Texas Staff: PUC Should Require Oncor, Hunt Companies To File Report On Feasibility Of Consolidating Oncor and Sharyland Utilities
December 10, 2015 Email This Story Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • email@example.com
Staff of the Public Utility Commission of Texas have recommended, in testimony concerning the application of various Hunt Consolidated companies to acquire Oncor, that the Commission order Oncor and the Hunt companies to file a report on the feasibility of consolidating Oncor and Sharyland Utilities
However, Staff further recommended that, "[i]rrespective of whether the Commission approves the transaction as proposed or with changes as suggested by Staff and other parties," the Commission should require, "the Applicants to file -- within a specified time period, at their own cost, and under parameters set by the Commission -- a report on the feasibility and logistics of consolidating the operations of Oncor and Sharyland."
"Given that Sharyland is part of Shary Holdings [one of the Applicants], it is reasonable to assume that operational synergies and cost efficiencies could be achieved by the consolidation of the two companies, and a filing that details a plan to analyze the steps necessary to appropriately effectuate this outcome would be in the best interests of both companies' ratepayers," Staff said.
Though not addressed specifically by Staff, any such consolidation could likely include a unified tariff for retail delivery service, facilitating REPs' ability to access and provide service to the combined service areas. Currently, Sharyland features two small service areas (though a unified delivery tariff is to be instituted by winter 2016-17), and while REP participation and offers to Sharyland customers is substantial, it is not as robust as in the larger TDU service areas such as Oncor.
"If the proposed transaction is approved the Commission should require that Purchasers file, within a specified time period, at their own cost, and under parameters set by the Commission, a study to investigate potential net benefits to ratepayers that could be generated by the affiliate relationship between OEDC [post-transaction Oncor Electric Delivery Company] and Sharyland, or by the potential combination of AssetCo/OEDC and SDTS/Sharyland. The examination of such benefits should include, but not be limited to, implications to service reliability, the process for planning future infrastructure, operational benefits of the relationship, improvements in service and/or reliability, and cost reductions. The study should compare scenarios where the utilities remain separate entities and where they combine," Staff said