Hawaiian Electric says it is not for sale, withdraws LNG import proposal
- Hawaiian Electric Industries (HEI), parent company of the state's dominant electric utility Hawaiian Electric Co., announced Tuesday that it is not for sale following regulatory rejection of its acquisition by Florida-based NextEra Energy.
- Since the June 15 decision, Gov. David Ige (D) told local press he had been approached by at least one other company interested in buying HEI. Company officials, however, said the "company is not currently in discussions with any other party regarding a business combination and does not intend to initiate any such discussions."
- In the wake of the NextEra merger rejection, HEI also withdrew an application to import liquefied natural gas from Canada — a major component of its power supply plan now under review by the Public Utilities Commission.
In the buildup to the recent merger decision, some Hawaii stakeholders speculated that Warren Buffett's Berkshire Hathaway Energy may be preparing a bid for HEI if the NextEra application faltered.
MidAmerican Energy Services, a Berkshire subsidiary, was recently registered in the state, one media report noted, and Buffett has a long-standing affinity for investing in regulated utilities.
But the rumors of a new suitor are just that, according to an HEI statement.
"[T]he boards have determined that it is in the best interests of the company and all of the stakeholders that it serves ... to remain independent and to work toward realizing the clean energy future and vibrant local economy we all want for Hawaii," HEI officials wrote. "In this regard, and despite statements reported in the media about other unnamed parties rumored to be interested in acquiring HEI, the company is not currently in discussions with any other party regarding a business combination and does not intend to initiate any such discussions."
That statement appears to leave the door open to potential owners in the future, but HEI would offer no elaboration.
"The company will not provide any updates to the above statement nor otherwise comment on market rumors or speculation," the statement added.
HEI may run into more opposition if it is intent on not only preserving its local ownership, but its investor-owned utility status as well.
In the aftermath of the merger rejection, supporters of a public utility said they would redouble their efforts to convert HEI's companies into municipal or cooperative electricity providers. Hawaii legislators allocated $1.2 million to studying alternative utility business models budget negotiations this spring.
Beyond corporate control, the NextEra decision could prompt major changes to HEI's long-term power supply plans. In April, HEI included a proposal to retrofit existing fuel oil plants to run on imported LNG in its Power Supply Improvement Plan (PSIP) filed with state regulators. NextEra's support, HEI said, would be crucial in deploying this "bridge" to the state's 100% renewable energy goal.
With the NextEra merger terminated, HEI withdrew those LNG import plans this week, along with a proposal to upgrade its Kahe Power Plant to run on the fuel.
A company statement said HEI remains "committed to transitioning to 100% renewable energy in the most cost-effective way possible while ensuring reliable service," but it is unclear how the withdrawal will affect regulatory review of the PSIP.
In that document, HEI proposed to source nearly half its generation from LNG through the 2020s. With that option off the table, regulators may choose to evaluate fuel supply scenarios in the PSIP that do not include LNG imports, or require the utility to re-submit parts or all of the plan.
The current PSIP under review by regulators is itself a second copy. Regulators rejected an initial plan in Nov. 2015, saying it was insufficent to address HEI's "poor performance" and meet Hawaii's energy goals.
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