Wednesday, March 20, 2019

NextEra’s Rejected Oncor Bid Gets Second Look

By Tom Kleckner

Texas regulators on Wednesday agreed to reconsider its recent rejection of a proposed acquisition of Oncor by Florida-based NextEra Energy, which sought a review of the decision.

The state’s Public Utility Commission will rehear the case (Docket 46238) during its May 18 open meeting, the first without longtime Chairman Donna Nelson, who is retiring May 15. No replacement has yet been named to the three-person panel. (See Texas PUC Chair Nelson Stepping Down.)

The PUC last month unanimously rejected NextEra’s $18.7 billion bid for the Texas utility, saying the risks outweighed the promised benefits. (See Texas Commission Denies NextEra’s Bid for Oncor.)

In a filing made earlier this week, NextEra said the commission went beyond the scope of its powers when it found the acquisition not to be in the public interest, calling the PUC’s order “unprecedented.”

“The order represents an expansion of power that exceeds the limits set by the Legislature and the bounds of the commission’s own precedent,” NextEra said, listing 14 points of error ranging from “the exercise of authority not granted by the Legislature to reliance on facts not in evidence.”

The company said the order also ignores “Moody’s determination that NextEra Energy’s acquisition … will unequivocally benefit Oncor,” and that it fails “to give any consideration to the benefits and protections” of the 73 regulatory commitments the company made to the PUC.

NextEra requested the commission give it as much time as allowed by law to “encourage possible settlement discussions.”

At stake is a $275 million termination fee that NextEra would be liable for should the deal fail for certain reasons.

The PUC has until June 7 to act on NextEra’s request.

Oncor’s future is central to parent company Energy Future Holdings’ bid to exit Chapter 11 bankruptcy proceedings,  which have now dragged on for three years. The PUC rejected Hunt Consolidated’s bid for Oncor last year.

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