A Dallas oil family is going back to the drawing board after determining it can't go forward with its current plan for buying Oncor, the state's largest electric utility, an attorney for the group told the Texas Public Utility Commission in a Wednesday filing.
Ray L. Hunt's family had gathered investors in an $18 billion deal to purchase Oncor and convert it into a tax-friendly real estate investment trust. The deal, had it gone through, would have played a major role in Oncor parent Energy Future Holdings' emergence from bankruptcy.
The plan would have turned Oncor into two companies under the trust and created an estimated $250 million in annual savings. Legally, 90 percent of those savings would have gone to the shareholders in the trust.
Oncor's sale was approved by a Delaware-based bankruptcy judge in federal court, but the details of the purchase also had to be OK'd by the state Public Utilities Commission. In March, the commission approved the plan with stipulations unwelcome by investors. The commission also suggested it may require the trust to share expected tax savings with Oncor's more than 3 million customers in North and West Texas.
Hunt said the conditions would scare off investors, endangering the Oncor sale and Energy Future Holding's bankruptcy proceedings, which are reportedly costing about $1 million a day in legal fees.
Last month, Hunt asked for another hearing over those issues, but on Wednesday, his group's attorney said the prospective buyer group is no longer able to move forward with the purchase.
A spokesperson for the family's business said it is still invested in making sure the sale is completed and that the owners are local.
"While we wanted to have a rehearing on the order, it is obvious now that, as written, the transaction will not close, so we believe that it is best to clean the decks and start over," read a statement from Jeanne Phillips of Hunt Consolidated Inc. "Hunt is working to develop a model that can work for all parties involved, including EFH (Energy Future Holdings), investors, Oncor customers and management. We continue to pursue a new transaction that will allow Oncor to remain under the management of Texans for Texans."
Disclosure: Oncor has been a financial supporter of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.