Dive Brief:
- Hawaii’s Consumer Advocate filed its official decision with the Public Utilities Commission (PUC) that the proposed $4.3 billion purchase by NextEra Energy of Hawaii Electric Industries (HEI), the parent of the state’s dominant electric utilities, is not in the best interests of the public.
- The Advocate’s decision was based on its conclusion that NextEra has failed to clearly explain what benefits its purchase of HEI would bring to consumers. Instead, NextEra has provided promised savings with “faulty calculations” that overstate benefits, it said.
- NextEra promised its ownership of HEI would save approximately $60 million over the first four years after the purchase but the Advocate said the poorly supported claim only creates “serious concerns.” NextEra and HEI will file rebuttals by August 31. The PUC will rule on the purchase by June.
Dive Insight:
The Consumer Advocate’s filing recommended several conditions to the NextEra deal that would protect consumers and immediately return merger savings to consumers. It follows Gov. David Ige’s recent announcement of opposition to the merger's currently structure.
The Consumer Advocate’s testimony is “another significant hit of bad news” for NextEra, an official intervenor in the merger docket who asked not to be named confided to Utility Dive. The Consumer Advocate has essentially challenged Florida-based NextEra to run HEI “as a public trust.” It raises the question of whether and when HEI and NextEra will “conclude the path to success is problematic enough to walk away?”
“It’s obvious that NextEra has tons more work to do,” Earthjustice Attorney Isaac Moriwake, who represents intervenor Sierra Club, recently told Utility Dive. But, he said, “this is a $4.3 billion transaction. The merger agreement contains heavy penalties for early withdrawal…[and] NextEra also needs to show it can perform on these kinds of deals, so I’d be surprised if they folded this early.”
