — the parent of Hawaiian Electric Co. on Oahu, Maui Electric Co. and Hawaii Electric Light Co. on Hawaii island — promised NextEra would save ratepayers $60 million over four years, not raise base rates for four years and keep all management local.
NextEra Energy spokesman Rob Gould said the vote shows that shareholders and electric customers see value in NextEra.
“This is clearly a significant affirmation of the value not only the shareholders but customers of Hawaiian Electric see is part of the transaction,” Gould said.
The value wasn’t fully recognized the first time around.
HEI extended the deadline for the shareholder vote at a meeting on May 12 after failing to win the necessary approval with only 70 percent of outstanding shares voting in favor of the sale.
“It was difficult to get those who don’t bother to vote,” said Peter Lewis, an HEI shareholder who voted in favor of the sale.
“I think for HECO (the sale) is an important change that will ensure the future of financial viability for the company,” Lewis said.
If the sale is approved, shareholders would get 0.2413 NextEra shares for every HEI share. The shareholders would also receive a 50-cent cash dividend for every share of HEI stock. The shareholders would also own about 0.33 American Savings Bank shares for every HEI share — as HEI’s bank subsidiary would be spun off from NextEra if the sale were finalized.
Despite the winning vote, many at Wednesday’s meeting at the American Savings Bank Tower voiced concerns about the pending sale.
“I’m disgusted with it,” said Ruth Marie Derigo, an HEI shareholder. “They tried to push (the vote) too fast. Things they try to cram down your throat you wonder about.”
Kat Brady, an HEI shareholder, said she was disappointed because she felt that the shareholders weren’t properly informed about what would happen after the sale.
“I’m disappointed because people voted on a merger without knowing what really will happen,” Brady said. “What about all of the employees? What happens to the people and their families?”
When announcing the purchase on Dec. 3, NextEra Energy executives said they would not lay off any of HEI’s 2,800 utility workers for two years but declined to say what would happen beyond that.
When submitting their application to the PUC, NextEra said its resources and experience would help speed up the 2030 energy goals HECO proposed in August, which include lowering customer bills by 20 percent, tripling rooftop solar and getting 65 percent of the utility’s energy from renewable sources.
Lau said the sale to NextEra was a good move for the state, promising that NextEra would help accelerate the state’s new energy goals of 100 percent of electricity generated by renewable energy by 2045.
“They can come to Hawaii and help us with that strong push to renewable energy,” Lau said.
HECO supplies 21 percent of its customer electricity needs with renewable energy resources and approximately 12 percent of HECO’s residential customers have rooftop solar.
NextEra approached HEI because of the renewable energy opportunities in Hawaii, Lau said.
“We really caught their eye,” Lau said. “NextEra sees renewable energy as their future. Hawaii is at the forefront with issues related to renewables.”
If the sale is finalized, HEI’s utilities under the name Hawaiian Electric Holdings would become a third principal business of NextEra. NextEra’s other subsidiaries include Florida Power & Light Co. and NextEra Energy Resources.
In Wednesday’s vote in favor of the sale, 7 percent of outstanding shares were voted against the deal, 2 percent abstained and 15.5 percent were not voted. Shares not voted counted as no votes.
In addition to Lau getting $11.57 million if the sale closes, James Ajello, HEI’s executive vice president and chief financial officer, would get $3.97 million, and Chester Richardson, executive vice president and general counsel, would get $2.99 million.
