The $60 million that NextEra Energy Inc. is promising to save customers if its purchase of Hawaiian Electric Industries is approved comes out to only $1 on a monthly bill, the head of the state’s largest utility company acknowledged Tuesday when testifying during trial-like hearings put on by state regulators.
Hawaiian Electric Co. President and CEO Alan Oshima spent another full day responding to questions at the second of 12 hearings that the Public Utilities Commission is holding to review the proposed $4.3 billion purchase of Hawaiian Electric Industries Inc.
“Turned on its head, would people object to a $60 million rate increase a year, and the answer is yes.”
Alan Oshima
Hawaiian Electric Co. president and CEO |
Legal counsel representing renewable energy organizations, local groups and environmental advocates took turns asking Oshima about customer savings and the electrical utility’s renewable energy plans if the sale were to be approved. NextEra Energy Hawaii President Eric Gleason will take Oshima’s spot today at the Neal S. Blaisdell Center to respond to questions by various parties under the observation of PUC Chairman Randy Iwase, PUC Commissioner Mike Champley, PUC Commissioner Lorraine Akiba and PUC Chief Counsel Tom Gorak.
Oshima defended the savings when William Brilhante, counsel for Hawaii County, pointed out that, on average, the $60 million amounted to 3 cents per day or roughly $1 per month for customers.
“Turned on its head, would people object to a $60 million rate increase a year, and the answer is yes,” Oshima said. “$60 million is significant no matter which way you look at it. … I think any amount of money that the customers get should be viewed as a plus. $60 million is a give-up in terms of what (HECO) would normally be able to receive under the regulatory environment we have now.”
NextEra’s added commitments in August included customer savings of nearly $465 million, but the questioning parties focused Tuesday on NextEra’s original promise of $60 million. The $465 million is based on projections and is not guaranteed, as is the $60 million customers would save over four years. NextEra said it would not file a general rate case for four years to provide these savings to customers.
“Do the applicants consider that a reduction of less than a dollar a month is a significant savings for the Hawaii ratepayers?” Brilhante asked.
“Yes, in the view of all of the investments and other things that have to go in to make our renewable future realizable,” Oshima said.
Iwase ended the hearing by asking whether HEI’s utilities could reach the state’s 100 percent renewable goal by 2045 without the help of NextEra.
“If this merger was not approved, would HECO be able to meet its obligation under the clean energy requirements?” Iwase asked.
Oshima said that he could not promise that the utility could meet the timeline of the state’s goal with or without the help of NextEra, but that the odds would be much higher with the help of the Florida-based company.
At 3 p.m. the PUC closed the session, asking the media to leave. All observers who did not sign a protective agreement were asked to leave the room.
“We are very reluctant to close the hearing. However, we recognize there may be times where such closure may be necessary,” Iwase said. “We find that this is one of them.”
Despite Iwase saying he was opposed to closing the session to the public, he gave the Consumer Advocate and Hawaii Gas a combined 45 minutes to question Oshima behind closed doors.
Earlier in the day Oshima confirmed that HECO is still looking to supply the state with liquefied natural gas as a source for electrical generation. Gov. David Ige said in August he was opposed to HECO’s use of LNG.
Oshima confirmed that 70 to 80 percent of power generation would be supplied by LNG over a period of 20 to 25 years. Oshima said the use would decline as the utility would depend on more renewables for power generation.
Oshima said HECO has selected a bidder for the LNG supply for the state but does not have a contract drawn out yet.
“Our expectation is to provide something to the commission for the first quarter of 2016,” Oshima said.
