ONCOR REPORTS SECOND QUARTER 2023 RESULTS
- Total distribution base revenues increased by 2.3% in the three months ended June 30, 2023.
- Oncor's strategic investments in grid infrastructure and customer growth position the company for continued success.
- Passage of key bills during the Texas legislative session is expected to have a positive impact on Oncor's business.
- Oncor experienced solid growth in premises and construction of new transmission and distribution lines within its service territory.
- Reported net income of $303 million in the six months ended June 30, 2023, compared unfavorably to net income of $423 million in the six months ended June 30, 2022.
"We are pleased to announce another quarter characterized by impressive growth and robust operational performance. These achievements underscore our critical role in supporting
"During another summer of blistering heat, our employees have continued to provide safe, reliable and affordable electric service." Nye continued, "Their unwavering dedication has been instrumental in working towards meeting the needs of our customers, our state and the ERCOT market."
Oncor's reported net income of
Oncor's total distribution base revenues in the three months ended June 30, 2023 as compared to the three months ended June 30, 2022 increased
Regulatory and Legislative Updates
As previously announced, in April 2023, the PUCT issued a final order in the comprehensive base rate review Oncor filed in May 2022 with the PUCT and the cities in Oncor's service territory that have retained original jurisdiction over rates. New base rates implementing the terms of the final order took effect on May 1, 2023. Oncor and other intervening parties in the proceeding filed motions for rehearing with respect to various provisions of the final order, and on June 30, 2023, the PUCT issued an order on rehearing in response to those motions for rehearing. The order on rehearing made certain technical and typographical corrections to the final order, but otherwise affirmed the material provisions of the final order and did not require modification of the rates that went into effect May 1, 2023.
On June 29, 2023, Oncor filed an application for an interim distribution cost recovery factor ("DCRF") rate adjustment for recovery of certain distribution investments that went into service in 2022. Oncor estimates that the requested interim DCRF rate adjustment would result in a
During its 2023 regular session, the Texas Legislature passed various legislation impacting the electric industry, which Oncor anticipates could have a significant positive impact on its business, particularly through reduction of regulatory lag and increased regulatory certainty regarding recovery of certain costs, including Senate Bill 1015, Senate Bill 1016 and House Bill 2555, which have all been enacted into law.
Senate Bill 1015 allows utilities to file up to two DCRF interim rate update applications each year at any time during the year (with certain exceptions if a base rate proceeding is pending) and shortens the administrative process for the proceedings to 60 days. The legislation also permits filing an application during a base rate proceeding, provided that filing is made 185 days after the commencement of the base rate proceeding.
Senate Bill 1016 creates a presumption that employee compensation and benefit expenses (other than pension, other post-retirement employee benefits or certain incentive compensation for officers) are reasonable and necessary if the expenses are consistent with market compensation studies issued within three years of the rate proceeding.
House Bill 2555 authorizes an electric utility, following rulemaking proceedings by the PUCT, to file for approval of a plan to increase the resiliency of its transmission and distribution system and provides recovery options for certain of those costs, including through deferral to regulatory assets.
Other state legislation enacted recently that could impact Oncor's business and operations includes legislation reducing property taxes, legislation shortening the time period for certain approvals relating to transmission projects, legislation expanding and clarifying the uses of mobile generation leased by utilities during power outages and legislation directing the Electric Reliability Council of
Growth Within Oncor's Service Territory
In the three months ended June 30, 2023, Oncor continued to experience solid growth in premises and the construction of new transmission and distribution lines, all while remaining focused on safety and reliability.
Oncor continues to support
At June 30, 2023, Oncor had approximately 720 active generation and retail transmission point-of-interconnection ("POI") requests in queue, representing a
Operational Highlights
For the industry's primary benchmark for reliability, System Average Interruption Duration Index (non-storm), Oncor continued to improve in the twelve months ended period June 30, 2023 as compared to the prior year period. On average, Oncor's customers experienced ten fewer minutes of outage over the period – an improvement of approximately
In June 2023, Oncor released its fourth annual Corporate Sustainability Overview, which is available on Oncor's website at oncor.com under the Investor Relations section.
