October 31, 2016
NextEra Energy and Oncor Electric Delivery Company file joint merger approval application with the Public Utility Commission of Texas
JUNO BEACH, Fla. – NextEra Energy, Inc. (NYSE: NEE), together with Oncor Electric Delivery Company LLC (“Oncor”), today filed a joint application with the Public Utility Commission of Texas (“PUC”) requesting the approval of two proposed merger transactions. The first transaction, which was announced on July 29, 2016, involves NextEra Energy’s proposed acquisition of the approximately 80 percent interest in Oncor, which is indirectly held by Energy Future Holdings Corp. (“EFH”). The second transaction, which was announced earlier today, involves the proposed merger of a NextEra Energy affiliate with Texas Transmission Holdings Corporation (“TTHC”), including TTHC’s approximately 20 percent indirect interest in Oncor. The proposed transactions have a combined enterprise value of approximately $18.7 billion, assuming a 100 percent ownership interest in Oncor by NextEra Energy.
“NextEra Energy’s proposed combination with Oncor is a straightforward, traditional merger by a utility holding company that has one of the strongest balance sheets in the utility industry,” said Jim Robo, chairman and chief executive officer of NextEra Energy. “Under our proposed combination, Oncor will be backed by a financially strong parent company with experience managing electric utility assets and a record of fiscal discipline, providing a strong foundation for the future as Oncor continues to provide its customers with safe, reliable electric service and the lowest transmission and distribution rates of any investor-owned utility in Texas. Our filing with the PUC is an important step in the process and outlines how our proposed combination will improve Oncor’s financial strength, resulting in tangible benefits for its customers, and substantially eliminate the financial risks associated with Oncor’s current ownership structure.”
Today’s filing follows the Sept. 19, 2016, approval by the United States Bankruptcy Court for the District of Delaware for EFH to enter into the previously announced definitive agreements related to NextEra Energy’s proposed acquisition of EFH’s approximately 80 percent interest in Oncor, as well as today’s announcement of definitive agreements related to the proposed merger of a NextEra Energy affiliate with TTHC, including TTHC’s approximately 20 percent indirect interest in Oncor, and NextEra Energy’s agreement to acquire the remaining 0.22 percent interest in Oncor that is owned by Oncor Management Investment, LLC (“OMI”).
A proven partner for Texas
Since 1999, NextEra Energy has had a significant and established presence in Texas, including Lone Star Transmission, LLC (“Lone Star”), a transmission service provider. NextEra Energy is a substantial contributor to the Texas economy, having invested $8 billion in transmission, power generation, gas pipelines and other operations in Texas. The company provides hundreds of good, well-paying jobs across the state and pays more than $100 million annually in payroll, property taxes and lease payments to landowners in Texas.
“We have prepared what we believe is a thoughtful, comprehensive application,” said Robo. “NextEra Energy recognizes the vital role Oncor plays in providing safe, reliable and affordable transmission and distribution service to millions of customers in Texas. We respect that the Commission has an important statutory responsibility to determine whether our proposed combination is in the public interest and look forward to participating in a dialogue that balances the interests of all stakeholders.”
Oncor will remain ring-fenced and operate under an updated Code of Conduct
NextEra Energy proposes a ring-fenced structure and updated Code of Conduct for Oncor.
Oncor: Locally led and locally managed
The combination will provide workforce stability and protections for Oncor employees.
Benefits to Oncor and its customers
The combination will improve Oncor’s financial strength and result in tangible benefits for its customers.
“We are incredibly impressed by Oncor, its management team, its employees and what they have been able to accomplish during the past several years in the areas of reliability, affordability, safety and customer service,” said Robo. “This combination will provide Oncor with a financially strong, utility-focused owner that shares Oncor’s commitment to affordable, reliable service and has demonstrated the ability to serve Texas in an efficient and cost-effective manner. Our partnership with Oncor will only further our long-term and already-significant commitment to the state of Texas.”
The proposed combination will bring together two of the most experienced and well-respected utility leaders in North America to the mutual benefit of their customers. Serving more than 10 million people, NextEra Energy’s subsidiary, FPL, provides its customers with electric bills that are the lowest in Florida and about 30 percent below the national average. FPL’s record complements Oncor’s, whose rates for electric delivery service are consistently the lowest among investor-owned utilities in Texas. FPL offers award-winning customer service, reliability that is the best in the state of Florida and among the best in the nation, and is the most operationally efficient among all large utilities in America. FPL received the top ranking for residential customer satisfaction among large electric providers in the southern U.S., according to the J.D. Power 2016 Electric Utility Residential Customer Satisfaction StudySM. In addition, NextEra Energy has been recognized as the top electric and gas utility in Fortune’s “Most Admired Companies” ranking 9 out of the last 10 years.
