Hawaii Consumer Advocate: Review of NextEra Deal Should Proceed
UPDATED: Jeff Ono says the PUC should reject a petition from the solar industry and environmental groups seeking to delay the review of NextEra’s purchase of HECO.
Hawaii’s consumer advocate, Jeff Ono, has recommended that the Public Utilities Commission reject a petition by renewable energy groups to delay reviewing the sale of Hawaiian Electric Co. to Florida-based NextEra Energy until the commission resolves pending cases related to the electric utilities’ long-term energy plans and future business model.
Last month, the聽Hawaii Solar Energy Association, Alliance for Solar Choice, Hawaii PV Coalition, Blue Planet Foundation and Hawaii Sierra Club filed a petition聽with the PUC arguing that commissioners need to first rule on several issues, including approval of HECO’s long-range聽energy plans, before taking up the NextEra acquisition.
The solar industry has been聽particularly alarmed by the sale because of NextEra’s reputation of being hostile to rooftop solar in Florida, where it operates the state’s largest electric utility, Florida Power & Light.
Hawaiian Electric building, Richards Street in downtown Honolulu.
Cory Lum/Civil Beat
NextEra announced in December that it had entered into an agreement to purchase the Hawaiian Electric companies that serve Oahu, the Big Island and Maui County in a $4.3 billion deal. Before it can be finalized, the PUC must determine that the deal is in the public interest.
Ono, who represents consumer interests,聽called the petition “vague and ambiguous” in his filing with the PUC.聽He said that the delay “would create a significant regulatory review backlog and have unintended consequences on all future merger applications.”
NextEra officials have said that the company can help Hawaii obtain its clean energy goals faster and bring down electricity rates for consumers by leveraging its strong balance sheet and good credit rating in order to borrow capital at lower rates. The company has also pledged to聽forgo revenues聽under HECO鈥檚 decoupling mechanism聽for four years,聽saving customers an estimated $60 million.
Ono said that his office needed time to evaluate NextEra’s聽claims.
“Unnecessarily delaying review of the merger application might not only delay and reduce the benefits that the customers could receive, but could also result in lost opportunities,” wrote Ono.
NextEra and Hawaiian Electric need to close on the sale by December, according to SEC filings. However, the merger聽agreement can be extended by six months if there are regulatory delays. If either party backs out of the deal, it would have to pay the other a $90 million penalty.
Ono stressed that his recommendation to the PUC should not be construed as a tacit approval of the sale.
“To the contrary, the merger application was filed five days ago and the consumer advocate has initiated efforts to conduct a rigorous review of the merger application to evaluate whether sufficient customer benefits have been identified to ensure that the proposed merger is also in the customers’ and public’s best interest and not just in the interest of shareholders,” Ono wrote.
Ultimately, it will be up to the PUC to rule on聽the petition.
UPDATE: Ono rejected on Thursday a separate, but similar petition聽filed by a coalition of community groups, including Life of the Land, the Big Island Community Coalition and others. In his filing, Ono writes that the petitioners “fail to consider the complexity” of dockets before the PUC, asserting that the review will “brief.” Ono says there is nothing to support this assumption.
NextEra has opposed both petitions, arguing in PUC filings that the requests lack legal basis and are contrary to the public interest.
You can read the recommendation below:聽
