NextEra Energy and Hawaiian Electric propose merger

NextEra Energy and Hawaiian Electric have filed a joint application with the Hawaii Public Utilities Commision for approval of their proposed merger.

The two companies made a number of claims and promises around the merger, including the maintenance of existing labour and union agreements with its workers, no involuntary job reductions for two years, and a commitment to not file a request with the PUC for a general base rate increase for at least four years.

If the proposed merger is granted approval, the two companies have said that Hawaiian Electric will continue to operate under its original name, despite falling under the umbrella of NextEra Energy. In addition, Hawaiian Electric is to remain locally-committed, with its headquarters to remain in Honolulu and a local, independent advisory board made up of six to twelve members with substantial ties to the Hawaiian community. However, neither company have said what powers the advisory board will have, or of what constitutes ‘substantial ties’ to the local community.

Among other claims, Hawaii Electric claims to have integrated rooftop solar with 12 percent of residential customers, including 11 000 installations in 2014, and achieved 21 percent renewable energy. No mention was made of business customers, or whether the 2014 figure was an increase or decrease on previous years. Any merger between the two entities will also bring a claimed $60m in savings for customers as long as certain conditions are met.

Eric Gleason, president of NextEra Energy Hawaii, said, "The filing of this application begins an important review process that we believe will ultimately result in a more affordable clean energy future for Hawaii," said "We share Hawaiian Electric’s vision of increasing renewable energy, modernizing its grid, reducing Hawaii’s dependence on imported oil, integrating more rooftop solar energy and, importantly, lowering customer bills, and we believe our combination will help to accelerate Hawaii’ clean energy transformation. We welcome the opportunity to engage directly with the PUC and the communities that Hawaiian Electric serves. As we move forward, our focus will be on applying our expertise and resources, alongside Hawaiian Electric’s, to bring significant benefits, savings and value to Hawaiian Electric customers and to create the clean energy future we all want for Hawaii."

Hawaii has long been at the forefront of solar power in the U.S.. According to the Interstate Renewable Energy Council’s U.S. Solar Market Trends 2013, “Hawaii had the highest per capita installed capacity of PV systems. The same report pinpoints the state as one of the top five for distributed capacity in 2013 alongside California, Massachusetts, New Jersey, and Arizona. Ranked by grid-connected PV capacity installed in 2013, the state placed sixth.

In conclusion, author Larry Sherwood, said of Hawaii, “[It] has the highest electricity rates in the country. The 2013 average price of nearly $0.33/kWh is more than twice the rate in any other state, and almost three-and-a-half times the national average electricity price. Hawaii also has a personal state solar income tax credit. Some 92 percent of Hawaii installations were distributed in 2013. The financial benefits of PV are more favorable in Hawaii than in any other state. On a per capita basis, Hawaii had, by far, the most installed capacity of distributed PV.”