NextEra wants to make Hawaii’s power cleaner and cheaper
by Susan Salisbury, Palm Beach Post, January 3, 2015 (excerpt)
...Some Hawaiians have said it will be a sad day if the historic firm is bought out.
Hawaii’s consumer advocate, Jeffrey Ono, who represents ratepayers in utility matters, said, “Certainly we have been hearing that. This is one of the oldest locally owned corporations. But we have a number of other businesses that are owned by mainland interests. It is not unusual in Hawaii.”
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Marco Mangelsdorf, president of Honolulu-based ProVision solar, says NextEra wants to acquire the Hawaii company, “Put simply, to make money.”
“NextEra sees an opportunity in a captive market, as in not connected to any other power distribution grid, to go where few, if any, electric utilities have gone before as far as mixing utility-scale solar and wind farms with traditional combustion generation,” Mangelsdorf said.
In Florida NextEra has a lot of political clout, but it’s too early to tell what level of influence NextEra might have in Hawaii.
“NextEra will have challenges being viewed as a foreign, carpet-bagging owner,” said David Cruthirds, a Houston-based attorney and regulatory consultant. “They’re complicated. They contribute a lot of positive things. That doesn’t entitle them to be a benevolent dictator.”
George Cavros, an attorney with the Southern Alliance for Clean Energy, said, “This is going to be a cash cow for NextEra, much like FPL.”
Young Kim, principal, Energy Research Consulting Group, Boston, said, “NextEra sees a really good fit, not only with the regulated asset. How many companies are in a position to develop utility-scale renewables in a state with such blessed renewable asset potential?”
The Hawaiian firm is committed to increasing its renewable energy to 65 percent from about 20 percent now and reducing customer bills by 20 percent by 2030.
“They have big boy problems, and they need big boy solutions. They have skyrocketing prices and very impressive targets,” Kim said.
While it’s admirable how much Hawaiian has accomplished, Kim said, it’s going to take a lot more to reach its energy goals, and that’s where NextEra comes in, with its renewables expertise and lower cost of capital.
NextEra isn’t new to Hawaii. In 2012 it formed NextEra Energy Hawaii. Now its subsidiary Ka La Nui Solar seeks to build, own and operate a 15-megawatt solar project in Oahu. If approved by Hawaii regulators it will provide power to the company NextEra wants to buy, Hawaiian Electric, by 2016.
But its biggest proposal in the Aloha state is a $600 million cable project that would connect the grids of the islands of Oahu and Maui.
In July 2013 NextEra’s experts told the Hawaii Public Utilities Commission that the cable project’s benefits would exceed the cost. The PUC has not made a decision yet.
But in August Hawaiian Electric came up with a power supply improvement plan that did not include the undersea cable, Ono said. Its experts determined the cable would not be cost effective, Ono said.
Now there is speculation that NextEra will try to move the proposed cable project forward.
A big difference between Florida and Hawaii is that Hawaii is heavily unionized.
“Florida is a ‘right-to-work’ state. Hawaii is number three in union density, after New York and Alaska, ” said Brian Ahakuelo, business manager of the International Brotherhood of Electrical Workers Local 1260, which represents more than half of Hawaiian Electric’s employees, not just linemen.
“I think it is going to be an interesting thing. It is going to be a challenge. It is a good time for the ratepayer and our membership. New skills and technologies will be coming about,” Ahakuelo said....
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