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Oncor Reports Second Quarter 2024 Results
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.
Oncor Electric Delivery Company LLC
Table A – Condensed Statements of Consolidated Income (Unaudited)
Three and Six Months Ended June 30, 2024 and 2023
Three Months Ended June 30,
Six Months Ended June 30,
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
Oncor Electric Delivery Company LLC
Table B – Condensed Statements of Consolidated Cash Flows (Unaudited)
Six Months Ended June 30, 2024 and 2023
Six Months Ended June 30,
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:
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:
Accounts receivable
(202)
(78)
Inventories
(28)
(49)
Accounts payable – trade
162
(6)
Regulatory assets – deferred revenues
(51)
(120)
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)
Borrowings under AR Facility
540
425
Repayments under AR Facility
(400)
(100)
Borrowings under $500M Credit Facility
500
–
Net change in short-term borrowings
(282)
(198)
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
Oncor Electric Delivery Company LLC
Table C – Condensed Consolidated Balance Sheets (Unaudited)
At June 30, 2024 and December 31, 2023
At June 30,
At December 31,
2024
2023
(U.S. dollars in millions)
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
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
Oncor Electric Delivery Company LLC
Table D – Operating Statistics
Three, Six and Twelve Months Ended June 30, 2024 and 2023; mixed measures
Twelve Months EndedJune 30,
%
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
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
Three Months EndedJune 30,
Increase
Six Months EndedJune 30,
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 EndedJune 30,
%
Six Months EndedJune 30,
%
2024
2023
Change
2024
2023
Change
Operating statistics:
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
(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.
(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.
Oncor Electric Delivery Company LLC
Table E – Operating Revenues
Three and Six Months Ended June 30, 2024 and 2023
Three Months EndedJune 30,
$
Six Months EndedJune 30,
$
2024
2023
Change
2024
2023
Change
(U.S. dollars in millions)
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
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
(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.
(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.
(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.
(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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