Oncor Reports Third Quarter 2024 Results
DALLAS, Nov. 6, 2024 /PRNewswire/ -- Oncor Electric Delivery Company LLC ("Oncor") today reported three months ended September 30, 2024 net income of $324 million compared to three months ended September 30, 2023 net income of $380 million. The $56 million decrease was driven by higher interest expense and depreciation expense associated with increases in invested capital and higher operation and maintenance expense, partially offset by overall higher revenues primarily attributable to updated interim rates to reflect increases in invested capital, increases in transmission billing units and customer growth, net of lower revenues due to lower customer consumption primarily attributable to milder weather when compared to the prior period and lower energy efficiency program performance bonus revenues due to the timing of Public Utility Commission of Texas ("PUCT") approval of an annual energy efficiency cost recovery factor application.
"I am incredibly proud of our team's strong financial and operational performance this quarter. Our dedicated employees have continued to deliver exceptional results, executing on unprecedented growth, reflecting our commitment to investing in critical infrastructure to support Texas's growing energy needs," said Allen Nye, CEO of Oncor. "I also want to extend my deepest gratitude to our crews who spent weeks restoring service in hurricane-ravaged areas of Florida, Georgia and North Carolina. Their hard work and dedication in helping fellow Americans in need embody the very spirit and mission of our company, and our dedication to the communities we serve."
Oncor's reported net income of $800 million in the nine months ended September 30, 2024 compared favorably to net income of $683 million in the nine months ended September 30, 2023. The $117 million increase was driven by overall higher revenues primarily attributable to updated interim rates to reflect increases in invested capital, increases in transmission billing units, customer growth and the new base rates implemented in May 2023, net of lower revenues due to lower customer consumption primarily attributable to milder weather when compared to the prior period and lower energy efficiency program performance bonus revenues due to the timing of PUCT approval of an annual energy efficiency cost recovery factor application and the write-off of rate base disallowances recorded in the first quarter of 2023, partially offset by higher interest expense and depreciation expense associated with increases in invested capital and higher operation and maintenance expense. Financial and operational results are provided in Tables A, B, C, D and E below.
Regulatory Update
In August, Oncor filed an unopposed settlement agreement for PUCT review and approval in its system resiliency plan proceeding (PUCT Docket No. 56545). The system resiliency plan outlined in the settlement agreement provides for approximately $2.9 billion in capital expenditures and $520 million in operation and maintenance expenses to enhance the resiliency of Oncor's transmission and distribution system, including measures to address extreme weather, wildfires, physical security threats and cybersecurity threats. The plan provides for the majority of the spend to occur over a three-year period, with approximately $300 million in capital expenditures and approximately $20 million in operation and maintenance expenses to be carried over into a fourth year. Oncor expects the PUCT will issue a final order in the proceeding by the end of this year, and, to the extent its system resiliency plan is approved by the PUCT, anticipates beginning to make the investments contemplated by the plan in the fourth quarter of 2024.
In October, the PUCT issued an order approving the Permian Basin Reliability Plan proposed by the Electric Reliability Council of Texas, Inc. ("ERCOT") to address anticipated long-term transmission capacity needs in the Permian Basin (PUCT Docket No. 55718). The Permian Basin Reliability Plan identifies an estimated over $13 billion in capital investment transmission projects to be completed through 2038, with those projects to be assigned by the PUCT to transmission service providers in Texas. Based on its current operations in the Permian Basin region and the initial project assignment recommendations made by ERCOT (PUCT Docket No. 57152), Oncor anticipates it could receive a significant portion of the final Permian Basin Reliability Plan transmission projects.
Operational Highlights
Oncor continues to support Texas' growth with new construction, including projects designed to increase reliability for the ERCOT market. In the three months ended September 30, 2024, Oncor constructed or upgraded over 800 miles of distribution and transmission lines, all while remaining focused on safety and reliability. Oncor connected 19,000 new premises to the ERCOT grid and placed nearly $140 million of transmission projects, including eight load-serving substations, into service in the third quarter of 2024.
In the third quarter of 2024, Oncor entered 121 new transmission point of interconnection ("POI") requests into queue, a 38% increase over the same period in 2023. The majority of those new requests are from large commercial and industrial ("LC&I") customers. At September 30, 2024, Oncor had a total of 884 active generation and LC&I transmission POI requests in queue. Generation customers represented 505 of those active POI requests in queue of which 44% are solar, 44% are storage, 7% are wind, 4% are gas and 1% are other. LC&I customers represented 379 of those active POI requests, an increase of 23% over September 30, 2023, equaling 103 gigawatts of potential load. These requests arise from a diverse group of industries, including artificial intelligence and data centers, which equal approximately 82 gigawatts of the potential load. Large load customers, each seeking 100 megawatts or more of demand, represented 172 of the active POI requests at September 30, 2024.
Oncor currently expects to announce a new five-year capital expenditure plan for 2025 through 2029 in the first quarter of 2025 that projects an increase of 40-50% over its previously announced 2024 through 2028 capital plan of $24.2 billion, largely driven by forecasted growth of customer demand in ERCOT.
Liquidity
As of November 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 $1.9 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 third 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 September 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.
Oncor Electric Delivery Company LLCTable A, Condensed Statements of Consolidated Income (Unaudited)Three and Nine Months Ended September 30, 2024 and 2023
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
(U.S. dollars in millions)
Operating revenues
$
1,660
$
1,592
$
4,610
$
4,227
Operating expenses:
Wholesale transmission service
351
322
1,053
965
Operation and maintenance
338
296
932
830
Depreciation and amortization
269
247
787
729
Provision in lieu of income taxes
72
78
172
146
Taxes other than amounts related to income taxes
151
142
431
428
Write-off of rate base disallowances
-
-
-
55
Total operating expenses
1,181
1,085
3,375
3,153
Operating income
497
507
1,235
1,074
Other (income) and deductions, net
(15)
(12)
(45)
(10)
Non-operating benefit in lieu of income taxes
-
(1)
(1)
(9)
Interest expense and related charges
170
140
481
396
Write-off of non-operating rate base disallowances
-
-
-
14
Net income
$
324
$
380
$
800
$
683
Oncor Electric Delivery Company LLCTable B, Condensed Statements of Consolidated Cash Flows (Unaudited)Nine Months Ended September 30, 2024 and 2023
Nine Months Ended September 30,
2024
2023
(U.S. dollars in millions)
Cash flows, operating activities:
Net income
$
800
$
683
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization, including regulatory amortization
914
826
Write-off of rate base disallowances
-
69
Provision in lieu of deferred income taxes, net
117
36
Other, net
(1)
(1)
Changes in operating assets and liabilities:
Accounts receivable
(222)
(257)
Inventories
(53)
(86)
Accounts payable, trade
12
22
Regulatory assets, deferred revenues
25
(28)
Regulatory assets, self-insurance reserve
(337)
(234)
Other assets and liabilities
(16)
155
Cash provided by operating activities
1,239
1,185
Cash flows, financing activities:
