FAQs

FAQs

Frequently asked questions about Sempra Energy's agreement to acquire Energy Future Holdings Corp. (EFH), the indirect owner of approximately 80 percent of Oncor Electric Delivery Company (Oncor).

Oncor’s indirect majority owner, Energy Future Holdings Corp. (EFH), filed for Chapter 11 bankruptcy protection in April 2014. As part of a plan to exit bankruptcy, there will be new ownership of EFH and its approximately 80 percent indirect interest in Oncor.

On August 21, 2017, Sempra Energy entered into an agreement to acquire EFH and its approximately 80 percent indirect ownership of Oncor.

Sempra Energy has offered approximately $9.45 billion in cash to acquire a reorganized EFH. The enterprise value of the proposed transaction values Oncor at approximately $18.8 billion. Currently, Oncor has a minority owner, Texas Transmission, Inc. (TTI), who owns 19.75 percent of Oncor, and Sempra’s proposed transaction would maintain TTI as the minority owner of Oncor.

Yes, Oncor and Sempra Energy both believe this deal is in the public interest and benefits Oncor customers and Texas.

Sempra Energy has made 47 regulatory commitments that are intended to preserve the independence and financial strength of Oncor, so it can continue to provide top-notch service to the more than 10 million Texans. In addition, Bob Shapard, currently Oncor’s CEO will be appointed Chairman of the Oncor Board. Allen Nye, currently Oncor’s general counsel, will be promoted to be CEO of Oncor.

Yes, Sempra Energy intends to be a long-term owner of Oncor. Oncor is an excellent strategic fit for Sempra Energy’s portfolio of utility and energy infrastructure businesses.

Resolution of EFH’s long-running bankruptcy proceeding would extinguish all debt at EFH and EFH subsidiary, Energy Future Intermediate Holding Co. LLC (EFIH).

No, Oncor remains financially strong with healthy cash flows and existing “ring-fence” provisions that have shielded it from EFH’s and EFIH’s bankruptcy proceeding.

A ring-fence is a financial and operational separation of a company from other entities in its ownership chain. The use of separateness provisions like ring-fences for businesses, and specifically electric utilities, is not unique to Oncor and can help minimize the risk that the utility would be negatively impacted by financial losses of its unregulated parent company or affiliate.

Yes. Sempra Energy will keep the current ring-fence provisions to help maintain both legal and financial separation between Oncor and Sempra Energy and its competitive affiliates. Sempra Energy has made a number of regulatory commitments that are intended to preserve the independence and financial strength of Oncor, so it can continue to provide top-notch service to more than 10 million Texans.

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Oncor will continue to operate the way it does today – independent and financially strong. In fact, it is expected that Oncor’s credit profile will improve as a result of new ownership, resulting in lower borrowing costs and, ultimately, savings for Oncor customers. Sempra Energy has committed that Oncor customers will not be responsible for any transaction-related expenses, nor will Oncor seek to include transaction costs in future rates.

Yes. Oncor will remain independent and based in Dallas with a majority independent board of directors and continued local management.

Oncor and Sempra Energy’s joint Change-in-Control filing begins a mandatory regulatory review. If approved by regulators, Sempra Energy expects the transaction to close sometime in the first half of 2018.

In terms of regulatory and legal approvals, this proposed transaction has to be approved by a number of different federal and state bodies, including: the United States Bankruptcy Court, the Public Utility Commission of Texas (PUCT), the Federal Energy Regulatory Commission (FERC), and others.

Sempra Energy expects to ultimately fund approximately 65 percent of the $9.45 billion transaction with Sempra Energy equity and approximately 35 percent with Sempra Energy debt. This financing approach will enable Sempra Energy to purchase 100 percent of EFH, which owns approximately 80 percent of Oncor immediately upon closing the transaction.