Agency hires aid for filing on HEI

The Consumer Advocate chose a Maui-based consultant to help the state agency develop its position on NextEra Energy Inc.’s purchase of Hawaiian Electric Industries after ethical concerns arose over a previously proposed adviser.

On Aug. 10 the Consumer Advocate will be the last state agency to file testimony with the state Public Utilities Commission about the proposed $4.3 billion purchase of HEI.

Before the Consumer Advocate submits its stance, the state agency wants to define what it means to operate a business in Hawaii, as the Florida-based buyer would own the largest electric utility in the state.

Ian Chan Hodges of Ingenuity Underwriters signed a contract with the Division of Consumer Advocacy on June 19 to help the Consumer Advocate prepare for its August deadline. The financial terms of the contract are still being negotiated.

“I just wanted to put a definition to the concept of doing business in Hawaii, figure out what it actually means — draw some parameters,” Consumer Advocate Jeff Ono said Thursday.

Gov. David Ige said Monday that he opposed the sale after two other state agencies among the 28 approved “intervenors” filed testimony recommending against the sale with the PUC.

The PUC will have the final say about NextEra Energy’s purchase of HEI, which is the parent company of Hawaiian Electric Co., Maui Electric Co. and Hawaii Electric Light Co.

The Division of Consumer Advocacy first proposed to hire Enterprise Honolulu — the Oahu Economic Development Board. But potential conflict of interests noted by the state Ethics Commission in an email to the Department of Commerce and Consumer Affairs on June 5 caused the Division of Consumer Advocacy to look elsewhere.

“We were considering (Enterprise Honolulu) but these ethical concerns came up,” Ono said.

The ethical concerns, which involved recent funding from HEI to Enterprise Honolulu and HEI executives serving on Enterprise Honolulu’s board of directors, were outlined by the state Ethics Commission.

Enterprise Honolulu, a nonprofit, received a $100,000 grant from HEI in 2014. Enterprise Honolulu’s board includes Robert Alm, former executive vice president of Hawaiian Electric Co., and James Ajello, HEI executive vice president and chief financial officer.

Ajello has been the CFO at HEI since January 2009 and executive vice president since May 2011. Alm served as an executive vice president of HECO from March 2009 until August 2013.

“Enterprise Honolulu’s receipt of a $100,000 HEI grant and its current board membership raises questions regarding potential conflicts of interest,” the Ethics Commission said in a subsequent letter to the Department of Commerce and Consumer Affairs.

The DCCA, the overseeing department of the Consumer Advocate, reached out to the Ethics Commission in May for guidance on the proposed contract with Enterprise Honolulu.

Adding to ethical issues of the Division of Consumer Advocacy’s proposed contract with Enterprise Honolulu were the workers chosen to research the sale.

Keali‘i Lopez, former director of the DCCA, would help prepare the written and oral testimony to the PUC, draft information questions and conduct interviews with small-business leaders about the NextEra-HEI deal.

Former PUC Chairwoman Mina Morita was another researcher assigned to work for Enterprise Honolulu. The state Ethics Commission advised against Morita’s appointment and placed conditions on Lopez’s involvement, if the Division of Consumer Advocacy decided to move forward with the contract.

The consultant will help the Division of Consumer Advocacy answer questions as to what a loss of local governance means for HECO, how doing business in Hawaii is different from doing business anywhere else and the value of the “local advisory board” promised by NextEra to help sustain local control.