By Tom Kleckner
The Public Utility Commission of Texas on Thursday rejected all motions for rehearing in Hunt Consolidated’s proposed acquisition of Oncor, effectively closing the books on a deal thought to be key to Energy Future Holdings’ emergence from bankruptcy (Docket No. 45188).
The commission’s unanimous vote allowed its March 24 order conditionally approving the acquisition to stand. Because the Hunt group has said it couldn’t complete the deal as approved, that means the order will “evaporate,” as Commissioner Ken Anderson put it.
The Hunt group and other EFH creditors had filed a request May 18 asking the commission to vacate the order and dismiss the proceeding, which would have left open the possibility of a new application.
Commission Chair Donna Nelson said she was joining her two fellow commissioners in denying the motions “solely in the interest of allowing us to be done with this today.”
“Time is of the essence in this case,” she said, “which is funny because of how it’s dragged along.”
The Hunt group asked the commission in September for approval to acquire Oncor, the largest transmission company in Texas, for almost $20 billion. In March, the commission approved Hunt’s proposal to split Oncor into two companies, one of which would operate as a real estate investment trust (REIT). (See Texas Commission Approves Oncor REIT Structure.)
However, the PUC attached conditions to the approval that included sharing the REIT’s tax savings with Oncor customers, which EFH creditors found unacceptable. EFH filed a new Chapter 11 reorganization plan May 1, saying it would be unable to complete the Oncor acquisition as it tries to eliminate $42 billion in debt. (See EFH Files New Chapter 11 Plan; Oncor-Hunt Deal in Doubt.)
Richard Nolan, an attorney for the Hunt group, said his parties had concluded May 17 that if they were to pursue a new transaction, “it will require a new application.”
“From our perspective … it would be more helpful to clear the decks and make a fresh start,” Nolan said. He said the original proceeding became moot when the acquisition was terminated.
He received no argument from intervenors and PUC staff, who all agreed with denying the rehearing request.
“I don’t want to go through another proceeding where we end up with major stumbling blocks,” Anderson said. “ERCOT, and the Texas power market, will benefit from getting this matter resolved.”
The Hunt group said it will continue to work with stakeholders on a plan that meets its goal of keeping Oncor under management control by Texans. “The commission’s actions today now allow all parties to engage in conversations about next steps,” Hunt spokesperson Jeanne Phillips said in a statement.
While Phillips, Anderson and others have expressed a strong desire that Oncor remain under in-state control, Florida-based NextEra Energy reportedly remains a suitor. The company made its own bid for Oncor last year, only to be outflanked by the Hunt group.
Anderson said that with the proceeding behind the commission, it can now take a more assertive role in EFH’s bankruptcy case in Delaware.
“We’ve generally been pretty passive up until now,” he said.
Under EFH’s new bankruptcy exit plan, it would again be broken up into two parts (Oncor and the competitive Luminant and TXU Energy businesses), with noteholders potentially being able to grab Oncor. EFH has asked the bankruptcy court to hold a hearing on the plan Aug. 1.
