NextEra Hawaii President Eric Gleason's Responses

Applicants Exhibit-36
Docket No. 2015-0022
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NEXTERA ENERGY, INC.
DOCKET NO. 2015-0022
APPLICANTS EXHIBIT-36
RESPONSIVE TESTIMONY
OF
ERIC S. GLEASON
I. INTRODUCTION AND PURPOSE1
Q. Please state your name, business address and title.2
A. My name is Eric Gleason and my business address is 1001 Bishop Street,3
Suite 2815, Honolulu, Hawai‘i 96813. I am the president of NextEra Energy4
Hawai‘i, LLC (“NEEH”) and the president of NextEra Energy Transmission,5
LLC (“NEET”). NEET and NEEH are indirect wholly owned subsidiaries of6
NextEra Energy, Inc. (“NextEra Energy”).7
Q. Have you previously filed testimony in Docket No. 2015-0022?8
A. Yes, on April 13, 2015, I filed Direct Testimony on behalf of NextEra Energy9
and the Hawaiian Electric Companies (collectively "Applicants"). A10
statement of my qualifications is included in my Direct Testimony.11
Q. What is the purpose of your Responsive Testimony?12
A. The purpose of my Responsive Testimony is to address the concerns13
raised by other parties to this case, to share NextEra Energy’s perspective14
of its kuleana (responsibility, privilege and obligation) to attain Hawaii’s15
energy aspirations, and to make clear the many specific commitments16
NextEra Energy is making to customers, communities, employees, the17
Commission, other stakeholders and the State.18

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Q. Are other witnesses sponsoring Responsive Testimony on behalf of1
the Applicants?2
A. Yes. Table 1 below identifies the Applicants’ witnesses who are providing3
testimony to respond to the testimony of other parties in this case. The4
Hawai‘i Public Utilities Commission ("Commission") established a set of5
issues it will consider in assessing whether the Proposed Transaction6
satisfies the Commission’s standard of review in Order No. 32739 ("Order").7
For ease of reference, this table identifies the Order issues and the8
Applicants’ witnesses who will address these issues when responding to9
the testimony of other parties.10
Table 1: Table of Commission Issue11
and Applicants’ Witness Responsibility12
13
Issue
Number
Commission Question Witnesses
1 Whether the Proposed Transaction is in the public
interest.
Gleason,
Dewhurst,
Reed, Oshima,
Cox, Deason
1a Whether approval of the Transaction would be in the
best interests of the State's economy and the
communities served by HECO Companies.
Gleason, Reed,
Cox
1b Whether the Transaction, if approved, provides
significant, quantifiable benefits to HECO Companies
ratepayers in both the short and the long term, beyond
those proposed by HECO Companies in recent
regulatory filings.
Gleason, Reed,
Ching,
Sekimura, Cox
1c Whether the Proposed Transaction will impact the
ability of the HECO Companies employees to provide
safe, adequate and reliable service at reasonable cost.
Gleason, Olnick,
Ching, Cox

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Issue
Number
1d Whether the financing and corporate restructuring
proposed in the application is reasonable.
Gleason, Reed,
Sekimura
1e Whether adequate safeguards exist to prevent cross
subsidization of any affiliates and to ensure the
Commission's ability to audit the books/records of the
HECO Companies, including affiliate transactions.
Gleason, Reed,
Sekimura
1f Whether adequate safeguards exist to protect the
HECO Companies' ratepayers from any business and
financial risks associated with operations of NextEra
and/or any of its affiliates.
Gleason, Reed,
Sekimura
1g Whether the transaction will enhance or detrimentally
impact the State's clean energy goals.
Gleason,
Dewhurst,
Reed, Oshima,
Kimura, Cox
1h Whether the transfer, if approved, would potentially
diminish competition in Hawaii's various energy
markets and, if so, what regulatory safeguards are
required to mitigate such adverse impacts.
Gleason, Reed,
Kimura, Cox,
Oliver
2 Whether the Applicants are fit, willing, and able to
properly provide safe, adequate, reliable electric
service at the lowest reasonable cost in both the short
and long term.
Gleason,
Dewhurst,
Reed, Olnick,
Oshima, Ching,
Cox, Deason
2a Whether the transaction, if approved, will result in more
affordable electric rates for the customers of the HECO
Companies.
Gleason,
Dewhurst,
Reed,
Sekimura, Cox
2b Whether the transaction, if approved, will result in an
improvement in service and reliability for the customers
of the HECO Companies.
Gleason,
Dewhurst,
Olnick, Ching
2c Whether the transaction, if approved, will improve the
HECO Companies management and performance.
Gleason,
Dewhurst, Reed
2d Whether the transaction, if approved, will improve the
financial soundness of the HECO Companies.
Gleason,
Dewhurst,
Reed, Sekimura

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Issue
Number
3 Whether the transaction, if approved, would diminish in
any way the Commission's current regulatory authority
over the HECO Companies, particularly in light of the
fact that the ultimate corporate control of the HECO
Companies will reside outside of the State.
Gleason, Reed,
Sekimura, Cox,
Deason
4 Whether the financial size of the HECO Companies
relative to NextEra's other affiliates would result in a
diminution of regulatory control by the Commission.
Gleason, Reed
5 Whether NextEra, Florida Power & Light’s (“FPL”), or
any other affiliate has been subject to compliance or
enforcement orders issued by any regulatory agency or
court.
Gleason,
Deason
6 Whether any conditions are necessary to ensure that
the transaction is not detrimental to the interests of the
HECO Companies' ratepayers or the State and to avoid
any adverse consequences, and, if so, what conditions
are necessary.
Gleason, Reed,
Lapson,
Sekimura, Cox
Q. How is your Responsive Testimony organized?1
A. Section II comprises a comprehensive overview and summary of the key2
points made in my Responsive Testimony. Sections III through XII respond3
to specific concerns and contentions discussed in parties’ testimony.4
Section XIII presents my conclusions.5
II. OVERVIEW AND SUMMARY OF KEY POINTS6
Q To establish the context for your response to the contentions made7
by certain parties, please summarize the benefits from the Proposed8
Transaction and why you believe NextEra Energy is the right partner9
for Hawai‘i.10
A. Although the quantifiable benefits for customers are tremendous, and they11
do matter, this merger is not just about numbers. It is about a future that we12

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– the Hawaiian Electric Companies and NextEra Energy – envision for1
Hawai‘i, and that we believe is consistent with Governor Ige’s vision for2
Hawaii’s energy future, and the aspirations of many people across the3
State.4
Hawaii’s desire to transform its energy economy is what first5
attracted us to these islands. As world leaders in renewable energy and6
one of America’s premier electric utility operators, we look forward to7
bringing our capabilities and capital to Hawai‘i, and investing in the success8
of the State’s clean energy transformation. We see a future in which9
Hawai‘i continues to lead the nation in setting and achieving bold clean10
energy goals. We see a future in which Hawai‘i has meaningfully reduced11
and ultimately eliminated its dependence on expensive imported oil and12
other fossil fuels. And we see a future in which lower electric bills mean13
families and businesses have more financial resources to invest in the14
future they want for themselves and others. Simply put, NextEra Energy15
shares the hopes and vision for Hawaii’s energy future that the Governor so16
eloquently described.1
17
By working together, we believe that by 2045 the Hawaiian Electric18
Companies will achieve:19
• The 100% Renewable Portfolio Standard (“RPS”);20
1
Governor of the State of Hawai‘i David Ige, press conference and press release dated July 21
2015, press release available at
http://governor.hawaii.gov/newsroom/news-release-state-releases-testimony-opposing-propose
d-hei-nextera-merger/.

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• More affordable bills;1
• Improved reliability and resiliency;2
• More options for customers to manage their energy budgets;3
• Exceptional customer satisfaction and loyalty;4
• Active support of and engagement with our communities;5
• A uniquely skilled and highly motivated clean energy workforce;6
• A reputation as a leading local company and corporate citizen; and7
• A global model for clean energy innovation.8
We believe that achieving these goals will create value for all stakeholders:9
customers, communities, employees, industry, and NextEra Energy. And10
the benefits will not take 30 years to begin to materialize; for example, with11
respect to more affordable bills, we estimate nearly $1 billion in customer12
savings and other economic benefits in the first five years alone.13
In order to provide further assurances that together we can achieve14
these goals and to respond to many of the concerns that have been raised15
by parties in this proceeding, we have added 54 new commitments to the16
original list we proposed in our Application and Direct Testimonies, for a17
total of 85 commitments. We are making these commitments and they will18
be binding if the Proposed Transaction is approved and consummated. Our19
full package of commitments is reflected in Applicants Exhibit-37 to my20
Responsive Testimony, and will be discussed throughout my testimony.21
Q. Having reviewed the testimonies of the other parties, what is your22
overall understanding of the concerns expressed by the various23
parties?24

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A. Hawai‘i has embarked upon a pioneering journey toward a cleaner, more1
affordable energy future. This represents the continuation of a unique2
energy heritage: from the development of the ahupua‘a system of3
integrated resource management many centuries ago, to King David4
Laʻamea Kalākaua’s early recognition of the potential of electricity for5
Hawaiʻi in the 1870s, to Senator Daniel Inouye’s sponsorship of the Hawai‘i6
Deep Water Cable Program in the 1980s, to the Hawai‘i Clean Energy7
Initiative and 100% RPS of recent years. Hawai‘i has set a bold course to8
honor and enrich this legacy.9
With these aspirations in mind, many in Hawai‘i have expressed10
concerns about whether the State’s principal electric utility is capable of11
serving as an effective partner on this journey. In response, our company12
proposed to unite with the Hawaiian Electric Companies in order to13
strengthen and accelerate Hawaii’s clean energy transformation, while14
strategically advancing our own capabilities as a leading clean energy15
company. Since taking that step, we have come to understand that16
Hawaii’s past experience with outsiders leads many to fear the prospect of a17
mainland company assuming ownership of such a vital institution. In other18
words, at a time when Hawai‘i needs an exceptional utility, we perceive a19
shortage of trust for the Hawaiian Electric Companies as incumbent utilities,20
and NextEra Energy as a prospective mainland acquirer.21
Against this backdrop, it seems the overarching concern expressed22
by the parties, as recently articulated by Governor Ige, is whether the union23

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of NextEra Energy with the Hawaiian Electric Companies will produce the1
right energy partnership for Hawai‘i. Underlying that, there appear to be ten2
general areas of concern, which will be addressed in sections III through XII3
of my Responsive Testimony:4
1. How aligned is NextEra Energy with the values of Hawai‘i?5
2. What are NextEra Energy’s overall plans and intentions?6
3. How committed is NextEra Energy to clean energy transformation?7
4. What does this merger mean for employees?8
5. How will customers benefit economically?9
6. How will customers be protected?10
7. How will utility reliability and performance improve?11
8. How will competition be safeguarded?12
9. How will the Commission’s regulatory authority be preserved?13
10. What are Hawaii’s strategic alternatives to the merger?14
Q. How do you respond to these concerns?15
A. We are listening, learning and seeking common ground. Not just in this16
docket, but during the course of many interactions around the State. Our17
discussions with customers and other members of the community have18
generally aligned with a recent focus group effort conducted on Maui by the19
Maui Economic Development Board, 2
which identified key electricity20
priorities (see Chart 1 below):21
2
See Maui Economic Development Board, “Are we seeing what they’re seeing: customer
perceptions on energy”, attached as Exhibit-40 at Page 12 of 25, available at:
http://mauienergyconference.com/pdf/2015MEC_MPowerMaui_Skog.pdf.

