NextEra Discussion Addresses Merger Challenges
Numerous questions surfaced Wednesday at the Hawai’i Island Chamber of Commerce gathering about NextEra Energy Inc.’s merger with Hawai’i Electric Industries.
The Florida-based company is attempting to purchase Hawai’i Electric’s electricity utilities, including Hawaii Electric Light Co. on Hawai’i Island.
Since the merger was announced in December of last year there’s been opposition from state officials, including Hawai’i Gov. David Ige, who are questioning whether the deal is the right fit for the state’s goals of attempting to have 100 percent “clean” energy by 2045.
Present at the meeting was Eric Gleason, president of NextEra Energy Transmission, LLC; Jay Ignacio, president of Hawai‘i Electric Light Company; Marco Mangelsdorf, the co-founder and spokesperson for Hawai’i Island Energy Cooperative (HIEC); Mina Morita, former chair of Hawaii’s Public Utilities Commission; Jeffrey Ono, consumer advocate for the Hawai’i Division of Consumer Advocacy; and Will Rolston, energy coordinator for County of Hawai‘i.
A mediator asked questions about how the off-island company would be able to properly focus and serve the local community and whether or not NextEra has the patience and steadfastness needed to clear current political hurdles surrounding the merger.
Gleason said he’s “staying optimistic” but was taken by surprise by all the opposition.
“It was a little bit of a surprise to us. We did our homework. We’ve been coming here for a few years now…” he said. “It’s more political than anticipated.”
Ignacio backed the decision and said he thinks the merger is a good idea for the future.
“We think partnering with NextEra, sharing in their technology, in their human resources they have and also sharing their financial background, makes it a good partnership to move forward,” he said.
Ono, whose job it is to represent the interest of Hawai’i utility consumers, previously said that he did not support the merger. He also recommended that the Public Utilities Commission, who must give approval before the merger can occur, should not support the action.
NextEra representatives provided testimony to the PUC in response to his concerns, but still Ono expressed his objection to the acquisition.
“We feel that the benefits they’re offering consumers is just not significant enough,” he said.
Morita raised questions about how the NextEra deal would support local jobs and the community.
“I want to know how are they going to invest in our local workforce…” she said.
The question also came up as to whether or not individuals looking to install photovoltaic systems on their own would be able to under the acquisition, in which no clear answer was given.
Mangelsdorf also touched on the co-op opportunity. The co-op model he’s proposing would not involve investor-owned utilities and would have a democratically elected board of directors.
“It’s much more community-based, local-based, a much more local-focused model,” he said.
NextEra Energy and Hawaiian Electric Industries proposed $4.3 billion merger would include the assumption of $1.7 billion in HEI debt.
To date, the Federal Energy Regulatory Commission and HEI shareholders have approved the acquisition. The transaction remains subject to approval by the state PUC, the spinoff of ASB Hawaii, parent company of American Savings Bank, and other customary conditions.
On Wednesday the company announced the expiration of the mandatory, pre-merger waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.