Can’t win them all

Sempra Energy made sweeter offer right before court appearance

Warren Buffett’s Berkshire Hathaway Energy was beaten at the last minute in its Oncor bid.

After making a bid to buy Texas’ largest utility, Berkshire Hathaway Energy was prepared to walk into a Delaware bankruptcy court Monday and get approval for its $9 billion deal to buy the bankrupt Energy Future Holdings.

Instead, hours before the court appearance, San Diego-based Sempra Energy offered a sweeter deal for Energy Future and its largest investor: more money for the company’s crown jewel, the Dallasbased utility Oncor, and a lower termination fee if the agreement fell apart, according to court documents.

Berkshire, a subsidiary of billionaire investor Warren Buffett’s Berkshire Hathaway, had secured tentative approval in July from state regulators and consumer advocates for its offer to buy Oncor, which serves 10 million Texans and is mostly owned by Energy Future. Berkshire’s offer was the third in the past year — two previous deals had been scrapped by the Public Utility Commission.

Under the agreement, Energy Future would owe Berkshire $270 million if the deal didn’t go through. Berkshire has declined to comment on the status of the termination fee; Energy Future did not return requests for comment.

Energy Future rescinded its agreement with Berkshire and signed a new agreement with Sempra, which had offered $9.45 billion. Sempra also agreed to reduce the deal’s termination fee to $190 million and narrowed the requirements for paying that fee, according to court documents.

As a part of the deal, Sempra has agreed to maintain Texas’ “ring fence” policy, which prevents transmission and distribution utilities like Oncor from owning power generation assets.

All measures are meant to prevent ratepayers from incurring costs not related to the distribution of electricity and to ensure that Oncor has the resources to maintain its transmission lines.

Dallas-based utility Oncor, which serves 10 million Texans, is mostly owned by Energy Future Holdings.

Berkshire Hathaway Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway, lost out on Oncor. Energy Future Holdings’ Lake Hubbard Power Plant is near Dallas. Sempra, a California-based energy company, has agreed to pay $9.45 billion for bankrupt...

Nati Harnik / Associated Press file