Oncor, Texas Energy set to resolve merger issues with state commission

By Susanna Moon

Chicago, Oct. 5 - Oncor Electric Delivery Co. said it signed an agreement in principal to resolve all outstanding issues under a review by the Public Utility Commission of Texas related to the merger of its parent company TXU Corp. with Texas Energy Future Merger Sub Corp.

The agreement was to be filed with the commission on Friday.

Texas Energy is a wholly owned subsidiary of Texas Energy Future Holdings LP formed by a group of investors led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group.

The agreement includes the following provisions:

• Oncor will agree to a one-time credit of $72 million, which is intended for all retail customers in its service territory, subject to the commission's dismissal of Oncor's currently pending rate case. It is the intent of the parties to the agreement that the benefits of the credit flow directly to consumers rather than to retail electric providers. Consistent with its existing agreement with cities, Oncor will file a system-wide rate case no later than July 1, 2008, based on a test year ended Dec. 31, 2007;

• Oncor will incur a one-time $35 million write-off in 2007 or 2008 to its storm reserve and a one-time write-off in 2007 or 2008 to the 2002 restructuring expenses held as regulatory assets, which is about $21 million;

• Oncor will file annual reports with the commission regarding compliance with its commitments;

• Texas Energy and Oncor will limit the dividends paid by Oncor through Dec. 31, 2012 to an amount not to exceed Oncor's net income;

• Oncor will commit to minimum capital spending of $3.6 billion over the five-year period ending Dec. 31, 2012;

• Oncor will agree to certain system reliability, street light maintenance and customer service standards.

Oncor is an energy company based in Dallas.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.