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Chart 1: Electricity Priorities of Customers on Maui1
2
We understand that many of the parties, and most people in Hawai‘i,3
reject the status quo, and desire more rapid progress towards a cleaner,4
more affordable energy future. At the same time, we understand and5
respect that people want to feel comfortable that uniting our companies will6
be beneficial for customers and Hawai‘i. When we carefully sort through7
and consider what the parties have told us, we think there is much common8
ground on many of the areas where NextEra Energy’s capabilities fit well9
with the Hawaiian Electric Companies. We also recognize that we need to10
do our best to address the remaining concerns, while seeking to build trust.11
Over the past several months, we have extensively supplemented12
our Application and direct testimony, investing thousands of man-hours to13
produce approximately 40,000 pages of answers to some 4,000 individual14
questions, including subparts. Attached as Exhibit-38 is the list of15

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responses to information requests that the Applicants incorporate by1
reference.2
Through my Responsive Testimony and that of the Applicants’ other3
witnesses, we have continued the process of trying to find productive4
common ground. In some instances, there may have been5
misunderstandings, which we will try to correct; in some instances, we6
respectfully disagree, and will make our case to support our position; and in7
a number of other instances, we will offer one or more new commitments to8
address the concern.9
III. FIRST GENERAL AREA OF CONCERN: HOW ALIGNED IS NEXTERA10
ENERGY WITH THE VALUES OF HAWAI‘I?11
Q. Please elaborate on the first of the ten general areas of concern,12
regarding NextEra Energy’s alignment with the values of Hawai‘i.13
A. We understand that Hawai‘i is a special place and that we have a lot to14
learn. We continue to study the history and culture of Hawai‘i in order to15
understand the unique legacy of the Hawaiian Electric Companies. We find16
that it is the rich stories from people throughout the islands that bring the17
words on paper to life, and which most help us to expand our understanding18
of this unique place. We acknowledge that as a mainland firm we will need19
to make the effort to authentically and meaningfully apply the values of20
Hawai‘i. NextEra Energy recognizes the importance of values and we strive21
to perpetuate our stated values throughout our corporation and the22
communities in which we live and work. Likewise, we are excited by the23

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opportunity to integrate Hawai‘i values, such as aloha, into the fabric of our1
corporation. For their part, various parties have expressed concerns in2
areas such as:3
• Cultural compatibility;4
• Charitable giving;5
• Local control; and6
• Corporate track record7
As Hawaii’s aspiring strategic energy partner, it is incumbent upon us to8
address each of these concerns, and we will do so as best we can.9
Q. How do you respond to the concerns regarding cultural10
compatibility?11
A. We take seriously our responsibility to enter Hawai‘i with humility, open12
hearts and open minds, and to adapt to our new home and neighbors. Early13
on we were advised that “people here don’t care how much you know until14
they know how much you care,” and we have found this to be true. Within15
this proceeding, we have delved into issues such as what it means to be16
local, the role of the Hawaiian Electric Companies within the community,17
and the alignment of our corporate values with those of Hawai‘i.3
Questions18
like these typically would not be asked in other states or even other19
countries; they underscore the unique and diverse cultural values of20
Hawai‘i. And beyond this proceeding, we are learning more about Hawai‘i21
3
See Applicants’ Response to OP-IR-149 (what does it mean to be local); Applicants’ Response
to OP-IR-150 (what is the role of the Hawaiian Electric Companies in the Hawai‘i community);
Applicants’ Response to CA-IR-379 (how do your corporate values differ from Hawaii’s triple
bottom line).

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and its communities every day from our interactions with our counterparts at1
the Hawaiian Electric Companies and people across Hawai‘i.2
This learning is also a two-way process. NextEra Energy3
understands that who we are is also relevant, and we would like the people4
of Hawai‘i to know that we are not just another mainland corporation, but a5
team of people with strong community ties and involvement, united by a6
shared passion for solving energy challenges. As an example, one of my7
team members, Genese Galvan, moved away from her family in Texas to8
join our company right out of college. She let us know she had a family9
emergency, and we were able to move her back to Texas and stay with us10
while working for our Lone Star Transmission subsidiary. When she11
decided she wanted to move back to Florida, we were happy to make an12
opportunity available to her, and she has excelled. Genese’s story is just13
one of many about the great people at our company. A few of their stories14
are attached as Exhibit-41 to my Responsive Testimony.15
We are committed to do our best to grow into our role as the owner of16
one of Hawaii’s foundational institutions, and ultimately to nurture the17
Hawaiian Electric Companies into the utility of the future Hawai‘i requires.18
As a part of this effort, and to enrich our dialogue with the community, we19
commissioned research into the history and genealogy of energy resource20
development in Hawai‘i, including the lineage of the Hawaiian Electric21
Companies. This study included collecting and analyzing numerous22
primary and secondary resources including but not limited to documents23

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from the Hawai‘i State Archives, University of Hawai‘i libraries, published1
articles, books and Hawaiian language resources including the nūpepa2
(the Hawaiian language newspapers). Much of this work reflects a Native3
Hawaiian perspective, and as such that of the indigenous host culture,4
which we recognize is one of many that co-exist in Hawai‘i today. This is a5
work in progress and our understanding of these matters continues to6
evolve and grow every day.7
Q. Certain parties question NextEra Energy’s understanding and8
commitment to Hawaii’s cultural values, including the “triple bottom9
line”4
of kuleana, mālama pono and aloha. Please comment.10
A. NextEra Energy appreciates that Hawaii’s cultural values are distinctive and11
that we have much to learn. That said, our core corporate values of12
commitment to excellence, doing the right thing and treating people with13
respect, while not identical, are closely aligned and very compatible with14
Hawaii’s “triple bottom line” of kuleana, mālama pono and aloha.15
We have learned that kuleana means taking responsibility, which16
clearly is a broader concept than NextEra Energy’s value of “commitment to17
excellence.” Although kuleana may not literally be “commitment to18
excellence,” Hawaii’s culture also places a high value on pursuing19
excellence as exemplified in the ‘ōlelo no‘eau (Hawaiian proverb), “kūlia i ka20
4
Consumer Advocate Exhibit-5 at 23, line 3 through 24, line 16; LOL-KLMA-PPA Exhibit-1 at 6,
lines 18-22; and Ulupono Exhibit-1 at 66, line 17 through 70, line 5.

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nu‘u” (to strive for the summit).5
As I am learning, a commitment to1
excellence is embedded in the host culture and we view this as an implied2
and indispensable part of our kuleana.3
I have learned that mālama pono means to take good care, and that4
Hawai‘i places a high worth on this value as evidenced by the State motto5
“Ua mau ke ea o ka ‘āina i ka pono.”6
In both cases, I understand “pono” is6
“doing what is right.” The concept of “mālama” implicates care on multiple7
levels – social, environmental, cultural, and economic – doing things with or8
from the heart. This is very consistent with NextEra Energy’s values.9
It has been explained to me that “aloha” is a complex word with many10
layers of meaning, but one meaning is compassion and cooperation. I have11
listened to the proverb “aloha kekahi i kekahi” (love and respect one12
another). To me, this implies the reciprocal cultural mandate that “aloha” is13
a reciprocal relationship and is parallel with NextEra Energy’s value to “treat14
people with respect.” I view NextEra Energy’s value to “treat people with15
respect” as an implied and indispensable element of “aloha.”16
This is already reflected in the Hawaiian Electric Companies’ existing17
core values of Aloha, Integrity, Excellence, and Safety. NextEra Energy18
supports the post-transaction maintenance and continued nurturing of19
these existing core values as the Hawaiian Electric Companies carry out20
their mission of providing innovative energy leadership for Hawai‘i.21
5
Pukui, ‘Ōlelo No‘eau: Hawaiian Proverbs and Poetical Sayings, #1913.
6

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Q. What has NextEra Energy done to better acquaint itself with the local1
community?2
A. We continue to embrace the culture and communities of Hawai‘i in a3
number of ways. For example, during a series of 13 informational open4
house meetings in April on O‘ahu, Hawai‘i Island, Maui, Moloka‘i and Lāna‘i,5
we interacted with and received direct feedback from concerned citizens, all6
of it informative and helpful to our continued learning about the perspectives7
and priorities of the people of Hawai‘i. We heard from many Hawai‘i Island8
customers who praised the responsiveness, dedication and9
professionalism of the Hawai‘i Electric Light team, and wanted to ensure10
that its ability to respond to tropical storms and lava flows would not suffer11
as a result of the merger. We also heard from many retirees on O‘ahu and12
Maui about how much they relied upon their post-retirement benefits and, in13
some instances, dividends from their shareholdings. And on Moloka‘i and14
Lāna‘i, we heard from many people who were passionate about wanting to15
play an active role in charting their energy future.16
I have also met either one-on-one or accompanied by Hawaiian17
Electric Company officials with a wide variety of local residents, community18
leaders and industry participants, including many of the parties in this19
proceeding. My perspective is that visiting first-hand with people across the20
State is one of the most important ways to inform and shape our strategy21
and activities because, more than anywhere else I know, people here care22
deeply about their electricity provider and their energy future.23

