The Public Utility Commission of Texas has rejected the NextEra Energy’s proposed deal to acquire transmission company Oncor Electric for $18.4bn.
The Texas regulators said that the deal was not in the public interest “at this point”.
In August 2016, NextEra agreed to purchase an 80% stake in Oncor from Energy Future Holdings (EFH). The sale is part of EFH’s restructuring plan to exit bankruptcy.
Under the terms of the agreement, NextEra agreed to fund $9.5bn, mainly to repay the debt of EPH.
However, the commission was concerned about the combined company’s debt and payments to the parent company at the expense of Oncor, reported Reuters
Texas Public Utility Commission chairwoman Donna Nelson was reported by RTO Insider as saying: "The lack of a truly independent, disinterest board and the lack of independent board control over the dividends are what worry me the most,"
"Unfortunately, those are the issues on which it seems NextEra is not willing to budge."
Earlier, the Hawaii Public Utilities Commission (PUC) rejected the NextEra Energy’s proposed $4.3bn deal to acquire Hawaiian Electric Industries (HEI).
The transaction, which was signed in 2014, involved the assumption of $1.7bn in HEI debt and excluded banking subsidiary of HEI.
In November 2016, NextEra Energy agreed to acquire the remaining 20% stake in Oncor Electric Delivery for $2.4bn.
As part of this deal, the company agreed to merge with Texas Transmission Holdings (TTHC), which holds an indirect stake of about 20% in Oncor.
NextEra also reached an agreement to acquire the remaining 0.22% interest in Oncor that is owned by Oncor Management Investment (OMI) for approximately $27m.
Image: An electric power transmission line. Photo: courtesy of sirirakphotos/FreeDigitalPhotos.net.