A proposed merger between Hawaii’s biggest electric utility and renewable energy developer NextEra Energy has passed a major regulatory hurdle, gaining approval by the US Federal Energy Regulatory Commission (FERC), the two companies have announced.
Hawaiian Electric Industries and NextEra announced their intention to “combine” last December in a deal worth around US$4.3 billion. The plan was claimed by both parties to be a move to support Hawaii’s “clean energy future”, with the US island state having in place a target of 65% renewable energy generation in the overall mix by 2030 and the lowering of consumer energy bills by 20% by that time. The state is also aiming to triple the number of solar PV systems on customer rooftops by 2030.
The plan was not without its critics however, with some commentators describing it as a “takeover” of Hawaiian Electric. NextEra is also set to assume some US$1.7 billion of Hawaiian Electric’s debt.
Although NextEra Energy CEO Jim Robo said FERC approval, announced by the NYSE-listed company on Monday, was a “significant step” towards the merger’s completion, the deal still requires approval from a number of other parties. These include the Hawaii Public Utilities’ Commission (PUC) which is the state-level utility regulator, shareholders of Hawaiian Electric and its financial services spinoff ASB Hawaii as well as other regulatory bodies.
“Hawaiian Electric is gaining a partner that is the world's largest generator of renewable energy from the wind and sun, with a commitment to supporting rooftop solar in Hawaii and a proven track record of lowering electric bills,” Hawaiian Electric Industries' president and CEO Connie Lau said.
“This approval provides further momentum toward ultimately delivering that substantial value to our customers and communities,” added Lau, who is also chairman of the boards of both Hawaiian Electric and the bank, ASB Hawaii.