The Texas Public Utility Commission on Thursday formally voted down NextEra Energy’s proposed $18 billion takeover of troubled Oncor Electric Delivery, according to news reports.
The regulatory panel’s order said it did not think the merger was in the best interest of ratepayers. The TPUC doubts ranged from concern over a termination fee NextEra would receive if it was later outbid to the impact on competition in the market.
NextEra made its move for Oncor, which is part of the massive Energy Future Holdings bankruptcy, in July. NextEra announced the Oncor bid shortly after its long-delayed combination with Hawaiian Electric Co. was terminated due to lack of support from regulators in that state.
NextEra had not officially commented on the TPUC ruling by press time.
In March, all three regulators on the TPUC board said they had concerns about the sale — in particular the lack of an independent board not controlled by NextEra.
The Federal Energy Regulatory Commission approved the NextEra takeover in January 2017.
In 2015, Hunt Consolidated and partners offered to buy Oncor as part of EFH’s Chapter 11 bankruptcy proceeding in an estimated $20 billion deal. NextEra announced the Oncor bid shortly after its long-delayed combination with Hawaiian Electric Co. was terminated due to lack of support from regulators in that state.
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.
NextEra also had a deal to buy Hawaiian Electric Industries that was announced in 2014, but fell apart in 2016 when Hawaiian regulators voted not to approve the merger.
Oncor is privately held by a limited number of investors including Energy Future Holdings Corp.
Oncor is directly owned by: Oncor Electric Delivery Holdings Co. with an 80 percent ownership interest; Texas Transmission Investment with a 19.75 percent ownership interest; and Oncor Management Investment with a 0.22 percent ownership interest.
Oncor serves about 10 million customers in northern Texas, including Dallas, Fort Worth, Odessa and Waco.