DALLAS and SAN DIEGO,
May 9, 2019 /PRNewswire/ -- Today,
Oncor Electric Delivery Company LLC (Oncor) and Sempra Energy
(NYSE: SRE) announced that they have received approval from the
Public Utility Commission of Texas
(PUCT) for Oncor's acquisition of InfraREIT, Inc. (NYSE: HIFR)
(InfraREIT), and, concurrently, Sempra Energy's acquisition of a
50% limited-partnership interest in a holding company that will own
Sharyland Utilities, LP (Sharyland). PUCT approval was the final
regulatory approval needed to complete the transactions.
"Texas is a great place to do
business, and we are pleased that the Public Utility Commission
approved another opportunity for Sempra Energy to invest in Oncor,
and the state," said Jeffrey W.
Martin, chairman and CEO of Sempra Energy. "We look forward
to continuing to advance our growth strategy in Texas and the U.S. Gulf Coast region."
"Today is an exciting day for Oncor. When our acquisition of
InfraREIT is complete, we will expand our transmission footprint
and be better positioned to support the long-term needs of the
ERCOT market," said Oncor CEO Allen
Nye. "We want to thank the Commissioners, Commission staff,
and all the stakeholders involved in this process for their hard
work. We look forward to closing this transaction."
"With the PUCT's approval to integrate the InfraREIT assets into
Oncor's system, the Oncor team has engineered a great outcome that
balances the needs of all stakeholders. We are proud to be a part
of this team," said the owners of Texas Transmission Investment
LLC, Oncor's minority owner.
The transaction required approvals by the PUCT, the Federal
Energy Regulatory Commission, the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as well as other regulatory approvals.
The transaction also required the approval of InfraREIT's
shareholders, which was received in February
2019. In addition to these approvals, the transaction is
subject to the satisfaction of various closing conditions.
On Oct. 18, 2018, Oncor and Sempra
Energy announced that they entered into agreements whereby Oncor
would acquire 100% of the equity interests of InfraREIT, including
all the limited-partnership units in its subsidiary InfraREIT
Partners, LP, for approximately $1.275
billion, or $21 per share (or
partnership unit), excluding certain transaction costs, and,
concurrently, Sempra Energy would acquire a 50% limited-partnership
interest in a holding company that will own Sharyland for
approximately $98 million. Oncor's
acquisition of InfraREIT also includes InfraREIT's outstanding
debt, which totaled approximately $946
million at March 31, 2019.
As part of the transaction, a subsidiary of InfraREIT will
exchange certain assets with Sharyland, with the end result being
that, after Oncor's acquisition of InfraREIT, Oncor will own all of
InfraREIT's and Sharyland's electric transmission and distribution
business in Central, North and
West Texas, and Sharyland will own
Sharyland and InfraREIT assets in South
Texas.
If all remaining closing conditions are satisfied, Oncor and
Sempra Energy expect to close the transaction by the end of the
month.
Headquartered in Dallas, Oncor
Electric Delivery Company LLC is a regulated electricity
distribution and transmission business that uses superior asset
management skills to provide reliable electricity delivery to
consumers. Oncor operates the largest distribution and transmission
system in Texas, delivering power
to more than 3.6 million homes and businesses and operating more
than 137,000 miles of transmission and distribution lines in
Texas. While Oncor is owned by two
investors (indirect majority owner, Sempra Energy, and minority
owner, Texas Transmission Investment LLC), Oncor is managed by
its Board of Directors, which is comprised of a majority of
disinterested directors.
Sempra Energy's mission is to be North
America's premier energy infrastructure company. With 2018
reported revenues of more than $11.6 billion, the San
Diego- based company is the utility holding company with the
largest U.S. customer base. The Sempra Energy companies' more than
20,000 employees are focused on delivering energy with purpose to
approximately 40 million consumers worldwide. Sempra Energy has
been consistently recognized for its leadership in diversity and
inclusion, and social responsibility, and is a member of the
S&P 500 Utilities Index and the Dow Jones Utility Index.
