From the onset, the Ige Administration has put attention on the issue of "localness" regarding the HECO-NextEra merger/acquisition application. Several days ago, Ian Lind reported on the possible Marriott-Starwood acquisition, which could have a humongous impact on the State's largest industry, the visitor sector, and, according to him, is getting very little attention in the news. While I was aware of the bidding war that went on between Marriott and a Chinese investment group, I really didn't think about the impacts until I read his post:
Read through the list of hotel brands and you’ll see how many properties in Hawaii will be impacted by the merger. In those areas where the two companies hotels are clustered together, it can be expected to have an increased impact.
But you wouldn’t know if from the lack of local attention to the deal and its possible implications.Lind ends with the following:
I wonder whether such a deal will reduce competition and result in higher prices in Hawaii? Will the merger lead to reductions in executive staff, or a consolidation of suppliers? Will there be some properties jettisoned by the new conglomerate? Lots of questions, little initiative on the part of local media.This transaction, with the trappings of an unregulated monopoly, will anyone be asking the question, "is this out of state company 'local' enough?" After all, the product and services to be provided are directly representative of Hawaii's unique qualities and values. What if the above happens? Surely employees and consumers will be on the losing end as lack of diversity, competition and employment and consumer choices are diminished. And, will anyone be questioning the influence of such a large corporation over politicians?
However, with the HECO-NextEra merger, the Ige Administration continues to "fear" an out of state company, one that would be subject to regulation by the State of Hawaii. One would think the administration would be more concerned about the effects of an unregulated monopoly like the potential of the Marriott acquisition rather than the HECO-NextEra merger.
At this link: Utility Dive analyzes the positions of the parties in the merger application after the filing of the post-evidentiary last week including the continued opposition to the merger by several state agencies.
NextEra is recognized as a top performing utility and company nationally. There is little doubt about NextEra being financially and technically fit, willing and able, the typical standard in judging the capabilities of a entity to acquire a public utility. Other than this question of "fitness," the larger issue is whether the approval can be conditioned to satisfy a broader concern of the regulator to address public interest as defined by the regulator. It is a failure on the part of the State parties, possibly at the Governor's directive, that the Department of Business, Economic Development and Tourism, Office of State Planning and the Consumer Advocate, have not made an attempt to negotiate a settlement to condition an approval.
We need to put into perspective the State of Hawaii's responsibilities in this very important transaction between two private entities. The aforementioned State agencies are responsible for our State's business climate. The State has the ability and duty to regulate and govern the environment NextEra functions in to align its business with the public interest. However, it appears that this isn't a question of "fitness" anymore. It has become an issue of an intransigent administration refusing to negotiate a possible settlement by its agencies to bring to the regulator, possibly in an attempt to stymie a business transaction between private companies at any cost, including the already damaged business climate in Hawaii. Unfortunately, its more indicative of the State lacking confidence in its ability to regulate when it has the authority and power to do so.