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Q. Will you make a commitment to provide regular updates on your1
progress in learning about and reflecting the values of Hawai‘i?2
A. Yes. Responding to general requests of several intervenors and the3
specific request of the Consumer Advocate, in addition to NextEra Energy’s4
annual overall Corporate Responsibility Report, NextEra Energy will5
prepare an annual Hawai‘i-specific Corporate Responsibility Report, which6
will describe the activities of NextEra Energy subsidiaries and affiliates7
doing business in Hawai‘i, with separate sections for each of the Hawaiian8
Islands on which NextEra Energy subsidiaries and affiliates conducted9
business in the year covered by the report. The Hawai‘i Corporate10
Responsibility Report will include a detailed description with relevant11
metrics addressing the progress NextEra Energy is making in operating as12
a Hawai‘i business, including the Hawaiian concepts of kuleana, mālama13
pono and aloha, and will include information on its annual charitable14
contributions. NextEra Energy commits to work with the Commission, the15
Consumer Advocate and the Planning Office to develop metrics and16
assessment tools specifically for use within its Hawai‘i Corporate17
Responsibility Report. The first annual Hawai‘i specific Corporate18
Responsibility Report will be prepared following the completion of the first19
calendar year after the year in which the merger closes. We also commit to20
work with the Commission, Consumer Advocate and other relevant21
government agencies to discuss the development of specific programs that22
will directly benefit low-income customers.23

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Q. How do you respond to the concerns regarding charitable giving?1
A. We do understand that Hawai‘i counts on the Hawaiian Electric Companies2
to be generous supporters of local communities. We have proposed to3
maintain HEI’s current level of charitable giving. Some parties have argued4
that what we offer is not an improvement, and expressed concern that there5
was no time commitment. 7
The first concern is unfounded: our6
commitment to maintain the HEI current level of corporate giving of7
$2,200,000 per year represents an increase in corporate charitable giving in8
Hawai‘i, reasonably assuming that American Savings Bank will make9
charitable contributions of its own, which have averaged about $700,00010
annually in recent years. With respect to the second concern, we are11
volunteering to make this commitment binding for a 10-year period12
post-closing and to make inflationary adjustments to maintain the 201413
level of HEI giving in real terms throughout that period. The HEI Charitable14
Foundation will be renamed Hawaiian Electric Charitable Foundation15
(“HECF”) and will operate under the same policies and governance as it16
does today. And, as discussed in Section VIII of my Responsive Testimony,17
charitable contributions will not be included in rates.18
Of course, we understand this is not just about the money, but also19
about the time and passion that the Hawaiian Electric Companies’20
employees devote to worthy causes throughout Hawai‘i. During 2014, the21
7
DBEDT Exhibit-1 at 41, line 9 through 42, line 5; FOL Exhibit-1 at 5, lines 20-23; Planning
Office Exhibit-1 at 6, line 6 through 8, line10; Consumer Advocate Exhibit-20 at 8, line 12
through 12, line 14.

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Hawaiian Electric Companies devoted approximately 12,000 hours to1
support local communities. NextEra Energy is itself a strong supporter of2
employee community service, and our employees logged over 54,0003
hours of community service time in 2014. NextEra Energy also has a4
“Dollars for Doers” program in which employees who volunteer a certain5
number of hours per year may be eligible to earn company grants totaling6
up to $350 for nonprofit organizations for which the employees volunteered.7
Last year, this program resulted in approximately $123,000 in NextEra8
Energy Foundation Dollars for Doers grants to 278 worthy charities. This is9
part of our culture and most importantly, the type of people who make us10
who we are as a company.11
We also feel strongly that in order to meet the State’s goal of 100%12
renewable energy we will all need to work together. The Hawaiian proverb,13
‘A‘ohe hana nui i ke alu ‘ia (no task is too big when done together by all),8
is14
very relevant, and we will continue to invest and partner in Hawaii’s15
communities to make our common vision a reality.16
Q. How do you respond to the concerns regarding corporate governance17
and local control?9
18
A. It is interesting to look at this question in the context of the entire genealogy19
of the Hawaiian Electric Companies, rather than just this one point in time.20
8
9
DBEDT Exhibit-1 at 43, line 19 through 49, line 13; DOD Exhibit-1 at 82, line 19 through 83, line
12; TASC Exhibit-1 at 22, line 4 through 23, line 3; Ulupono Exhibit-1 at 66, line 13 through 70,
line 5.

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When it was formed, the company that later became Hawaiian Electric was1
owned and controlled by just four individuals in Honolulu; decades later, it2
was floated on the New York Stock Exchange, diluting and shifting to the3
mainland much of its ownership; and then over time, it acquired many4
smaller local utilities statewide. In fact, it wasn’t that many years ago that5
towns like Hāna and Lahaina claimed electric utilities of their own; but over6
time they all conceded some degree of local control, becoming part of a7
larger company with mainland shareholders. Regulation has evolved in8
parallel: when the company that later became Hawaiian Electric was9
formed there was no Public Utilities Commission or Consumer Advocate to10
ensure the public interest was served, and the scale and scope of these11
organizations has grown substantially since they were initially established.12
The people of Hawai‘i have been well-served by this evolution in utility13
ownership and regulation, which ultimately has enabled everyone to share14
resources and thus the benefits of safer, more reliable, more affordable15
power.16
Today, given that only about 25% of HEI shares are held by17
residents of Hawai‘i, it can fairly be said that the Hawaiian Electric18
Companies are not locally-owned and controlled, and have not been so for19
decades. Out-of-state shareholders have long held the controlling interest20
that makes the critical governance decisions: they cast the deciding votes21
to determine the composition of HEI’s Board of Directors, which in turn22
determine the directors and executive management of the Hawaiian23

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Electric Companies, from whom all corporate decisions flow. That said, it is1
true that as a practical matter, this merger will result in the transfer of some2
incremental degree of corporate control to the mainland as a necessary3
consequence of being part of the NextEra Energy family.4
Q. Has NextEra Energy made any commitments to address the concerns5
of the parties10
on issues related to local control and governance?6
A. Yes. As reflected in Applicants Exhibit-37, we have agreed to a series of7
commitments that are intended to mitigate these concerns11
as much as8
reasonably possible, without agreeing to measures that would undermine9
our ability to deliver on our obligations to customers and other stakeholders.10
We maintain our previous commitments related to preserving local11
headquarters and local management in Hawai‘i, having the President and12
CEO of the Hawaiian Electric Companies report directly to the Chairman13
and CEO of NextEra Energy, and establishing a local, independent14
advisory board. We have added to this list.15
To address concerns regarding local management and control, we16
are also committing that local Hawaiian Electric Companies’ management17
will maintain responsibility for the preparation of the Hawaiian Electric18
Companies’ capital and operating budgets, which, as with the other two19
principal businesses at NextEra Energy, Florida Power & Light Company20
10
Consumer Advocate Exhibit-7 at 67, line 1 through 69, line 6; DBEDT Exhibit-1 at 71, line 20
through 73, line 17; DOD Exhibit-1 at 82, line 18 through 83, line 11.
11
through 63, line 3; LOL-KLMA-PPA Exhibit-1, page 39, line 12 through 41, line 16.

Page 21 of 91
(“FPL”) and NextEra Energy Resources, LLC (“NEER”), will be subject to1
the review of the NextEra Energy Chairman and CEO, and the approval of2
the NextEra Energy Board of Directors. Consistent with the $20 million3
authority provided to the President and CEO of each of NextEra Energy’s4
other two principal businesses, FPL and NEER, the President and CEO of5
the Hawaiian Electric Companies will have a commitment authority of up to6
$20 million for any individual capital investment within an approved overall7
budget.8
To address concerns regarding the breadth of community input, we9
are now amending our commitment regarding the advisory board to specify10
that it will include members from each of the counties of O‘ahu, Maui and11
Hawai‘i. This represents an increase in geographic diversity of influence as12
compared with the situation today.13
Importantly, local regulatory control by the Commission will remain14
unchanged as a result of this merger. And local management of the15
Hawaiian Electric Companies’ will remain the primary point of contact in16
Hawai‘i regulatory matters. Unlike many other industries, the power of the17
local regulator has become, and will remain, a critically important safeguard18
in the electric utility business, which should provide further comfort to the19
State.20
Applicants’ witness Reed will also address NextEra Energy’s21
corporate governance and local control commitments in his Responsive22
Testimony.23

Page 22 of 91
Q. Please respond specifically to Planning Office witness Hempling’s1
recommendation that NextEra Energy guarantee that the Hawaiian2
Electric Companies management will create their own budgets,3
without any review or approval of NextEra Energy.4
A. That is not practical. NextEra Energy is a strategic investor with extensive5
experience in electric utility planning and operations, not a passive financial6
investor, and the level of review and approval discussed above will7
contribute to the effectiveness of the Hawaiian Electric Companies’ capital8
and operating budget processes. Moreover, NextEra Energy’s9
management and Board of Directors have a fiduciary duty to the company’s10
investors to review and approve, modify or reject proposals from each of the11
company’s business units, including the Hawaiian Electric Companies if the12
merger is approved. The condition described in this request would delegate13
that duty to others, and effectively strip the duties of business managers14
from the representatives of the investors. It would also unnecessarily15
isolate local Hawai‘i business units from the proven financial resource16
management expertise of NextEra Energy. Such an action would be17
unprecedented, inappropriate and is one NextEra Energy cannot accept.18
Applicants’ witness Reed addresses Planning Office witness Hempling’s19
arguments in his Responsive Testimony as well.20

Page 23 of 91
Q. Certain parties question whether NextEra Energy will adequately1
support the budgetary needs of the Hawaiian Electric Companies.12
2
Do you agree?3
A. No. There is no basis for these assertions. NextEra Energy has every4
intention to support the budgetary needs of the Hawaiian Electric5
Companies. NextEra Energy has a strong balance sheet and a track record6
of raising and deploying capital in all market environments to make clean7
energy investments. The Board of Directors of NextEra Energy, on behalf8
of the stockholders of NextEra Energy, have demonstrated their full support9
for the purchase of HEI’s shares, and the investment opportunity that this10
represents to achieve the goals of the Hawaiian Electric Companies.11
NextEra Energy will not now pull back and limit the Hawaiian Electric12
Companies’ access to capital for new investments to achieve these goals.13
Q. Some parties 13
are requesting that NextEra Energy commit to a14
certain level of availability in Hawai‘i of NextEra Energy’s senior15
management, including its Chairman and CEO. Please respond.16
A. In response to the parties’ comments, NextEra Energy commits that the17
Chairman and CEO of NextEra Energy will travel to Hawai‘i for meetings18
with the Commissioners, Consumer Advocate and local, independent19
advisory board at least once annually. Any costs incurred for the travel of20
the Chairman and CEO of NextEra Energy will not be included in the21
12
FOL Exhibit-1 at 18, line 9 through 21, line 2.
13
Consumer Advocate Exhibit-5 at 26, line 1 through 29, line 21; DOD Exhibit-3 at 1, No. 2.