This press release contains statements that are not historical
fact and constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by words such as "believes,"
"expects," "anticipates," "plans," "estimates," "projects,"
"forecasts," "contemplates," "assumes," "depends," "should,"
"could," "would," "will," "confident," "may," "can," "potential,"
"possible," "proposed," "target," "pursue," "outlook," "maintain,"
or similar expressions, or when Oncor and Sempra Energy
discuss their respective guidance, strategy, plans, goals, vision,
mission, opportunities, projections, initiatives, objectives or
intentions. Forward-looking statements are not guarantees of
performance. They involve risks, uncertainties and assumptions.
Future results may differ materially from those expressed in the
forward-looking statements.
Such forward-looking statements include, but are not limited to,
statements about the timing of the anticipated transactions
contemplated by the proposed acquisition of InfraREIT, and any of
the applicable parties' post-acquisition plans and intentions, and
other statements that are not historical facts. The following
important factors, among others, could cause actual results to
differ materially from those set forth in the forward-looking
statements: the satisfaction of conditions to closing the
definitive agreements for the transactions; obtaining required
governmental and regulatory approvals, which may delay the
transactions or result in the imposition of conditions that could
cause the parties to abandon the transactions or be onerous to
Oncor or Sempra Energy; the expected timing to consummate the
proposed transactions; the risk that the businesses will not be
integrated successfully; the risk that any potential cost savings
and any potential synergies from the transactions may not be fully
realized or may take longer to realize than expected; and the
diversion of management time and attention to issues related to the
transactions.
Additional factors, among others, that could cause actual results
and future actions of Oncor, Sempra Energy and/or their
subsidiaries to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: for Sempra Energy and its subsidiaries, the greater degree and
prevalence of wildfires in California in recent years and the risk that
Sempra Energy or its subsidiaries may be found liable for damages
regardless of fault, such as where inverse condemnation applies,
and risk that Sempra Energy or its subsidiaries may not be able to
recover any such costs in rates from customers in California; actions and the timing of actions,
including decisions, new regulations and issuances of
authorizations by, as applicable, the California Public Utilities
Commission, U.S. Department of Energy, California Department of
Conservation's Division of Oil, Gas, and Geothermal Resources, Los
Angeles County Department of Public Health, U.S. Environmental
Protection Agency, Federal Energy Regulatory Commission, Pipeline
and Hazardous Materials Safety Administration, Public Utility
Commission of Texas, states,
cities and counties, and other regulatory and governmental bodies
in the U.S. and other countries in which Oncor, Sempra Energy
and/or Sempra Energy's subsidiaries operate; the success of Sempra
Energy's and its subsidiaries' business development efforts,
construction projects, major acquisitions, divestitures and
internal structural changes, including risks in (i) obtaining or
maintaining authorizations; (ii) completing construction projects
on schedule and budget; (iii) obtaining the consent of partners;
(iv) counterparties' ability to fulfill contractual commitments;
(v) winning competitively bid infrastructure projects; (vi)
disruption caused by the announcement of contemplated acquisitions
and/or divestitures or internal structural changes; (vii) the
ability to complete contemplated acquisitions and/or divestitures;
and (viii) the ability to realize anticipated benefits from any of
these efforts once completed; the resolution of civil and criminal
litigation and regulatory investigations and proceedings; actions
by credit rating agencies to downgrade credit ratings of Oncor,
Sempra Energy or those of their subsidiaries or to place those
ratings on negative outlook and the ability of Oncor, Sempra Energy
and their subsidiaries to borrow at favorable interest rates;
deviations from regulatory precedent or practice that result in a
reallocation of benefits or burdens among shareholders and/or
ratepayers; denial of approvals of proposed settlements; delays in,
or denial of, regulatory agency authorizations to recover costs in
rates from customers or regulatory agency approval for projects
required to enhance safety and reliability; for Sempra Energy and
its subsidiaries, moves to reduce or eliminate reliance on natural
