The Hawaii Public Utilities Commission vetoed the takeover of Hawaiian Electric Industries Inc. by Florida-based NextEra Energy Inc. on July 15, 2016. The commission stated that is believed that the proposed transaction is not in the interest of state. Among other reasons, PUC raised concerns about the risks and benefits to utility customers, and Next Era's clean-energy commitments to help the state achieve its aggressive goal to become more energy self-sufficient.
NextEra Energy, a Fortune 200, clean energy company, had campaigned since December 2014 to seal the takeover deal with Hawaiian Electric Industries, which provides nearly 95% of the energy needs of the Hawaiian Islands through Hawaiian Electric, Maui Electric, and Hawai'i Electric Light.
Hawaii is one of the states that are leading the national trend in investments in clean energy as it aims to be 100% renewable by 2045. The NextEra and Hawaiian Electric merger had the potential of being one of the biggest deals in the island's history, according to analysis from Stock-Callers.com. Hawaii residents pay one of the highest amounts of per kilowatt-hour for electricity in U.S. as the state is heavily dependent on imported oil to meet its energy requirements.
Under the terms of the deal NextEra was going to take over the operations and running of Hawaiian Electric, and Hawaiian Electric's bank subsidiary - American Savings Bank would be spun off and run as a standalone company.
According to analysis by Stock-Callers.com, NextEra felt that it put forth its best offer in terms of lower energy rates that could lower the islands' energy bills. The company had also promised to not lay off any employees for a period of two years after the closure of the sale.
Reasons for Opposition
Opponents of the deal stated that a big Florida-based company like NextEra would not be a good fit for Hawaii as it would form a miniscule part of the company's overall operations. Governor David Ige was quoted in an article on News of Hawaii, stating that the company's aim to convert some HEI power plants to liquefied natural gas would only delay the state's move to renewables. According to Bloomberg, the regulatory panel raised concerns about the benefits to ratepayers, the loss of local control of the utility and the companies' commitments to deploying rooftop solar systems.
From the early stages of the deal, the governor, state, and county officials had major reservations and favored exploring alternate local opportunities. The deal was also opposed by almost all environmental, consumers, and local business parties. Lawmakers and consumers were in favor of a modern-day energy infrastructure with the goal of involving local partners that support the islands aim of clean energy production and economically strengthening its consumers.