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Texas regulators considers rule changes for review of proposed TXU buyout

Texas regulators considers rule changes for review of proposed TXU buyout

Texas regulators are considering changing their own rules to give themselves a bigger role in reviewing a takeover bid for TXU Corp., a move that could complicate the $32 billion (euro24 billion) sale of the state's largest electric utility.
The Public Utility Commission voted Thursday to publish proposed rule changes. These include requiring companies to get PUC approval to transfer their certification to new owners and to tell the commission of changes in majority ownership six months before a sale. Currently, notification must be made within 30 days after the sale.
Last month, investors led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group announced they would pay about $32 billion (euro24 billion) in cash and assume about $13 billion (euro9.76 billion) in TXU debt in the largest private buyout ever.
The firms have maintained they do not need PUC approval under state law.
However, a member of the PUC, Paul Hudson, said during a meeting Thursday that "perhaps our rules have been cast in new light by some of the things we've seen unfold."
The commission approved a motion to publish new rules proposed by its staff and allow public comment on the changes.
State lawmakers have pushed for PUC review of the sale, which the buyers say would amount to unfairly changing the rules in the middle of the game.
Representatives of the buyers did not immediately return calls for comment after the PUC action.
Last week, Henry Kravis, the founding partner of KKR, told a state House committee that if the buyers had known Texas would change the rules for buying a utility, "that would have changed our thinking as to whether we would have made an offer here or not." He added that changing the PUC rules would send a bad message to other businesses that are thinking of investing in Texas.
Also on Thursday, TXU asked for a hearing to contest a proposed $210 million (euro158 million) fine for allegedly manipulating the Texas electric market in 2005. TXU denied manipulating the market, and it criticized the commission staff's conclusions.
The request for a hearing was expected since earlier in the week, when the PUC staff proposed the fine _ $70 million (euro52.5 million) to offset higher costs that consumers paid for electricity in mid-2005, and a $140 million (euro105 million) penalty.


Updated : 2021-10-22 12:52 GMT+08:00