HONOLULU, Hawaii – Governor David Ige announced his opposition to the Hawaiian Electric Industries-NextEra Energy Inc. merger, joining several intervenors who are taking the same position in the Hawaii Public Utilities Commission approval proceeding. Testimony and exhibits from the 29 intervenors in the PUC docket were due Monday.
Governor Ige held a press conference to explain the state’s opposition.
“Although I welcome capital investment in Hawai‘i with respect to energy, any merger or investment must align with the state’s 100 percent renewable energy goal. The state respectfully opposes the merger in its current form because it fails to align with the state’s renewable energy goals. We are committed to a 100 percent renewable future, standing alone among fifty states in the nation in that action. We need an electric company that sees Hawai‘i 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,” – Governor David Ige on July 21, 2015.
Alan Oshima, Hawaiian Electric Company president and CEO, issued a statement after the govnernor’s media conference.
“We recognize that this proposed merger is a very important matter for our customers, our communities and the state at large. The PUC review is an ongoing process that provides an opportunity to address and answer questions or concerns. As more information is provided throughout this process, we feel strongly that others will also conclude that this partnership with NextEra Energy will result in significant benefits for our customers and for Hawai‘i’s leadership in clean energy.” – Alan Oshima on July 21, 2015
The state’s position was praised by The Sierra Club of Hawai‘i, an intervenor in the merger docket.
“We 100% agree with the Governor on the NextEra takeover. Hawai‘i is leading a revolution in renewable energy that requires local leadership that is committed to serving the needs of Hawai‘i’s energy customers…. NextEra is just not on the same page with the rest of Hawai‘i,” – Marti Townsend Director of Sierra Club’s Hawai‘i Chapter.
Paniolo Power Company, LLC, another intervenor and subsidiary of Parker Ranch, Inc., withdrew from the merger docket last week. Paniolo Power said in a media release that the company will instead concentrate on the PUC’s pending Power Supply Improvement Plan (PSIP) docket, “which is better suited to address transformational planning issues”.
“The merger docket before the PUC is focused on the utility ownership model and NextEra’s capabilities. Since the merger docket opened, two other ownership models have been discussed or proposed: a municipal electric utility and a utility cooperative. Paniolo Power’s plan works with all ownership models; it is not dependent on the outcome of the merger docket.” – Jose Dizon, general manager of Paniolo Power.
Paniolo Power tried unsuccessfully to consolidate the merger docket and the PSIP docket. The County of Hawaii, also an intervenor, supported their March 17 motion to consolidate. Hawaii County Energy Coordinator William Rolston concluded in his testimony that the PUC should deny the merger.
“There is significant lack of transparency with this transaction in terms of ‘what, how, when things will be done’. Further the ratepayer is not guaranteed any cost-reductions.” – William Rolston on July 20, 2015
Another Big Island based intervenor, Puna Pono Alliance, also opposed the merger.
“Electric Utilities in Hawaii have an opportunity to be drivers in one of the largest economic and cultural shifts of the last Century — something as important as flight, digital technology, and improved life expectancy. In short, we have the opportunity to see a culture in which energy from the sun is virtually free (as computing power has become virtually free today). The question in the future will not be whether we can afford energy, but whether we can have it available when and where we need it.
NextEra does not appear ready to work with the legislature, the regulators, and the public to coordinate change in the utility business model—taking advantage of the opportunities of distributed generation.
• has not communicated strategic intentions or objectives in a straight forward and transparent way to create meaningful public dialogue;
• has not shown a willingness to look at proponents of micro-grids and other management and ownership schemes that may be of value to the Islands;
• has not shown any evidence that it has the intent or capability to manage the disruptive innovation of distributed energy.” – Tom Travis in joint testimony submitted on June 9, 2015
Intervenor Tawhiri Power LLC – which has a power purchase agreement with the Hawaii Electric Light Company to generate up to 20.5 MW of energy from its Pakini Nui Wind Farm near South Point – expressed concern over how the merger would impact its business.
“The Application for Approval of the Proposed Change of Control does not contain any provisions or commitments that the Applicants will ensure adequate protection of current long-term power purchase agreements (“PPAs”) with Independent Power Producers (“IPPs”). Without such mechanisms, independent renewable energy producers like Tawhiri must consider the possibility of losing its PPA subsequent to the Change of Control of the Hawaiian Electric Companies. Additionally, the Proposed Change of Control has no assurances that Tawhiri will not risk incurring substantial loss of revenues because of increasing curtailment of energy deliveries to the utilities because of either significant load migration or uncontrolled growth of affiliates.” – Tawhiri Power LLC