No Retail Delivery Tariff or Rate Changes Proposed In Oncor Acquisition Application

Affiliates of Hunt Consolidated, Inc. have jointly filed an application along with Oncor Electric Delivery Company L.L.C. at the Public Utility Commission of Texas seeking regulatory approval for the sale of Energy Future Holdings' (EFH) current ownership stake in Oncor as part of EFH's ongoing bankruptcy proceeding.

The application does not propose any revisions to Oncor's Tariff for Retail Delivery Service or Tariff for Transmission Service as a result of the transaction. Also, there are no proposed changes to the existing rates or to the existing terms of service under those tariffs

The proposed Transaction will not cause any changes to Oncor's current rates or the ratemaking methodology that will be used to set Oncor's rates in the future, applicants said

Purchasers commit that ratepayers will be held harmless for any fees, expenses, or incremental borrowing costs associated with the Transaction.

Also notable, given the history of Oncor change-in-control proceedings, is that no ratepayer credit is proposed as part of the transaction. REPs will recall that the 2008 change in control resulting from the leveraged buyout that created EFH included a ratepayer credit for Oncor customers, raising the issue of whether REPs' receipt of such credit from Oncor could be conditioned on passing such credit along to customers

Regarding a concern about Oncor AssetCo's (the company that will hold the legal title to all of Oncor's T&D assets) potential ownership of assets outside of ERCOT, and whether this implicates FERC jurisdictional issues, the applicants said that the PUCT should not prohibit Oncor AssetCo from owning assets outside ERCOT

"[S]uch a prohibition is not necessary to prevent FERC’s jurisdiction over ERCOT. If Oncor AssetCo were to acquire FERC jurisdictional assets, it would keep them separate from ERCOT assets such that there would be no transmission of electricity in interstate commerce. To further mitigate any concerns, the Commission could impose a requirement similar to that found in ERCOT’s standard market participant agreement whereby Oncor AssetCo will not take any action that would subject Oncor AssetCo, ERCOT or ERCOT market participants to FERC jurisdiction. From a ratemaking perspective such assets would be held in a separate subsidiary so as to avoid any ratemaking concern," applicants said

Applicants also said that approval of the change in control, which along with EFH's bankruptcy plan will see competitive businesses TXU Energy and Luminant separated from Oncor, will fully realize the promises of the vision enacted in Senate Bill 7.

Docket 45188