Oncor Seeks Limited Code of Conduct Waivers at Texas PUC
June 02,2020
Oncor Electric Delivery Company LLC ("Oncor" or "Company") and Oncor Electric Delivery Company NTU LLC ("NTU") (collectively, "Applicants") filed an application requesting approval from the Public Utility Commission of Texas ("Commission") of limited code of conduct waivers regarding certain of the Commission's affiliate reporting and affiliate transaction rules as they may apply to certain investors in Oncor through its minority owner and confirmation that NTU may be governed by Oncor's code of conduct ("Application").
Oncor said that certain waivers are needed because the existence of affiliates, and their activities, may not be immediately known to Oncor, due to the operations of various global investors in its minority owner
"Given the breadth and volume of GIC and OMERS' s business activities globally, both entities maintain company-wide policies of confidentiality to protect both their information and the confidential information obtained from third parties, including, but not limited to, their investee companies. In addition to their policies, individual lines of business within GIC and OMERS, such as GIC Infra and OMERS Infra, regularly comply with enhanced obligations of confidentiality in favor of third parties that provide for information sharing within GIC and OMERS, respectively, only on a need-to-know basis. Indeed, GIC Infra and OMERS Infra deal teams do not, in the ordinary course of business, provide such information to other groups within GIC or OMERS. As such, members of GIC Infra and OMERS Infra (1) cannot access information regarding GIC or OMERS broader activities without incurring significant hardship to business operations and (2) will only use confidential information obtained from the group's portfolio companies to monitor and report on the group's investment in such companies. Specifically, such members will not misuse confidential information obtained from Oncor to favor investments in entities that could be Oncor's vendors or its 'competitive affiliates,'" Oncor said
"In light of the foregoing, Oncor has become aware that, due to the diversified and wide-ranging global business activities of OMERS and GIC, Oncor cannot always be certain of immediate, full compliance with the Commission's affiliate rules. For example, Oncor does not always know of new affiliations as they are created or acquired through transactions involving these global investors. Similarly, Oncor is not always able to immediately discover affiliates created within the OMERS or GIC chains of ownership," Oncor said
"OMERS and GIC are global, diversified investment vehicles that face practical barriers to immediately or regularly informing Oncor of each instance in which they acquire ownership interests of 5% or more in another entity. As a result, under a strict application of the Commission's affiliate rules," Oncor could inadvertently fail to comply with certain affiliate reporting and affiliate transaction requirements. OMERS Infra and GIC Infra have, however, worked with Oncor to commit to creating a framework for regular reviews and disclosures of entities that could be implicated in various Commission affiliate rules. This framework will be implemented in compliance with the Commission's order on this Application, but Oncor has already worked with OMERS Infra and GIC Infra to ensure that any available knowledge of competitive affiliates, in particular, will be communicated to Oncor immediately. Oncor looks forward to discussing this framework in detail with Commission Staff," Oncor said