Hawaii Electric and NextEra Energy ‘combine’ in US$4.3 billion deal

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Renewable energy developer NextEra Energy is set to merge with Hawaii’s main electricity provider, Hawaiian Electric Industries, in a deal worth around US$4.3 billion, it was announced yesterday.

Hawaiian Electric Industries serves 95% of the US island state’s population, through its subsidiaries Hawaiian Electric Company, Maui Electric and Hawaii Electric Light. Its shareholders will receive 0.2413 NextEra Energy shares per Hawaiian Electric share, as well as a US$0.50 cash dividend per share, under the terms of the deal.

James Robo, NextEra chairman and CEO told Bloomberg the company would use Hawaii as a test bed to educate the company about the anticipated transition of the electricity market towards renewables.

The total the US$4.3 billion value of the deal includes the assumption of US$1.7 billion of Hawaiian Electric Industries’ debt, while HEI’s banking subsidiary American Savings Bank will be spun off to HEI shareholders. According to a statement announcing the deal, excluding assumed debt and the value of American Savings Bank, HEI shareholders will benefit to the tune of around US$33.50 per HEI share, around US$3.5 billion.

The transaction is expected to close within 12 months. NextEra Energy said that the arrangement will be neutral to its earnings per share (EPS) for its own shareholders for one year but is then expected to rise in value. Its quarterly dividend policy will be unaffected. NextEra will however assume some tax liability for the spinoff of American Savings Bank.

Both parties said the deal will support Hawaii’s “clean energy future”. The US island state came out on top in research firm Clean Edge’s annual Clean Tech Leadership Index (CTLI) for 2013, for proportion of peak generation capacity met from solar. As an archipelago of islands without its own natural resources, the drivers for PV are strong in Hawaii. HECO announcing a target earlier this year to meet 65% of the state’s electricity demand from solar by 2030. It has also pledged to cut its customers’ energy bills 20% by the same year, which it says the increased deployment of renewable energy – starting with a tripling of rooftop solar capacity  could help with. Due to its high renewable energy penetration already, the island is also becoming something of a leader on energy storage deployment.

NextEra Energy said it is “supportive” of HEI and Hawaii’s goals – to increase renewable energy generation, to modernise the grid, reduce the state’s heavy dependence on imported fossil fuels, to integrate more rooftop solar and the aforementioned target to lower consumer bills. NextEra works with other forms of energy including nuclear but says that approximately 95% of generation by one of its principal subsidiaries, NextEra Energy Resources comes from renewable or clean fuels.

HEI president and chief executive officer Connie Lau, who also serves as chairman of the board for American Savings Bank and Hawaiian Electric said the combination with NextEra Energy was a “transformational opportunity to unlock the value of two strong, local companies, American Savings Bank and Hawaiian Electric”.

“NextEra Energy and Hawaiian Electric share a common vision, a more affordable clean energy future for Hawaii. While our goals are among the most ambitious in the nation, including increasing renewables to 65%, tripling solar and lowering customer bills 20% by 2030, we are confident that by leveraging both NextEra Energy and Hawaiian Electric’s expertise and the additional financial resources that NextEra Energy brings, we can meet these targets even sooner,” Lau said.

26 January 2022
Join this free webinar for our analysis of the growth of N-Type technology including; new capacity expansions and production output. We'll also be looking at the global manufacturing footprint with forecasts on how much product will be made outside of China this year and which companies are driving technology change across the crystalline silicon value chain.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.

Read Next

January 24, 2022
Italy’s government will limit the windfall profits of some feed-in tariff-backed solar PV projects that have been able to benefit from rising energy prices.
January 24, 2022
More than 260 companies in the US clean energy sector are demanding urgent action on the US$1.75 trillion Build Back Better (BBB) Act, claiming that US$2 billion is being lost in economic activity every month the long-awaited bill is delayed.
January 24, 2022
Major polysilicon and wafer producer GCL-Poly Energy Holdings confirmed the completion of its granular silicon facility and, in a major reversal of last year’s fortunes, is expecting RMB5.5 billion (US$850 million) in net profit for 2021, according to a company statement.
January 24, 2022
Polysilicon producer Daqo New Energy is expecting a five-fold increase in net profit from its Xinjiang subsidiary as it continues to progress expansion plans.
January 24, 2022
Renewables developer and operator Leeward Renewable Energy has signed power purchase agreements (PPAs) with telecom company Verizon for a portfolio of four under-development solar and wind plants in the US with a combined capacity of 640MW.
January 24, 2022
The average cost of forecasting errors in the US is lower than previously thought at less than US$1/MWh, according to a study by Berkeley Lab that employed a new, publicly available method to examine the practice.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal