PUC decision on HEI sale tops list of anticipated stories

It’s already going to be a groundbreaking year in Hawaii business for 2016 with medical marijuana dispensaries coming on the scene. But in what promises to be the No. 1 story to follow this year, the state Public Utilities Commission is expected to make a decision on NextEra Energy Inc’s controversial $4.3 billion takeover bid for Hawaiian Electric Industries, the state’s largest electric utility.

In the meantime, construction continues on in Kakaako with cranes dotting the sky as the urban area in Honolulu is transformed with much-needed housing.

1. NextEra-HEI decision likely to miss June target

The date for state regulators’ decision on the proposed purchase of the state’s largest electric utility is likely to push back beyond its original June goal, as hearings for NextEra Energy Inc.’s $4.3 billion buyout of Hawaiian Electric Industries have extended beyond the scheduled 12 days.

The Public Utilities Commission is tasked with approving or denying the sale of HEI to Florida-based NextEra. The decision was slated by the companies’ purchase agreement to have been decided by June 3, 2016 — or, as currently written, NextEra faces a $90 million penalty for failure to obtain regulatory approval. PUC Chairman Randy Iwase has said that he is not going to rush the decision because of the historic significance of the sale.

Since the companies announced the sale on Dec. 3, 2014, NextEra has attracted support and criticism. Local business leaders, labor unions and others have voiced support for the utility’s suitor because NextEra’s access to capital would help the state reach its 100 percent renewable energy goals.

Environmentalist groups, solar companies and others have said they are concerned with the loss of local control associated with the larger mainland company acquiring one of the largest employers in the state. Hawaiian Electric Co., the utility subsidiary of HEI, has about 2,800 employees.

While finishing the 12-day hearings ensured a PUC ruling closer to June, the continued hearings — with NextEra lawyers looking to question approximately 40 expert witnesses — have pushed back the decision to an unknown date. Iwase said he was looking to start the hearings again sometime in January. Secured dates for additional hearings are Feb. 1 through Feb. 10. The hearings, scheduled at the Neal S. Blaisdell Center from 9 a.m. to 5 p.m., are open to the public and streamed on ‘Olelo at olelo.org.

2. Medical marijuana market will debut statewide in July

The establishment of medical marijuana dispensaries in Hawaii is sure to dominate news headlines this year.

Already there is intense interest as state legislators and health officials hammer out the details in the law that is expected to create a potentially lucrative new market with up to 800 jobs and $65 million a year in sales.

It’s a high-stakes game that has

attracted celebrities, big-name entrepreneurs, high-profile attorneys and former politicians to form alliances to compete for one of eight licenses starting on Jan. 12, when the Health Department is scheduled to open an 18-daybidding window.

Act 241 opens the way for 16 medical marijuana stores to open starting July 15. Three licenses will be issued for Oahu; two licenses each for Hawaii and Maui counties; and one license for Kauai. Each license allows a company tooperate two marijuana production centers and up to two retail stores.

3. Development in Kakaako scheduled to continue

There was a good deal of residential high-rise construction in Kakaako last year, and even more is slated to take place in 2016.

This year is expected to reflect more of the boom in Oahu housing development concentrated in the urban Honolulu area between downtown and Ala Moana.

Four condominium towers — The Collection, Symphony Honolulu, Waiea and 801 South St. Building B — are scheduled to open this year. That compares with just one Kakaako tower, 801 South A, last year and a tower calledWaihonua the year before.

Several towers also are expected to break ground this year, including the luxury Vida at 888 Ala Moana, a tower anchored by Whole Foods at Ward Village, a moderate-priced condo tower at Ward Village called 988 Halekauwilaand perhaps one of two planned ultra-luxury towers called Gateway Towers on the site of Ward Warehouse.

The considerable new construction will join two Kakaako towers that broke ground last year and aren’t slated for completion until next year — Keauhou Place on South Street and Anaha at Ward Village.

Besides the high-rises, several residential mid-rise projects are ongoing and a few more are slated to start this year, adding to the changes that include deploying construction cranes, closing sidewalks, increasing trafficcongestion and welcoming new residents in the area bordered by Ala Moana Boulevard and Piikoi, Punchbowl and King streets.