Dive Brief:
- The Houston Chronicle reports NextEra Energy has asked the Texas Public Utilities Commission to reconsider its proposal to purchase Oncor Electric for a second time, following denials in April and earlier this month.
- Regulators cited concerns about the independence of the utility's board and the possibility of increased risk for ratepayers, while NextEra did nothing to alleviate those concerns in its rehearing requests.
- Oncor has been seeking a new owner since its parent company Energy Future Holdings declared bankruptcy in 2014.
Dive Insight:
The utility has been told by Texas regulators why they won't sign off on the deal, and NextEra keeps submitting the same request.
"The Commission must determine whether a proposal to 'change the ownership of the largest utility in Texas is in the public interest' or whether the public interest is better served by leaving the state's largest utility under the constraints of ownership by financial investors mired in bankruptcy," NextEra told the court.
In rejecting the NextEra offer, Texas regulators said they wanted to ensure Oncor's independence and financial security. In April, NextEra CEO Jim Robo announced the company would ask the commission to reconsider. But in a call with analysts and journalists, he said the company would hold firm on issues around Oncor board members and its ability to access dividends.
Robo said at the time "we think we would be a terrific owner of Oncor," but said accepting the PUC's conditions would be "bad business."
Texas regulators indicated they would again reject the proposal, and then did. And now NextEra is asking again, arguing that any fears the company is financially unstable, and hence would require more ringfencing, are unfounded.
NextEra was the original frontrunner for Oncor before EFH canceled a planned auction and agreed to Hunt Consolidated's proposal to spin off Oncor as a Real Estate Investment Trust. When regulators rejected that proposal, NextEra came back to the table.
