A write-off of rate base disallowances during the first quarter of 2023 associated with a PUC final order in an Oncor rate case contributed to the $194 million quarter-over-quarter decrease.
Cncor Electric Delivery received net income of $103 million during the three months ending March 31, which represents a $91 million decrease from the same period in 2022, according to a call with investment analysts on May 4.
A write-off of certain rate base disallowances during the first quarter of 2023 relating to a Public Utility Commission final order in an Oncor rate case (combined with lower revenues from decreased customer consumption because of milder weather) contributed to the $194 million quarter-over-quarter decrease. However, higher revenues from transmission rate updates partially offset the decrease, according to the company.
Rate Case Details
The rate case in question, which was filed by the utility in May of 2022, was concluded with a PUC final order on April 6 and with new rates taking effect on May 1 (PUC Docket No. 53601). The utility reports that the final order in the rate case will result in an average increase over 2021 test year revenues of 1.4 percent, or approximately $79 million. The PUC in its final order also authorized a return on equity of 9.7 percent.
Oncor noted that the final order excluded from rates some costs associated with a number of plant facilities it acquired in 2019. The final order also excluded $65 million of employee benefit and compensation-related costs.
2023-2027 Capital Expenditure Plan
The company on May 4 also detailed its ongoing capital expenditure budget, which it said totals $3.4 billion for 2023. Oncor management expects to recommend to its board further capital expenditures of $3.6 billion in 2024, $3.8 billion in 2025, $3.9 billion in 2026 and $4.3 billion in 2027 — for an aggregate 2023-2027 capital plan of approximately $19 billion. Oncor said that 97 percent of the recovery for its capital expenditures will come through rates approved through interim rate adjustment riders such as the Distribution Cost Recovery Factor rider and Transmission Cost of Service rider.
The company reported that it connected 17,000 new premises to the ERCOT grid during the first quarter of 2023, as compared to 16,000 during the first quarter of 2022. The company also announced the construction or upgrade of 257 miles of distribution and transmission power lines during the first quarter of 2023. In addition, Oncor had approximately 650 active generation and retail transmission point-of-interconnection requests in queue as of March 31. This represents a 41 percent increase compared to the same period in 2022, according to Oncor. Of the approximately 400 active generation POI requests in queue, 50 percent are for solar, 40 percent for storage, 8 percent for wind and 2 percent for gas, according to Oncor.
The company also reported reliability improvements, as measured by the PUC’s System Average Interruption Duration Index (non-storm). The company reported that its customers experienced on average of approximately seven fewer minutes of outages over the 12 months ending in March, which is an improvement of approximately 9 percent over the previous corresponding period.
Headquartered in Dallas, Oncor Electric Delivery Company operates the largest transmission and distribution system in Texas. The company delivers power to more than 3.9 million homes and businesses and operates more than 141,000 miles of transmission and distribution lines in Texas.