A panel of experts in power production and distribution weighed in on the pending sale of Hawaii Electric Industries to Florida-based NextEra — a matter before the Public Utilities Commission that one expert described as the state’s single greatest opportunity for change.
A panel of experts in power production and distribution weighed in on the pending sale of Hawaii Electric Industries to Florida-based NextEra — a matter before the Public Utilities Commission that one expert described as the state’s single greatest opportunity for change.
HEI shareholders approved the $4.3 billion sale to Florida-based NextEra Energy last week. The company says it will lower electricity bills, saving Hawaii ratepayers $60 million over four years. The PUC has yet to approve the merger.
NextEra Energy Resources is the largest producer of energy from wind and sun in the country, and NextEra has had years of success in providing low-cost service, said Jay Ignacio, president of the Big Island’s Hawaii Electric Light Co.
“This entity can help us put in resources and drive down the price on Hawaii Island,” Ignacio said.
NextEra’s massive staffing allows the company to take a group of people and focus on an issue — not an option for HELCO, a small utility company that can be stretched thin, he said.
Regardless of whether the merger goes ahead, HELCO plans to offer 65 percent renewable energy by 2030, doubling distributed solar and lowering bills by 20 percent, Ignacio said. Big Island electricity is currently 47 percent renewable, primarily from geothermal and wind. The company also plans to step up biomass energy and geothermal in the future, he said.
Henry Curtis, an energy blogger for Iliani Media and director of the Oahu-based consumer advocacy group Life of the Land, said one would wonder why NextEra would be a good fit for energy-progressive Hawaii, given that its subsidiary, Florida Power &Light Co. — the third largest utility in the nation — has only 1 percent renewable energy.
“I have heard they have more money and are bigger,” Curtis said. “Honolulu County has more money than Hawaii County. Maybe we should merge with them.”
Curtis acknowledged that Florida Power &Light’s advantages include a smart grid and a knack for gaining federal funding. But he noted that mergers are enormously complex and half of them fail. And while NextEra is trying to buy HEI, it is also attempting to purchase a Texas company for $18 billion, he said.
With 29 intervenors on the merger docket before the PUC, “we have a free-for-all coming,” he said.
“Right now 29 intervenors are asking a zillion questions of NextEra,” Curtis said.
Curtis predicted the docket will be 35,000 to 45,000 pages long, and the PUC must then figure out how to hold public hearings on it. Appeals are also possible by intervenors, he said.
It is not clear if NextEra will be a good or bad thing, Curtis said.
“Hawaiian Electric has run into a roadblock trying to figure out how to add more renewable energy to the grid,” he said. “The situation is unprecedented. Maybe there are companies on the mainland that are willing to put in the effort. We have to consider all options.”
Marco Mangelsdorf, director of the new nonprofit Hawaii Island Energy Cooperative, said an energy co-op would bring local control, attention to local priorities and an ability to more aggressively pursue development of island-based fuels. HIEC is exploring the idea of buying HELCO and is one of the intervenors in the merger docket before the PUC.
The problem is, HELCO is not for sale and it’s been made very clear the sale of HEI to NextEra is a package deal, Mangelsdorf said.
“That is base reality,” he said.
HIEC recently retained a consultant who was involved in Kauai Island Utility Cooperative’s purchase of Kauai Electric in 2002. That $215 million purchase was entirely financed by the U.S. Dept. of Agriculture’s Rural Utility Service. KIUC is the state’s only electric cooperative. HIEC exploration of the option of an island electric co-op has good backing from successes on Kauai at lowering rates, Mangelsdorf said.
“I see this as an opportunity to educate people and stimulate discussion,” he said.
The forum was sponsored by Community Enterprises.