Intervenors File Post-Hearing Briefs in Oncor Acquisition Case

Intervenors File Post-Hearing Briefs in Oncor Acquisition Case

Mar 13, 2017

by Margarita Fournier; Copyright 2016 by Competitive Assets, LLC.  All rights reserved

On 3/10/17, a number of parties to NextEra’s Oncor acquisition case filed initial briefs, as requested by the PUCT after the February hearing on the merits (Docket No. 46238). In addition to NextEra and Oncor, eight intervenors submitted briefs, with most repeating their objections to the transaction as currently proposed by NextEra. The PUCT staff recommended finding that the transaction is in the public interest only if certain ring-fencing provisions are strengthened (including some that NextEra labeled as deal breakers). The Oncor Cities believe that the purchase is not consistent with the public interest because of: “1) unnecessary and risky linkage of Oncor credit to NextEra credit; 2) loss of Oncor board of director independence; and 3) failure to provide tangible, quantifiable benefits to Oncor ratepayers sufficient to justify the risk that NextEra has asked Oncor and its ratepayers to assume.”

The Office of Public Utility Counsel concluded that “NextEra has selected a financing plan that maximizes the value of the transaction to NextEra’s benefit and to the benefit of its shareholders, while putting Oncor and its customers at additional risk through the elimination of key ring fencing provisions.” Golden Spread did “not oppose the Commission’s approval of the proposed transaction if the Commission provides for the safeguards and protections of a robust ring fence and code of conduct and a performance measure monitoring process to protect the public interest.” The Texas Industrial Energy Consumers’ (TIEC) brief makes many of the same points as other intervenors.

Defending its case, NextEra stated, in part, that “[t]he approximately $11 billion in legacy debt that now resides directly above Oncor at EFH and EFIH will be immediately eliminated” and that “Oncor will experience improved credit ratings and a lower cost of debt that is expected to save customers $360-600 million over time.” Reply briefs are due on 3/17/17, and the Commission has until 4/29/17, to decide the case.

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