Dive Brief:
- Hearings this week into the proposed acquisition of Hawaiian Electric by NextEra Energy have treated observers to a behind the scenes look at how the deal came about, including some frustration from a senior HEl official over state regulators' control over the utility's long-term strategy.
- A series of email exchanges between HEI officials was the the focus of hearings this week as the Hawaii Public Utilities Commission (PUC) heard more testimony relating to NextEra's offer to acquire the utility.
- The proposed $4.3 billion acquisition was announced in December 2014. NextEra believes it can help HEI meet aggressive clean energy goals set by the state, including a 100% renewables mandate by 2045.
Dive Insight:
Hawaiian Electric Industries CFO Jim Ajello was an early champion of NextEra's bid, saying in emails with HEI President and CEO Connie Lau that HEI had an "extremely weak team," and the acquisition was a blessing.
While CEO Lau apparently believed the utility could execute its strategy without putting itself up for sale, the deal was ultimately announced in December 2014.
Leadership of HEI will receive about $20 million in change-of-control payments, and regulators also questioned whether that money could have been better spent on sweetening the deal for ratepayers. Lau is poised to receive $11.6 million should the deal go through, but the arrangement predates the proposed merger by many years.
Last year details emerged as to Lau's compensation. In a filing with the Hawaii Public Utilities Commission, she said "I do not believe that I am overcompensated as the president and CEO of HEI," but added "I am aware that some Hawaii consumers have complained about the level of my compensation ... None of my compensation is in Hawaiian Electric's or Maui Electric's base rates, and only a minimal amount of base salary (about $41,500 or less than 50 cents per customer per year) remains charged to HELCO (Hawaii Electric Light Co.)."
