More than 40 elected state and county officials called Thursday for an exploration of alternatives to private ownership of the state’s largest electric utility, as regulators consider a bid from Florida-based NextEra Energy Inc. to buy Hawaiian Electric Industries Inc.
About 20 lawmakers were present at a news conference at the state Capitol where they said it is in the best interest of the public to consider other electrical utility ownership models. Another 20 state and county leaders not present pledged support for an examination of other utility ownership models.
There are approximately 3,000 customers of Florida Power & Light, a NextEra subsidiary, with rooftop solar among the utility’s 4.8 million total customers. HEI’s utility subsidiaries have approved almost 70,000 rooftop solar systems among a total of 450,000 customers.
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NextEra, a company owned by shareholders, said in December it wants to buy HEI — parent company of Hawaiian Electric Co. on Oahu, Maui Electric Co. and Hawaiian Electric Light Co. on Hawaii island — for $4.3 billion. The sale needs the approval of the state Public Utilities Commission, which will make a decision by June.
“We understand that the public has some significant concerns about the NextEra merger,” said state Rep. Chris Lee (D, Kailua-Waimanalo). “We have a decision before us in our state that will last for decades to come. We are here to say that for our purposes, for the public, for the constituents of Hawaii, we need to put the best interest of the public first. That means putting all options on the table.”
Lee said examining different electrical utility models as the sale is being reviewed by state regulators is important, as it is the first time the discussion has happened in 100 years.
The lawmakers said that municipal ownership or cooperatives are potential models for electrical utilities that need to be evaluated.
While the lawmakers are not directly involved in the PUC’s review of the sale, Lee said the Legislature ultimately controls the utility franchise rights.
The leaders’ joint call to consider other utility models came three days after NextEra filed an updated set of commitments with the PUC — a mandatory part of the regulatory review of the sale.
Henry Curtis, executive director of Life of the Land, one of the groups involved in the review of the purchase, said NextEra proposing to buy HEI has pushed lawmakers in the right direction.
“(NextEra) has woken up the local community and really put forward the idea that we need to take control of our own energy future, and now we need to look at different paths forward which work,” Curtis said.
In the filing Monday, NextEra added more than 50 new commitments to its proposal, including supporting the state’s goal to reach 100 percent of its utility electrical generation from renewable resources by 2045, committing to more than $465 million in customer savings over a five-year period as well as accelerating the development of smart grids throughout the isles.
Lee said that after reading the new commitments from NextEra, he was concerned with the amount of customer savings promised, how the savings will be generated and what happens further down the road.
“The PUC is deciding whether NextEra is going to take over for HECO. What needs to be asked is, What do the people of Hawaii actually want?” Lee said. “We could say we prefer utilities that put the public first, instead of putting shareholders first.”
State Rep. Kaniela Ing (D, Kihei-Wailea-Makena) said he is worried about NextEra’s history of residential rooftop solar in Florida.
“People are very frustrated about how difficult it is to install photovoltaic on their roofs under HECO,” Ing said. “If you look at NextEra’s track record regarding solar proliferation, it is not a good one.”
There are approximately 3,000 customers of Florida Power & Light, a NextEra subsidiary, with rooftop solar among the utility’s 4.8 million total customers. HEI’s utility subsidiaries have approved almost 70,000 rooftop solar systems among a total of 450,000 customers.
NextEra said that the company’s low electricity rates is one reason there are fewer rooftop solar systems in Florida than Hawaii.
Rob Gould, spokesman for NextEra, said Florida Power & Light offers lower rates than its cooperative and municipality counterparts.
“While I can’t speak to what a co-op would mean for a specific community in Hawaii, we know from our experience that out of the 50 nonprofit, munis and co-ops in Florida, all charge their customers higher rates, and none report the high level of reliability or customer service that we provide our customers at our utility,” Gould said.
Groups on Maui and Hawaii island have been examining alternative utility models, sparked by NextEra’s interest in buying HEI.
The Maui Mayor’s Office of Economic Development said Tuesday it has selected Guernsey, an Oklahoma-based consulting firm, to study utility options for the community. A group on Hawaii island, Hawaii Island Energy Cooperative, is considering turning HELCO into a cooperative.