HONOLULU (HawaiiNewsNow) - NextEra Energy, one of the nation's largest clean energy companies, announced Wednesday it wants to buy Hawaiian Electric Company in a deal worth $4.3 billion that both sides would mean lower bills for electric consumers on five Hawaiian islands who pay some of the highest rates in the country.
Hawaiian Electric, Hawaii's largest company, already has a plan that calls for increased renewable energy in the state aiming to lower customers' electric bills here by about 20 percent over the next 15 years.
NextEra Energy's CEO Jim Robo said his company's take-over of Hawaiian Electric will speed that up.
"What we want to do is do the best thing for customers. What's going drive the lowest bills and the most clean energy in the state," Robo said at a news conference in Honolulu Wednesday afternoon.
Connie Lau, Hawaiian Electric Industries' CEO, said, "This partnership with NextEra actually gives us that opportunity to see whether we can accelerate lowering of bills for customers. It's harder for us to do that as a smaller company, they have much greater resources."
Lau said her company will keep its name and remain based in Honolulu.
And the companies both said there will be no Hawaiian Electric layoffs for at least two years after the transaction closes.
But solar energy advocates said NextEra's home state utility, Florida Light and Power which provides electricity to three-quarters of Florida is "hostile" to solar power. The company allows only about 2,500 solar customers out of 4.7 million, producing and selling the power itself. Just three percent of its Florida electricity comes from solar, while in Hawaii, ten percent of residents have solar.
"NextEra is very supportive of renewable energy that they own, they control and they can sell,” said Robert Harris, a Hawaii representative of The Alliance for Solar Choice, a national coalition of solar advocates. “And the difference is whether or not you want to have competition in the market. Do you want to have different sources of power coming on that allow us to get the cheapest price for the customer?"
State Rep. Chris Lee, who chairs the State House energy committee, said, "It's our job to put people first and make sure that they can save money and install solar and get off the grid if they want to. We can't have a company try to come in and hold them down and tie them to the grid."
But clean energy advocate Jeff Mikulina, CEO of Blue Planet Foundation, is optimistic.
"I think this is a real exciting development for Hawaii. This is an established mainland utility that's going to bring some fresh ideas, some new talent and resources to Hawaii," Mikulina said.
NextEra, whose stock has increased by 58 percent in the last three years, does business in 26 states and three countries. Hawaiian Electric's shares were up more than 17 percent to $33.10 in extended trading after the announcement, while NextEra Energy's stock price was unchanged at about $104.
The sale must be approved by Hawaiian Electric stockholders and the state Public Utilities Commission, a process that is expected to take about a year.
Under the deal, NextEra will assume $1.7 billion of HEI's debt.
The agreement calls for Hawaiian Electric to spin off the parent company of American Savings Bank into a publicly traded company.
NextEra said it is the North American leader in clean energy generation with a proven record of reducing oil dependence and improving fuel efficiency.
The company said typical residential bills at its Florida Power and Light Company are the lowest in Florida and about 25 percent below the national average. But that's hard to compare to Hawaii, which has much higher land costs, taxes and business expenses compared to Florida. And FPL generates 65 percent of its power from natural gas, a cheap form of energy in Florida that is not yet available in Hawaii.