Tampa Bay Times: Next Era Buy May be Bad for Distributed Generation Business

The merger raises lots of questions about what this means for the Juno Beach-based company. Hawaiian law requires utilities to meet get 70 percent of their supply from clean energy by 2030 and, in Florida, NextEra's largest subsidiary, FPL, has aggressively fought off attempts to establish a similar clean energy goal here.

NextEra has also effectively blocked the emergence of competitive distributive energy generation in Florida with a dominant, take-no-prisoners approach to regulation and politics, while Hawaii has merged as one of the nation's top one of the markets where competitive distributive generation is becoming a reality.

Forbes contributor William Pentland points out that "Hawaii has become a flash point in the battle over the future architecture of the electric grid. The relentless rise of power prices in the state has accelerated customers’ adoption of distributed generation."

That's in stark contrast to Florida where FPL and its parent, NextEra, has kept wholesale competitors out by controlling access to the transmission grid except for incumbent utilities.

"NextEra’s expansion into Hawaii is likely a mixed blessing for the distributed generation business,'' Pentland wrote.

Bloomberg: NextEra Buys Hawaii’s Biggest Utility in Green Energy Test Case

“It makes a lot of sense for NextEra with all the renewables that Hawaiian Electric was going to do,” Tim Winter, an analyst at Gabelli & Co. in Rye, New York, said in a telephone interview. NextEra is “the premier renewable energy builder and developer and really good at transmission.”

NextEra Chairman and Chief Executive Officer James Robo said he sees Hawaiian Electric, which serves 95 percent of Hawaii’s population, as a testing ground for the expected transition from fossil-fuels to power generated from the sun and wind.

“You can think about Hawaii as a postcard from the future of what’s going to happen in the electric industry in the United States,” Robo said by phone yesterday. “As renewable generation gets cheaper, as electric storage becomes more efficient and possible, all electric utilities are going to have to face this.”

Solar electricity, helped by federal and state tax incentives, is already as cheap as utility-supplied power in 10 states including Hawaii, Deutsche Bank AG said in a report published in October.

NextEra can use its expertise in integrating more renewables and transitioning to cleaner fuels while lowering customer bills in Hawaii, Robo said. Hawaii relies on expensive imported oil for its generators. NextEra has experience in weaning its Florida utility, FPL, off the fuel, reducing its reliance by more than 99 percent since 2001, he said yesterday during a conference call with investors.

“Given NextEra’s track record, I would think they would probably increase the operational efficiency of the company, which over the long-term should lead to lower customer bills,” said Paul Patterson, a New York-based analyst for Glenrock Associates LLC.

NextEra, the nation’s largest buyer of natural gas, can also use its expertise to help Hawaii import liquefied natural gas to burn to make electricity, said Hawaiian Electric Chairman and CEO Constance Lau in a conference call with investors.

“This is a phenomenal opportunity for us to accelerate clean energy here in Hawaii,” Lau said in a telephone interview.

PBN: HEI Buyer Sinks $10M into Big Cable, Big Wind

PBN: NextEra Energy (NYSE: NEE), one of North America's largest renewable energy companies, along with its affiliates, said in a filing with the Hawaii Public Utilities Commission last year that it had invested more than $10 million to "assemble a strong, local team, acquire site control, develop viable cable routes, undertake preliminary engineering, prepare for the environmental review process and advance other critical path work-streams to develop a grid-tie undersea cable system," which it would call "NextGrid Hawaii."

Additionally, it pointed out that it was actively looking to develop utility-scale wind and solar renewable-energy projects on Oahu, Maui and the Big Island.

Just last month, NextEra Energy's subsidiary, Ka La Nui Solar, signed a contract with Hawaiian Electric Co., a subsidiary of Hawaiian Electric Industries (NYSE: HE) that it will now control, to develop a 15-megawatt solar energy farm in Waianae in Leeward Oahu.

NextEra also is looking to develop a large solar farm in Central Oahu on Dole Food Co.'s land as part of a public-private partnership with the state.

Earlier this year, NextEra Energy confirmed to PBN that it has an agreement to buy the nearly four-acre site of the former Gasco manufactured-gas facility in Honolulu, which would serve as the home of its planned Oahu transmission system for the planned undersea cable project that would connect the electric grids on Oahu and Maui.

NextEra Energy Hawaii, which registered with the state Department of Commerce and Consumer Affairs in 2012, has filed the paperwork with the PUC to participate in the discussion regarding the Castle & Cooke Hawaii 200-megawatt Lanai project.

"We intervened in the [Lanai wind project docket] because we wanted to assist the commission in developing information and because we felt many of the issues involved in that docket overlapped with the undersea cable docket," NextEra Energy spokesman Steve Stengel previously told PBN.

KHON: “Florida is not known for rooftop solar. It’s known for utility scale projects,” said Leslie Cole-Brooks, executive director, Hawaii Solar Energy Association....

Forbes: NextEra's Acquisition Of Hawaii's Biggest Electric Utility May Be Bad News For Distributed Power Business

WSJ: NextEra’s Appliance of Science in Hawaii

DJ: Fitch Affirms Nextera on Acquisition; Hawaiian Electric on Watch Positive

WSJ: NextEra Energy to Buy Most of Hawaiian Electric for $2.6 Billion

Ige: “The State of Hawaii will do its due diligence to ensure the sale will be in the best interest for Hawaii Ratepayers."

Dec 2: Day Before Announcing Sale of Company, HECO Inks Biofuel Deal with Cronies

Background: Hawaiian Electric Bought out by 'Nation's Largest Clean Energy Company' for $4.3B