Oncor Electric Delivery Company LLC (“Oncor”) today reported three months ended June 30, 2024 net income of $251 million compared to three months ended June 30, 2023 net income of $200 million. The $51 million increase was driven by higher revenues primarily due to updated interim rates to reflect increases in invested capital, increases in transmission billing units, higher customer consumption primarily attributable to weather, the new base rates implemented in May 2023 and customer growth, partially offset by higher costs associated with increases in invested capital (primarily borrowing costs and depreciation) and higher operation and maintenance (“O&M”) expense.
“Over a 21-day period in the months of May and June, tornados touched down in the Temple/Killeen area, a storm with straight line winds measuring as high as 95 miles per hour passed through the DFW metroplex, and additional storms impacted our East Texas region. I want to thank the 12,000 Oncor employees, contractors and off-system personnel who worked around the clock, restoring service to our customers as soon as safely possible,” Allen Nye, Oncor CEO said. “Oncor has also reached a settlement in principle with the parties to our system resiliency plan case. We hope to have the agreement documented and approved by the Public Utility Commission of Texas in the coming months. We believe the agreement will accomplish all of the benefits of our filed plan. We appreciate all of the parties’ constructive engagement, especially the Public Utility Commission of Texas Staff.”
Oncor’s reported net income of $476 million in the six months ended June 30, 2024 compared favorably to net income of $303 million in the six months ended June 30, 2023. The $173 million increase was driven by higher revenues primarily due to updated interim rates to reflect increases in invested capital, increases in transmission billing units, higher customer consumption primarily attributable to weather, the new base rates implemented in May 2023 and customer growth, and the write-off of rate base disallowances recorded in the first quarter of 2023, partially offset by higher costs associated with increases in invested capital (primarily borrowing costs and depreciation) and higher O&M expense. Financial and operational results are provided in Tables A, B, C, D and E below.
Operational Highlights
In the three months ended June 30, 2024, Oncor increased its premise count by 20,000. The continued growth across Oncor’s transmission and distribution footprint resulted in the construction or upgrading of approximately 175 circuit miles of transmission lines and included 25 load-serving substation projects and 18 major switching station projects all being placed into service in the second quarter of 2024. Oncor received 98 new transmission point of interconnection (“POI”) requests in the three months ended June 30, 2024, an approximate seven percent increase over the same period in 2023. The majority of those new requests are from large commercial and industrial (“LC&I”) customers. At June 30, 2024, Oncor had a total of 814 active generation and LC&I transmission POI requests in queue as compared to 720 at June 30, 2023, representing a 13% increase. Generation customers represented 473 of those POI requests in queue of which 46% are solar, 43% are storage, 7% are wind, 3% are gas and 1% are other. LC&I requests come from customers across a diverse group of industries, including many with electricity loads that represent the potential for hundreds of megawatts of new electric load, such as artificial intelligence and data centers. Of the 341 active LC&I transmission POI requests in Oncor’s queue at June 30, 2024, approximately 25% of those projects represent large load customers that in the aggregate represent over 40 gigawatts of potential load.
Oncor is committed to enhancing the resiliency and reliability of its system. In May 2024, Oncor filed a system resiliency plan (“SRP”) with the Public Utility Commission of Texas (“PUCT”) for approval that, if fully implemented, Oncor believes will help mitigate the impact and duration of severe weather outages. Oncor’s SRP (PUCT Docket No. 56545) requests approval of approximately $2.9 billion in capital investment and $520 million in O&M expenses over a three-year period to enhance the resiliency of its transmission and distribution system. These capital investments would be incremental to Oncor’s previously announced $24.2 billion five-year capital plan for the 2024-2028 period. The SRP proposes various measures to address certain resiliency events, including extreme weather, which Oncor believes will provide a substantial reduction in outage minutes for customers, while also expanding and accelerating Oncor’s efforts around wildfire risk mitigation, physical security threats, cybersecurity threats, vegetation management and the expanded deployment of smart grid technologies. These investments, if approved, are expected to enable Oncor’s transmission and distribution system to better withstand and more quickly recover from the wide range of extreme weather conditions and other risks Oncor experiences across its diverse service area.
On August 5, 2024, Oncor filed a letter in the SRP proceeding noting that the parties have reached a settlement in principle and that the parties are working to finalize a written settlement agreement by August 16, 2024 for PUCT review and approval. A final order on Oncor’s SRP application is expected from the PUCT by the end of the year.
In late June, Oncor published its fifth annual Corporate Sustainability Overview, highlighting its sustainable business practices, including its efforts to enhance the resiliency and reliability of its system. The Corporate Sustainability Overview is available on Oncor’s website at oncor.com under the Investor Relations section.
Liquidity
As of August 5, 2024, Oncor’s available liquidity, consisting of cash on hand and available borrowing capacity under its existing credit facilities, commercial paper program and accounts receivable facility (“AR Facility”), totaled $2.2 billion.
