Apr 11, 2007 12:52 pm US/Central
PUC Chief Says TXU Threatened Lawsuit
AUSTIN (AP) ―
A power company interested in bidding for part of TXU Corp. withdrew after the electric utility threatened to sue it, according to a state regulator.
Sharyland Utilities, controlled by the Hunt family of Dallas, told the Public Utility Commission last week of its plans to bid for TXU's electric-delivery business but changed its mind two days later.
PUC Chairman Paul Hudson called the development "troubling," according to a letter obtained by the Fort Worth Star-Telegram.
TXU has agreed to be purchased for $32 billion. Investors led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group would also assume about $12 billion in TXU debt.
Sharyland's interest in part of TXU was disclosed Tuesday at a hearing of the state House Regulated Industries Committee, which is considering legislation that could have a bearing on the TXU sale.
Sharyland and TXU officials did not immediately respond to calls for comment Wednesday by The Associated Press.
In a letter to two lawmakers on Monday, Hudson said Sharyland planned to publicly announce its interest in TXU's transmission business last week but called him two days later to say it had given up on those plans.
"Representatives of that organization alleged that threats of legal action precluded them from proceeding," Hudson wrote in a letter addressed to the chairmen of House and Senate committees that handle utilities legislation.
Hudson testified before the House regulated industries panel that the PUC hasn't found violations of utility regulations, but that he decided to tell lawmakers of the incident because it made him uneasy.
Rep. Phil King, R-Weatherford, chairman of the House committee, said he was concerned that Hudson had made the allegations public, and he hinted that Sharyland was manipulating the commission for its own purposes. King has opposed efforts to expand the PUC's role in reviewing the TXU sale.
"This is exactly what bothers me about the issue of giving the PUC up-or-down authority over the transaction," King said.
TXU has until Monday to solicit other bids.
Current state law would require KKR and Texas Pacific to notify the PUC after buying the regulated part of TXU's business, the transmission division. The buyers have volunteered to give the PUC information about that part of their bid this month, before the sale closes.
But Sen. Troy Fraser, R-Horseshoe Bay, chairman of the Senate Business and Commerce Committee, proposes to give the PUC the right to examine all parts of a utility sale to judge whether the transaction is in the public interest.
In the case of TXU, that could give the PUC veto power of all parts of the sale, including the transfer of the Dallas company's deregulated power-generation unit and the electric-sales division, which has the most direct contact with consumers.
U.S. Rep. Joe Barton, R-Ennis, wrote to state lawmakers urging them to let the PUC review the TXU buyout and consider its impact on electric rates.
Sharyland operates in Mission and McAllen along the Mexican border.
(© 2007 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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