On May 19, 2016, the Texas Public Utility Commission (PUCT) will
again consider the acquisition of Oncor by Hunt Consolidated, Inc.
The PUCT previously approved the acquisition of the Oncor assets by
Hunt but imposed certain conditions that proved unacceptable to
Hunt's investors. Hunt sought reconsideration of the conditions
and the PUCT passed on the chance to take up the matter at its May
4 meeting.
The core of the Hunt acquisition of the Oncor assets is the use
of a Real Estate Investment Trust (REIT) as a financing vehicle for
the transaction. Since the use of the REIT enables the investors to
avoid federal tax liability, the PUCT has considered whether Hunt
should be able to continue to recover in rates an increment that
would otherwise be used to pay federal income taxes. Due to the
proposed use of the REIT, recovery of a federal income tax
component in the rates would not be necessary and would, therefore,
result in additional income to investors. The PUCT has
