By Tom Kleckner
The Texas Public Utility Commission’s scheduled hearing on a $4.3 billion private equity bid for El Paso Electric has been postponed until January to allow time for the parties to reach a unanimous settlement (49849).
EPE and its private equity suitors filed the continuance request on behalf of commission staff and the proceeding’s intervenors. They said the applicants, commission staff, and “most of the intervenors” had reached an agreement in principle on the major terms and hope to resolve all issues in the next few weeks.
“The remaining parties believe additional time for further discussions is merited rather than proceeding to a hearing at this time,” the applicants said.
Administrative Law Judge Hunter Burkhalter granted the request Wednesday. He directed the parties to file a non-unanimous settlement by Dec. 17 and invited them to provide detailed status reports during the PUC’s Dec. 13 open meeting.
Burkhalter rescheduled the commission’s hearing for Jan. 7-8. It had originally been set for Nov. 20-22.
J.P. Morgan Investment Management’s Infrastructure Investments Fund US Holding 2 and Sun Jupiter Holdings, a limited liability company formed to enter into the merger agreement, announced their proposed purchase of EPE in June.
The parties have proposed a purchase price that is a 17% premium to EPE’s closing price before the merger’s announcement. The private equity firms have said the management team will remain in El Paso and no jobs will be transferred outside of Texas. They have sweetened the deal by offering a $21 million credit to current EPE customers and creating a $100 million community economic sustainability fund.
The deal has been opposed by the Texas Office of Public Utility Counsel, which says the proposal does not provide sufficient tangible, quantifiable benefits to EPE’s customers and does not adequately protect them from “the additional risks created by the post-closing corporate structure and governance.”
The utility’s industrial customers have also raised concerns over the utility’s governance and financial risks. Other intervenors include PUC staff and the city of El Paso, who both say most of the regulatory commitments don’t impact customer rates or promise any benefits beyond the status quo.
