Court OKs Plan to Sell Transmission Provider Oncor

Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Bankruptcy Court for the District of Delaware has approved Energy Future Holdings Corporation's (Dallas, Texas) plan to sell subsidiary Oncor Electric Delivery Holdings Company LLC (Dallas) to NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida) as part of its ongoing effort to exit bankruptcy. The subsidiary owns about 80% of Oncor Electric Delivery Company, which has the largest electricity distribution and transmission system in Texas, serving 10 million customers across the state. Industrial Info is tracking $3 billion in Energy Future Holdings projects, including more than $268 million in projects involving Oncor.

The deal was reached after NextEra threw in another $300 million, bringing the total value of its offer to $18.7 billion, including $4.4 billion in cash and responsibility for debt and asbestos liabilities, according to Bloomberg News. The next step in the process is the Public Utility Commission of Texas, with which NextEra and Oncor soon will file a joint application requesting approval of the transaction. NextEra said that it expects the transaction, which has been approved by the boards of directors of both NextEra and Energy Future Holdings, to be completed in first-quarter 2017.

Oncor owns more than 121,000 miles of power lines in Texas, according to the Dallas Morning News. Its active projects include two lines that are undergoing site preparation: the $96 million Permian Basin-to-Culberson line, and the $29.7 million Hicks-to-Elizabeth Creek line. The former runs 90 miles and the latter 15.2 miles, with both using overhead, double-circuit, 138-kilovolt (kV) line. The Permian Basin line is particularly important, as oil and gas exploration growth in the Permian Basin has upped demand for energy sources. For more information, see Industrial Info's project reports on the Permian Basin and Hicks lines.

An Oncor project still in the early planning stage is the $55 million New Bethel line, in which overhead, double-circuit, 345-kV line will run 15 to 40 miles from the New Bethel switching station to an existing line that supports Apex Compressed Air Energy Storage LLC's (Tennessee Colony, Texas) $420 million Bethel Energy Center, also in its early planning stage. If built, the natural gas-fired Bethel facility will utilize compressed air energy storage (CAES) technology to generate roughly 317 megawatts (MW). For more information, see Industrial Info's project reports on the New Bethel transmission line and the Bethel Energy Center.

NextEra already plays an influential role in Texas energy; the company's development subsidiary is a renewables leader in the state, with 17 facilities totaling 3,000 MW of capacity. These include one of the state's largest wind-energy projects: the $950 million Hale County Community Windfarm in Plainview, still in its planning phase. If approved and constructed, the facility would comprise 100 turbine generators from General Electric (NYSE:GE) (Fairfield, Connecticut) to produce 478 MW. The developers say it is the largest community-sponsored windfarm development in the world, covering more than 122,000 acres leased from more than 350 land owners, according to KAMC News of Lubbock, Texas. For more information, see Industrial Info's project report.

Energy Future Holdings filed for bankruptcy in April 2014, which was the largest bankruptcy of a private equity-backed company since Chrysler Group LLC filed in 2009, and the largest ever for a U.S. company, according to Bloomberg News. It carried almost $50 billion in debt at the time.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.