Serving more than 10 million Texans in 402 cities and 91 counties, Oncor is Texas’ largest transmission and distribution utility, provides the lowest transmission and distribution rates and is one of the most reliable of any investor-owned utility in Texas. Oncor, which delivers power to its customers through 121,000 miles of transmission and distribution lines, has invested billions of dollars in its infrastructure, supporting a safer, smarter, more reliable electric grid.
Like Oncor, NextEra Energy has built its existing utility network on a solid foundation of safety, technology, reliability, innovation, operational excellence, quality service and experienced people. NextEra Energy, like Oncor, also has a reputation as a company that cares about and is involved in the local communities that it serves. NextEra Energy’s strengths are in many areas complementary to the existing strengths and capabilities of Oncor, and the two companies look forward to sharing expertise and best practices, and a successful and constructive relationship.
Merger approval process
The proposed combination is subject to bankruptcy court confirmation of EFH’s plan of reorganization, approval by the PUC and the Federal Energy Regulatory Commission (“FERC”), the expiration or termination of the waiting period under the Hart-Scott-Rodino Act (“HSR”) and other customary conditions and approvals. NextEra Energy plans to file by Nov. 1 information in compliance with HSR and a joint application with Oncor seeking approval from FERC. The completion of the other transactions also is subject to conditions specified in the definitive agreements for those transactions.
NextEra Energy expects the transactions to be completed in the first half of 2017.
Additional information about the benefits of the transactions is available at www.Oncor-NextEra.com.
NextEra Energy, Inc.
NextEra Energy, Inc. (NYSE: NEE) is a leading clean energy company with consolidated revenues of approximately $17.5 billion and approximately 14,300 employees in 27 states and Canada as of year-end 2015, as well as approximately 45,000 megawatts of generating capacity, which includes megawatts associated with noncontrolling interests related to NextEra Energy Partners, LP (NYSE: NEP) as of April 2016. Headquartered in Juno Beach, Fla., NextEra Energy’s principal subsidiaries are Florida Power & Light Company, which serves more than 4.8 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, and NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun. Through its subsidiaries, NextEra Energy generates clean, emissions-free electricity from eight commercial nuclear power units in Florida, New Hampshire, Iowa and Wisconsin. A Fortune 200 company and included in the S&P 100 index, NextEra Energy has been recognized often by third parties for its efforts in sustainability, corporate responsibility, ethics and compliance, and diversity, and has been ranked No. 1 in the electric and gas utilities industry in Fortune’s 2016 list of “World's Most Admired Companies.” For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “predict,” and “target” and other words and terms of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. NEE cautions readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in any forward-looking statement. Such forward-looking statements include, but are not limited to, statements about the anticipated benefits of the proposed transactions involving NEE, EFH, TTHC, OMI and Oncor, including future financial or operating results of NEE or Oncor, NEE’s, EFH’s or Oncor’s plans, credit ratings changes, objectives, expectations or intentions, the expected timing of completion of the transactions, the value, as of the completion of the EFH merger, the TTHC merger or the acquisition of OMI’s interest in Oncor, or as of any other date in the future, of any consideration to be received in the EFH merger in the form of stock or any other security, NEE’s earnings expectations and other statements that are not historical facts. Important factors that could cause actual results to differ materially from those indicated by any such forward-looking statements include risks and uncertainties relating to: the risk that NEE, EFH, TTHC, OMI or Oncor may be unable to obtain bankruptcy court and governmental and regulatory approvals required for the transactions, or required bankruptcy court and governmental and regulatory approvals may delay the transactions or result in the imposition of conditions that could cause the parties to abandon any or all transactions; the risk that a condition to closing of any of the transactions may not be satisfied; the expected timing to consummate the proposed transactions; the risk that the businesses will not be integrated successfully; disruption from the transactions making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time and attention on merger-related issues; general worldwide economic conditions and related uncertainties; the effect and timing of changes in laws or in governmental regulations (including environmental); fluctuations in trading prices of securities of NEE and in the financial results of NEE, EFH or Oncor or any of their subsidiaries; the timing and extent of changes in interest rates, commodity prices and demand and market prices for electricity; and other factors discussed or referred to in the “Risk Factors” section of Oncor’s or NEE’s most recent Annual Reports on Form 10-K filed with the Securities and Exchange Commission. These risks, as well as other risks associated with the transactions, will be more fully discussed in subsequent filings with the SEC in connection with the mergers. Additional risks and uncertainties are identified and discussed in NEE’s and Oncor’s reports filed with the SEC and available at the SEC’s website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement and NEE does not undertake any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.