Public Utilities Commission Chairman Randy Iwase said Wednesday his agency will likely issue a decision this month on whether the state’s largest electric utility will have a new owner.
Florida-based NextEra Energy Inc. announced in December 2014 its plan to purchase Hawaiian Electric Industries — parent company of Hawaiian Electric Co. on Oahu, Maui Electric Co. on Maui and Hawaii Electric Light Co. on the Big Island — for $4.3 billion and set Friday as a deadline for closing. After Friday, either party can walk away from the deal, although if NextEra walks, it would have to pay HEI roughly $95 million.
Iwase said the PUC, which can grant final regulatory approval for the deal, isn’t pushing to meet the deadline set by the companies.
“If we meet it, we meet it. If we don’t, we don’t,” Iwase said in a telephone interview. “What happens with the applicants, that is up to them. That is not part of our psyche at all.”
When asked when the agency will likely rule on the case, Iwase said, “I’m hopeful we will get something out in June.” The PUC can approve the sale as is, approve it with conditions or reject it.
Friday marks the end of the 18-month contract HEI and NextEra entered into on Dec. 3, 2014. On Friday, HEI can start entertaining offers from other interested suitors. Several other buyers have already expressed interest in purchasing HEI if the NextEra deal falls through.
Another important date is June 30, when the term of PUC Commissioner Mike Champley, one of the three commissioners involved in the NextEra decision, expires. Champley, Iwase and Commissioner Lorraine Akiba will decide the NextEra case.
The three commissioners are sifting through comments from public listening sessions on Maui, Molokai, Lanai, the Big Island and Oahu; testimony from 22 days of trial-like hearings; and 1,593 documents from roughly 30 parties involved in the review.
Ever since the companies announced the buyout, it has attracted supporters and skeptics. Many local unions and chambers of commerce have voiced support for NextEra’s purchase of HEI. The local energy community, including environmental activists such as the Sierra Club, clean-energy advocates and representatives from solar-power companies have either voiced concern or outright opposition to the sale.
Gov. David Ige has repeatedly said he is opposed to NextEra’s current application to buy HEI, saying he doesn’t believe the company is the right partner to help the state achieve its goal of generating 100 percent of its electricity from renewable sources by 2045.
If Friday passes and the PUC is still silent, NextEra and HEI could decide to extend the merger agreement until the PUC issues a decision.
HEI declined to comment Wednesday, and NextEra representatives did not respond to phone calls and emails.
If approved, the electrical utilities on Oahu, Maui and the Big Island will have a new owner, and HEI’s bank subsidiary, American Savings Bank, will be spun off as its own company. NextEra has promised it will provide $60 million in customer savings over four years after the sale closes, accelerate the state’s goal to get to 100 percent renewable energy by 2045 and deploy smart-meter technology to customers faster than the current electric utility could. NextEra also promised there would be no layoffs for at least two years after the sale closes.
If denied, NextEra could file a motion with the PUC for reconsideration, file a motion to appeal the PUC decision with the Intermediate Court of Appeals or walk away.
As Friday marks the end of any legal obligations between the two companies, other groups interested in buying HEI have been making their intentions known.
Rep. Chris Lee (D, Kailua-Waimanalo), chairman of the Energy and Environmental Protection Committee and an opponent of the NextEra deal, said he has heard from multiple potential buyers.
“I have been approached by several different groups both local as well as from outside Hawaii looking to do a completely different business model that is still an investor-owned utility, but one which puts the interest of people first and puts consumer saving and our push toward renewable energy as its top priority.”
Lee declined to name the interested companies because they are waiting for the PUC decision before announcing their plans.
Isaac Moriwake, the Earthjustice attorney representing the Sierra Club of Hawaii in the PUC’s review of NextEra, said he also had heard from companies looking to throw hats in the ring.
“During this case, I’ve been contacted by a number of companies keeping track of the situation and interested in offering alternatives if the NextEra deals falls through, and I know other parties have been getting such calls as well,” Moriwake said.
“Just as you don’t need to marry after a first date, a breakup with NextEra is not the end of the world,” Moriwake continued. “A PUC rejection would actually open the door to other alternatives, including a whole world of investors who can appreciate what Hawaii has to offer in creating a clean-energy grid of the future.”
