The Honolulu Board of Water Supply said Tuesday it has changed its position on NextEra Energy Inc.’s proposed purchase of Hawaiian Electric Industries and now supports the deal.
The Oahu water utility is among the 26 groups involved in the Public Utilities Commission’s decision on whether to approve the $4.3 billion sale, a necessary step for the sale to close.
The Board of Water Supply changed its position after signing an agreement with NextEra and HEI. The companies agreed that Hawaiian Electric Co. would work with the Board of Water Supply on various renewable-energy programs that would help the water utility cut costs and improve emergency response planning. They also agreed to schedule regular meetings between the two utilities.
The agreement addressed the conditions the Board of Water Supply listed in July, when it opposed NextEra’s bid.
“The memorandum of understanding satisfied our concerns about the situation of a potential new owner coming in,” said Ernest Lau, manager and chief engineer for the Board of Water Supply. “It is a commitment to work together. We look forward to building on this relationship. If NextEra does come into the the picture, it makes sure NextEra is at the table with us.”
The Board of Water Supply said it requested to withdraw from its position as an intervening party in the PUC review. The Board of Water Supply is the second intervener to change its stance to support the proposed purchase. In October the International Brotherhood of Electrical Workers Local 1260 changed its stance to support the transaction.
The memorandum of understanding with the Board of Water Supply included commitments to keep a line of communication open between the two utilities with a schedule of periodic meetings between operations, senior executives and CEOs or managers.
The Board of Water Supply and HECO would “explore the feasibility” of building a pump storage hydro-facility using existing Board of Water Supply pipelines at the Nuuanu Reservoir and other facilities. Using renewable energy, such as solar, the hydro-system pumps water uphill when power is available. When power is not available, such as at night with solar power, the water flows downhill through a turbine that generates electricity.
Other renewable-energy projects the utilities agreed to work together on included a potential photovoltaic facility at Kalaeloa, hardening of various transmission and distribution lines that serve critical Board of Water Supply facilities, and smart meter technology. The agreement said HECO would seek input from the Board of Water Supply annually for its emergency response plan.
“We are very pleased to have signed this memorandum of understanding with HECO and NextEra Energy and look forward to collaborating on projects that improve Oahu’s water system infrastructure and help the Board of Water Supply reduce its energy costs,” said Lau.
The MOU will be in effect for a period of three years from Oct. 30 unless terminated earlier by mutual agreement between the utilities. The two parties can later decide to extended the MOU for one-year terms.
