Headquartered in Juno Beach, Fla., NextEra Energy’s principal subsidiaries are Florida Power & Light Company, which serves more than 4.8 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, and NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun. Accordingly, though possessing potential to accelerate the state’s clean energy goals, the proposed commitments in this area were simply too broad and vague to be consistent with the public interest, says the PUC.
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Shortly after the decision was released, the two companies said they were reviewing the order; however, by July 18, they had formally terminated the deal – leaving NextEra to pay a $90 million break-up fee, as well as about $5 million in reimbursement for costs associated with the transaction.
The merger would have enabled retirement of three oil-fired units at the Kahe power plant, replacing them with a new 383-MW LNG-fired combined-cycle unit that would have helped with the utility’s intended transition to the state goal of 100% renewables, Hawaiian Electric said in a May announcement.
Not surprisingly, NextEra Energy said the decision was driven by the Hawaii Public Utilities Commission’s (PUC’s) 2-0 decision on July 15 to dismiss the Joint Application for the Change of Control filed by the companies. Specifically, it concluded that the application had not demonstrated a benefit to ratepayers, mitigation of risks posed by NextEra’s complex corporate structure, adequate clean energy commitments, a positive effect on local governance, or a benefit to competition in local energy markets.
In response to this decision, NextEra and Hawaiian Electric Industries Inc. have stated: “We are in receipt of today’s PUC order and are now reviewing it”. “No matter who owns the company, the energy vision for Hawaii remains very clear – 100 percent renewable energy with a transformation to a customer-centered utility focusing on smart meters, smart grid, distributed local solutions, and as much consumer choice as possible”.
Controversy immediately followed the merger announcement in December 2014.
The ruling does not preclude Hawaiian Electric from seeking a different partner or from renewing discussions with NextEra in the future, however, the commission ruled.
Hawaiian Electric will move forward as an independent company and American Savings bank will remain part of HEI. Its purchase of Hawaii Electric was seen by utility industry watchers as an opportunity for the company to test its handling of renewable energy and rooftop solar operations as the practice threatens to take hold across the nation.
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More on the PUC’s decision can be found here.
