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Energy Future unit acquisition rehearing denied again by Texas PUC
By Caroline Salls
Pittsburgh, June 29 – A second request for a rehearing following an April denial of NextEra Energy, Inc.’s application for approval by the Public Utility Commission of Texas for the acquisition of the equity interests in Energy Future Holdings Corp. unit Oncor Electric Delivery Co. LLC was denied by the commission, according to a notice and order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.
As previously reported, NextEra sought approval of the commission to acquire the 80% interest in Oncor indirectly held by Energy Future, as well as the 19.75% interest held by Texas Transmission Holdings Corp. NextEra also agreed to purchase a 0.22% interest in Oncor held by Oncor Management Investment LLC, subject to closing of the proposed transaction with Energy Future.
The proposed acquisition was part of Energy Future’s eighth amended plan of reorganization, which was confirmed on Feb. 17.
In its April order denying approval of the acquisition, the commission said “the expansive and diversified structure of NextEra Energy and its affiliates would subject Oncor to new and potentially substantial risks.”
The commission said Oncor would be required to support about 15% of the $45 billion of consolidated NextEra Energy debt, which could open it up to substantial risks.
According to the order, these risks, in conjunction with the high amount of leverage at NextEra, “increase the likelihood that unforeseen events could jeopardize Oncor’s financial stability, yet NextEra Energy suggests that the commission weaken the ring fence protecting Oncor and its ratepayers from such financial troubles.”
Because the commission did not approve the transactions, they will not close, according to the original order.
Energy Future is a Dallas-based power generation company and utility operator. The company filed for bankruptcy on April 29, 2014. The Chapter 11 case number is 14-10979.
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