DALLAS, July 24, 2017 /PRNewswire/ -- Sharyland
Utilities, L.P. (Sharyland or Sharyland Utilities) announced today
that it and Sharyland Distribution & Transmission Services,
L.L.C. (SDTS) have signed a definitive agreement with Oncor
Electric Delivery Company LLC (Oncor) to exchange their retail
distribution assets and retail distribution operations for a set of
Oncor's transmission lines in West and Central Texas. In connection with this
agreement, Sharyland and SDTS, along with other parties, have
agreed to dismiss Sharyland's current rate case upon closing of the
Oncor transaction.
This proposed transaction means that Sharyland's approximately
54,000 retail distribution customers will become Oncor customers
and, as a result, will see significantly reduced regulated retail
delivery rates.
"This provides significant rate relief for our retail
distribution customers," said David A.
Campbell, CEO of Sharyland Utilities and InfraREIT, Inc.
"This transaction is the right thing to do for our customers and
for the communities we serve. We would like to thank the
Staff of the Public Utility Commission of Texas, the Texas Office of Public Utility
Counsel, and the other parties for working diligently and
constructively with the companies to reach these agreements."
"Since our inception, Sharyland Utilities has been strongly
committed to serving as a community-centric utility, providing our
customers with safe, reliable, affordable power," said Hunter Hunt, Chairman of Sharyland Utilities.
"We believe the most community-centric action we can take is to
give our customers access to a world class utility like Oncor with
the lowest rates in the State, and focus our forward strategy in
support of the transmission infrastructure necessary for our
communities to continue to grow and prosper."
Brian Lloyd, Executive Director
of the Public Utility Commission of Texas (PUCT), commented, "I am immensely
appreciative of Sharyland, SDTS and Oncor for the months of hard
work that went into crafting these agreements. This landmark
settlement will provide substantial rate relief to Sharyland
customers by rolling them into the much larger customer base of
Oncor, a fair resolution to Oncor's rate case, and regulatory
certainty for these utilities and their customers. I am proud
to have the PUCT Staff join the other signatories in presenting
these agreements to the Commissioners for their prompt
consideration."
Specific details of the proposed transaction include:
- Sharyland and SDTS will transfer to Oncor their retail
distribution assets and retail distribution operations located in
their Stanton, Brady, and Celeste (SBC) service territories, as well as
their McAllen service
territory.
- Oncor will transfer to SDTS transmission lines of similar value
located in West and Central Texas,
which Sharyland will operate on behalf of SDTS.
- Along with the assets transferred by Oncor, Sharyland and SDTS
will retain their transmission system in the Texas Panhandle and their transmission assets
and substations in the Stanton and
McAllen service territories.
- Once all required approvals are obtained and the transaction
closes, after a brief transition period Sharyland's retail
distribution customers in all of its service territories will
transfer to Oncor and Oncor's tariff schedule.
- Sharyland's retail distribution customers in its SBC
territories will receive a significant reduction in their regulated
delivery rates.
- For Sharyland's retail distribution customers in its
McAllen territory, this
transaction will prevent the anticipated rate increases that were
proposed in Sharyland's pending rate case.
- In the interim, Sharyland will reduce its base distribution
rates by approximately 10 percent for its residential customers in
its SBC service area. This interim rate relief for residential
customers will reflect a $3 million
decrease in Sharyland's retail distribution revenue requirement on
an annualized basis. Sharyland is seeking regulatory approval for
the interim rate relief and hopes that it will take effect in the
next 60 days and remain in effect until customers are transitioned
to Oncor after the transaction closes.
- Upon closing of the transaction, the rate case for Sharyland
and SDTS will be dismissed.
- Going forward, Sharyland will operate transmission assets and
substations and will serve as a transmission service provider.
"We are excited and optimistic about our current and expanding
transmission business," said Campbell. "Texas continues to experience electric load
growth, the addition of renewables generation, and the ongoing
modernization of the grid, and Sharyland looks forward to
supporting the infrastructure needs of the state."
As of today, Sharyland and SDTS entered into an agreement with
certain parties to the rate case under Docket No. 45414, which, if
approved by the PUCT, would result in the dismissal of the rate
case upon the closing of the transaction with Oncor. A new
rate case is required to be filed in 2020 with a test year ending
December 31, 2019. Until the
next rate case, Sharyland and SDTS will continue to operate under
their existing regulatory structure and currently approved
regulatory parameters.
The closing of this transaction will be subject to a number of
closing conditions, including approval by the PUCT of the
transaction, the rate case dismissal, and Oncor's rate case
settlement, in each case on terms consistent with those proposed by
the relevant parties. The closing of the transaction is also
contingent upon Oncor's parent company obtaining consent of the
U.S. Bankruptcy Court for the District of Delaware, as well as other customary closing
conditions. Sharyland, SDTS and Oncor expect to jointly file
the Sale-Transfer-Merger application with the PUCT no later than
August 4, 2017. If the required
approvals are obtained, Sharyland expects that the transaction will
close in the fourth quarter of 2017.
In addition, Sharyland has contributed $150,000 to a charitable fund that will be
administered by The Dallas Foundation to provide financial
assistance during the interim period for churches and places of
worship of all denominations in Sharyland's SBC service area that
are billed on a demand basis, until they are transitioned to
Oncor. Eligible customers can download an application form at
www.sharyland.com/rates or get more information by contacting
Tiffany Collins, Grants Department
at The Dallas Foundation, at 214-741-9898 or
grants@dallasfoundation.org.
Additional information about the proposed transaction can be
found at www.sharyland.com/oncor.
About Sharyland Utilities, L.P.
Sharyland Utilities, L.P. is a Texas-based public electric utility that is
fully regulated by the Public Utility Commission of Texas. We
are committed to providing quality customer service, affordable
rates, safe and reliable electric delivery, and increased
investment in the electric grid of Texas. Sharyland Utilities
currently serves approximately 54,000 customers in 29 counties
throughout Texas. Sharyland Utilities is privately-owned by
Hunter L. Hunt and other members of
the family of Ray L. Hunt, and is managed by Hunter L. Hunt. Additional information
about Sharyland can be found at www.sharyland.com.
About Sharyland Distribution & Transmission Services,
L.L.C. (SDTS)
SDTS is a regulated subsidiary of InfraREIT, Inc., a real estate
investment trust that is engaged in owning and leasing
rate-regulated electric transmission and distribution assets in the
state of Texas. InfraREIT, Inc. is externally managed by Hunt
Utility Services, LLC, an affiliate of Hunt Consolidated, Inc. (a
diversified holding company based in Dallas, Texas and managed by the Ray L. Hunt
family), and its shares are traded on the New York Stock Exchange
under the symbol "HIFR". Additional information on InfraREIT
is available at http://www.InfraREITInc.com.
Contact: Paul Schulze
214-978-8534
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SOURCE Sharyland Utilities, L.P.