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Another Sunset Cycle, Another Railroad Commission Review

Also, the Public Utility Commission mulls over the state of the proposed Oncor takeover deal.

An oil pump.

Is the Sunset Advisory Commission getting tired of writing lengthy reports on the Texas Railroad Commission, only to see lawmakers reject their recommendations?

You betcha.

Consider this passage from the panel’s latest report on the curiously named agency, published Friday afternoon:

For the Railroad Commission to even be under Sunset review is a direct challenge to the commission’s status quo. Intense and pointed debate in the waning days of the 2015 legislative session rejected a proposal to delay the agency’s review until 2021 and instead culminated in this third Sunset review of the agency since 2010. Such frequent review is hard on agency staff who have their own important jobs to do in addition to attending to the needs of the Sunset review. It also heightens interest in having a positive review and a “clean” Sunset bill that will finally pass the Legislature.

As the Tribune reported, this session’s suggestions for the 125-year-old agency include: beefing up oversight of oil and gas drilling, pipeline safety and abandoned wells, giving up duties to regulate natural gas utilities and changing its name to the Texas Energy Resources Commission.

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Does the $18 billion proposal led by Ray L. Hunt to buy and reshape Oncor into a real estate investment trust still exist?

The Texas Public Utility Commission mulled that question at its open meeting Wednesday and couldn’t come to a conclusion — at least not yet.

“Is there even a transaction for us to approve?” Commissioner Ken Anderson Jr. wondered aloud.

Here’s why the question is so complicated:

In March, the PUC approved a version of the deal, but added major stipulations that Hunt’s investors say are unworkable. So the investment group last month asked for a rehearing.

But before the commission ruled on that request, Energy Future Holdings — Oncor’s parent — filed a new plan in a Delaware bankruptcy court that no longer made the Hunt deal for Oncor its centerpiece.

Under Energy Future’s new proposal, creditors could take control of Oncor, or it could sell the transmission and distribution utility to Hunt’s folks or anyone else (like Florida-based NextEra) that may be interested.

So that leaves the commissioners to contemplate whether the old Hunt proposal was tossed out with the old Energy Future plan or if it’s still technically in play.

Hunt is still asking for its rehearing, saying the commission could still bless the deal the Dallas family wants (if it wants to), which Energy Future could then pitch to the bankruptcy court (if it wants to).

“That is clearly still a viable option,” Richard Noland, an attorney for the Hunt group told the commissioners. “That would be the quickest way for the debtors to exit the bankruptcy proceeding without going through another six-month process.”

That's how long it took for the commission to issue the ruling the Hunt family calls too harsh.

But others aren’t sure that the commission can reopen the Hunt proceedings.

“What was presented to the commission is no longer relevant. It no longer exists," said Geoffrey Gay, general counsel for the Steering Committee of Cities Served by Oncor, a consumer group.

Other consumer advocates — who are also opponents of the Hunt plan — agreed.

The commissioners ultimately decided to punt on Wednesday. They will continue to debate— and possibly resolve — this existential crisis at their May 19 meeting.

Disclosure: Oncor and Energy Future Holdings have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

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