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NextError

Three reasons why the NextEra/HECO merger would be wrong for Hawai‘i

  • 3 min to read

Where does Hawai‘i’s electricity come from? For the past 124 years, it was Hawaiian Electric Company’s (HECO) responsibility to provide us with power. 

For the last nine months, though, the Public Utilities Commission has been debating over whether or not to allow Florida based utilities company NextEra to acquire HECO. The move, however, would be a critical mistake. Here are three reasons why.

Fracking hypocrisy

NextEra prides itself on ”standing for clean energy.” Yet in 2014, 68 percent of its power generation in Florida was from liquefied natural gas (LNG). The company claims it’s better for the environment than other fossil fuels like coal and oil. 

“When you burn [LNG], it is much cleaner than coal, that’s true,” said Elliot Van Wie, Executive Committee member of the O‘ahu Group for Sierra Club Hawai‘i. “If you factor in the [methane] just pouring into the air at the site of extraction, it’s much more polluting than coal.”

LNG is made from shale gas, extracted through a process called fracking. With methane being up to 86 times more harmful than CO2, fracking accelerates climate change beyond what coal and oil can do. 

“Any time and money spent on LNG is time and money not spent on renewable energy,” Gov. Ige said at the Asia-Pacific Resilience Innovation Summit & Expo last August.

Outside of its impact on the environment, investing in fracking is an economic gamble at best. In 2012, the Energy Information Agency predicted that the Monterey Shale Formation would produce 13.7 billion barrels of oil, only to reduce it by by 96 percent two years later. The International Energy Agency similarly ate their own words when their 2014 report predicted U.S. oil production would drop in the 2020s, while in 2012 they had predicted shale oil would turn the U.S. into a leader in global oil production.

Why is NextEra so committed to a fuel source with a bleak future? Fracking is America’s last attempt to be fossil fuel-independent. The less foreign oil, the more money for U.S. corporations.

So long, solar

Hawai‘i likes solar energy. We like it so much that we generate more solar energy per capita than any state in the country. And why wouldn’t we? Hawai‘i has the highest electricity rates in America (about three times the national average), and more solar means lower bills. 

NextEra, however, doesn’t seem to like solar. In fact, NextEra doesn’t seem to like renewable energy, period. In 2014, the company generated less than one percent of its energy from solar power and used no other renewable energy sources. 

Despite being the “Sunshine State” and averaging more sunny days per year than Hawai‘i, Florida only produces 3.5 percent of the solar power that Hawai‘i does per capita. Florida is also one of only five states that made it illegal for anyone but a utility company to sell solar energy. This is no accident. 

NextEra works hard to ensure their state’s politicians act in the company’s best interest. In the 2012 election cycle alone, NextEra (under their subsidiary Florida Power and Light) gave $2.6 million in campaign donations. 

“Those donations allow the power companies to keep pro-solar bills from getting anywhere,” said Florida state Rep. Dwight Dudley to the Miami Herald

What reason does NextEra have for conducting business in Hawai‘i any differently?

No power to the people

In a non-scientific August Honolulu Star-Advertiser poll, over 70 percent of participants said HECO should be publicly owned. Hawai‘i wants a publicly owned grid and they want it for a good reason. 

“The way utilities are set up is problematic: it is a state sponsored monopoly that’s supposed to serve the public interest and yet they are compensated, paid more for essentially the more electricity they sell,” said Robert Harris, former director of Sierra Club Hawai‘i. 

Ultimately, an investor-owned utility wants to please its investors. For NextEra, that means answering to non-Hawai‘i residents who aren’t directly interested in the state’s welfare. 

Publicly owned utilities, however, are local entities that operate to meet ratepayers’ needs. According to a 2013 study conducted by the American Public Power Association, the national average residential rate for publicly owned utilities was 11.9 percent cheaper than investor-owned utilities. Publicly owned utilities are democratically controlled by the people and will make decisions in the people’s interest.

HECO is an investor-owned utility like NextEra. If HECO is a corporate monopoly giant, however, then NextEra is a behemoth. For the second quarter of 2015, HECO made $35 million. For NextEra, that number is $716 million

Twenty times the financial power means 20 times the resources to lobby for its purposes. -NextEra hires about 33 lobbyists per year: there is at least one lobbyist for each of the 27 state representatives. Naturally, they get what they want.

Drawing the line

Henry Curtis, who serves on the PUC Reliability Standards Working Group, called the potential buyout “the biggest and most complex proceeding the state has ever dealt with.”

The matter, however, is simple: HECO is failing, and NextEra is giving it a $4.3 billion lifeline. The problem is that NextEra shows no signs that it’s interested in pursuing what the people of Hawai‘i want: renewable options and publicly owned utilities. 

“We need an electric company that sees Hawai‘i as the center of its work...” Gov. David Ige said in a press release from July.

If a merger is really what Hawai‘i needs, then we should find a company that has demonstrated a legitimate commitment to serving its ratepayers. NextEra, unfortunately, is a wolf in sheep’s skin–hiding greed behind a thin veil of “clean” energy. 

The Public Utilities Commission will be presenting a hearing on Oct. 27 at 6 p.m. at McKinley High School (1039 S. King St.). It will be open for the public to voice opinions on the acquisition. PUC will not be looking for testimony, citations or reasons for your opinion – that will be for the evidentiary hearing starting Nov. 30. All they want to know is “yes” or “no.”