Page 24 of 91
Hawaiian Electric Companies’ rates. The Applicants do not agree that any1
additional formal commitments are necessary, and indeed at some point2
such commitments work counter to the objective of empowering local3
management. Of course, in the normal course of business, NextEra4
Energy’s senior management and CEO will make regular visits to Hawai‘i.5
Consistent with our emphasis on empowering local management,6
NextEra Energy’s CEO will look to the President and CEO of the Hawaiian7
Electric Companies for advice with respect to meetings with stakeholders.8
Over time these may include, but not be limited to, the Hawaiian Electric9
Companies’ leadership teams, employees, advisory board members, State10
and county government officials, business and community leaders, and11
major customers. The President and CEO of the Hawaiian Electric12
Companies will meet with the Commission and the Consumer Advocate at13
least on a quarterly basis and will hold an annual community meeting on14
each island served by the Companies, with two meetings on the Island of15
Hawai‘i. These of course represent minimum thresholds and we anticipate16
much more community and stakeholder interaction by the President and17
CEO of the Hawaiian Electric Companies and his or her management team.18

Page 25 of 91
Q. How do you respond to the concerns regarding corporate track1
record?14
2
A. We are proud of the track record of our company, which is widely and justly3
regarded as exceptional both within the energy industry and among large4
corporations globally. On a personal note, I joined NextEra Energy nearly5
five years ago precisely because I believed it to be a leading company in the6
industry – based on the caliber of the team, and their accomplishments and7
future prospects in clean energy – and this is a belief I very much still hold.8
Furthermore, the record in this proceeding is consistent with my9
belief. No party disputes that NextEra Energy is the world’s largest10
producer of renewable energy from the wind and sun, and has received11
numerous awards from credible third parties for its overall performance12
relative to its national and global peers, as well as its leadership in areas13
such as innovation, ethics and sustainability. And with respect to our utility14
operations in Florida, no party disputes that FPL’s customer-centric,15
“virtuous circle” philosophy15
is an industry best practice noted particularly16
by the Commission. No party disputes that FPL has successfully reduced17
its consumption of oil by 99% since 2001, saving its customers more than18
$7.5 billion and counting. No party disputes that FPL delivers high19
customer satisfaction, excellent reliability, and the lowest reported rates out20
14
Hawaii Gas Exhibit-7 at 28, line 20 through 30, line 6; Blue Planet Exhibit-1 at 17, line 3 through
20, line 24; TASC Exhibit-1 at 14, line 10 through 15, line 17; HREA Exhibit-1 at 7, line 160
15
Direct Testimony of Applicants’ witness Gleason at 11, lines 8-11.

Page 26 of 91
of the 43 reporting municipal, cooperative, and investor-owned utilities in1
Florida. In short, no party disputes that FPL is one of the industry’s leading2
utilities.3
Without exception, the concerns that have been expressed by4
multiple parties appear to derive from a combination of mistrust regarding5
whether we mean what we say, misleading omissions regarding all the6
ways in which we provide outstanding service to our customers and7
communities in Florida and beyond, misinformation that does not have a8
factual basis, and misinterpretations of the facts. Nearly all of the concerns9
relate to renewable energy, political influence, or compliance. I will10
summarize a few major themes and Applicants’ witness Deason will also11
address them in his Responsive Testimony.12
A number of parties assert that our Florida track record13
demonstrates we are not the right partner for Hawai‘i.16
Notably, the14
Intervenors do not point to any other company that would be a better fit for15
Hawai‘i or the Hawaiian Electric Companies.16
The general characterization of assertions is that our utility FPL:17
does not have a lot of renewables,17
and what little they do have is mostly18
utility-scale rather than rooftop solar;18
burns a lot of natural gas and19
16
Hawaii Gas Exhibit-7 at 28, line 20 through 30, line 6; Blue Planet Exhibit-1 at 17, line 3 through
20, line 24; HREA Exhibit-1 at 7, line 160 through 8, line 182; TASC Exhibit-1 at 24, line 3
through 25, line 6.
17
TASC Exhibit-1 at 15, line 3 through 16, line 21.
18
Blue Planet Exhibit-1 at 14, line 4 through 17, line 2; Planning Office Exhibit-4 at 147, line 4
through 149, line 15; HSEA Exhibit-1 at 4, line 7 through 10, line 18.

Page 27 of 91
operates nuclear plants;19
does not have much in the way of demand1
response or energy efficiency programs; 20
owns mostly utility-scale2
generation, rather than buying from independent producers;21
has a lot of3
influence in the state which it has used to serve its own interests rather than4
the public interest;22
must reflect the NextEra Energy corporate mindset so5
doing things the same way in Hawai‘i must surely be our intention;23
and6
lacks the capabilities to help Hawai‘i even if NextEra Energy does have the7
right intentions.24
Remarkably, press stories and a discredited writing are8
cited by intervenor witnesses and used as “factual” support for various9
aspects of what are essentially arguments, not testimony.25
All of these10
assertions are flawed and none rises to the level of facts upon which a valid11
case can be made.12
I will just touch on one example of how selective use of the facts, bad13
assumptions and innuendo have been employed to attack our track record:14
there is a widely-held notion that because FPL has only about 3,000 net15
energy metering customers, it must be against rooftop solar. FPL16
demonstrably supports customer choice, interconnecting rooftop solar17
19
COH Exhibit-1 at 24, line 3 through 25, line 7.
20
DBEDT Exhibit-3 at 10, lines 12-17; Sierra Club Exhibit-1 at 25, lines 5-15 and at 34 lines 2-9.
21
COH Exhibit-1 at 25, lines 1-7; LOL-KLMA-PPA Exhibit-1 at 8, line 9 through 9, line 4.
22
LOL-KLMA-PPA Exhibit-34 at 13, line 13 through 16, line 16; Hawaii Gas Exhibit-7 at 33, line
17 through 35, line 12; SunEdison Exhibit-1 at 20, line 11 through 21, line 5; Sierra Club
Exhibit-1 at 37, line 3 through 44, line 10; LOL-KLMA-PPA Exhibit-34 at 15, lines 6-11.
23
Blue Planet Exhibit-1 at 17 line 3 through 19, line 10; Sierra Club Exhibit-1 at 6, line 6 through
11, line 22; TASC Exhibit-1 at 19, lines 4-13.
24
DBEDT Exhibit-3 at 11, lines 8-19.
25
LOL-KLMA-PPA Exhibit-35; LOL-KLMA-PPA Exhibit-36 at 14, line 14 through 17, line 2; HSEA
Exhibit-1 at 7, lines 5-8.

Page 28 of 91
customers in an average of just 12 days, so this is not a case of a utility1
standing in the way of its customers. In fact, the main reason FPL does not2
have much rooftop solar in its Florida service territory is simple home3
economics: because their typical residential retail rate is only 9.7 cents per4
kilowatt-hour, our customers generally elect not to install rooftop solar. This5
phenomenon is not unique to Florida: solar penetration and rates are6
positively correlated across the country (see Chart 2 below). Moreover,7
leading rooftop solar companies admit that low utility power prices8
discourage the use of rooftop solar, and are therefore a threat to their9
business models.26
No party has disputed any of these facts, yet some10
persist in the fear-mongering claim that its low penetration rate means that11
FPL must be against rooftop solar.12
26
For example, the “Risk Factors” section in SolarCity’s 2015 Form 10-K Annual Report states
that “[a] material drop in the retail price of utility-generated electricity . . . would harm our
business, financial condition and results of operations. . . . We believe that a customer’s
decision to buy renewable energy from us is primarily driven by their desire to pay less for
electricity. Decreases in the retail prices of electricity from the utilities . . . would harm our ability
to offer competitive pricing and could harm our business. A reduction in utility electricity prices
would make the purchase of our solar energy systems or the purchase of energy under our
lease and power purchase agreements less economically attractive. . . . If the retail price of
energy available from utilities were to decrease due to any of these reasons, or others, we
would be at a competitive disadvantage. As a result, we may be unable to attract new
customers and our growth would be limited. Id., available at
http://investors.solarcity.com/secfiling.cfm?filingID=1564590-15-897&CIK=1408356. See also
Sunrun Inc. Form S-1 Registration Statement.

Page 29 of 91
Chart 2: Solar PV Installations vs. Customer Bills (2012-2015)27
We are also proud of our ethical and lawful approach to doing1
business as well as our overall compliance culture. As Applicants’ witness2
Deason covers in his Responsive Testimony, the record in this case is3
consistent with that of a company that does business in the right way, in a4
pono way.5
NextEra Energy acknowledges and fully respects that there are6
many differences between Hawai‘i and Florida.28
The laws are different.7
27
Figures based on the January 2015 Edison Electric Institute (“EEI”) Typical Bills and Average
Rates Report. Since that time FPL's typical 1000 kWh bill has decreased and is currently
$97.11.

Page 30 of 91
The customer preferences are different. There are many other differences1
as well. We respect the right of Floridians to prioritize their energy and2
other needs, just as we respect the right of people in Hawai‘i to do the same.3
NextEra Energy faithfully serves its customers’ wants and needs in other4
jurisdictions, and it will faithfully serve the wants and needs of its new5
customers in Hawai‘i. And the fact is that any prospective energy partner6
can only bring some of the experience and capabilities required by Hawai‘i.7
Fortunately, NextEra Energy brings a lot to the table that will help, as I will8
discuss further on.9
Q. Consumer Advocate witnesses Nishina and Carver make reference to10
FPL’s 2010 motion to disqualify a former Florida Commissioner from11
participating in cases involving FPL.29
Can you elaborate on the12
circumstances that led FPL to file it?13
A Yes. The filing of the motion was taken only as a last resort and after very14
careful consideration on the part of FPL. However, as documented in the15
motion and then in the writ of prohibition filed with the appellate court,30
the16
anti-FPL bias of the former commissioner had become so abundantly clear17
that FPL was compelled to take steps to protect its customers and investors18
from this bias to secure its right to due process and a fair hearing before an19
impartial decision maker. The seriousness of the step of filing for the20
28
DBEDT Exhibit-3 at 11, lines 17-19; Ulupono Exhibit-1 at 69, lines 22-25; Blue Planet at 6, lines
23-25; Hawaii Gas Exhibit-7at 21, lines 15-20.
29
Consumer Advocate Exhibit-1 at 62, lines 3-5; Consumer Advocate Exhibit-16 at 53, line 9
through 54, line 9.
30
See Case no: 1D10-4757, Florida First District Court of Appeal.