gas; the availability of electric power and/or natural gas and
natural gas storage capacity, including disruptions caused by
failures in the transmission grid, limitations on the withdrawal or
injection of natural gas from or into storage facilities, and
equipment failures; risks posed by actions of third parties who
control the operations of investments; weather conditions, natural
disasters, accidents, equipment failures, computer system outages,
explosions, terrorist attacks and other events that disrupt
operations, damage facilities and systems, cause the release of
harmful materials, cause fires and subject Oncor, Sempra Energy or
their subsidiaries to third-party liability for property damage or
personal injuries, fines and penalties, some of which may not be
covered by insurance (including costs in excess of applicable
policy limits), may be disputed by insurers or may otherwise not be
recoverable through regulatory mechanisms or may impact the ability
of Oncor, Sempra Energy or their subsidiaries to obtain
satisfactory levels of affordable insurance; cybersecurity threats
to the energy grid, storage and pipeline infrastructure, the
information and systems used to operate the businesses of Oncor,
Sempra Energy or their subsidiaries and the confidentiality of
proprietary information of Oncor, Sempra Energy or their
subsidiaries and the personal information of their customers and
employees; actions of activist shareholders, which could impact the
market price of Sempra Energy's securities and disrupt its
operations as a result of, among other things, requiring
significant time by management and its board of directors; changes
in capital markets, energy markets and economic conditions,
including the availability of credit; and volatility in currency
exchange, interest and inflation rates and commodity prices and our
ability to effectively hedge the risk of such volatility; the
impact of federal or state tax reform and the companies' ability to
mitigate adverse impacts; changes in foreign and domestic trade
policies and laws, including border tariffs and revisions to or
replacement of international trade agreements, such as the North
American Free Trade Agreement or the
United States-Mexico-Canada Agreement (subject to
congressional approval), that may increase Sempra Energy's and its
subsidiaries' costs or impair their ability to resolve trade
disputes; expropriation of assets by foreign governments and title
and other property disputes; the impact at San Diego Gas &
Electric Company on competitive customer rates and reliability of
electric transmission and distribution systems due to the growth in
distributed and local power generation and from possible departing
retail load resulting from customers transferring to Direct Access
and Community Choice Aggregation or other forms of distributed and
local power generation and the potential risk of nonrecovery for
stranded assets and contractual obligations; Oncor's ability to
eliminate or reduce its quarterly dividends due to regulatory
capital requirements and other regulatory and governance
commitments, including the determination by Oncor's board of
directors, a majority of Oncor's independent directors or a
minority member director to retain such amounts to meet future
requirements; and other uncertainties, some of which may be
difficult to predict and are beyond the control of Oncor and Sempra
Energy and/or their subsidiaries.
These risks and uncertainties are further discussed in the reports
that Sempra Energy and/or Oncor have filed with the U.S. Securities
and Exchange Commission (SEC). These reports are available through
the EDGAR system free-of-charge on the SEC's website, www.sec.gov.
Investors should not rely unduly on any forward-looking statements.
These forward-looking statements speak only as of the date hereof,
and Sempra Energy and Oncor undertake no obligation to update or
revise these forecasts or projections or other forward-looking
statements, whether as a result of new information, future events
or otherwise.
Sempra South American Utilities, Sempra North American
Infrastructure, Sempra LNG, Sempra Renewables, Sempra Mexico,
Sempra Texas Utility, Oncor Electric Delivery Company LLC (Oncor)
and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are
not the same companies as the California utilities, San
Diego Gas & Electric Company (SDG&E) or Southern California
Gas Company (SoCalGas), and Sempra South American Utilities, Sempra
North American Infrastructure, Sempra LNG, Sempra Renewables,
Sempra Mexico, Sempra Texas Utility, Oncor and IEnova are not
regulated by the California Public Utilities Commission.
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SOURCE Oncor Electric Delivery Company LLC
