HONOLULU (AP) — Hawaii's largest utility and Florida-based NextEra Energy are walking away from their plans to merge, following months of hearings and deliberations on what would have been one of the largest business deals in Hawaii history.
NextEra and Hawaiian Electric terminated their merger agreement because the Hawaii Public Utility Commission didn't approve their plans, the companies said in a joint press release Monday.
"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 CEO of NextEra.
Executives didn't say why they chose to walk away from the $4.3 billion deal instead of appealing the commission's decision, and representatives from NextEra and Hawaiian Electric didn't answer additional questions about their reasoning.
NextEra will pay Hawaiian Electric a $90 million "breakup fee" and up to $5 million in expenses, they said.
After taxes, Hawaiian Electric will get about $60 million, which the company plans to spend on clean energy projects, according to a news release.
"Even before the merger process began, the Hawaiian Electric Companies were working to stabilize and reduce energy costs, modernize and improve our electric grids, support new options, such as electric vehicles, add more value for our customers, and expand a diverse portfolio of clean energy sources," said Alan Oshima, president and CEO of Hawaiian Electric.
The company has several clean energy projects awaiting regulatory approval, including a project that could make it easier to bring more renewable energy onto the grid. Hawaiian Electric also is working on community-based renewable energy programs that would allow customers who can't install rooftop solar systems to participate in renewable energy programs.
Dozens of renewable energy and environmental organizations intervened in the merger proceedings. Some were relieved at the outcome, hoping the Public Utilities Commission would shift its focus to issues like whether to allow more utility customers to get reimbursed for supplying renewable energy to the grid.
"Having that decision done should allow the state to finally move forward on a lot of renewable energy policy measures that have been delayed," said Colin Yost, attorney for Hawaii PV Coalition, a group of solar companies that intervened.
American Savings Bank, which would have become a separate company if a merger happened, remains part of Hawaiian Electric.
Hawaiian Electric supplies energy to 95 percent of Hawaii residents. Its stock price fell $2.38 to $30.10 Monday, a 7 percent drop, following news of the failed merger.