Oncor Electric Delivery Company LLC (Oncor) has filed a Sale, Transfer, Merger (STM) application with the Public Utility Commission of Texas (PUCT) as part of its previously reported proposed purchase of InfraREIT, Inc. (InfraREIT) and its subsidiary, InfraREIT Partners, LP for approximately $1.275 billion, or $21 per share or limited partnership interest.

As part of the STM application, Sempra Energy is seeking regulatory approval to acquire an indirect ownership interest in Sharyland Utilities, L.P., an existing utility that will own assets in South Texas.

The proposed transactions include multiple transactions that would occur concurrently, all of which are required to accomplish the following result: (1) the termination of the REIT status of InfraREIT and of agreements between Sharyland Distribution & Transmission Services (SDTS) and Sharyland Utilities (Sharyland) by which Sharyland leases and operates assets of SDTS; (2) SDTS becoming an indirect wholly owned subsidiary of Oncor that owns T&D assets previously owned by Sharyland or SDTS in north, central, and west Texas (North Texas Utility); and (3) Sharyland remaining a utility that owns T&D assets previously owned by Sharyland or SDTS in south Texas (South Texas Utility), with Sempra indirectly owning 50 percent of Sharyland.

Under the application, Oncor and Sharyland agreed to provide bill credits to customers of the various transmission utilities included in the application

Under the application, Oncor and Sharyland each has agreed, subject to the Commission’s approval, that the North Texas Utility and the South Texas Utility will provide, to ratepayers, bill credits for 90 percent of the interest savings that they realize as a result of the improved credit quality of the North Texas Utility and the South Texas Utility, respectively, if any, and 90 percent of the debt issuance savings that each realizes, if any.

The ratepayers of the North Texas Utility and South Texas Utility are transmission customers, such as the distribution utilities. The bill credits would impact the transmission costs ultimately charged to, and collected by (from REPs and ultimately retail customers), such distribution utilities

Also under the application, Oncor and Sharyland have committed to amending their respective Codes of Conduct to include the North Texas Utility, the South Texas Utility, and any other affiliates resulting from the proposed transactions.

Docket 48929

Tags:
Texas   Oncor   M&A   Sharyland  

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