NextEra Energy’s proposed $18.4 billion acquisition of Oncor Electric Delivery, the utility that maintains the power lines in North Texas, has run into trouble with state regulators.
At a meeting Thursday in Austin, all three members of the Public Utility Commission expressed concerns about the terms of the deal and said it was not in the public interest.
Their views aren’t final, so there will still be a chance for NextEra to negotiate. A vote is likely to take place at the next open meeting on April 13, Nelson said.
Donna Nelson, who chairs the commission, said she was worried about removing “ring-fencing protections” that would keep the utility from being affected by the affairs of the parent company.
“The lack of a truly independent, disinterested board and the lack of independent board control over the dividends are what worry me the most,” Nelson said. “Unfortunately, those are the issues on which it seems NextEra is not willing to budge.”
The sale is key to ending the bankruptcy of Oncor’s parent, Dallas-based Energy Future Holdings, which sought court protection in 2014 to restructure almost $50 billion in debt left from a huge leveraged buyout of the former TXU Corp.
A previous deal with a group backed by Hunt Consolidated failed after encountering resistance from Texas electric customers, including power industrial companies, who have opposed the latest transaction as well.
PUC commissioner Kenneth Anderson said NextEra is “generally considered to be among the best operators in the business.” But he too emphasized the need for an independent board, which helped Oncor continue operating efficiently even as its parent company fell into bankruptcy.
Commissioner Brandy Marquez said the independent board shouldn’t “bend on.”
Debra Larsson, a spokeswoman for NextEra, declined to comment when reached by email. Geoff Bailey, a spokesman for Oncor, also declined to comment.
NextEra, owner of Florida’s largest utility, agreed to purchase Energy Future’s 80 percent stake in Oncor last year in a transaction that has been valued at more than $18 billion, including debt. A bankruptcy judge approved the sale of the Oncor unit in February.
The deal was opposed by Texas Industrial Energy Consumers, which made the same demands as during the earlier Hunt bid. The commission should require NextEra and Oncor to “commit to sharing any savings from the transaction with Oncor’s customers,” the group said in a March 17 filing.
If the commission blocks the deal next month, Oncor could still find another buyer or possibly sell shares in an initial public offering, Patterson said.
This article includes material from Bloomberg News and The Dallas Morning News.