Page 31 of 91
disqualification is underscored by the fact that the verified motion was1
sworn to by FPL’s Senior Vice President, now President, Eric Silagy. FPL2
explained how the former commissioner had breached his legal obligations3
by engaging in openly adversarial conduct towards FPL, essentially taking4
on the role of prosecutor rather than judge. Additionally, the former5
commissioner made public comments further displaying his animosity6
towards FPL.7
FPL was not alone in its concern. In the midst of these8
developments the credit rating agencies recognized the deteriorated9
political and regulatory situation in Florida as a marked departure from the10
previously stable regulatory environment.31
11
This was an unprecedented action for FPL to take, and certainly not12
indicative of how FPL routinely functions in Florida’s regulatory13
environment, as Applicants’ witness Deason explains in his Responsive14
Testimony. FPL always strives to work cooperatively with the Florida Public15
Service Commission to foster a constructive regulatory environment that16
benefits its customers and Florida.17
31
See Moody’s Investor Service, Regulatory Frameworks – Ratings and Credit Quality for
Investor-Owned Utilities, at 6 and 13 (June 18, 2010), available at:
http://www.amchamar.com.ar/cms/files/608/regulatory%20frameworks%20-%20ratings%20a
nd%20credit%20quality%20for%20utilities.pdf?bcsi_scan_b188b7305b22cf96=I2rNipYeB3Kh
MBS6m43Ba6XTh7x4AAAAPM5L1w==&bcsi_scan_filename=regulatory%20frameworks%20
-%20ratings%20and%20credit%20quality%20for%20utilities.pdf.

Page 32 of 91
Q. Do you believe the Applicants’ commitments appropriately address1
the requests from the parties32
for stronger local management and2
governance measures?3
A. Yes. I believe the package of local management and governance4
commitments that we have proposed strikes the right balance in preserving5
local control and providing a forum for broad feedback and input from6
stakeholders in Hawai‘i, while affording NextEra Energy the flexibility it7
needs to do what it does best – manage utilities well. If local governance8
restrictions are put in place that impede the ability of NextEra Energy’s9
management to exercise appropriate oversight of the Hawaiian Electric10
Companies, it will diminish the value of the merger to both Applicants and11
hinder our prospects for effecting clean energy transformation.12
Additionally, this merger likely will mean a ratings upgrade for the Hawaiian13
Electric Companies that is unsurpassed in other utility mergers, and it is14
important not to put in place measures that would jeopardize the resultant15
customer benefits.16
Q. Consumer Advocate witness Hodges states that being a kama‘āina is17
not required. What is necessary is showing respect to everyone,18
demonstrating humility, resisting greed and giving back along with19
other Hawai‘i values.33
What is your response?20
32
Consumer Advocate Exhibit-7 at 69, lines 2-6; DBEDT Exhibit-1 at 72, line 22 through 73, line
1; DOD Exhibit-1 at 83, lines 1-11.
33
Consumer Advocate Exhibit-5 at 10, lines 19-21.

Page 33 of 91
A. I could not agree more. This is exactly what NextEra Energy will strive to do1
to merit its position as the owner of one of Hawaii’s most important business2
and public service institutions.3
IV. SECOND GENERAL AREA OF CONCERN: WHAT ARE NEXTERA4
ENERGY’S OVERALL PLANS AND INTENTIONS?5
Q. Please elaborate on the second general area of concern, regarding6
NextEra Energy’s overall plans and intentions.7
A. There are many areas where parties seek more information regarding our8
plans and intentions, such as:9
• Business model and related questions raised by the Commission in10
its Inclinations paper34
(“Commission’s Inclinations”);35
11
• Resource planning questions such as those addressed in the Power12
Supply Improvement Plans (“PSIP”) docket, 36
including major13
projects such as liquefied natural gas (“LNG”)37
and the inter-island14
cable;38
15
34
Commission’s Inclinations on the Future of Hawaii’s Electric Utilities, Docket No. 2012-0036, In
the Matter of Public Utilities Commission Regarding Integrated Resource Planning, Decision
and Order No. 32052, filed April 28, 2014 at Exhibit A.
35
HSEA Exhibit-1 at 13, lines 6-14; COM Exhibit-1 at 28, lines 9-10; LOL-KLMA-PPA Exhibit-34
at 1, lines 14-16; Planning Office Exhibit-4 at 29, lines 7-10.
36
Tawhiri Exhibit-2 at 11, lines 15-22; Ulupono Exhibit-1 at 6, lines 4-7; HWSC Exhibit-1 at 7,
lines 138-143; Consumer Advocate Exhibit-1 at 40, lines 8-14.
37
Hawaii Gas Exhibit-1 at 8, line 23 through 9, line 2.
38
FOL Exhibit-1 at 3, line 18 through 4, line 2; LOL-KLMA-PPA Exhibit-34 at 16, lines 19-22;
DBEDT Exhibit-1 at 53, line 17 through 54, line 8.

Page 34 of 91
• Merger integration plans39
including the prospects for sharing of best1
practices;40
and2
• Other questions that generally relate to employees41
and customers3
and will be addressed further on in this testimony.4
Right now our primary focus necessarily is on getting ready to bring5
these two companies together as part of a comprehensive merger6
integration planning process. So while all of these questions are7
understandable, at this stage in the proceeding the Applicants have8
provided the documents and information we have that are appropriate and9
responsive to the information requests, and indeed, everything that could10
reasonably be expected at this stage of a corporate merger.11
A number of parties take the position that the Commission should not12
approve the merger unless and until NextEra Energy first produces13
comprehensive, detailed plans for how the combined companies will14
operate in the years, if not decades, to come.42
Applicants’ witness Reed15
explains in his Responsive Testimony why these demands are both16
unreasonable and contrary to the public interest at this time. That said, we17
do agree that it is entirely reasonable to ask us to explain our intentions18
39
Consumer Advocate Exhibit-11 at 27, line 1 through 28, line 3; Planning Office Exhibit-4 at 152,
lines 16-22.
40
Ulupono Exhibit-1 at 32, lines 9-21.
41
through 9, line 3; DBEDT Exhibit-1 at 43, lines12-18; FOL Exhibit-1 at 2, lines 8-18; IBEW
Exhibit-1 at 15, lines 12-16; Planning Office Exhibit-1 at 9, lines 4-18.
42
HINA Exhibit-1 at 5, lines 15-20; HREA at 5, line 110 through 6, line 139; HWSC Exhibit-1 at 6
line 130 through 7, line 143.

Page 35 of 91
based on what we know today, as well as the status of the ongoing merger1
integration planning effort. And in some cases, there are commitments that2
we either have or can make to mitigate reasonable concerns.3
Q. What are your intentions regarding the Commission’s Inclinations?4
A. Our intentions are to clarify our understanding of them and to conduct5
ourselves accordingly. We appreciate the significance of the Commission’s6
Inclinations, and indeed this document was an important factor in our7
decision last year to approach HEI regarding a merger. Based on our8
understanding of this document, we are fully aligned with the forceful vision9
put forth through the Commission’s Inclinations, and those who assert that10
NextEra Energy’s approach or business model is somehow incompatible11
are mistaken.43
We also agree that we can and should do more to explain12
our perspectives on this seminal document.44
NextEra Energy’s initial13
response to the Commission’s Inclinations is provided at Applicants14
Exhibit-42, wherein we outline our view of a sustainable business model for15
the Hawaiian Electric Companies. We are also proposing as an additional16
commitment to produce a comprehensive response to the Commission’s17
Inclinations, in conjunction with the development of updated resource18
plans, within twelve months post-closing.19
43
SunPower Exhibit 1 at 7, lines 1-12; FOL Exhibit-1 at 12, lines 26-28; Sierra Club, Exhibit-1 at
9, lines 9-16; SunPower Exhibit-1 at 6, lines 6-13.
44
See Applicants’ response to DBEDT-IR-156 and NextEra Energy’s response to
DBEDT-IR-157.

Page 36 of 91
Q. What are your intentions regarding resource planning matters?1
A. Whether in resource planning or otherwise, we employ our virtuous circle2
philosophy (see Chart 3 below).45
This approach was commended by the3
Commission in 2013 as a model for the Hawaiian Electric Companies to4
emulate.46
5
Chart 3: The "Virtuous Circle"
At the same time, we recognize that in Hawai‘i, customer-focused6
resource planning is not just about technical and economic considerations,7
because customers here are also very focused on doing what is right for the8
broader community as well as for the environment. For example, we9
45
Direct testimony of Applicants’ witness Gleason at 11.
46
See Decision and Order No. 31288 filed May 31, 2013 (Docket No. 2011-0092), Exhibit C at 4,
n. 8 (noting that “top performing utilities” embrace the virtuous circle and referencing a Florida
Power & Light presentation).

Page 37 of 91
understand that in Hawai‘i the ʻāina, and more importantly the connection to1
the ʻāina, is a cultural cornerstone. Such considerations make resource2
planning in Hawai‘i very complex, as it needs to incorporate a holistic array3
of technical, economic, cultural and environmental factors. Therefore, our4
intention is to meaningfully engage with our communities regarding their5
energy future, and to incorporate the feedback from that engagement into6
the resource planning process.7
Some parties who are either for or against an inter-island cable or8
LNG have criticized us in their testimonies for not reaching definitive9
conclusions that are aligned with their own positions on either side of the10
issues. For example, we do understand and respect that the State’s energy11
policy has been supportive of inter-island cables. However, the fact is that12
regardless of State policy, such projects can only be realized if the utility is13
able to make a satisfactory public interest case to the Commission, together14
with vetting by the appropriate authorities on environmental and cultural15
grounds. From the utility’s perspective, the first step in this process is16
resource planning, and good resource planning is hard, complex, and17
time-consuming work. We have a duty not to shortcut that analysis, which18
has yet to be completed. While this is just one example, it illustrates our19
thought process and our customer-focused approach to resource planning20
matters.21
Another issue that people have raised is our stated support of the22
Hawaiian Electric Companies’ plans, including the PSIPs, Distributed23

Page 38 of 91
Generation Interconnection Plan (“DGIP”), and Integrated Demand1
Response Portfolio Plan (“IDRPP”).47
These plans, particularly the first2
two, are controversial, and some have found our stated support of them3
objectionable. While the Commission has already decided to address4
these matters in separate dockets, let me restate here what we have5
already said elsewhere: We think that these plans represent a good-faith6
effort by the Hawaiian Electric Companies to address the Commission’s7
directives. However, there is still room for improvement, they are not cast in8
stone, and we look forward to stakeholder feedback as an integral part of9
the Commission’s ongoing review of these plans, with a view to further10
improving them. So we have expressed both reservations about the plans,11
and a desire to work collaboratively to make them better. Those parties12
who have suggested otherwise are mistaken.13
The other major resource planning issue raised by intervenors is14
when and how NextEra Energy should be required to produce its own15
resource plans for the Hawaiian Electric Companies.48
As touched on16
previously and addressed more extensively by Applicants’ witness Reed,17
the suggestion that this should happen prior to Commission approval of the18
merger is not feasible, partly because the timing would preclude meaningful19
stakeholder and community input, an integral part of the process in our20
view. However, we have already committed to produce updated plans21
47
Hawaii Gas Exhibit-1 at 10, line 3 through 11, line 4; DBEDT Exhibit-1 at 56, lines 4-18; REACH
48
DBEDT Exhibit-1 at 79, lines 12-18; Hawaii Gas Exhibit-1 at 10, lines 9-11.

