One of the greatest challenges our children and grandchildren will face will be the struggle for clean and affordable energy production. It is a concern on a global scale, impacting world economies and fueling political conflicts at a great cost to both the environment and human lives. In Hawaiʻi, we've been fortunate to look at this challenge with a progressive lens. As a state, we've committed to a 100 percent renewable future in the electricity sector, helping to reduce our dependency on imported fossil fuels.
While Hawaiʻi's land mass isn't huge - our chain of small islands makes up less than 11,000 square miles - we do have plentiful access to the ideal mix of the most powerful sources of renewable energy on the planet: solar, wind power, ocean thermal and geothermal. Ocean cooling can eliminate conventional air conditioning in our downtown area buildings, and the mix of renewable energy can provide guaranteed reliable and affordable power. Hawaiʻi also leads the nation in rooftop solar per capita. More than 50,000 households have panels on their roofs - that is about 14 percent of residential customers. That compares with about 0.5 percent nationally.
Despite these considerable natural and renewable resources available, we still need innovative solutions and billions of dollars of new capital to meet our goal of 100 percent renewables by 2045.
Today, we have the opportunity to chart the course for our energy future and provide input on one of the most crucial environmental and financial developments in our state's history - the merger of NextEra and Hawaiian Electric.
NextEra has taken some recent steps in the right direction by endorsing Hawaiʻi's 100 percent renewable goal, firming the $60 million rate relief, adding another $10 million of program support, and accepting greater regulatory oversight. Yet, a significant gap still remains between the benefits NextEra is hopeful will happen and what it is actually committing to deliver unconditionally. The company's commitments still fall short of benefits that other utilities have guaranteed ratepayers on the mainland. The most critical commitments are $100 million in unconditional rate credits, acceleration of the near-term renewable portfolio standard targets, improvements in reliability, and ring-fencing, a financial mechanism that protects ratepayers in the event NextEra ever runs into financial difficulty.
Governor David Ige, the state Consumer Advocate, and the majority of intervenors in the case continue to voice strong opposition to the merger unless NextEra is willing to make firm commitments that align with Hawaiʻi's customer - and sustainability - interests.
Should the merger be approved, shareholders of Hawaiian Electric will receive more than $600 million. We want to make certain that ratepayers receive similar guarantees. This is our only shot to turn what NextEra has promised into something to which it actually commits. The truth is, that despite what has been said, Hawaiian Electric is a company that could attract other partners to help Hawaiʻi reach our bold energy goals. We believe NextEra could be that partner but only if it engages in straight talk - and firm commitments - with our community.
As a Hawaiʻi-focused investment firm helping to make our state more self-sufficient, we want to do our part, along with you, to ensure the proposed merger is in the people's best interest, keeps electricity affordable, and supports the state's ambitious goal of producing 100 percent renewable electricity by 2045. To be sure, we do believe that NextEra can be a good partner for Hawaiʻi, and bring real benefits to everyone. We do not question its capabilities, balance sheet or ability to execute. We want to work with NextEra in order to firm up its commitments to our state.
Starting in late November, the Hawaiʻi Public Utilities Commission will hold formal evidentiary hearings to review all the evidence and testimony. The commissioners have until June 2016 to approve or reject the merger, but after the hearings begin, the public will not have another opportunity to provide input. For Hawaiʻi residents, it will be crucial to voice your opinion to ensure real commitments from the company are upheld in support of our energy future.
The outcome of this merger will impact our communities for generations to come and we may not get another chance to alter this course. We need to work together to get this right.