HOUSE OF REPRESENTATIVES

H.R. NO.

158

TWENTY-EIGHTH LEGISLATURE, 2015

H.D. 1

STATE OF HAWAII

 

 

 

 

 

HOUSE RESOLUTION

 

 

REQUESTING THE PUBLIC UTILITIES COMMISSION TO PROTECT THE PUBLIC INTEREST IN REVIEWING THE PROPOSED ACQUISITION OF HAWAIIAN ELECTRIC INDUSTRIES BY NEXTERA ENERGY, INC.

 

 

 


     WHEREAS, NextEra Energy, Inc.'s subsidiary, Florida Power and Light, is the largest electrical power utility in Florida; and

 

     WHEREAS, the company's business model in Florida principally relies on selling power generated by older nuclear power plants and those using natural gas, with relatively little renewable energy, as reported by the Fort Lauderdale Sun Sentinel; and

 

     WHEREAS, concerns have been raised that the company has a history of opposing competition and leveraging political influence to favor the interests of the company's shareholders over the interests of ratepayers; and

 

     WHEREAS, the company has aggressively blocked competition from rooftop solar adoption in Florida, as reported by the Associated Press; and

 

     WHEREAS, the company has spent millions of dollars in political contributions and funding for campaigns to block federal and state regulations that would promote utility competition, as reported by the Washington Post; and

 

     WHEREAS, the company is one of the top political donors in Florida, giving more than $7,000,000 in political contributions in the 2014 election cycle alone, as reported by the Tampa Bay Times; and

 

     WHEREAS, Florida utilities have been reported to hire, on average, one lobbyist for every two legislators, as reported by the Orlando Sentinel; and

 

     WHEREAS, the company has a history of giving former top staffers and public utility commissioners lucrative utility jobs, as evidenced by its hiring of five former Florida public utility commissioners, as reported by the Tampa Bay Times; and

 

     WHEREAS, the company used its political clout to remove Florida public utility commissioners who denied a widely publicized rate increase that would benefit the utility, as reported by the Citrus County Chronicle and the Orlando Sentinel; and

 

     WHEREAS, the company successfully lobbied to reduce energy efficiency goals in Florida from two-hundred and twenty-nine gigawatt hours to four gigawatt hours by 2019, as reported by the Tampa Bay Times; and

 

     WHEREAS, public interest groups have raised concerns about the company's shifting to Florida ratepayers the significant financial risk and costs associated with the construction of nuclear power plants, renewable energy projects, and fracking for natural gas, as reported by The Palm Beach Post and the Tampa Bay Times; and

 

     WHEREAS, NextEra Energy, Inc., has begun a process to take over Hawaii's local utilities on Oahu, Maui, and Hawaii islands; and

 

     WHEREAS, after announcing its proposed takeover of Hawaii's utilities, NextEra Energy, Inc., has acted in a manner that does not reflect the good faith that had been promised to ensure that the acquisition would benefit Hawaii's ratepayers; and

 

     WHEREAS, the utilities have aggressively opposed virtually all stakeholder participation in the Public Utilities Commission docket proceeding regarding the proposed takeover; and

 

     WHEREAS, once stakeholders were admitted to the Public Utilities Commission proceeding, the utilities vigorously proposed limiting discovery on the merger proceedings to the detriment of broader public transparency and oversight; and

 

     WHEREAS, the utilities announced their intention to prevent solar customers from interconnecting to the electrical grid unless the Public Utilities Commission enacted sweeping policy reforms benefiting the utility; and

 

     WHEREAS, the modern utility business model, which adapts to new technology and distributed generation, is moving away from the vertically integrated business model of NextEra Energy, Inc., and toward making utilities the transmitters of power, rather than the generators of it; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2015, that the Public Utilities Commission is requested to protect the public interest in reviewing the proposed acquisition of Hawaiian Electric Industries by NextEra Energy, Inc., to determine:

 

     (1)  Whether the proposed transaction is in the public interest, including:

