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Texas regulators could vote on Sempra/Oncor deal in March

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Members of the Public Utility Commission of Texas meet on Feb. 15.
Source: PUCT

Texas regulators could vote March 8 on whether to approve Sempra Energy's acquisition of Oncor Electric Delivery Co. LLC.

DeAnn Walker, chairwoman of the Public Utility Commission of Texas, directed regulatory staff on Feb. 15 to prepare a proposed order for the agency's next open meeting. The document would be a directive for commissioners to either greenlight or reject the transaction, which consists of a $9.45 billion cash bid, plus the assumption of about $7 billion in net debt.

A regulatory staffer said a Feb. 15 prehearing on the deal would have to be canceled. Regular hearings on the sale scheduled for the week of Feb. 19 were removed from the PUCT calendar, hinting at an accelerated review process.

Commissioners also seemed to imply that the Oncor sale saga was coming to a close.

"I again want to thank all the parties for the hard work they've put into this. I know it took a lot of hard work to get us here," Walker said at a PUCT meeting. She specifically thanked Sempra representatives in the audience, one of whom replied, "We love being here."

Walker also acknowledged two top Oncor executives: CEO and Executive Director Bob Shapard, along with Allen Nye, the company's senior vice president, general counsel and secretary.

"Thank you for all y'all's hard work throughout this," Walker said. "I know it's been a very painful process."

"This commission has supported us through a long and winding road," Shapard, who plans to retire upon the deal's completion, responded. "We appreciate it very much."

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Oncor CEO Bob Shapard (left) and general counsel Allen Nye.
Source: PUCT

If approved, Sempra's effort to acquire Oncor will have succeeded where other companies including Hunt Consolidated Inc., NextEra Energy Inc. and Berkshire Hathaway Energy came up short. The California company early on launched a charm offensive to woo PUCT members, working to address commissioners' concerns over past attempts to scoop up the Texas transmission and distribution firm.

A bankruptcy court in September 2017 approved Sempra's proposal to acquire Energy Future Holdings Corp., which owns 80.03% of Oncor. And although Sempra had to defend the deal structure after a PUCT member raised concerns, the California company has since secured the consent of the Federal Energy Regulatory Commission and every intervenor in the PUCT proceeding.

To help finance the acquisition, Sempra in January 2018 closed the sale of $5 billion of its senior unsecured notes.

If the deal goes through, Sempra would be adding more than 3.4 million retail electric customers, over 16,000 miles of transmission lines and close to 116 million MWh in retail sales volume. Sempra currently has 1.4 million retail electric customers through its subsidiary San Diego Gas & Electric Co.