Sempra Internet Broadcast Today
Sempra (NYSE: SRE) (BMV: SRE) will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. ET, which will include discussion of second quarter 2024 results and other information relating to Oncor. Oncor Chief Executive Allen Nye will participate in the broadcast. Access to the broadcast is available by logging onto the Investors section of Sempra’s website, sempra.com/investors. Prior to the conference call, an accompanying slide presentation will be posted on sempra.com/investors. For those unable to participate in the live webcast, it will be available on replay a few hours after its conclusion at sempra.com/investors.
Quarterly Report on Form 10-Q
Oncor’s Quarterly Report on Form 10-Q for the period ended June 30, 2024 will be filed with the U.S. Securities and Exchange Commission after Sempra’s conference call and once filed, will be available on Oncor’s website, oncor.com.
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Oncor Electric Delivery Company LLC Table A – Condensed Statements of Consolidated Income (Unaudited) Three and Six Months Ended June 30, 2024 and 2023 |
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Three Months Ended June 30, |
Six Months Ended June 30, |
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|
2024 |
2023 |
2024 |
2023 |
|||||||||
|
(U.S. dollars in millions) |
||||||||||||
|
Operating revenues |
$ |
1,492 |
$ |
1,343 |
$ |
2,950 |
$ |
2,635 |
||||
|
Operating expenses: |
||||||||||||
|
Wholesale transmission service |
351 |
322 |
702 |
643 |
||||||||
|
Operation and maintenance |
295 |
271 |
594 |
534 |
||||||||
|
Depreciation and amortization |
261 |
242 |
518 |
482 |
||||||||
|
Provision in lieu of income taxes |
53 |
41 |
100 |
68 |
||||||||
|
Taxes other than amounts related to income taxes |
136 |
141 |
280 |
286 |
||||||||
|
Write-off of rate base disallowances |
– |
– |
– |
55 |
||||||||
|
Total operating expenses |
1,096 |
1,017 |
2,194 |
2,068 |
||||||||
|
Operating income |
396 |
326 |
756 |
567 |
||||||||
|
Other (income) and deductions – net |
(16) |
(5) |
(30) |
2 |
||||||||
|
Non-operating benefit in lieu of income taxes |
– |
(2) |
(1) |
(8) |
||||||||
|
Interest expense and related charges |
161 |
133 |
311 |
256 |
||||||||
|
Write-off of non-operating rate base disallowances |
– |
– |
– |
14 |
||||||||
|
Net income |
$ |
251 |
$ |
200 |
$ |
476 |
$ |
303 |
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Oncor Electric Delivery Company LLC |
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Table B – Condensed Statements of Consolidated Cash Flows (Unaudited) |
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Six Months Ended June 30, 2024 and 2023 |
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|
Six Months Ended June 30, |
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|
2024 |
2023 |
||||||||||||
|
(U.S. dollars in millions) |
|||||||||||||
|
Cash flows – operating activities: |
|||||||||||||
|
Net income |
$ |
476 |
$ |
303 |
|||||||||
|
Adjustments to reconcile net income to cash provided by operating activities: |
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|
Depreciation and amortization, including regulatory amortization |
602 |
536 |
|||||||||||
|
Write-off of rate base disallowances |
– |
69 |
|||||||||||
|
Provision in lieu of deferred income taxes – net |
57 |
23 |
|||||||||||
|
Changes in operating assets and liabilities: |
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|
Accounts receivable |
(202) |
(78) |
|||||||||||
|
Inventories |
(28) |
(49) |
|||||||||||
|
Accounts payable – trade |
162 |
(6) |
|||||||||||
|
Regulatory assets – deferred revenues |
(51) |
(120) |
|||||||||||
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Regulatory assets – self-insurance reserve |
(236) |
(166) |
|||||||||||
|
Other assets and liabilities |
(142) |
19 |
|||||||||||
|
Cash provided by operating activities |
638 |
531 |
|||||||||||
|
Cash flows – financing activities: |
|||||||||||||
|
Issuances of senior secured notes |
1,442 |
1,400 |
|||||||||||
|
Repayments of senior secured notes |
(500) |
– |
|||||||||||
|
Borrowings under term loans |
– |
775 |
|||||||||||
|
Repayments under term loans |
– |
(875) |
|||||||||||
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Borrowings under AR Facility |
540 |
425 |
|||||||||||
|
Repayments under AR Facility |
(400) |
(100) |
|||||||||||
|
Borrowings under $500M Credit Facility |
500 |
– |
|||||||||||
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Net change in short-term borrowings |
(282) |
(198) |
|||||||||||
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Contributions from members |
480 |
221 |
|||||||||||
|
Distributions to members |
(251) |
(255) |
|||||||||||
|
Debt discount, financing and reacquisition costs – net |