 

          (A)  Whether approval of the proposed transaction would be in the best interests of the State's economy and the communities served by the Hawaiian Electric Companies;

 

          (B)  Whether the proposed transaction, if approved, provides significant, quantifiable benefits to the Hawaiian Electric Companies' ratepayers in both the short and the long term beyond those proposed by the Hawaiian Electric Companies in recent regulatory filings;

 

          (C)  Whether the proposed transaction will affect the ability of the Hawaiian Electric Companies' employees to provide safe, adequate, and reliable service at reasonable cost;

 

          (D)  Whether the proposed financing and corporate restructuring proposed in the application is reasonable;

 

          (E)  Whether adequate safeguards exist to prevent cross-subsidization of any affiliates and to ensure the Public Utilities Commission's ability to audit the books and records of the Hawaiian Electric Companies, including affiliate transactions;

 

          (F)  Whether adequate safeguards exist to protect the Hawaiian Electric Companies' ratepayers from any business and financial risks associated with the operations of NextEra Energy, Inc., or any of its affiliates;

 

          (G)  Whether the proposed transaction, if approved, will enhance or detrimentally affect the State's clean energy goals; and

 

          (H)  Whether the transfer, if approved, would potentially diminish competition in Hawaii's various energy markets and, if so, what regulatory safeguards are required to mitigate such adverse impacts;

 

     (2)  Whether the applicants are fit, willing, and able to properly provide safe, adequate, and reliable electric service at the lowest reasonable cost in both the short and the long term, including:

 

          (A)  Whether the proposed transaction, if approved, will result in more affordable electric rates for the customers of the Hawaiian Electric Companies;

 

          (B)  Whether the proposed transaction, if approved, will result in an improvement in service and reliability for the customers of the Hawaiian Electric Companies;

 

          (C)  Whether the proposed transaction, if approved, will improve the Hawaiian Electric Companies' management and performance; and

 

          (D)  Whether the proposed transaction, if approved, will improve the financial soundness of the Hawaiian Electric Companies;

 

     (3)  Whether the proposed transaction, if approved, would diminish, in any way, the Public Utilities Commission's current regulatory authority over the Hawaiian Electric Companies, particularly in light of the fact that the ultimate corporate control of the Hawaiian Electric Companies will lie outside the State;

 

     (4)  Whether the financial size of the Hawaiian Electric Companies relative to the other affiliates of NextEra Energy, Inc., would result in a diminution of regulatory control by the Public Utilities Commission;

 

     (5)  Whether NextEra Energy, Inc.; Florida Power & Light Company; or any other affiliate has been subject to compliance or enforcement orders issued by any regulatory agency or court;

 

     (6)  Whether any conditions are necessary to ensure that the proposed transaction is not detrimental to the interests of the Hawaiian Electric Companies' ratepayers or the State and to avoid any adverse consequences and, if so, what conditions are necessary; and

 

     (7)  Whether NextEra Energy, Inc., is likely to influence public policy to benefit ratepayers or the company itself; and

 

     BE IT FURTHER RESOLVED that the Public Utilities Commission is requested to consider, at a minimum, imposing strict conditions to ensure the bedrock principles of:

 

     (1)  Reliability;

 

     (2)  Reasonable rates;

 

     (3)  Competition and customer choice; and

     (4)  Protecting local jobs and economic benefits to the State; and

 

     BE IT FURTHER RESOLVED that the Public Utilities Commission is urged to adopt the recommendation of the Consumer Advocate and establish a procedural schedule that would have the regulatory review process completed by June 2016 to allow for a complete and thorough review of the concerns raised by the merger application docket; and

 

     BE IT FURTHER RESOLVED that the Public Utilities Commission is requested to submit findings and recommendations, including any proposed legislation, to the House of Representatives not later than twenty days prior to the convening of the Regular Session of 2017; and

 

     BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Chairperson of the Public Utilities Commission.

Report Title: 

PUC; Public Interest