NextEra Energy’s proposed takeover of Hawaiian Electric Company is running into serious, well-grounded opposition—and for good reason.
In July, the governor of Hawaii weighed in against the deal, along with Hawaii’s Office of Planning and the state’s Department of Business, Economic Development and Tourism.
More recently, Hawaii’s Division of Consumer Advocacy—a state agency charged with representing residential electric consumers—filed hundreds of pages of testimony against the deal.
Informed opposition like this raises doubts about NextEra’s willingness and ability to meet Hawaii’s progressive but achievable renewable energy goals. Hawaii is the only state in the country that is aiming for 100 percent of its electricity to be generated by renewable sources, and the state seeks to achieve that goal by 2045.
NextEra is dismissive of such ambition, having said the state is too aggressive, a naysayer point of view that makes Hawaiians wonder—quite rightly—whether the company might just try to undermine the state’s renewable-energy agenda. Gov. David Ige stated this suspicion as well as anybody has: “We need an electric company that sees Hawaii as the center of its work and the opportunity we represent as one of the greatest moments in history for any utility. We have not seen that in this proposal.”
Scott Hempling, an energy lawyer who has testified on the issue with the state Office of Planning, notes also that NextEra, an off-island conglomerate, would have less interest in pleasing Hawaiian regulators than the Hawaiian Electric Company does now. This would be true on any issue, including renewable energy, because Hawaii would be a much smaller proportion of NextEra’s business than it is of the business of Hawaiian Electric Company and its parent company, Hawaiian Electric Industries.
“As Hawaii’s relative contribution to shareholder earnings declines, so will NextEra’s stake in what the commission thinks,” Hempling said. “NextEra will literally care less about Hawaii than HEI does today. That is a mathematical inevitability.”
HERE’S ANOTHER POINT OF DOUBT. NEXTERA HAS A LOUSY RECORD OF SUCCESS WITH SOLAR IN FLORIDA, THE ONLY STATE IN WHICH IT OPERATES A REGULATED ELECTRIC UTILITY (NextEra owns unregulated power plants in other parts of the country). Skeptics of a NextEra’s takeover in Hawaii are only being reasonable when they ask whether NextEra really brings any expertise to bear on Hawaii’s renewable integration challenges. This point is wisely noted in testimony by the Hawaii Consumer Advocate office: “FPL [Florida Power & Light] has not experienced the same planning issues that Hawaii has been facing and, thus, cannot reasonably claim expertise that it can lend to immediately assist HECO’s efforts at integrating greater and greater amounts of rooftop solar on to the grid.”
Florida is facing two competing ballot initiatives related to solar. One is backed by a coalition of solar companies, environmental organizations, and Tea Party solar-energy supporters. It would allow solar producers to enter into power purchase agreements and sell their excess electricity directly to third parties, a privilege currently reserved to monopoly utilities. NextEra and other Florida utilities oppose this measure, which threatens their fundamental interests in simply selling electricity; they back a competing measure that solar advocates argue is designed to confuse Florida voters and kill the pro-solar initiative.
The decision on whether to let NextEra’s proposed takeover of Hawaii’s electricity commission rests now with the Hawaii Public Utilities Commission—which is expected to rule on it sometime in the fourth quarter of this year. The commission would best serve the public interest by following the lead of Governor Ige and of the island’s other public-interest defenders who have weighed in already.
Cathy Kunkel is an IEEFA research fellow.
