The company reports highest organic growth in its history in 2020, and expects growth to continue in 2021.
Oncor Electric has reported net income during the three months ending March 31 of $168 million — a 28.2 percent increase from the $131 million it reported during the first quarter of 2020.
Oncor is a subsidiary of California-based Sempra Energy. Oncor released the new information on May 5 and included it in Sempra’s 2021 first quarter earnings call with financial analysts on the same day.
Increases in base transmission and distribution rates, along with higher weather-related consumption, primarily drove Oncor’s $37 million quarter-over-quarter net income increase, the company reported. Increases in costs associated with additional investments (primarily depreciation, amortization, and property taxes) partially offset those gains.
Oncor’s total distribution base revenues in the three months ending March 31—as compared to the same period during the prior year—increased by nine percent. On a weather‑normalized basis, the increase was 1.6 percent.
The change in Oncor’s total distribution base revenues included a 17.8 percent increase in revenues from residential customers (1.2 percent increase on a weather-normalized basis) and a 2.6 percent increase in revenues from large commercial and industrial customers.
WINTER WEATHER STORM IMPACT
The utility also reported $90 million in operation and maintenance restoration costs related to Winter Storm Uri. These costs were booked as a regulatory assets, meaning that Oncor can seek recovery of them in a future rate proceeding. Oncor also made approximately $12 million in capital expenditures related to the storm. Oncor will seek recovery of those capital expenditures during a future interim rate filing.
Due to the financial distress relating to high wholesale energy prices during the storm, a number of retail electric providers have filed for bankruptcy or transitioned customers to other REPs. As of March 31, Oncor has deemed as uncollectible $10 million in charges owed to the utility by these REPs. Oncor will book these uncollectible amounts as a regulatory asset and seek recovery of them during a future rate proceeding.
ONCOR SERVICE TERRITORY GROWTH
During the Sempra earnings call, an executive also said that Oncor experienced the highest organic growth in its history in 2020, and that the company likewise expected that trend to continue in 2021. Oncor connected approximately 19,000 additional premises to the grid during the first quarter of 2021, as compared to approximately 18,000 additional premise connections during the first quarter of 2020.
In addition, Oncor constructed or upgraded approximately 277 miles of transmission and distribution lines during the first quarter of 2021. Company officials reported 302 active requests for retail and generation transmission interconnections as of March 31, representing a 26-percent increase from the same quarter last year. Oncor reports that if new requests continue at this pace, it will set a company record in 2021 for new annual transmission interconnection requests.
CAPITAL EXPENDITURE PROGRAM AND LIQUIDITY
Oncor reported that its five-year capital expenditure plan (announced in November 2020) remains on track. The utility reported expenditures of $627 million during the first quarter (of a planned $2.4 billion in total capital expenditures for 2021). According to the utility, Oncor’s available liquidity consisting of cash on hand and available credit capacity totaled $2.3 billion as of March 31.