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July 17, 2020

Texas Commission approves modified stipulation allowing sale of WETT (D-50584)

by Kelso King, Grid Monitor
Source – Grid Monitor
Posted 07/17/2020

Prior to the Open Meeting, Chairman Walker filed a memo recommending approving the parties’ unanimous agreement provided that two modifications to the regulatory commitments in the final order are made:

1.    Regulatory Commitment 24 should be modified to add that the prohibition against asserting preemption under the Federal Power Act also applies before the Federal Energy Regulatory Commission and federal courts.

2.    Regulatory Commitment 31 should be modified to remove the contingent nature of the final order in this proceeding and to identify all the entities required to make the necessary amendments to the LLC agreements within 30 days of the close of the transaction. It should also require the same entities to obtain Commission approval prior to making changes to their LLC agreements that would make any changes to the regulatory commitments approved in this proceeding.

At the Open Meeting, Chairman Walker noted that the joint applicants had made a filing saying the changes were acceptable to them and she would, therefore, recommend approving the stipulation with these changes.

Commissioner D’Andrea agreed and added that a stipulation makes a lot of sense in this case.

The Commission approved directing Staff to draft an Order consistent with Chairman Walker’s memo and the Commission’s discussion.

Background

Wind Energy Transmission Texas, LLC (WETT), AxInfra US LP (AxInfra), Hotspur HoldCo 1 LLC (Hotspur 1), Hotspur HoldCo 2 LLC (Hotspur 2), and 730 Hotspur, LLC (730 Hotspur) (Joint Applicants) filed an application with the PUCT for approval of a proposed sales transaction that would result in the ownership and control of WETT being transferred through various subsidiaries to AxInfra, an investment fund managed by Axium Infrastructure US, Inc. (Axium US); AxInfra and its affiliates’ holdings consist of North American infrastructure assets with a diversified portfolio valued at about $4.3 billion as of December 2019. Further, as part of the overall transactional process, Teachers Insurance and Annuity Association of America (TIAA) — a Fortune 100 financial services organization and the leading provider of financial services in the academic, research, medical, cultural and governmental fields, with over $1 trillion in assets — would, through its wholly-owned indirect subsidiary 730 Hotspur, acquire an indirect minority non-controlling interest in WETT.

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