Hawaii needs strong regulator to deal with HEI-NextEra merger

Hawaii’s 100 percent renewable goal will not happen quickly and it will not be cheap, requiring billions of dollars in infrastructure investments.

For more than 35 percent of Hawaii’s residents, those of us over age 50, this energy system transformation is unlikely to be completed in our lifetimes unless there are major technology and cost breakthroughs.

This transformation is a multi-decade endeavor that must survive beyond political election cycles, requiring good analysis, planning and certainty to attract the capital for the infrastructure upgrades necessary to achieve our clean-energy goals affordably.

Hawaii’s clean energy transformation cannot be achieved without a financially strong, technology- savvy, analytical and data-driven electric utility.

To be successful, it will have to be an electric utility whose focus is on its customers and its responsibility to provide a public good under the supervision of a capable and independent regulator to monitor its performance and serve as a buffer from the antics of politics.

A 2003 study prepared for the Hawaii Energy Policy Forum identified the regulator as a significant barrier to achieving Hawaii’s clean energy future stating:

The integrity and effectiveness of the regulatory agencies are essential to a healthy utility industry and to the general welfare of the broader economy and population this industry serves.

It is clear that Hawaii’s utility regulatory agencies are in need of revitalization and improvement.

This is especially true if these agencies are to play an effective role in the determination and implementation of energy policy.

For more than 15 years, as a legislator and later as chairperson of the Hawaii Public Utilities Commission (PUC), I worked with key legislators to give the PUC its independence and the resources it needed to reform and revitalize the agency to tackle the policy, economic and technical challenges to oversee the transformation of the electricity sector by Hawaii’s electric utilities.

Recently, this effort has finally come to fruition but, unfortunately, all will be for naught if the biggest decision before the PUC — the NextEra-Hawaiian Electric merger application — becomes a decision of just doing the governor’s bidding rather than the decision of a capable and independent regulator.

NextEra is recognized as a top performing utility and company nationally. There is little doubt about it being financially and technically fit, willing and able — the typical standard in judging the capabilities of an entity to acquire a public utility.

Other than this question of “fitness,” the larger issue is whether the approval can be conditioned to satisfy a broader concern of the PUC to address public interest as defined by the PUC.

It has been a failure on the part of the state parties that the Department of Business, Economic Development and Tourism, Office of Planning and the Consumer Advocate, have not made an attempt to negotiate a settlement to condition an approval.

We need to put into perspective the state of Hawaii’s responsibilities in this very important transaction between two private businesses subject to regulation.

The aforementioned state agencies are responsible for our state’s business climate.

The state has the ability and duty to regulate and govern the environment NextEra functions in; to align a public utility providing a public good with the public interest.

However, it appears that this isn’t a question of “fitness” anymore. It has become an issue of an intransigent administra- tion refusing to negotiate in an attempt to stymie a business transaction between private companies at any cost, including the already damaged business climate in Hawaii.

Unfortunately, this appears more indicative of the Ige administration lacking confidence in its ability to regulate when the state government has the authority and power to do so.

Whether it’s a go or no go, a timely PUC decision before the June 3 walk-away date would allow all parties to move on rather than being held captive to further political drama.