Page 39 of 91
post-completion, and the suggestion by several parties to put a time limit on1
this is a reasonable one, which we are incorporating into our commitments.2
Specifically, the Applicants commit to collaborate with the Commission,3
Consumer Advocate and DBEDT in the development of updated resource4
plans that the Hawaiian Electric Companies will file within 12 months5
post-closing.49
The Hawaiian Electric Companies also commit to engage in6
stakeholder and community outreach with respect to its updated resource7
plans.50
8
Q. Related to merger integration planning, certain parties51
contend that9
the Applicants’ integration efforts are not far enough along and lack10
detail for the Commission to approve the Proposed Transaction. Do11
you agree?12
A. No, I do not agree. The Applicants commenced integration activities as13
quickly as it made sense, and this effort is on schedule. Integration14
planning efforts began immediately following a favorable shareholder vote,15
when the Applicants believed there was an increased level of certainty16
regarding the ultimate consummation of the merger, and therefore that the17
investment of resources in integration planning was warranted.18
Moreover, NextEra Energy recognizes the customer value to be19
derived from the successful execution of the Hawaiian Electric Companies’20
49
The reason we are proposing twelve months rather than a shorter period is to allow time to
involve stakeholders and communities in the process.
50
See Applicants Exhibit-37.
51
Consumer Advocate Exhibit-11 at 27, lines 12-19; DBEDT Exhibit-3 at 40, lines 10-13; and
HINA Exhibit-1 at 2, lines 4-14.

Page 40 of 91
clean energy transformation initiatives, as described in the Responsive1
Testimonies of Applicants’ witnesses Oshima and Kimura, and thus is2
focusing primarily on those integration activities needed to achieve Day 13
readiness, while minimizing impacts on the transformation efforts by not4
unduly accelerating the merger integration planning effort. Please refer to5
the Responsive Testimonies of Applicants’ witnesses Kimura and Reed for6
further discussion on merger integration efforts and how they compare to7
other merger proceedings.8
Finally, it is important to recognize that regardless of any possible9
desirability or feasibility of conducting more extensive integration planning10
on an accelerated basis, fundamentally there are legal and practical11
constraints around integrating and working as one company prior to12
receiving all necessary approvals. Please refer to the Applicants’ witness13
Reed for a more detailed discussion.14
For all of these reasons, while it is understandable that certain15
parties52
desire more details on NextEra Energy’s plans post-merger, there16
is a disciplined process that must play out before full details are available to17
be shared.18
52

Page 41 of 91
Q. Some parties53
question whether there will be significant benefits1
associated with NextEra Energy’s sharing of best practices with the2
Hawaiian Electric Companies. Do you believe the sharing of best3
practices made possible by the approval of the Proposed Transaction4
merger will result in benefits and cost savings?5
A. Absolutely. One of NextEra Energy’s core values is a commitment to6
excellence. This commitment is the foundation for the culture of continuous7
improvement, which in turn is the springboard for the development and8
implementation of best practices.9
As noted earlier, there are legal and practical concerns about the10
ability of the respective Applicants’ staffs to coordinate activities at the level11
needed to identify and implement best practices beyond those determined12
to be part of the consent activities under the Agreement and Plan of Merger13
(“Merger Agreement”). With this said, there are a number of areas of14
NextEra Energy best practices, as set forth in Exhibit-43, that we expect will15
result in high value best practices being ultimately identified and16
implemented at the Hawaiian Electric Companies after the consummation17
of the Proposed Transaction. It is worth highlighting that many of the best18
practices in Applicants Exhibit-43 are directly related to the challenges19
facing the Hawaiian Electric Companies acceleration of clean energy20
53
DBEDT Exhibit-3 at 24, line 20 through 26, line 2; Ulupono Exhibit-1 at 28, lines 4-14.

Page 42 of 91
transformation, improving the reliability of the electric grid, and1
cost-effectively integrating renewable generation.2
It is also my opinion, as confirmed by the Responsive Testimony of3
Applicants’ witness Oshima, that it would be very challenging, if not4
impracticable, for the Hawaiian Electric Companies to identify and5
implement these best practices on their own, even with the assistance of6
consultants.7
After the consummation of the Proposed Transaction, the process8
for identifying and implementing best practices will involve bringing together9
teams of subject matter experts from both NextEra Energy and the10
Hawaiian Electric Companies to proceed through a disciplined stepwise11
process of identifying best practices that can be cost effectively12
implemented in Hawai‘i. These teams will also develop plans and timelines13
for the implementation of best practices, as well as, when appropriate,14
evaluation techniques and controls to ensure the best practices are15
optimally implemented.16
V. THIRD GENERAL AREA OF CONCERN: HOW COMMITTED IS17
NEXTERA ENERGY TO CLEAN ENERGY TRANSFORMATION?18
Q. Please elaborate on the third general area of concern, regarding19
NextEra Energy’s commitment to clean energy transformation.20
A. Concerns have been raised in a number of areas, including:21
• Commitment to clean energy including the 100% RPS;22
• Commitment to distributed energy;23

Page 43 of 91
• Smart grid deployment;1
• LNG capabilities; and2
• Independent power producer (“IPP”) contracting3
Q. Is NextEra Energy committed to the attainment of 100% RPS?4
A. Absolutely. We have consistently said that we fully support the revised5
standard of 70% by 2040 and 100% by 2045, consistent with the current6
law. The assertion that we are vague or noncommittal on this point is simply7
mistaken.54
It appears to be based on a misinterpretation of a statement8
originally made by the Hawaiian Electric Companies in testimony before the9
legislature, and subsequently submitted in response to an information10
request, that the 100% target “may prove to be very aggressive.”11
This statement cannot reasonably be interpreted to mean that the12
Applicants will be anything less than fully engaged in meeting this standard.13
It simply acknowledges that we will have work to do, work that the Hawaiian14
Electric Companies will be better positioned to undertake through15
consummation of the merger. We acknowledge that the 100% RPS may16
present technical and other challenges, given that it is unprecedented in17
this country (see Chart 4 below). At the same time, we understand and are18
fully aligned with Governor Ige’s vision of Hawai‘i as a clean energy leader,19
and fully support and are committed to the attainment of the 100% RPS20
consistent with the RPS law (see Chart 5 below). In addition, NextEra21
Energy commits to continue to support the Hawaiian Electric Companies’22
54
DBEDT Exhibit-1 at 32, lines 9-22.

Page 44 of 91
work in the area of green technology innovation, including collaborating with1
DBEDT, Energy Excelerator and the University of Hawai‘i system.55
2
Chart 4: Hawaii’s RPS Goal Comparison
55

Page 45 of 91
Chart 5: Hawaii’s Renewable Goals
Simply put, the important point here is that we are totally committed1
to achieving Hawaii’s aggressive 100% RPS. Not just because it is the law,2
with established penalties for non-compliance, but also because it is pono,3
the right thing to do for Hawai‘i.4
We will go even further, and say that ultimately we will not be5
satisfied with just meeting the 100% RPS: if, as we expect, we can save6
customers money by substituting renewable energy for fossil fuels, sooner7
is better. We are determined to do everything in our power to accelerate8
and maximize the use of cost-effective renewable energy for the benefit of9
Hawai‘i.10

Page 46 of 91
Q. Certain parties 56
contend that NextEra Energy overstates its1
commitment to clean energy. Do you agree?2
A. No. NextEra Energy has been producing clean, renewable energy for 253
years, has invested over $20 billion in renewables, is the world’s largest4
producer of renewable energy from the wind and the sun, and has one of5
the lowest emissions profiles of any electric utility holding company in North6
America. It would be difficult to overstate our commitment to clean energy.7
Q. DOD witness Smith57
questions why NEER has not developed wind8
and solar in the southeastern U.S. Please comment.9
A. To clarify, NextEra Energy’s FPL has invested nearly one billion dollars in10
renewable generation assets in Florida (which is part of the southeastern11
United States), and will have almost 225 MW of new solar projects under12
construction in just a few months. NextEra Energy’s NEER is active in other13
parts of the country.14
The ability to develop renewables resources – most notably wind15
and solar – relates to several key factors, one of those being the available16
resource (e.g., the wind blows with sufficient force and regularity; the sun17
shines with appropriate intensity without interference from clouds). Another18
important factor is having the wind turbine and solar array technology19
capable of efficiently and economically converting that resource into20
56
DBEDT Exhibit-3 at 9, lines 14-20 and at 24, line 22 through 27, line 11; Consumer Advocate
Exhibit-20 at 42, lines 7-13; TASC Exhibit-1 at 15, lines 3-5 and at 16, lines 15-21.
57
DOD Exhibit-1 at 8, line 10 through 9, line 3.