(15) |
(33) |
|||||||||||
|
Cash provided by financing activities |
1,514 |
1,360 |
|||||||||||
|
Cash flows – investing activities: |
|||||||||||||
|
Capital expenditures |
(2,196) |
(1,890) |
|||||||||||
|
Sales tax audit settlement refund |
56 |
– |
|||||||||||
|
Other – net |
20 |
17 |
|||||||||||
|
Cash used in investing activities |
(2,120) |
(1,873) |
|||||||||||
|
Net change in cash, cash equivalents and restricted cash |
32 |
18 |
|||||||||||
|
Cash, cash equivalents and restricted cash – beginning balance |
151 |
98 |
|||||||||||
|
Cash, cash equivalents and restricted cash – ending balance |
$ |
183 |
$ |
116 |
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Oncor Electric Delivery Company LLC Table C – Condensed Consolidated Balance Sheets (Unaudited) At June 30, 2024 and December 31, 2023 |
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At June 30, |
At December 31, |
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|
2024 |
2023 |
|||||
|
(U.S. dollars in millions) |
||||||
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ASSETS |
||||||
|
Current assets: |
||||||
|
Cash and cash equivalents |
$ |
20 |
$ |
19 |
||
|
Restricted cash, current |
32 |
24 |
||||
|
Accounts receivable – net |
1,150 |
944 |
||||
|
Amounts receivable from members related to income taxes |
23 |
4 |
||||
|
Materials and supplies inventories – at average cost |
369 |
341 |
||||
|
Prepayments and other current assets |
183 |
101 |
||||
|
Total current assets |
1,777 |
1,433 |
||||
|
Restricted cash, noncurrent |
131 |
108 |
||||
|
Investments and other property |
171 |
158 |
||||
|
Property, plant and equipment – net |
29,727 |
28,057 |
||||
|
Goodwill |
4,740 |
4,740 |
||||
|
Regulatory assets |
1,721 |
1,556 |
||||
|
Right-of-use operating lease and other assets |
153 |
142 |
||||
|
Total assets |
$ |
38,420 |
$ |
36,194 |
||
|
LIABILITIES AND MEMBERSHIP INTERESTS |
||||||
|
Current liabilities: |
||||||
|
Short-term borrowings |
$ |
– |
$ |
282 |
||
|
Accounts payable – trade |
811 |
600 |
||||
|
Amounts payable to members related to income taxes |
15 |
27 |
||||
|
Accrued taxes other than amounts related to income |
161 |
261 |
||||
|
Accrued interest |
127 |
117 |
||||
|
Operating lease and other current liabilities |
335 |
338 |
||||
|
Total current liabilities |
1,449 |
1,625 |
||||
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Long-term debt, noncurrent |
14,862 |
13,294 |
||||
|
Liability in lieu of deferred income taxes |
2,412 |
2,320 |
||||
|
Regulatory liabilities |
2,951 |
3,000 |
||||
|
Employee benefit plan obligations |
1,430 |
1,442 |
||||
|
Operating lease and other obligations |
422 |
305 |
||||
|
Total liabilities |
23,526 |
21,986 |
||||
|
Commitments and contingencies |
||||||
|
Membership interests: |
||||||
|
Capital account – number of units outstanding 2024 and 2023 – 635,000,000 |
15,093 |
14,388 |
||||
|
Accumulated other comprehensive loss |
(199) |
(180) |
||||
|
Total membership interests |
14,894 |
14,208 |
||||
|
Total liabilities and membership interests |
$ |
38,420 |
$ |
36,194 |
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Oncor Electric Delivery Company LLC Table D – Operating Statistics Three, Six and Twelve Months Ended June 30, 2024 and 2023; mixed measures |
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Twelve Months Ended |
% |
|||||
|
2024 |
2023 |
Change |
||||
|
Reliability statistics (a): |
||||||
|
System Average Interruption Duration Index (SAIDI) (non-storm) |
70.4 |
69.4 |
1.4 |
|||
|
System Average Interruption Frequency Index (SAIFI) (non-storm) |
1.0 |
1.1 |
(9.1) |
|||
|
Customer Average Interruption Duration Index (CAIDI) (non-storm) |
72.6 |
63.6 |
14.2 |
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Electricity points of delivery (end of period and in thousands): |
||||||
|
Electricity distribution points of delivery (based on number of active meters) |
4,008 |
3,933 |
1.9 |
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Three Months Ended |
Increase |
Six Months Ended |
Increase |
|||||||||
|
2024 |
2023 |
(Decrease) |
2024 |
2023 |
(Decrease) |
|||||||
|
Residential system weighted weather data (b): |
||||||||||||
|
Cooling degree days |
652 |
552 |
100 |
677 |
582 |
95 |
||||||
|
Heating degree days |
6 |
11 |
(5) |
459 |
386 |
73 |
||||||
|
Three Months Ended |
% |
Six Months Ended |
% |
|||||||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|||||||
|
Operating statistics: |
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|
Electric energy volumes (gigawatt-hours) |
||||||||||||
|
Residential |
11,432 |
10,807 |
5.8 |
21,896 |
20,492 |
6.9 |
||||||
|
Commercial, industrial, small business and other |
28,911 |
27,249 |
6.1 |
55,760 |
52,343 |
6.5 |
||||||
|
Total electric energy volumes |
40,343 |
38,056 |
6.0 |
77,656 |
