Texas PUC's Anderson Reiterates Concern Over Potential Transactions For Oncor Which Would Continue Material Debt Above Oncor
August 17, 2017 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
During yesterday's open meeting, Texas PUC Commissioner Kenneth Anderson reiterated his concerns about debt levels above Oncor in any potential transaction to acquire Oncor.
A proposed acquisition of Oncor by Berkshire Hathaway Energy would eliminate the existing debt at the Oncor parent level. Though none has been yet formally proposed, other potential transactions from rival suitors could, in contrast, leave significant debt at the parent level, above Oncor.
"I think it's fair to say that it's pretty widely understood that one of my big concerns is: what happens to the debt at EFIH, or at any entity that is up the ownership [chain] with respect to the 80% ownership in Oncor Holdings," Anderson said.
Transactions under which a material amount of debt remains, post-transaction, above Oncor will be a concern, Anderson said
Among various protections Anderson would expect if a material level of debt remains would be ensuring that the cashflow from Oncor must be protected, insofar as it must be available to go back into Oncor and fund Oncor's cap-ex
Anderson noted that the current parent debt was incurred into the original LBO of TXU Corp., or the refinancing of such debt
None of the debt ever was, nor can it be, an obligation of Oncor, Anderson said. None of the principal, or interest, can ever go into rates, Anderson said