NextEra Energy (NYSE: NEE) and Hawaiian Electric industries (HEI, NYSE: HE) ended their merger plans effective immediately.
The decision came after the Hawaii Public Utilities Commission July 15 voted 2-0 to dismiss the merger application. Commissioners concluded that while the applicants showed that NextEra is able to perform the services currently offered by HECO, they did not prove that the merger was in the public interest. The PUC said the benefits offered by the applicants are “both inadequate and uncertain,” that they did not offer sufficient protection to the HECO companies and their ratepayers to offset the risks presented by NextEra’s “complex” corporate structure, and that the companies did not put forth near-term clean energy commitments tailored for Hawaii’s unique circumstances. The PUC did say it was not precluding HECO from seeking another partner, nor from renewing discussions with NextEra.
“We wish Hawaiian Electric the best as it serves the current and future energy needs of Hawaii, including helping the state meet its goal of 100 percent renewable energy by 2045,” said Jim Robo, chairman and chief executive officer of NextEra Energy. “Looking forward, NextEra Energy remains extremely well-positioned to execute on our strategy and deliver exceptional results for our customers and shareholders.”
Under the terms of the merger agreement, NextEra Energy will pay HEI a $90 million break-up fee and up to $5 million for reimbursement of expenses associated with the transaction.