Thoughts on the NextEra Purchase of HEI

Richard Ha writes:

NextEra Energy’s purchase of Hawaiian Electric Industries (HEI), just announced yesterday, will be very good for Hawai‘i.

Here’s what we know about NextEra: It’s a publicly traded company headquartered in Florida. Its principal subsidiaries include Florida Power & Light Company, which was recognized by Market Strategies International earlier this year as the nation’s most trusted electric utility, and NextEra Energy Resources, which together with its affiliated entities (NextEra Energy Resources), is North America’s largest producer of renewable energy from the wind and sun.

NextEra says it will spin off HEI’s American Savings Bank, which makes a lot of sense. NexEra.jpg

NextEra has the balance sheet and other resources to support significant investment in Hawai‘i’s transmission and distribution system to enable much higher levels of renewable energy sources.

Most of all, this change in ownership of our electrical utility will finally make much needed new and different approaches possible. What we all want is a lower cost of electricity.

And each island needs to take advantage of its own resources. One size does not fit all.

For example, the Big Island and Maui each have the options of using wind, solar, and possibly geothermal and some biofuel.

O‘ahu has wind, solar and biofuel but no proven geothermal and so limited opportunities to lower rates. Solar is a possibility. Coal is cheap, but unacceptable. LNG is possible as a bridge fuel.

Maui has its own issues, which are different from both O‘ahu and Maui.

We are unique on the Big Island. Beside solar, wind and biofuels, we have proven geothermal. Once it’s developed, geothermal wants to run 100 percent of the time, and the more it runs, the cheaper it is to the rate payers.

What if we guaranteed the geothermal developer, say, 25MW, and put no restriction on generating electricity for hydrogen manufacturing over and above the 25MW. If, for instance, the geothermal company installed a 30MW generator, they could sell 25MW to the utility and sell the excess 5MW cheap to make hydrogen. That would solve our liquid transportation problem, via hydrogen fuel cells, and we could make nitrogen fertilizer so as not to be dependent on petroleum byproducts. That’s only one example of what we could do with new thinking.

I would resist the temptation to advocate for a cable going from the Big Island. We need to see demonstrated results first.

This sales is an unexpected but very interesting turn of events. We welcome NextEra.


2 thoughts on “Thoughts on the NextEra Purchase of HEI”

  1. Doesn’t this still require PUC final approval? And there is no PUC chair right now? Agreed, spinning off American Savings Bank is good for the utility customer. It means PUC doesn’t have to have a group to oversee the bank, the bank is not limited to a 5% profit, and the PUC would still have audit authority for the part that is in energy investment and financing. For the short term, ASB might be in trouble because they were financing mortgages in Lava Zone 2 and many thousands of those are going to go “underwater” with the ongoing eruption and moratorium on homeowner insurance, quickly reducing the value of homes by 50% or more. So, it’s good ASB won’t drag down the electric utility. Seems like PUC chair would be high on the priority list about now. Please find somebody that is technically qualified.

  2. On the surface, NextEra is a big supporter of net metering. Florida Power & Light is one of their subsidiaries and they have the rules on their site. One requirement is that equipment list must be from recognized manufacturers, and that a utility control cutoff switch be installed, neither which are a requirement in Hawaii — yet. The rules do make a lot of practical sense.

Comments are closed.