Dive Brief:
- The Public Utility Commission of Texas last week approved a draft preliminary decision that would approve NextEra's plan to purchase Oncor Electric Delivery Co. LLC., though SNL Energy reports some changes to the order may still be in the works.
- Regulators cited concerns about provisions related to the rights of minority owners of Texas Transmission Investment (TTI) that could be eliminated should NextEra fail to acquire those interests.
- NextEra announced in October that it had reached an agreement to purchase Texas Transmission Holdings Corp. (TTHC), which owns TTI and the company's 20% indirect interest in Oncor. The approval means a hearing in mid-February is the next step
Dive Insight:
NextEra's plan to purchase Oncor Electric Delivery out of the bankruptcy proceeding of its parent company, Energy Future Holdings is a complicated deal, but regulators are slowly guiding it towards a finish.
NextEra's plan is to acquire all of Oncor, and has reached agreements to also acquire the TTI portion for $2.4 billion. Earlier this year, a bankruptcy court in Delaware authorized NextEra's deal to buy the utility valued at more than $18 billion.
In September, Energy Future Holdings won approval from the Bankruptcy Court for the District of Delaware to 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. The Oncor sale is a key to EFH's plan to exit bankruptcy, where it has been mired in for about two years.
In summer 2015, there was speculation NextEra was the leader in the race to acquire Oncor, but its bid was upstaged by Texas real estate magnate Ray Hunt and a consortium led by his Hunt Consolidated company, which proposed to convert Oncor into a Real Estate Investment Trust. That deal ultimately failed, opening the door for NextEra's current proposal.
