Hawaii Consumer Advocate: Reject NextEra-HECO Merger in Current Form
UPDATED: In a filing with the Public Utilities Commission on Monday, Jeffrey Ono says the proposed聽$4.3 billion deal offers “illusory and inadequate” benefits.
Hawaii Consumer Advocate Jeffrey Ono believes that the proposed聽$4.3 billion NextEra Energy, Inc. merger with Hawaiian Electric Industries is not in the public interest.
Ono with the state Public Utilities聽Commission and issued a press release saying that NextEra has overstated the potential benefits of the merger for consumers.
“As proposed, the commission should reject the proposed transaction because of insufficient measures to protect Hawaii consumers,” Ono said in the testimony.
The Consumer Advocate’s criticism of the deal follows similar opposition from Gov. David Ige, the state Office of Planning and the state Department of Business, Economic Development and Tourism.
Hawaiian Electric workers replace a pole along South Beretania Street in May 2015
Cory Lum/Civil Beat
The governor announced July 21 that the merger is “unacceptable” because NextEra hasn’t committed to meet the state’s 100 percent renewable energy goal. He was also concerned about losing local control of the utility.
Ono criticized the deal’s “illusory and inadequate” benefits for consumers.
“Among many questionable claims, NextEra offers flawed and broad speculative savings estimates, repeatedly touting benefits of millions of dollars in savings for customers. The company鈥檚 filings do not clearly or consistently explain how these savings will materialize to the full extent they have been claimed,” Ono said in聽the statement.
“This includes, for example, millions of dollars in purported savings resulting from broad reductions in operations and maintenance expenses that have not been clearly laid out despite the company having ample opportunity to clarify these and other benefits during the discovery period.”
Henry Curtis from Life of the Land, an organization opposed to the merger, said Monday that he doesn’t necessarily accept Ono’s testimony as calling for rejection because Ono included several conditions to protect consumers if the deal聽moves forward.
“Basically the Consumer Advocate聽is saying to the PUC, if you go with all 47 of our recommendations then the project becomes in the public interest,” Curtis told Civil Beat. “To me, that is basically rewriting the application and saying, ‘Yeah you did a聽lousy job but with my recommendations it’s acceptable.'”
Curtis’s organization is one of 28 groups that has intervened in the PUC’s decision regarding the sale.
Even though the governor criticized the deal, he left聽the door open to supporting it in the future based聽on responses and actions by NextEra as the regulatory review process continues.
NextEra issued a statement in response to Ono’s criticism that reiterated their commitment to the merger:
| 鈥淲e respect the views of the Consumer Advocate and we will continue to listen, learn and constructively engage with people throughout the state. As we are in the beginning stages of the PUC review process, we are confident we will find more common ground as we further demonstrate the strong public interest benefits of this merger. To that end, our filed merger plan anticipates almost $1 billion in customer savings and economic benefits for Hawai鈥榠 in the first five years after closing and we have already made commitments to customer cost savings, employees and community causes that compare favorably to other utility mergers. But what this story is really about is Hawai鈥榠鈥檚 future 鈥 a more affordable, 100 percent renewable energy future 鈥 and we firmly believe that this merger represents the best way to get there.鈥 |
NextEra and HEI announced the deal in December. The PUC said it could take until next June to decide whether it should be approved.
Based in Juno Beach, Florida, NextEra owns Florida Power & Light Company.
HEI is the parent company of Hawaiian Electric Co. on Oahu, Maui Electric Co., and Hawaiian Electric Light on the Big Island. Kauai, with its locally owned electric cooperative, is the only county not powered by HEI.
Reporter Chad Blair contributed to this report.
