Weathering HEI’s transition

NextEra Energy vows to keep the utility’s workforce intact for now, but the company’s history of layoffs leaves long-term prospects cloudy
Honolulu Star Advertiser - December 14, 2014
Kathryn Mykleseth

NextEra Energy Industries, the Florida company that plans to buy Hawaiian Electric Industries for $4.3 billion, has a history of laying off workers to cut costs.

When announcing the purchase on Dec. 3, NextEra Energy executives said they will not lay off any of HEI's 2,800 utility workers for two years but declined to say what would happen beyond that.

There will be "no involuntary workforce reductions at Hawaiian Electric Company for at least two years after transaction close," NextEra said in a news release. The agreement is expected to take one year to close, which means any NextEra layoffs are at least three years away.

"Two years is three years from now and a lot of things can happen in three years," NextEra CEO Jim Robo said when asked about layoffs.

Recently NextEra has used layoffs as a tool to cut costs to keep rates low for customers at its Florida power utility.

Last year, as part of a larger cost cutting initiative called "Project Momentum," NextEra eliminated roughly 1,000 positions across its two subsidiaries, Florida Power & Light Co. and NextEra Energy Resources. The cut was projected to save the company $75 million per year.

A total of 160 employees were laid off with the remaining 840 positions cut through employees changing jobs or participating in an enhanced retirement program.

When the reduced positions were announced, the company employed 15,000 people with 10,000 people at its Florida Power & Light subsidiary and 5,000 workers at NextEra Resources, which builds utility-scale solar and wind farms.

NextEra Energy currently employs 14,000 people with approximately 8,900 of those employees at its Florida utility.

The Florida utility also cut 300 jobs in 2010 through a combination of retirements, layoffs and eliminating open positions.

The job reductions increase efficiency and allow the company to keep rates low. Florida Power & Light's rates are 25 percent below the national average, the company said.

NextEra's primary concern is providing clean and cost-effective energy for customers, said Robo.

"We are big believers in doing the right thing for customers and delivering the lowest cost of renewables for customers," Robo said.

Advances in technology — such as smart meters that provide automated meter reading and power outage notification — can cut the number of workers needed.

Modernized generation plants and smart meters have contributed to the cut in demand of positions, said Robert Gould, vice president for marketing and communication at Florida Power & Light.

In July, Florida Power & Light demolished its older Port Everglades Power Plant and built a new, more fuel-efficient natural gas plant in its place. The new plant is expected to come online in mid-2016.

Only 38 workers are needed to run the natural gas-fired plant, compared to 135 at the older plant, reported the South Florida Business Journal.

NextEra hopes to follow through on Hawaiian Electric's plans to convert oil burning power plants to liquified natural gas, which can be cheaper than oil and burn cleaner.

NextEra's plans will help Hawaii reach its energy goals, but the impact on jobs needs to be considered, said state Sen. Mike Gabbard (D, Kapolei, Makakilo) chairman of the committee on Energy and Environment.

"It's a huge concern for these folks to continue to have good jobs and feed their family," Gabbard said. "The positive economics of clean renewables has been a big part of my support for the industry in general and the jobs are key to that."

Brian Ahakuelo, business manager and financial secretary for the International Brotherhood of Electrical Workers Local 1260, said NextEra and the electrical union will work together to keep people employed while changing Hawaii's utility industry.

"Balancing is a huge dynamic of where we are going," Ahakuelo said. "Our members are middle class. They are the base of the middle class. … They pay their taxes. They hold up the state of Hawaii. What we want is to make sure that continues. My belief is that we are going to see a successful outcome for everyone."

Robo, NextEra's CEO, said expanding Hawaiian Electric's smart meter program is one way his company will help Hawaiian Electric deliver on its promise of cutting electric bills by 20 percent in 15 years, increasing renewables to 65 percent of Hawaii's energy mix and tripling solar use.

"We're spending a lot of time on smart grid and modernizing the grid, and it is an area that I think we can help accelerate things," Robo said.

The smart meter provides data broken down by day, time of day, even by 15-minute increments to help customers understand and manage energy use.

HECO finished installing 5,200 smart meters for a pilot program in September. NextEra has installed smart meters to almost all of its 4.7 million Florida Power & Light customers.

There are 38 meter readers employed by HECO who may be affected by the change.

After finishing the smart meter installation in Florida, NextEra offered impacted meter readers placement services, Gould said.

"We offered them training to get ready for the job search," Gould said. "We were able to place former meter readers in 33 different types of positions throughout the company."

Hawaiian Electric Co. has been working to train employees impacted by the smart meter program, said Darren Pai, HECO spokesman.

"We have begun that process, working with the union as we develop training for some of our employees to work with the new smart grid infrastructure," Pai said.

The training process has been very successful, Ahakuelo said.

"All of our members are totally engaged in this process," Ahakuelo said. "Our members are learning how to be more technically sharp with the smart meter and how to be more customer focused."