HONOLULU, Hawaii – The Hawaii Public Utilities Commission has voted to not approve a merger between Florida-based NextEra and Hawaii’s largest utility, saying the companies didn’t show they would provide adequate benefits to ratepayers or help the state meet its aggressive renewable energy goals.
The regulatory body announced Friday that it voted 2-0 to reject the merger. One commissioner, recently appointed by Gov. David Ige, abstained.
The commission said NextEra and Hawaiian Electric failed to show the merger would be in the public’s interest. They called the companies’ proposed $60 million in benefits to ratepayers — who pay the highest electricity rates in the nation — inadequate and uncertain.
“The proposed $60 million is a conditional guarantee that is not irrevocable,” they wrote in the decision summary. “Accordingly, it does not represent a ‘guaranteed’ benefit to ratepayers.”
In a joint statement, NextEra and Hawaiian Electric said they received the order and are currently reviewing it.
Commissioners also questioned the companies’ commitment to clean energy and were worried about what would happen if the utility lost local control. Hawaii has a goal of using 100 per cent renewable energy by the year 2045.
NextEra has considerable resources and experience with renewable energy, but the company lacks experience in the unique renewable energy issues facing Hawaii, they said. For example, it doesn’t have experience integrating high levels of distributed energy — particularly from residential rooftop solar systems — into isolated island grids, commissioners said.
NextEra critics, including Ige, environmental groups and solar companies, praised the decision.
“This decision is a huge win for local consumers and affirms that from this day forward major utility decisions must make the interests of local residents a priority, that the centralized utility monopoly must change, and that replacing one monopoly with an even bigger one isn’t the answer people are looking for,” state Rep. Chris Lee, chairman of the House Energy and Environmental Protection Committee, said in a statement.
The companies had announced NextEra’s plans to acquire Hawaiian Electric in December 2014. The deal was valued at $2.6 billion, or $4.3 billion including the assumption of Hawaiian Electric’s debt.
NextEra is one of the nation’s largest electrical utilities and owns a major wind and solar energy company, while Hawaiian Electric supplies power to 95 per cent of Hawaii’s population.
Commissioners reviewed thousands of documents and held weeks of public hearings before making the decision.
Thomas Gorak, who was recently appointed to the commission and abstained from the vote, said he supports the decision.