The Public Utilities Commission and the state Consumer Advocate pressed Hawaiian Electric Co.’s chief executive Monday on the potential costs ratepayers could shoulder if Florida-based NextEra Energy Inc. buys the utility.
On the first of 12 days of hearings for NextEra’s proposed $4.3 billion purchase of Hawaii’s largest utility, state regulators and approved groups began the trial-like investigation into whether the sale is in the public interest.
President and CEO Alan Oshima declined to give specifics about the potential costs or benefits for ratepayers but said customers would come out ahead overall.
“We perceive benefits to ratepayers as a result of the transaction,” Oshima said during the hearing at the Neal S. Blaisdell Center. “There are some that view risks, but we believe they can be addressed.”
Critics of the proposed sale say it will cause customers to shoulder more costs, citing the $30 billion price that Eric Gleason, president of NextEra Energy Hawaii LLC, said it would cost to get the state off its dependence on oil. Gleason estimated the cost to be
$30 billion over the next three decades.
State Rep. Beth Fukumoto (R, Mililani-Mililani Mauka), minority leader, said she did not support NextEra’s purchase of Hawaiian Electric Industries and was worried about the price tag NextEra recently placed on the cost to accomplish the state’s
100 percent renewable energy goals.
“They’re putting the
$30 billion in ‘Cadillac plan’ infrastructure upgrades on the credit card of the people of Hawaii,” she said at a news conference. “We’re the ones who will have to pay it back.”
State Rep. Chris Lee (D, Kailua-Waimanalo) said the $30 billion is a concern because the utilities can pass it on to consumers and take up to $7,000 in profits from each family.
“If this is the case, we need to know right now what their plans are because the more they spend, the more we, as local consumers, end up having to pay,” Lee said.
“We firmly reject Rep. Lee’s characterization of the capital needs and customer rate impacts of Hawaii’s clean energy transformation,” said Rob Gould, spokesman for NextEra. “His math on customer impacts is simply wrong. Moreover, it should come as no surprise to anyone, including Rep. Lee, that to achieve a 100 percent renewable energy future by 2045 will require massive investment regardless of whether or not our merger is approved. It is abundantly clear to informed observers that having a financially strong utility is essential to attracting the necessary capital while at the same time lowering costs for customers.”
Before the hearing began, about 30 members of the International Brotherhood of Electrical Workers Local 1260 and Hawaii Regional Council of Carpenters lined up along Ward Avenue holding signs to show support for NextEra’s purchase of HEI.
Russell Yamanoha, director of media communications for IBEW 1260, said the group came to support NextEra because of the commitments the company has made to the union.
“Now that they are stepping up to the plate for members, we are stepping up to the plate for them,” he said.
Local 1260, which originally opposed the sale, said it changed its stance after NextEra committed in writing to recognize the union as the exclusive bargaining agent for its members, to train current and future union members for new jobs that evolve with new technologies, and to not lay off employees for two years following the sale’s closing.
PUC Chief Counsel Tom Gorak restructured his question multiple times during the hearing before getting an answer from HECO’s top executive.
“Did anyone from HEI or the HECO Cos. undertake any analysis to the risk to ratepayers under this transaction?” Gorak asked.
Oshima said the utility does not “perceive a risk to ratepayers.”
State Consumer Advocate Jeff Ono and William Brilhante, counsel for the County of Hawaii, also questioned Oshima on the potential risks to ratepayers.
When testifying, Oshima said $30 billion to achieve HECO’s clean energy transformation could be the right number, but the amount would be unclear until the future. “I’m not sure what the actual number will be until we know the road map clearly,” he said.
Oshima spent more than five hours answering questions as the Department of Business, Economic Development &Tourism, County of Hawaii, County of Maui and Hawaii Gas asked for more details from the CEO.
Oshima is the first of 12 witnesses that will be testifying on behalf of NextEra.