In a move that could put a Florida company in charge of Texas’ power lines, NextEra Energy announced two deals Monday that would give the company control over Texas-based transmission company Oncor.
A unit of Florida’s NextEra will merge with Texas Transmission Holdings Corp. in a deal worth about $2.4 billion — including Texas Transmission’s one-fifth interest in Oncor, according to the Wall Street Journal.
In another part of the deal, NextEra will buy a .22 percent interest in Oncor for $27 million.
As previously reported, NextEra is already buying up the 80 percent of Oncor that is owned by the bankrupt Energy Future Holdings Corp.
NextEra will pay $4.4 billion in cash and $5.4 billion in debt financing to purchase the 80 percent piece of Oncor. These deals are subject to the usual approvals.
NextEra will need to win the approval of the Public Utility Commission of Texas for the purchase deals to move forward.
If successful, NextEra would gain control of Oncor, which delivers power to more than 3 million Texas homes and operates about 119,000 miles of transmission and distribution lines in the state.
NextEra Energy expects the transaction, which has been approved by the boards of directors of both NextEra Energy and EFH, to be completed in the first quarter of 2017. The company says its acquisition would ensure the support of Oncor’s existing five-year capital plan, which includes substantial and necessary planned capital improvement projects across the state of Texas.
Oncor Electric Delivery has faced an uncertain future since EFH, formerly TXU, went bankrupt with $42 billion in debt. Only a few weeks ago, reports surfaced that Warren Buffett’s Berkshire Hathaway Energy might make a bid for Oncor.
Last year, Hunt Consolidated and partners offered to buy Oncor as part of EFH’s Chapter 11 bankruptcy proceeding in an estimated $20 billion deal. However, in May Hunt informed the Texas Public Utility Commission that it was backing out of the plan.
The Hunt plan had approval from a Delaware bankruptcy judge. One alleged reason it fell through, according to some news accounts, is that Texas regulators may have required the buyer to share tax savings with customers.
Hunt said that and other regulatory caveats might scare off investors. Hunt later indicated renewed interest in an Oncor deal but NextEra has stepped in with its eleven-digit financial offer.