NextEra makes sweeping series of new promises in Hawaiian Electric merger

NextEra Energy (NYSE: NEE) and also Hawaiian Electric, Hawaii Electric Light, and Maui Electric (all subsidiaries of Hawaiian Electric Industries (NYSE: HE)) on Aug. 31 provided additional extensive details on NextEra Energy’s plans for its merger with HEI.

That includes a comprehensive package of 85 commitments, of which more than 50 are new, that would accelerate the achievement of Hawaii’s goal of an affordable, 100% renewable energy future by 2045.

The parties said that these commitments, which were made as part of filings with the Hawaii Public Utilities Commission (PUC), strengthen and underscore the broad range of benefits that the merger will deliver, including customer savings of nearly $465 million and economic benefits toHawaii of approximately $500 million in the first five years following the close of the merger – a total of nearly $1 billion in customer savings and economic benefits.

Customers also will benefit from NextEra Energy’s ability to accelerate the development of more modern grids throughout the islands through the deployment of smart meters, including time-of-use rate options,  as well as improvements to overall service, reliability and performance, the companies said.

“Our expanded set of commitments is a clear reflection of the thoughtful input we have received from many key stakeholders, including the Governor and the Consumer Advocate,” said Eric Gleason, president of NextEra Energy Hawaii LLC. “We fully embrace Hawaii’s goal of 100 percent renewable energy by 2045 and believe this partnership represents the best path forward to achieving this goal – the most ambitious of its kind in the nation. This is a goal that will be accomplished by many people working together collaboratively, and we hope to play a major role in that effort.”

Gleason added: “As the world’s leading generator of renewable energy from the wind and sun, we are well positioned, alongside Hawaiian Electric, to partner with the state to achieve its 100 percent renewable portfolio standard by 2045, as well as integrate more rooftop solar, modernize the electric grids and lower customer bills.”

“Achieving Hawaii’s 100 percent renewable energy goal is of critical importance to all of us and we firmly believe that the combination of NextEra Energy and Hawaiian Electric will best position our state to realize this future,” said Alan Oshima, Hawaiian Electric’s president and chief executive officer. “As one of the world’s most innovative companies, NextEra Energy’s expertise and resources will significantly accelerate our efforts to strengthen Hawaii’s energy infrastructure, lower customer bills and continue our active support of our local communities.”

NextEra Energy is a world-class energy company, and the expertise, processes and best practices it will bring to Hawaiian Electric will enhance service, reliability and performance. Importantly, NextEra Energy said it brings to the table a powerful combination of renewable energy experience, technological know-how and financial strength necessary for developing modern smart grids and achieving Hawaii’s 100 percent renewable portfolio standard by 2045.

The PUC will be holding a series of public listening sessions in the September-December period as it reviews the merger proposal, filed with the commission in January.

Florida Power & Light has led the way in many of these areas

NextEra Energy’s utility, Florida Power & Light (FPL), is leading the industry in grid modernization. Having deployed more than 4.8 million smart meters and more than 12,000 intelligent devices, FPL’s smart grid is recognized as one of the most advanced grids in the nation and one of the most comprehensive, full-scale deployments of its kind.

NextEra Energy said it is committed to supporting local control and governance and has reaffirmed its proposal to preserve local headquarters, local management and the Hawaiian Electric name.

NextEra Energy also has reaffirmed its commitment that, for at least two years after closing, there will be no involuntary layoffs as a result of the transaction and compensation and benefits offered will be substantially comparable to those provided prior to the merger. In addition, NextEra Energy has committed to honor all existing union labor agreements.

Since 2001, FPL’s investments in high-efficiency, natural gas energy centers have enabled the company to cut its use of foreign oil by more than 99% – from more than 40 million barrels to less than 1 million barrels annually today. Since 2001, the effectiveness of these investments has saved FPL customers more than $7.5 billion on fuel costs and prevented more than 85 million tons of carbon emissions.

NextEra Energy is a leading clean energy company with consolidated revenues of approximately $17.0 billion, approximately 44,900 megawatts of generating capacity, which includes megawatts associated with non-controlling interests related to NextEra Energy Partners LP (NYSE: NEP), and approximately 13,800 employees in 27 states and Canada as of year-end 2014. Its subsidiaries include NextEra Energy Resources LLC, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun..

Hawaiian Electric comanies serve the islands of O’ahu, Maui, Lāna’i, Moloka’i and Hawaii, home to 95% of the population of Hawaii.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.