FERC on Jan. 5 approved the takeover of Texas power transmission owner Oncor Electric Delivery Co. LLC by NextEra Energy (NYSE:NEE).
Oncor is part of bankrupt Energy Future Holdings Corp., with Energy Future’s power plants in Texas spun off late last year to creditors and now operating under the name Vistra Energy.
On Nov. 1, 2016, Oncor Electric Delivery, NextEra Energy, EFH Merger Co. LLC (Merger Sub), WSS Acquisition Co. and T & D Equity Acquisition LLC sought FERC authorization for Oncor to dispose of its jurisdictional facilities through a series of transactions. The jurisdictional facilities involved consist of Oncor’s tariffs, Oncor’s ownership interests in interconnection facilities, and associated contracts, books and records.
Noted the Jan. 5 FERC order: "Although Applicants state that the Proposed Transactions may not require authorization under FPA section 203 (a)(1), Applicants nevertheless seek prior authorization. This order authorizes the Proposed Transactions without making any determination of jurisdiction."
Oncor is an electric transmission and distribution utility that delivers electricity pursuant to cost-based rates approved by the Public Utility Commission of Texas. Oncor owns a 100-MW undivided interest in the East high-voltage direct current (HVDC) interconnection between the Electric Reliability Council of Texas (ERCOT) region and the Southwest Power Pool (SPP) and provides interconnection and transmission service under three FERC-approved tariffs.
Oncor is directly owned by: Oncor Electric Delivery Holdings Co. LLC (Oncor Holdings) with an 80.03% ownership interest; Texas Transmission Investment LLC with a 19.75% ownership interest; and Oncor Management Investment with a 0.22% ownership interest.
Oncor Holdings is part of Energy Future Holdings (EFH). Texas Transmission Investment is held by a consortium of three private equity investment entities: Cheyne Walk Investment Pte Ltd with a 49.5% ownership interest; BPC Health Corp. and Borealis Power Holdings Inc. with a 49.5% ownership interest; and Hunt Strategic Utility Investment LLC with a 1% ownership interest.
Merger Sub, WSS Acquisition and T & D Acquisition each are subsidiaries of NextEra formed for the purpose of consummating these transactions. NextEra is an energy holding company that conducts business primarily through two unis: Florida Power & Light (FPL), a traditional public utility that generates, transmits, distributes and sells electricity in Florida, and NextEra Energy Resources LLC, which owns or operates a portfolio that totals approximately 20,000 MW of generating capacity located in 25 states and Canada, including approximately 2,500 MW of wind generation in SPP, the relevant geographic market for these transactions.
As a result of the planned transactions, Oncor will become an indirect, wholly owned subsidiary of NextEra.