Page 47 of 91
energy. Other factors include the availability of land, and policy and1
regulatory support.2
In the U.S. Southeast, the wind resource has historically fallen short3
of that needed to economically produce electricity from the available4
technology. While wind turbine technology is gradually becoming both5
more efficient and capable of economically capturing wind regimes, our6
current experience has been that our customers prefer to buy wind from our7
projects in other regions for application in the Southeast. For example,8
NEER has in its portfolio several wind facilities in the Southwest Power Pool9
and the Midcontinent Independent System Operator which sell to the10
Tennessee Valley Authority. At this time, wind economics work better for11
the customer on a delivered basis (from outside the region) rather than12
being physically sited in the Southeast. That could change in the future, but13
it’s the current state of the industry.14
With solar, NEER is a market leader in developing solar generation15
in the Southeastern U.S. As with wind, the recent decline in the costs of16
solar arrays, combined with greater technological advancements and17
greater efficiencies, have made utility scale solar projects economically18
viable in the U.S. Southeast. NEER currently has five utility scale projects19
in development in several Southeastern states totaling approximately 39020
MW. We look forward to doing more.21

Page 48 of 91
Q. Is NextEra Energy committed to distributed energy resources,1
including rooftop solar?2
A. Absolutely. We have consistently said that we fully appreciate that in3
Hawai‘i, rooftop solar and other forms of distributed energy already are, and4
increasingly will become, a critical part of the energy mix. We embrace the5
challenges and opportunities presented by the goal of maximizing the6
reliable and cost-effective integration of these resources. That said, taking7
into account all known and reasonably foreseeable technologies, we are8
also persuaded that centralized generation has a vital role to play in9
ensuring that all customers have access to reliable and affordable power,10
and that the electricity grid itself will continue to play an essential role in11
connecting all of the above, for many decades to come.12
The merger will result in lower power prices for utility customers than13
they would otherwise be paying. Rooftop solar companies in this docket14
concede this is a risk to their business model. To preserve their profits,15
these companies will need to become more competitive. Beyond this16
competitive concern, it seems that most if not all of the concerns expressed17
about our commitment to distributed energy resources can be traced to18
misperceptions regarding our approach in Florida, which I have already19
addressed.20
Q. Is NextEra Energy committed to smart grid deployment?21
A. Yes. A key component of the clean energy transformation is successfully22
executing the installation of smart meters and implementation of dynamic23

Page 49 of 91
time-of-use rates for customers of the Hawaiian Electric Companies. FPL1
was an early adopter and successfully deployed smart meters to over 4.82
million customers. Currently, the Hawaiian Electric Companies intend to3
install smart meters for their approximately 450,000 customers by the end4
of 2021. In order to accelerate deployment of smart meters and realize5
benefits including lower deployment costs, customer access to energy6
usage data and customer pricing options, Applicants commit to meeting7
specific milestones for smart grid deployment that will accelerate8
deployment by approximately two years relative to the Hawaiian Electric9
Companies’ current plans. These commitments are described in detail in10
Exhibit-37 of my Responsive Testimony.11
Q. Certain intervenors58
argue that NextEra Energy is more interested in12
promoting the conversion of generation to natural gas and the13
construction of LNG in Hawai‘i than promoting renewable generation14
to accelerate the clean energy transformation. Do you agree?15
A. No, I do not agree. NextEra Energy is first and foremost interested in16
helping the Hawaiian Electric Companies implement their clean energy17
transformation. We believe it is possible to cut fuel consumption, lower18
emissions, invest in a more reliable power system, and lower customer19
costs simultaneously.20
58
LOL-KLMA-PPA Exhibit-1 at 27, lines 15-17; Sierra Club Exhibit-1 at 6, lines 21-24 and at 12,
lines 6-8.

Page 50 of 91
NextEra Energy has been supporting the Hawaiian Electric1
Companies’ efforts to explore LNG as an option for Hawai‘i. Natural gas is a2
cleaner-burning fuel compared to oil-based fuels. In addition, natural gas3
has the potential to offer customer savings.4
The Hawaiian Electric Companies have been in the process of5
evaluating responses to its request for proposal for an LNG solution for6
Hawai‘i. LNG projects, by their nature, are complicated and require careful7
consideration of a range of elements.8
While that evaluation continues, LNG must be compared against9
alternatives. LNG is intended to primarily displace the use of oil in Hawai‘i.10
NextEra Energy is mindful of the fact that oil prices have fallen by11
approximately 50% over the past year, reducing the price difference12
between oil-based fuels and the estimated delivered cost of LNG. Whereas13
projected LNG costs to Hawai‘i (as shown in the PSIPs) offered strong14
customer savings compared to project oil prices (in the PSIPs), the drop in15
oil prices has reduced that difference.16
While NextEra Energy fully supports the State’s goal of a 100%17
renewable energy future as discussed above, fossil fuel-based generation18
(from oil or LNG) will be required to a certain extent during the transition19
period. Any LNG project pursued by the Hawaiian Electric Companies20
would need to account for a phase-out of LNG that matched the timing of an21
expansion in renewables in Hawai‘i. In addition, LNG may continue to serve22

Page 51 of 91
an important role as a back-up fuel after renewables penetration reaches a1
high rate.2
The Applicants acknowledge Governor Ige’s recent statements3
concerning the use of LNG. Applicants’ witness Cox addresses this in his4
Responsive Testimony.5
Q. Hawaii Gas59
questions NextEra Energy’s experience with LNG. Do6
you agree?7
A. No. NextEra Energy brings commercial sophistication and negotiating8
leverage as the largest purchaser of natural gas among U.S. utilities and9
stands ready to use this expertise to help the Hawaiian Electric Companies10
explore options and execute plans with regard to the use of LNG in Hawai‘i.11
NextEra Energy’s expertise could be helpful in reducing the price of LNG for12
the Hawaiian Electric Companies in three ways:13
• By obtaining the lowest cost source gas and gas transportation to the14
LNG facility;15
• By helping the Hawaiian Electric Companies negotiate the best16
terms for any potential LNG projects for Hawai‘i; and17
• By using NextEra Energy’s engineering, procurement and18
construction management expertise to reduce project costs.19
Q. SunEdison60
contends that NextEra Energy has little experience with20
power purchase agreements (“PPA”). Do you agree?21
A. No. NextEra Energy has extensive experience in working with utilities to22
achieve favorable PPA restructurings and understands as well as any23
59
Hawaii Gas Exhibit-7 at 47, lines 8-10.
60
SunEdison Exhibt-1 at 20, lines 16-19.

Page 52 of 91
electric generator in North America how to monetize financial, tax,1
operational and logistical advantages that one contractual party can provide2
to the counterparty. NextEra Energy has executed over 100 third party3
PPAs.61
NEER’s commodity marketing subsidiary (NextEra Energy Power4
Marketing, LLC) is a top-20 electricity and natural gas marketer in the5
United States and also transacts in the oil, oil products, and natural gas6
liquids markets. In addition, FPL’s Energy Management and Trading7
(“EMT”) department is regularly in touch with power producers who have8
the potential to supply firm capacity to FPL, particularly for relatively9
short-term periods. NextEra Energy’s breadth and depth of experience in10
these matters, and creativity in identifying and negotiating win-win11
solutions, will be a powerful and effective resource for the Hawaiian Electric12
Companies to call upon in securing benefits for Hawaii’s electric13
consumers.14
Q. SunEdison contends the Commission should be skeptical of NextEra15
Energy’s ability to bring affordable clean energy to Hawai‘i based on16
the pricing for NextEra Energy’s Ka La Nui solar project.62
Please17
comment.18
A. That is an overstatement. First, I would point out that the Ka La Nui project19
competed with over two dozen competitive proposals for inclusion on the list20
61
See NextEra Energy Partners, LP 10-k filing with the SEC, which can be accessed at:
http://www.sec.gov/Archives/edgar/data/1603145/000160314515000019/nep-12312014x10k.
htm
62
SunEdison Exhibit-1 at 9, lines 1-5 and 14-16 and at 23, lines 3-12.

Page 53 of 91
of solar projects to be recommended for approval by the Commission.1
Second, there is overwhelming evidence supporting NextEra Energy’s2
ability to compete in the renewable energy market. Our company did not3
become the world’s largest producer of renewable energy from the wind4
and sun without providing competitive pricing, and our record on utility5
operations in Florida demonstrates our ability to provide savings to6
customers and deliver reliable, clean energy.7
Q. Certain intervenors appear to contend that Hawai‘i would benefit8
more from NextEra Energy as a competitor than an owner of the9
Hawaiian Electric Companies.63
Please comment.10
A. That is misguided. These intervenors fail to recognize the considerable11
additive and synergistic benefits and savings that NextEra Energy brings as12
the owner of Hawaiian Electric Companies that will not be realized if13
NextEra Energy is solely a competitor. An overview of these additive and14
synergistic benefits and savings are discussed throughout my Responsive15
Testimony, with additional detail provided in Applicants’ witness Reed’s16
Responsive Testimony.17
VI. FOURTH GENERAL AREA OF CONCERN: WHAT DOES THIS18
MERGER MEAN FOR EMPLOYEES?19
63
LOL-KLMA-PPA Exhibit-8 at 7, line 20 through 8, line 6; Hawaii Gas Exhibit-X at 47, lines
10-18.

Page 54 of 91
Q. Please elaborate on the fourth general area of concern, regarding the1
implications of the merger for employees.2
A. The Hawaiian Electric Companies can only succeed through the talent,3
expertise and dedication of their employees. We are excited to join with this4
team to enable Hawaii’s clean energy transformation. To that end, the most5
important implication for employees is that, through this merger, they will6
become part of a stronger and more resilient company that is better7
positioned for long-term success. The utility business is changing rapidly,8
the risks of a small utility not keeping up are real, and being part of a9
company with the technical, managerial and financial strength of NextEra10
Energy is a clear benefit for employees.11
NextEra Energy is a company that invests in its greatest asset – our12
people. We demonstrate this commitment by investing in training,13
continuing education, career development, and performance management,14
and by providing a competitive total rewards package that includes health15
and well-being programs that promote a healthy and high-performing work16
environment. We look forward to partnering with the employees of the17
Hawaiian Electric Companies as together we build an industry-leading18
clean energy workforce.19
In addition, NextEra Energy commits to make available incremental20
internship programs and recruiting opportunities above those already made21
available by the Hawaiian Electric Companies, which will continue. This22
includes adding the University of Hawai‘i system to the list of colleges and23

Page 55 of 91
universities at which NextEra Energy recruits candidates for employment1
opportunities nationwide.64
2
The main concern is around preserving jobs.65
We committed that3
there would be no involuntary layoffs or changes in overall compensation or4
benefits for at least two years after the merger is completed, and we5
clarified that we have no current plans for any involuntary layoffs thereafter,6
either. But in the absence of more detailed plans, concerns persist.7
Some difference in staffing levels is inevitable because of the small8
island grids as well as the small overall size of the Hawaiian Electric9
Companies, which make it challenging to achieve the labor productivity of a10
larger company in an industry characterized by economies of scale. We11
just do not have a more informed view beyond that at this time: the need for12
and timing of any assessment of staffing levels – which would be required to13
determine if there could be reductions in one or more areas – will be14
evaluated and determined as part of the post-closing business combination15
process. But even if, as part of the ongoing effort to increase labor16
productivity, there were workforce reductions in one or more areas, that17
does not necessarily imply involuntary layoffs would be required.18
Involuntary reductions would always be a last resort, and would only occur19
years from now, if at all.20
64
Applicants Exhibit-37.
65
through 9, line 3; DBEDT Exhibit-1 at 35, lines 2-9; IBEW Exhibit-1 at 15, line 16 through 16,
line 12.

