The state’s consumer watchdog agency gave a thumbs-down Monday to the proposed $4.3 billion merger of Hawaii Electric Companies and Florida-based NextEra Energy Inc.
Expert witnesses for the Hawaii Department of Commerce and Consumer Affairs’ Division of Consumer Advocacy told members of the Public Utilities Commission that NextEra failed to show that the merger would benefit Hawaii’s economy, and the division recommended the PUC reject the merger of the electric utilities.
Division Director Jeffrey Ono, known as the state’s “Consumer Advocate,” said Monday in a written statement NextEra offered “flawed and broad speculative savings estimates, repeatedly touting benefits of millions of dollars in savings for customers,” he said.
However, the company’s filings did not clearly or consistently explain how those savings would be realized.
“These kinds of asserted savings based on NextEra’s faulty calculations effectively overstate the potential benefits of the proposed merger, thereby creating an illusory benefit,” Ono said. “Since our mission is to protect and advance the interests of Hawaii’s consumers, we have serious concerns about this proposed merger.”
Rob Gould, vice president and chief communications officer at NextEra, responded Tuesday to the Consumer Advocate’s testimony in a written statement.
“We respect the views of the Consumer Advocate and we will continue to listen, learn and constructively engage with people throughout the state,” he said. “As we are in the beginning stages of the PUC review process, we are confident we will find more common ground as we further demonstrate the strong public interest benefits of this merger. To that end, our filed merger plan anticipates almost $1 billion in customer savings and economic benefits for Hawaii in the first five years after closing and we have already made commitments to customer cost savings, employees and community causes that compare favorably to other utility mergers.
“But what this story is really about is Hawaii’s future — a more affordable, 100 percent renewable energy future — and we firmly believe that this merger represents the best way to get there.”
Should the PUC opt to approve the merger in spite of the advocate’s recommendation, Ono said several conditions should be applied to the companies to protect consumers and immediately return savings to consumers.
Gov. David Ige spoke out against the merger last month, citing testimony by the state Energy Office and the state Office of Planning.
“Although I welcome capital investment in Hawaii with respect to energy, any merger or investment must align with the state’s 100 percent renewable energy goal,” Ige said. “The state respectfully opposes the merger in its current form because it fails to align with the state’s renewable energy goals.”
In an order filed Aug. 4, the PUC announced a series of public “listening sessions” regarding the proposed merger. The dates for Hawaii Island include the following:
• 6 p.m., Tuesday, Sept. 29, Hilo High School Cafeteria.
• 6 p.m., Wednesday, Sept. 30, Kealakehe High School Cafeteria.
Listening sessions also are scheduled for Maui, Lanai, Molokai, Kauai and Oahu.
The Hawaii Electric Companies include Hawaii Electric Light Co. on the Big Island, Hawaiian Electric Co. on Oahu and Maui Electric Co. on Maui.
The Division of Consumer Advocacy is a state agency established to protect and represent consumer interests before the PUC, the Federal Communications Commission and other local and federal agencies that have regulatory jurisdiction over public utility services, including power generation, telecommunications services, synthetic natural gas, water and wastewater, transportation and other similar public utility services.
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.