72,835 |
6.6 |
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(a) |
SAIDI is the average number of minutes electric service is interrupted per consumer in a twelve-month period. SAIFI is the average number of electric service interruptions per consumer in a twelve-month period. CAIDI is the average duration in minutes per electric service interruption in a twelve-month period. In each case, Oncor’s non-storm reliability performance reflects electric service interruptions of one minute or more per customer. Each of these results excludes outages during significant storm events. |
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(b) |
Degree days are measures of how warm or cold it is throughout Oncor’s service territory. A degree day compares the average of the hourly outdoor temperatures during each day to a 65° Fahrenheit standard temperature. The more extreme the outside temperature, the higher the number of degree days. A high number of degree days generally results in higher levels of energy use for space cooling or heating. |
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Oncor Electric Delivery Company LLC Table E – Operating Revenues Three and Six Months Ended June 30, 2024 and 2023 |
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|
Three Months Ended |
$ |
Six Months Ended |
$ |
|||||||||||||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|||||||||||||
|
(U.S. dollars in millions) |
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|
Operating revenues |
||||||||||||||||||
|
Revenues contributing to earnings: |
||||||||||||||||||
|
Distribution base revenues |
||||||||||||||||||
|
Residential (a) |
$ |
358 |
$ |
307 |
$ |
51 |
$ |
687 |
$ |
551 |
$ |
136 |
||||||
|
Large commercial & industrial (b) |
312 |
274 |
38 |
617 |
545 |
72 |
||||||||||||
|
Other (c) |
30 |
33 |
(3) |
60 |
69 |
(9) |
||||||||||||
|
Total distribution base revenues (d) |
700 |
614 |
86 |
1,364 |
1,165 |
199 |
||||||||||||
|
Transmission base revenues (TCOS revenues) |
||||||||||||||||||
|
Billed to third-party wholesale customers |
263 |
238 |
25 |
525 |
488 |
37 |
||||||||||||
|
Billed to REPs serving Oncor distribution customers, through TCRF |
144 |
133 |
11 |
287 |
274 |
13 |
||||||||||||
|
Total TCOS revenues |
407 |
371 |
36 |
812 |
762 |
50 |
||||||||||||
|
Other miscellaneous revenues |
22 |
25 |
(3) |
46 |
42 |
4 |
||||||||||||
|
Total revenues contributing to earnings |
1,129 |
1,010 |
119 |
2,222 |
1,969 |
253 |
||||||||||||
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Revenues collected for pass-through expenses: |
||||||||||||||||||
|
TCRF – third-party wholesale transmission service |
351 |
322 |
29 |
702 |
643 |
59 |
||||||||||||
|
EECRF and other revenues |
12 |
11 |
1 |
26 |
23 |
3 |
||||||||||||
|
Total revenues collected for pass-through expenses |
363 |
333 |
30 |
728 |
666 |
62 |
||||||||||||
|
Total operating revenues |
$ |
1,492 |
$ |
1,343 |
$ |
149 |
$ |
2,950 |
$ |
2,635 |
$ |
315 |
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(a) |
Distribution base revenues from residential customers are generally based on actual monthly consumption (kWh). On a weather-normalized basis, distribution base revenues from residential customers increased 12.3% in the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 and increased 20.1% in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. |
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(b) |
Depending on size and annual load factor, distribution revenues from LC&I customers are based either on actual monthly demand (kilowatts) or the greater of actual monthly demand (kilowatts) or 80% of peak monthly demand during the prior eleven months. |
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(c) |
Includes distribution base revenues from small business customers whose billing is generally based on actual monthly consumption (kWh), lighting sites and other miscellaneous distribution base revenues. |
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(d) |
The 14.0% increase in distribution base revenues in the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 (12.1% increase on a weather-normalized basis) primarily reflects updated interim distribution cost recovery factor rates, higher customer consumption primarily attributable to weather, new base rates implemented May 1, 2023 and growth in points of delivery. The 17.1% increase in distribution base revenues in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 (15.0% increase on a weather-normalized basis) primarily reflects updated interim distribution cost recovery factor rates, new base rates implemented May 1, 2023, higher customer consumption primarily attributable to weather and growth in points of delivery. |
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