Page 56 of 91
We do understand that jobs matter to Hawai‘i, and also that in1
Hawai‘i, companies and their employees have a reciprocal kuleana.2
Demonstrating care and respect for others is critical. We respect the skills3
of the Hawaiian Electric Companies workforce and the commitment they4
have made to the Companies and achieving its goals. We fully intend to5
take time to get the balance right, and that is why we have made the6
commitments we have.7
Finally, we realize that in Hawaiʻi, even more than some other8
places, actions speak louder than words, and the reputation you earn9
through your actions will endure in the community for years to come.10
Through the Hawaiian Electric Companies, we expect to be living and11
investing in Hawaiʻi many generations from now, and it is as important to us12
as it is to communities throughout Hawaiʻi that we learn and embrace what it13
means to be local.14
Q. What is FPL’s track record with its bargaining employees?15
A. FPL has a solid track record with respect to its union employees. We value16
our employees, both union and non-union, and realize that it is through the17
hard work, effort and dedication of our employees that we achieve the18
operational excellence that provides superior service to our customers. Our19
union-represented employees are at the heart of our company working day20
and night, on regular scheduled work, and through the most adverse21
weather conditions to ensure our customers receive safe and reliable22
electric service. NextEra Energy has negotiated in good faith with union23

Page 57 of 91
representatives producing contracts that consistently have been ratified by1
the membership, and there have been no work stoppages at FPL since the2
early 1970s.3
FPL fosters a strong working relationship with its unions through the4
use of joint committees to address and find solutions to issues, and through5
our senior leaders in power generation, power delivery, customer service,6
and human resources engaging with union leadership and employees to7
understand challenges and identify solutions in the field. A joint safety8
committee engages in idea generation and implementation as safety9
champions to ensure the safety of our employees, the public and our10
operations. A joint health care committee has been formed to identify and11
tackle health care issues and costs. Further evidence of FPL’s strong12
working relationship with its unions is the implementation with the IBEW of a13
Joint Apprenticeship Training Program, which trains and develops some of14
the best electrical craft persons in the industry. The Joint Apprenticeship15
Training Program has been in effect for many years, but was significantly16
redesigned in 2012. At present, we have 125 apprentices in the program17
and 117 apprentices have graduated since 2012. The Nuclear Apprentice18
Program, which was run between 2007 and 2012 in conjunction with two19
state colleges, graduated a total of 187 apprentices.20
Q. What is your view of the IBEW’s comments?21
A. We appreciate the positive comments the IBEW has made regarding the22
Proposed Transaction in recognizing that NextEra Energy is willing and23

Page 58 of 91
able to support Hawaii’s clean energy goals, 66
has experience in1
streamlining and improving operations67
and has experience in deploying2
renewable energy resources68
and the comment that the IBEW believes the3
local union can build a strong relationship and partnership with NextEra4
Energy as the local union has with the Hawaiian Electric Companies.69
We5
do understand and appreciate that local union jobs for local people are6
critical to the State’s economy and the Hawaiian Electric Companies’7
successful transformation to a clean energy future. The concerns the IBEW8
has expressed with the Proposed Transaction relate to maintaining and9
increasing opportunities for local union jobs,70
transitioning the current10
workforce to new clean energy jobs, 71
and continuing the strong11
relationship and partnership it has with the Companies.72
12
We are committed to working with the union to transition the13
workforce to clean energy jobs as needed and appropriate, and to14
continuing a strong partnership. I can commit that any plans we make15
regarding employees will be consistent with the philosophy we share with16
the IBEW, that is doing right by the customers and ensuring those17
customers receive safe, adequate and reliable service at reasonable costs.18
We know our employees will be key to realizing this goal.19
66
IBEW Exhibit-4 at 9, lines 5-7.
67
68
IBEW Exhibit-4 at 9, line 5.
69
70
71
72

Page 59 of 91
Q. Planning Office witness Hempling argues that following the Proposed1
Transaction, the Hawaiian Electric Companies’ employees with2
ambition will “focus on pleasing NextEra Energy superiors based on3
financial factors, rather than achieving performance excellence based4
on customer satisfaction.”73
What is your response?5
A. The objectives of NextEra Energy and the Hawaiian Electric Companies are6
not mutually exclusive as witness Hempling seems to suggest. Our primary7
job is to provide safe, reliable, affordable service to our customers. And8
consistent with our virtuous circle philosophy, we believe that if we do these9
things well, the financial performance of the Hawaiian Electric Companies10
will follow. Furthermore, it is disrespectful to the employees of the Hawaiian11
Electric Companies to suggest that they will only be financially motivated12
and not be focused on the performance of their responsibilities to13
customers.14
VII. FIFTH GENERAL AREA OF CONCERN: HOW WILL CUSTOMERS15
BENEFIT ECONOMICALLY?16
Q. Please elaborate on the fifth general area of concern, regarding17
customer benefits and specific rate commitments.18
A. We understand that significant, quantifiable benefits in both the near and19
the long term beyond those producible or proposed by the Hawaiian Electric20
Companies is a key factor in the review of the merger. We estimate that the21
73
Planning Office Exhibit-4 at 109.

Page 60 of 91
merger will produce nearly $1 billion in customer savings and other1
economic benefits in the first five years after the merger is consummated2
and benefits will continue to be created for the long-term (see Chart 63
below). NextEra Energy has identified concrete savings opportunities4
through collaborative work with the Hawaiian Electric Companies in areas5
such as fuels, generation planning and smart grid. This ongoing work and6
the quantification of savings and benefits are discussed in detail in the7
Responsive Testimony of Applicants’ witness Reed.8
Chart 6: Customer Savings and Other Economic Benefits

Page 61 of 91
Q. Economic benefits aside, how much could residential customers1
expect to save as a result of the merger?2
A. Residential customers are expected to save a lot as a result of the merger.3
As discussed in more detail by witness Reed in his Responsive Testimony,4
the estimated cumulative net savings per residential customer by island, for5
the first five years (2016-2020) after the completion of the merger, range6
from $343 to $473 (see Chart 7 below):7
Chart 7: Residential Customer Savings
Q. Are these savings guaranteed?8
A. A minimum of $60 million of customer savings over the four-year general9
base rate case moratorium are guaranteed. In the Application and Direct10
Testimonies, the Applicants committed to a four-year moratorium on both11

Page 62 of 91
general base rate cases and increases in the O&M portion of the RAM1
during the four-year general base rate case moratorium, and an estimated2
savings to customers of $60 million. In response to questions from certain3
parties, including recommendations for an upfront rate credit, 74
the4
Applicants will modify this commitment, as part of their package of rate5
commitments, to guarantee a reduction to the otherwise applicable RAM6
revenue adjustment equaling $60 million across four years if the other7
elements of the Applicants’ regulatory plan are approved as submitted.75
8
As Applicants’ witness Reed discusses in his Responsive Testimony, this9
level of assured savings is unsurpassed when compared to other utility10
mergers.11
Q. Have the Applicants quantified additional benefits beyond the $6012
million in rate benefits?13
A. Yes. As discussed in detail by Applicants’ witness Reed in his Responsive14
Testimony and in response to questions from the parties76
, we have15
provided detailed estimates of annual expense savings and annual capital16
cost savings in the five years after closing. These savings include savings17
associated with the proposed base rate moratorium, lower cost of debt18
associated with capital additions, non-fuel O&M savings, fuel savings and19
savings on capital projects. These quantified revenue requirement savings,20
74
Consumer Advocate Exhibit-11 at 52, lines 1-18; DOD Exhibit-1 at 25, lines 3-5; Ulupono
75
See Applicants’ Response to CA-IR-350.
76
Consumer Advocate Exhibit-1 at 5, lines 11-12; Consumer Advocate Exhibit-11 at 50, lines
5-18; DOD Exhibit-1 at 25, lines 3-5; Ulupono Exhibit-1 at 61, lines 15-19.

Page 63 of 91
including the $60 million mentioned before, total nearly $465 million over1
the first five years post-closing. Applicants Exhibit-44 provides an overview2
of the robust benefits and savings that will result from the proposed change3
in control compared to the lack of benefits and savings without the4
Proposed Transaction. These savings are expected to accrue to customers5
over time and flow through to the customers via traditional ratemaking6
vehicles, such as earnings sharing mechanisms, riders, trackers and,7
following the proposed general base rate moratorium, general base rate8
proceedings.9
Q. Are Applicants making any other commitments to provide further10
assurances of savings for customers, both during and after the11
proposed four-year general base rate case moratorium?12
A. Yes. In addition to the four-year general base rate case moratorium and13
guaranteed reduction in the O&M RAM of $60 million, the Applicants14
commit to reflect 100% of all net non-fuel O&M savings achieved by each of15
the Hawaiian Electric Companies in the first test period following the16
proposed general base rate case moratorium for the benefit of the Hawaiian17
Electric Companies’ customers. In addition, the non-fuel O&M to be18
included in revenue requirements in each of the Hawaiian Electric19
Companies’ first general base rate case following the four-year general20
base rate case moratorium will be no higher than the non-fuel O&M in21
calendar year 2014, adjusted for inflation. The calendar year 2014 non-fuel22

Page 64 of 91
O&M is reflected in Exhibit-80 to the Responsive Testimony of Applicants’1
witness Sekimura.2
These commitments will guarantee that not only will non-fuel O&M3
not increase, in real terms, a significant benefit in and of itself, but also that4
non-fuel O&M in test periods following the moratorium will reflect all net5
savings.6
Q. Are the Applicants making any other commitments with regard to fuel7
costs?8
A. Yes. Today, fuel costs are essentially a pass through to customers of the9
Hawaiian Electric Companies. In order to put in place incentives to improve10
fuel cost performance, Applicants propose the immediate adoption upon11
closing of the Fuel Cost Incentive Mechanism reflected in Exhibit-45 to my12
Responsive Testimony, which includes penalties and incentives of up to13
$10 million across all three of the Hawaiian Electric Companies based upon14
fuel cost performance. While the Companies cannot control oil prices, it is15
possible to develop a mechanism to provide incentives and penalties16
depending on fuel cost performance. NextEra Energy has worked with the17
Hawaiian Electric Companies to develop an incentive mechanism for fuel18
cost performance, including improved generation resource efficiency in19

NextEra Hawaii President Eric Gleason's Responses

NextEra Hawaii President Eric Gleason's Responses

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NextEra Hawaii President Eric Gleason's Responses