Hawaii has been called a “postcard from the future”, due to its high levels of renewable energy integration and the unique challenges this faces on an island grid. The latest news on that postcard is that utilities will need to develop proactive plans for renewable energy and distributed generation, if they want to be allowed to acquire other utilities.
On Friday, the Public Utilities Commission in the U.S. state of Hawaii rejected 2-0 a US$4.3 billion bid by Florida’s NextEra Energy to acquire Hawaiian Electric Companies (HECO), with a newly appointed commissioner abstaining from the decision.
The commission stated that the two companies failed to demonstrate that the merger would be in the public interest. Among other concerns, the commission states that the applicants “Failed to put forth near-term commitments for specific action tailored to Hawaii’s unique circumstances and clean energy goals,” and instead were merely planning to maintain the status quo.
Failure to have an adequate plan for distributed solar appears to be high on the list. “The Commission noted Applicants’ lack of specific commitments relating to Distributed Energy Resources (“DER”), which runs contrary to Hawaii’s status as a national leader in integrating high levels of distributed solar photovoltaic systems,” read a press statement.
Such critiques have a basis in the track record of NextEra. While the company’s generation arm holds a number of renewable energy assets, including the SEGS concentrating solar power (CSP) projects in Souther California which were built in the 1980s and 1990s, NextEra’s utility arm, Florida Public Service, has been widely critiqued for its failure to deploy or support renewable energy in its service area, particularly distributed solar.
Other publications have cited Hawaiian Governor David Ige’s opposition to the deal. Ige replaced commissioner Michael Champley, who was said to be in favor of the deal, with Chief Counsel Thomas Gorak two weeks ago. And while Gorak did not vote on the deal, this may have sent a strong message to the remaining commissioners.
Whatever Governor Ige’s role, his office had made it clear that the utility business model will need to adapt to distributed solar.
“The challenge and the opportunity in 100 percent clean energy is that the business model has to be different,” reads a recent statement from Governor Ige’s office. “The old model is based on the utility doing everything from generation and distribution to storage. The 21st century model is more customer-centered, with distributed local solutions.”
“No matter who owns our utility company, the energy vision for Hawai‘i is clear. We need to create a process to determine what works best for the utility, local consumers, and the state’s clean energy goals.”
However, the ruling also leaves open the possibility that NextEra could try again with a different application. On Friday, the power company said that it was reviewing the commission’s order.