The ‘price of progress’
The ‘price of progress’
It came upon a moment of enlightenment: Ah, there’s a captive market in the middle of the Pacific where residents pay one of the highest electricity rates in the nation. And the entity that provides that power solicited us for our expertise. The investment isn’t huge. It’s a tiny market, but it’ll look good in our portfolio when we expand into other areas. So thought NextEra.
The story continues. It’s like we have this teeny, tiny establishment that serves a local community. This business would be able to service its customers better if it had more money to expand and improve its operations. The bank won’t lend it the capital because it’s worried the company won’t have the expertise and experience to manage more complexity. After all, the firm already is experiencing problems in its attempt to handle all of these issues, and it made mistakes along the way. It needs more solid solutions, not guesswork.
The customers will benefit from this upgrade because the newer technology will help prevent the annoyances of disrupted services. Additionally, it’ll lower operating expenses. With enhanced efficiency, profit margins should increase, making it worthwhile for an investor to inject money into this acquisition.
However, consumption revenues won’t significantly grow because of limited customer base, which is separated on islands, and the economy largely is dependent on tourism, a fickle industry. So, where is the money going to come from? Who’s going to have to pay for all of this?
Federal and state solar installation tax credits soon will end because they achieved the purpose of getting many a Hawaii consumer to join the bandwagon and become a participant in generating energy and contributing to the power supply, rather than having Hawaii Electric Industries being the sole provider. HEI evolved to become more of a distributor, not a generator of electricity, although it still does that.
Residential and small-business owners: You can kiss goodbye to the electricity credits you’ve been receiving for HEI. For now, at least, you’re going to get the wholesale rate vs. the previous retail rate of selling HEI your excess power. But who knows how long that policy change will continue? Your local power company needs customers who will pay the full rate, and there’s not enough of them lately.
The “savings” NextEra promises you is a temporary measure to solicit your approval and to get the deal done quickly. The HEI executives who “sold” NextEra on the merger probably convinced NextEra it was a “no brainer.”
NextEra definitely is surprised at the uproar that has risen. HEI is a bit embarrassed because it also did not expect such opposition from the public. Of course, it would be below its corporate dignity to apologize at this point.
Unfortunately, with all due respect to all intentions, this merger is needed. It kick-starts our energy capability and solves many shortcomings of our current grid. If we don’t say “yes,” we are going to be stuck with our antiquated system for who knows how much longer? Not that Hawaiian Electric is incompetent. It tried, but it needs outside help.
Ah, such is the price of progress and convenience.
Lloyd Fukuki
Waimea