Hawaiian Electric Industries shareholders have approved the merger agreement with NextEra Energy, officials announced Wednesday.
Of the shares voted, approximately 90 percent were in favor of the merger.
“We’re extremely pleased that our shareholders, many of whom are Hawaiian Electric, Maui Electric and Hawaii Electric Light customers, have shown their strong support for this historic partnership by approving the proposed merger,” said Jeff Watanabe, HEI’s chairman of the board. “The approval marks another significant milestone in our efforts to accelerate Hawaii’s clean energy transformation by bringing the expertise and resources of NextEra Energy to our state to achieve even higher levels of renewables and lower energy costs for our customers.”
“The future of it, I feel, is going to be profitable for the Hawaiian people here as far as the reduction of their energy bills and especially electric,” said shareholder James Price.
But not everyone is happy about Wednesday’s decision.
“I’m disappointed, but it isn’t over,” said shareholder Sarah Preble. “The PUC is looking at it and asking some very good questions, but if the votes go through, I certainly hope that Hawaii’s citizens like NextEra better than Floridians.”
While publicly held companies commonly may proceed with a merger with the affirmative vote of a majority of their outstanding shares, HEI is required under Hawaii law to obtain supermajority approval from 75 percent of its outstanding shares. Hawaii is the only state with such a high approval requirement for a merger.
While the Federal Energy Regulatory Commission (FERC) has approved the proposed merger, the transaction remains subject to other regulatory approvals including approval by the Public Utilities Commission, other customary closing conditions and the spinoff of American Savings Bank, a subsidiary of HEI and one of Hawaii’s largest full-service financial institutions.
Following completion of the transaction, Hawaiian Electric would continue to operate under its current name, be locally managed, and remain headquartered in Honolulu. Subject to approval by the Hawaii Public Utilities Commission (PUC), the companies have committed to approximately $60 million in customer savings over four years and to not request an increase in the general base electricity rate for at least four years post-transaction close.
NextEra Energy said it plans to help accelerate Hawaiian Electric’s plans to lower electric bills, triple distributed solar, including rooftop solar, and achieve a 65 percent renewable portfolio standard (RPS) by 2030. Both Hawaiian Electric and NextEra Energy said they support a new state law that sets a goal of 70 percent RPS by 2040 and 100 percent RPS by 2045.
“We’re confident that this merger will help us more quickly achieve the affordable clean energy future we all want for Hawaii,” said Connie Lau, HEI’s president and chief executive officer and chairman of the boards of Hawaiian Electric and American Savings Bank.
Following the spinoff, American Savings Bank will remain based in Hawaii as an independent public company, and continue to provide a full range of financial products and services, including business and consumer banking, insurance and investments, corporate banking and commercial real estate lending.
“The spinoff of American Savings Bank as a condition to completing the merger enables shareholders to continue to own American Savings Bank and to participate in the bank’s upside potential as an independent public company,” said Lau. “Our ability to spin off American Savings Bank reflects the strength of the bank’s business, its strong market position and its talented team of employees.”