In October 2007, a group of private investors bought TXU Corp., which is now known as Energy Future Holdings Corp. (EFH). EFH now owns approximately 80 percent of Oncor. At the time of the buyout, Oncor and its new owners established various legal, financial, and contractual provisions to enhance the separateness between Oncor and its new owners and other unregulated affiliates and to protect Oncor’s credit quality. The primary objective was to minimize the risk that Oncor would be negatively impacted in the event of a bankruptcy or other adverse financial condition occurring with the new owners and their other businesses. The provisions are commonly referred to as a “ring-fence.”
This ring-fence created both a legal and financial separation between Oncor and EFH and its competitive affiliates. Similar ring-fences were created in other mergers and acquisitions and are recognized in state and federal courts as valid structures that may mitigate the financial exposure of the ring-fenced entity from the owners or other businesses in the deals.
The following diagram provides an overview of Oncor's ownership structure:
The questions on the left-hand menu provide an overview of the separateness between Oncor and EFH, including what the ring-fence is and how it protects Oncor’s ability to provide vital electric transmission and distribution services to Texans and Texas businesses.