The latest uproar over the proposed acquisition of Hawaii’s largest electrical utility stemmed from the way the $4.3 billion deal was described as a “snack.”
The ostensible buyers of Hawaiian Electric Industries, NextEra Energy, hotly denied that such a term came from their side of the fence. But they haven’t denied the substance of the assertion, that the Florida-based company plans a series of investments across the country, in which the Hawaii deal figures in only a small-potatoes kind of way.
In fact, what’s most concerning about the recent hearings before the Public Utilities Commission was, instead, what NextEra still hasn’t said. Before the PUC signs off on the deal, commissioners need an answer to the key question: Exactly how does Hawaii fit into NextEra’s wider plans?
Although the commission has decided to extend the merger hearings after New Year’s, the originally scheduled 12-day series ended last week — with a bang. Randy Iwase, chairman of the commission that has approval power over the deal, announced that dozens of documents that had been declared confidential would be released.
Among the things to come to light was an email sent more than a year ago by Constance Lau, the CEO of HEI, to the company’s general counsel Chet Richards.
In it, Lau quoted Alan Oshima, president and CEO of Hawaiian Electric Co., saying that NextEra considered the deal a “snack.” She added that their understanding, following a dinner with Morey Dewhurst, vice chairman and chief financial officer of NextEra, was that the company was “on the way to their desired buffet luncheon to acquire other regulated utilities.”
That was the most notorious morsel initially extracted from the records, but there’s likely more the PUC needs to know about NextEra’s plans. About 3,000 pages of documents, roughly 5 percent of the 60,000-page total NextEra had filed for the hearings, had been marked confidential.
Requests to release confidential documents had come from the state Office of Planning, Sierra Club, the Division of Consumer Advocacy and Ulupono Initiative, intervenors in the proceedings reviewing the sale proposal.
The PUC decision was a welcome move for transparency. Some of what is being discussed could be considered proprietary and appropriate to keep out of view.
But Gov. David Ige, the most prominent outspoken critic of the NextEra/HEI deal, also questioned the proportion of secret documents and closed-door sessions, as well as a lack of responsiveness to questions from intervenors.
“I was disappointed that the applicants were not more forthcoming,” the governor said during a recent meeting with the Honolulu Star-Advertiser editorial board. “There were many opportunities for the proposed merger to really respond to specific concerns raised, and they did not take that opportunity to do it.”
That is a central point. Where a monopoly is concerned, the public’s right to know about future prospects as ratepayers to a regulated utility should be elevated.
Ige has opposed the merger outright, as well as initiatives being contemplated, including an expanded place for liquefied natural gas in Hawaii’s energy portfolio.
There’s also reason to doubt NextEra’s willingness to do more than the minimum compliance with the state’s green-energy policy. That pledge, enshrined in law during the last legislative session, is for Hawaii to attain a portfolio of 100 percent renewable energy by 2045.
“A utility that is 100 percent renewable is unlike any utility in the country will ever be,” Ige said. “You want to have management and leadership that truly embraces that opportunity, and that challenge.”
So far, that is not in evidence with NextEra, which has been slow to make any firm promises, either for the green energy goals or for the affordability concerns of ratepayers. Its planning for Hawaii seems focused on the next four years, but not beyond.
There have been pacts struck with the labor unions, including barring involuntary layoffs for two years after the sale closes, but nothing about maintaining the current level of retiree benefits, just to point out yet another question mark hanging over the deal.
The utility does bring considerable potential to create the change Hawaii needs in modernizing its electrical system. It seems to have the capital to make real investments, certainly more than HEI has to offer on its own.
The question is: Will it? The final decision must be based on the fullest disclosure of detail the agency can exact from the applicant.
When the hearings resume next year, the PUC must press NextEra for more information on its expansion plans, and whether Hawaii would be seen as more than a profit center to finance its corporate goals.
