Dive Brief:
- NextEra Energy announced yesterday it reached an agreement to purchase Texas Transmission Holdings Corp. (TTHC) for $2.4 billion, including the company's 20% indirect interest in Oncor Electric Delivery Co. LLC.
- Combined with a smaller, separate transaction, as well as the company's massive bid to purchase the bulk of Oncor out of Energy Future Holdings' bankruptcy proceeding, the deals would give NextEra complete ownership of the Texas utility giant.
- Earlier this year, a bankruptcy court in Delaware approved EFH to enter into NextEra's deal to buy the utility valued at more than $18 billion at Hunt Consolidated's bid fell apart.
Dive Insight:
If successful, the pair of smaller transactions will ultimately lead to NextEra owning 100% of Oncor.
NextEra Chairman and CEO Jim Robo said the company would file an application today with the Public Utility Commission of Texas to seek approval of the deal. NextEra Energy has also reached a $27 million agreement to acquire the remaining 0.22% interest in Oncor that is owned by Oncor Management Investment LLC.
In September, Energy Future Holdings won approval from the Bankruptcy Court for the District of Delaware sell its transmission and distribution utility—but not before NextEra added $300 million in cash to the purchase price in a bid to assuage worries from creditors about the deal.
NextEra's purchase of Oncor is a key to Energy Futures Holdings plan to exit bankruptcy, where it has been mired for about two years. NextEra had shown initial interest, but a complicated bid by Hunt Consolidated took center stage last year until it fell apart due to regulatory conditions. That deal had been predicated on operating the utility as a Real Estate Investment Trust, which led to stipulations that investors would need to share a hefty tax windfall with customers. At that point the deal fell apart, and Oncor returned to the bidding table.
In some ways, NextEra is a natural fit since NextEra Energy Resources — the company's development subsidiary — is already a renewable energy giant in Texas, owning 17 facilities totaling 3,000 MW of gross capacity.
