Partners in Proposed Power Merger Pressed to Release LNG Emails
Ulupono Initiative joins Hawaii Gas in聽its request for the PUC to force Hawaiian Electric and NextEra to turn over emails about its plans for liquified natural gas.
A social investment聽firm has joined Hawaii Gas in calling on the state Public Utilities Commission to force NextEra Energy and Hawaiian Electric to turn over internal emails about using liquefied natural gas to help power the islands.
Ulupono Initiative聽filed a motion this week聽in support of Hawaii Gas鈥 request that聽the PUC compel the information, an action聽NextEra and Hawaiian Electric have opposed.
鈥淲e believe that the more NextEra is willing to be transparent about its plans and intentions, even if not fully formed, the more we can trust them, and the more we can have a relationship based on mutual respect,” Kyle Datta, a general partner at Ulupono, told Civil Beat on Wednesday.
Hawaii Gas workers unearth and replace gas pipes along South Beretania Street before a repaving project.
Cory Lum/Civil Beat
The PUC is eight months into the biggest utility聽merger case in Hawaii history. A decision on the proposed $4.3 billion sale of Hawaiian Electric Industries to Florida-based NextEra Energy is not expected until June, but the back-and-forth between the companies and some of the聽28 PUC-appointed聽intervenors has been heating up.
In July, Gov. David Ige鈥檚 administration came out against the planned merger as it currently stands.
He questioned the companies鈥 support of the state鈥檚 goal of becoming 100 percent renewable聽by 2045 and said the information submitted so far聽lacks sufficient responses to show why the sale would benefit Hawaii鈥檚 electric customers.
‘The Same Type of Stonewalling’
NextEra has repeatedly tried to assure public officials and others that the deal is good for Hawaii. Last month, NextEra spokesman Rob Gould said the company鈥檚 filings with the PUC demonstrate more than $600 million in economic benefits in the first five years after closing.
NextEra declined to comment Wednesday on Ulupono joining the聽Hawaii Gas motion to compel.
Hawaii Gas says it wants to determine if NextEra鈥檚 statement that it has no LNG plans other than supporting HECO鈥檚 current power supply improvement plan is accurate.
The company says the emails could show whether NextEra and HEI are planning to procure LNG in a manner that favors NextEra affiliates and diminishes competition, contrary to the public interest; whether the companies intend to take the same approach to procuring future renewable energy resources; and whether their desire to control LNG procurement may be used to extend the life of HECO鈥檚 existing power plants to the detriment of more efficient and renewable power聽generation.
Nathan Nelson, Hawaii Gas vice president and general counsel, told Civil Beat that the company was glad to see Ulupono join in support.
“Many of the parties in the docket are experiencing the same type of stonewalling,” he said.
NextEra and Hawaiian Electric Industries鈥 three subsidiaries that provide power to Oahu, Maui and Big Island filed a joint memo Aug. 10 in opposition to the request, saying the documents Hawaii Gas wants 鈥渁re of a competitive nature, and could create undue delay in this proceeding.鈥
Hawaiian Electric and NextEra say Hawaii Gas is a business competitor seeking to unfairly and improperly use the regulatory process to gain access to sensitive business documents and information for its competitive advantage.
Alan Oshima, president and chief executive officer of Hawaiian Electric, speaks to the Civil Beat Editorial Board last December. His testimony to the PUC about NextEra’s natural gas expertise is cited in the efforts by Hawaii Gas to to force the release of LNG-related emails.
They view the attempts to compel disclosure as overly broad for determining if the merger is in the public interest.
“The issue is not a question of whether LNG issues could somehow be considered to fall within the overall subject matter of the current proceeding,鈥 attorneys for the companies told the PUC. 鈥淚nstead, the question is whether getting into granular detail in a particular field is proper in a broad-reaching proceeding such as this. Plainly it is not.鈥
Hawaii Gas attorney William Meheula said聽that HEI and NextEra have only produced a fraction of the requested emails, redacting them in the process, and have withheld others.
鈥淚mportantly, the withheld LNG Emails, especially the emails between the HECO Companies and NextEra executives, may reveal the extent to which the proposed merger is likely to confer upon NextEra affiliates/subsidiaries an unfair competitive advantage with respect to LNG procurement and other affiliate transactions,鈥 Meheula told the PUC in the motion to compel.
Some Additional Emails Are Coming
Ulupono attorneys Michael Marsh and Jason Kuzma said in their motion this week that the聽Hawaii Gas request for the emails is not beyond the scope of the merger decision-making process.聽They noted that HECO President Alan Oshima told the PUC in his testimony that NextEra’s extensive natural gas experience should help Hawaiian Electric execute plans to bring LNG to Hawaii.
NextEra and Hawaiian Electric said they would provide some additional emails, including correspondence regarding the delivery of LNG in bulk to a land-based terminal or floating storage and regasification unit, as well as discussions about the volume of LNG that may be required by Hawaiian Electric.
They also agreed to provide additional emails on a restricted basis that contain sensitive or proprietary commercial information, bid information and vendor information.
But the companies said they would not turn over any emails protected by attorney-client privilege or that are subject to a third-party nondisclosure聽agreement.
“A lot of information has been provided to all parties,” said Darren Pai, HECO spokesman. “The information Hawaii Gas is seeking has already been provided to the PUC and the Consumer Advocate. It was not provided to Hawaii Gas because it鈥檚 competitive business information.鈥
Hawaii Gas is not seeking any third-party emails about LNG, Nelson said.
Datta said Ulupono decided to join Hawaii Gas in its motion聽to compel the information because one of its corporate values is transparency.
Datta said NextEra and Hawaiian Electric don’t necessarily have to make the emails public, or even share them with Hawaii Gas, so long as they give them to the Hawaii Consumer Advocate and the PUC to use in the聽decision-making process.
The PUC will decide whether to grant the聽Hawaii Gas request for a hearing. The PUC could also rule on the motion to compel without a hearing.
On Sept. 4, the PUC plans to hold its first of seven聽“public listening sessions” on the proposed聽merger at Lihikai Elementary cafeteria on Maui. The series wraps up with a meeting Oct. 27 on Oahu, tentatively set聽to be held at McKinley High School.
The next step will be a series of evidentiary hearings that are scheduled to run through December.
The Ulupono Initiative was founded by Pierre and Pam Omidyar. Pierre Omidyar is the CEO and publisher of Civil Beat.
