NextEra Energy Inc. and Hawaiian Electric Industries Inc. argued Monday for state approval of the planned $4.3 billion sale of HEI in a major filing with the Public Utilities Commission.
In the 791-page document, Florida-based NextEra and HEI reiterated the reasons they believe the purchase should be given the green light, including $60 million in customer savings over four years and accelerating the utility’s renewable-energy goal.
Monday’s filing from the companies was the first "testimony" filed in the case. The PUC has granted "intervenor" status to 29 groups, including local solar advocates, environmental groups, the Department of Defense and three of the state’s counties.
Alan Oshima, president and CEO of Hawaiian Electric Co., said in the filing, "The proposed transaction, if approved, will result in significant benefits, as it will result in an improvement in service and reliability for our customers, will result in more affordable electric rates for our customers, will enhance the ability of the companies and their employees to provide safe, adequate and reliable service at reasonable cost, will enhance attainment of the state’s clean energy goals, will improve the financial soundness of the companies, and will help improve the companies’ management and performance."
In addition to Oshima, the testimony includes statements from Eric Gleason, president of NextEra Energy Hawaii; Colton Ching, vice president, Energy Delivery at Hawaiian Electric Co.; John Reed, chairman and CEO of Concentric Energy Advisors Inc. and CE Capital Inc.; Bryan Olnick, Florida Power & Light’s vice president of distribution operations; and Tayne Sekimura, senior vice president and chief financial officer of HECO.
NextEra and HEI filed a joint application in January requesting PUC approval of the sale of the parent company of Hawaiian Electric Co., Hawaii Electric Light Co. and Maui Electric.
Critics of the NextEra purchase have questioned whether turning over control of Hawaii’s largest utility to a company headquartered outside the state would result in less local control and less sensitivity to local issues.
The critics also have said NextEra favors the traditional model of centralized power generation over distributed generation, such as rooftop solar.
Environmentalists have questioned NextEra’s willingness to convert Hawaii power plants to liquefied natural gas, saying that would only delay adoption of more renewable energy sources.
NextEra has said it would speed up the 2030 energy goals that HECO proposed in August, which includes lowering customer bills by 20 percent, tripling rooftop solar, reaching 65 percent renewable energy dependence and using LNG as a bridge to move the state from oil.
"NextEra Energy, the nation’s leading clean energy company, shares the Hawaiian Electric Companies’ vision of increasing renewable energy, modernizing its grid, reducing Hawaii’s dependence on imported oil, integrating more rooftop solar energy and, importantly, lowering customer bills," Gleason said in the filing.
As Hawaii residents pay the highest prices in the nation for electricity, NextEra has said its advantages as a larger company can lower customer bills.
Reed, the head of Concentric Energy Advisors, said NextEra is positioned to help accelerate HECO’s plan because the Florida company can finance the $8.4 billion of capital investments that HECO needs to accomplish the utility’s 2030 goals.
"The approximately $8 billion of potential investments identified by these plans represent an enormous opportunity for a company like NextEra to bring its purchasing power, engineering and project management expertise and lower cost of debt to the table to achieve potentially hundreds of millions of dollars of lower costs for these projects, which will directly benefit electric consumers and the state overall," Reed said in the filing.
Lawmakers and local groups have voiced concern about the change in control after the sale is final. NextEra promised the state that the local utility will keep its name and be locally managed with headquarters remaining in Honolulu.
In the filing, Oshima said NextEra is a good partner for Hawaii because of planned local outreach and the overall reputation of the company.
"The advisory board will include six to 12 members, all of whom have substantial ties to the Hawaii community. Moreover, in addition to its tremendous financial, purchasing, engineering and construction, and technical resources, NextEra Energy is a recognized leader in social responsibility and innovation, and enjoys a long-standing reputation as a strong corporate citizen throughout the communities it serves."
If the sale is finalized, HEI under the name Hawaiian Electric Holdings will become a third-party principal business of NextEra. The other principal subsidiaries include Florida Power and Light and NextEra Energy Resources.
The companies cleared the first hurdle in March after the Federal Energy Regulatory Commission approved the sale. The PUC and HEI shareholders still need to approve the deal. The PUC has projected that the sale would take up to 18 months to review.
