Thursday, April 19, 2018

NextEra-Oncor Deal Meets Third Denial

By Tom Kleckner

Texas regulators last week again refused to revisit their decision to reject NextEra Energy’s proposed acquisition of Oncor, the state’s largest regulated utility.

Anderson | © RTO Insider

The ruling by the Public Utility Commission of Texas came just two days after Florida-based NextEra filed a 57-page request for rehearing. Commissioners Ken Anderson and Brandy Marty Marquez responded to the motion during a June 29 open meeting.

“It is time to bring this chapter in the [Energy Future Holdings] bankruptcy to a close and consider other options more suitable to Oncor and its ratepayers, as well as ERCOT and its market participants,” Anderson wrote in a memo.

The commission rejected NextEra’s $18.7 bid for Oncor in April, finding it not to be in the public interest. (See Texas Commission Denies NextEra’s Bid for Oncor.)

Anderson said he remained unpersuaded “by [NextEra’s] regurgitation of essentially the same arguments” made in a previous rehearing request. He noted that “almost every intervenor” in the docket (No. 46238) supported the commission’s original decision and urged the PUC to deny the request.

Marquez concurred with Anderson’s memo during a discussion that lasted 30 seconds.

NextEra did not respond to a request for comment on its next steps following the decision. The company has for years eyed the purchase of Oncor, the lone successful business of bankrupt EFH. Proceeds from the sale would have been spread among EFH’s creditors, who last year reached a settlement to end a bankruptcy first declared in 2014.

NextEra filed its latest request for a rehearing June 27, arguing that the PUC overstepped its authority, ignored evidence, misinterpreted Texas laws and used bad judgment when it shot down the acquisition.

The company contended that the PUC’s opinion “constitutes arbitrary and capricious decision-making and an abuse of the commission’s discretion.” The commission’s final order contained 14 errors of law, NextEra said, and it intends to “preserve the company’s rights to judicial review.”

“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,” the company said in its petition.

The commission turned down NextEra’s first request for a rehearing early last month. (See Texas PUC Again Rejects NextEra’s Oncor Bid.)

The PUC continues to operate with two commissioners while it waits on a replacement for former Chair Donna Nelson, who left the commission in May. Texas Gov. Greg Abbott is not expected to name Nelson’s successor until the end of the upcoming special legislative session, which begins July 18 and could last up to 30 days. (See Texas PUC Chair Nelson Stepping Down.)