Public ownership of HECO gains steam - Hawaii News Now - KGMB and KHNL

Public ownership of HECO gains steam

HONOLULU (HawaiiNewsNow) -

A bipartisan group of more than 40 state and county lawmakers said they want to explore ways of turning Hawaiian Electric Co. into a cooperative association like Kauai's electric company or a government-owned municipal utility.

The lawmakers said they want an alternative to NextEra Energy's widely criticized offer to buy HECO.

"I think a lot of people are frustrated with what they see, frustrated with high electrical bills. But the only way to get a handle on that is to make the utility focus on the interest of the people first and make them accountable first," said state Rep. Chris Lee, Chairman of the House Energy and Environmental Protection Committee.

But NextEra said its deal offers the best chance of lowering rates.

"In Florida, there are 50 municipals or coops. All of them have higher rates than we do," said Robert Gould, a NextEra vice president and its chief communications officer. "Their customer service, their reliability is much lower than what our utility offers our customers."

Unlike an investor owned utility, a coop is a nonprofit that's owned by its customers, who select its board of directors. A municipal utility is a government entity where board members are elected by voters or appointed by elected officials.

Lee (D-Kailua) said the public ownership model is already working in Hawaii. He said rates on Kauai were once the highest in the country but have stabilized since the Kauai Island Utility Cooperative acquired the Lihue electric company from privately owned Citizens Communications in 2002.

And as a cooperative, KIUC returns all excess profits to its customers at the end of the year. Earlier this year, the company gave back $2.1 million to its ratepayers, or about $24 per household.

Lee also said he toured the facilities of the Sacramento Municipal Utilities District in California last month. He said that company was able to invest more money in its infrastructure because it doesn't have to pay millions of dollars in dividends to its shareholders.

"With something that's publicly owned where the profit motive is removed from the equation, you'll have more flexibility, more transparency and more accountability," added Marti Townsend, director of the Sierra Club of Hawaii. "We have the highest rates in the country, the lowest customer satisfaction and the utility has fought renewable energy policies every step of the way." 

Lee said a study, which would look at financing and legal issues, could take several months. And even if a public buyout is ultimately rejected, Lee said he hopes it will force NextEra to sweeten its deal for consumers.


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