Oncor credits a $60 million revenue increase for the quarter to higher transmission and distribution rates and other factors.
Oncor Electric has reported net income of $318 million during the three months ending September 30, as compared to net income of $258 million for the same period in 2021, according to information released to investors.
The company attributed the $60 million quarter-over-quarter increase to higher weather-related consumption, increases in customer growth, increases to transmission and distribution rates, and performance bonus revenue from its energy efficiency efforts. Those gains were partially offset by increases in operation and maintenance expenses and taxes.
The new quarterly financial information was released November 3 and coincided with a call with financial analysts by California-based Sempra Energy, Oncor’s majority owner. Oncor is based in Dallas and operates the state’s largest electric transmission and distribution utility.
Oncor also reported an increase of 9.2 percent in distribution base revenues for the recent quarter (or 2.3 percent on a weather normalized basis), as compared to the same quarter in 2021. Contributing to this increase was a 12.6 percent increase in distribution base revenues from residential customers.
The company noted that its service territory continues growing at one of the nation’s fastest rates, and that this dramatic growth has allowed it to increase revenues while simultaneously developing new infrastructure projects. Indicative of that growth is the approximately 14,000 new premises Oncor connected to the ERCOT grid during the third quarter of 2022, an increase of about 7.7 percent as compared to the third quarter of 2021.
Oncor likewise reported 565 active transmission point-of-interconnection requests in queue as of September 30, which is a 52 percent increase from September 30, 2021. Of those active requests, approximately 52 percent are for solar generators, 35 percent for energy storage, 10 percent for wind generators and three percent for gas, according to the company.
In addition, Oncor reported the construction or upgrade of approximately 300 miles of power lines and the completion of two major substations during the third quarter of 2022. It also placed $80 million of transmission projects into service.
In total, the company reported capital expenditures totaling $2.2 billion during the nine months ending Sept. 30, and it reports that it remains on track to meet its $3 billion capital plan for 2022. However, financial uncertainties associated with high inflation and a pending rate case prompted the board to put off adoption of its 2023 capital expenditure budget until a later board meeting. It likewise delayed any announcement pertaining to a new five-year capital plan, and instead said it will reveal those details at the end of the first quarter of 2023.
Base Rate Review
The company also updated the progress of a bate rate case it has filed with the Public Utility Commission of Texas. The company reports it requested a 4.5 percent increase in its average annual revenue requirement and, if approved by the PUC, the result would be an annual revenue requirement increase of approximately $251 million. A proposal for decision from the State Office of Administrative Hearings is expected by Dec. 27, 2022, and the PUC is expected to issue a final order by the end of the first quarter of 2023, according to Oncor.
Oncor Electric Delivery operates more than 140,000 miles of transmission and distribution lines in Texas and delivers power to more than 3.8 million homes and businesses. It is owned by two investors — majority owner Sempra, and minority owner Texas Transmission Investment — but is managed by an independent board.
For more information about Oncor’s third quarterly earnings, see the release here.