2023 Capital Expenditure Budget
In July 2023, Oncor's board of directors increased the company's 2023 capital expenditure budget from
Liquidity
As of August 2, 2023, Oncor's available liquidity, consisting of cash on hand and available borrowing capacity under its accounts receivable facility ("AR Facility"), credit facility and commercial paper program totaled
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 2023 results and other information relating to Oncor. Oncor Chief Executive Allen Nye will also 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, 2023 will be filed with the
Oncor Electric Delivery Company LLC | ||||||||||||
Q2 '23 | Q2 '22 | YTD '23 | YTD '22 | |||||||||
Operating revenues | $ | 1,343 | $ | 1,293 | $ | 2,635 | $ | 2,542 | ||||
Operating expenses: | ||||||||||||
Wholesale transmission service | 322 | 290 | 643 | 571 | ||||||||
Operation and maintenance | 271 | 255 | 534 | 504 | ||||||||
Depreciation and amortization | 242 | 223 | 482 | 445 | ||||||||
Provision in lieu of income taxes | 41 | 50 | 68 | 92 | ||||||||
Taxes other than amounts related to income taxes
| 141 | 140 | 286 | 285 | ||||||||
Write-off of rate base disallowances | - | - | 55 | - | ||||||||
Total operating expenses | 1,017 | 958 | 2,068 | 1,897 | ||||||||
Operating income | 326 | 335 | 567 | 645 | ||||||||
Other deductions and (income) – net | (5) | (1) | 2 | 10 | ||||||||
Non-operating benefit in lieu of income taxes | (2) | (1) | (8) | (4) | ||||||||
Interest expense and related charges | 133 | 108 | 256 | 216 | ||||||||
Write-off of non-operating rate base disallowances | - | - | 14 | - | ||||||||
Net income | $ | 200 | $ | 229 | $ | 303 | $ | 423 |
Oncor Electric Delivery Company LLC | ||||||
YTD '23 | YTD '22 | |||||
Cash flows — operating activities: | ||||||
Net income | $ | 303 | $ | 423 | ||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||
Depreciation and amortization, including regulatory amortization | 536 | 486 | ||||
Write-off of rate base disallowances | 69 | - | ||||
Provision in lieu of deferred income taxes – net | 23 | 20 | ||||
Other – net | - | (11) | ||||
Changes in operating assets and liabilities: | ||||||
Regulatory accounts related to reconcilable tariffs | (120) | 12 | ||||
Other operating assets and liabilities | (280) | (285) | ||||
Cash provided by operating activities | 531 | 645 | ||||
Cash flows — financing activities: | ||||||
Issuances and borrowings of long-term debt (excluding AR Facility) | 2,175 | 2.100 | ||||
Repayments of long-term debt (excluding AR Facility) | (875) | (1,050) | ||||
Borrowings under AR Facility | 425 | - | ||||
Repayments under AR Facility | (100) | - | ||||
Net change in short-term borrowings | (198) | (215) | ||||
Capital contributions from members | 221 | 212 | ||||
Distributions to members | (255) | (212) | ||||
Debt discount, financing and reacquisition costs – net | (33) | (13) | ||||
Cash provided by financing activities | 1,360 | 822 | ||||
Cash flows — investing activities: | ||||||
Capital expenditures | (1,890) | (1,416) | ||||
Other – net | 17 | 38 | ||||
Cash used in investing activities | (1,873) | (1,378) | ||||
Net change in cash, cash equivalents and restricted cash | 18 | 89 | ||||
Cash, cash equivalents and restricted cash — beginning balance | 98 | 54 | ||||
Cash, cash equivalents and restricted cash — ending balance | $ | 116 | $ | 143 |
Oncor Electric Delivery Company LLC | ||||||
Table C – Condensed Consolidated Balance Sheets | ||||||
At June 30, 2023 and December 31, 2022; $ millions | ||||||
At 6/30/23 | At 12/31/22 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 28 | $ | 10 | ||
Restricted cash, current | 23 | 16 | ||||
Trade accounts receivable – net | 966 | 884 | ||||
Amounts receivable from members related to income taxes | 1 | - | ||||
Materials and supplies inventories — at average cost | 253 | 204 | ||||
Prepayments and other current assets | 122 | 109 | ||||
Total current assets | 1,393 | 1,223 | ||||
Restricted cash, noncurrent | 65 | 72 | ||||
Investments and other property | 136 | 137 | ||||
Property, plant and equipment – net | 26,531 | 25,203 | ||||
Goodwill | 4,740 | 4,740 | ||||
Regulatory assets | 1,607 | 1,502 | ||||
Right-of-use operating lease and other assets | 159 | 161 | ||||
Total assets | $ | 34,631 | $ | 33,038 | ||
LIABILITIES AND MEMBERSHIP INTERESTS | ||||||
Current liabilities: | ||||||
Short-term borrowings | $ | - | $ | 198 | ||
Long-term debt due currently | 500 | 100 | ||||
Trade accounts payable | 490 | 536 | ||||
Amounts payable to members related to income taxes | 16 | 45 | ||||
Accrued taxes other than amounts related to income | 174 | 277 | ||||
Accrued interest | 113 | 97 | ||||
Operating lease and other current liabilities | 443 | 330 | ||||
Total current liabilities | 1,736 | 1,583 | ||||
Long-term debt, less amounts due currently | 12,323 | 11,128 | ||||
Liability in lieu of deferred income taxes | 2,244 | 2,182 | ||||
Regulatory liabilities | 2,938 | 3,014 | ||||
Employee benefit plan obligations | 1,387 | 1,394 | ||||
Operating lease and other obligations | 291 | 275 | ||||
Total liabilities | 20,919 | 19,576 | ||||
Commitments and contingencies | ||||||
Membership interests: | ||||||
Capital account ― number of units outstanding 2023 and 2022 – 635,000,000 | 13,893 | 13,624 | ||||
Accumulated other comprehensive loss | (181) | (162) | ||||
Total membership interests | 13,712 | 13,462 | ||||
Total liabilities and membership interests | $ | 34,631 | $ | 33,038 |
Oncor Electric Delivery Company LLC | |||||||||||||||||||||||||||
Table D – Operating Statistics | |||||||||||||||||||||||||||
Three, Six and Twelve Months Ended June 30, 2023 and 2022; mixed measures | |||||||||||||||||||||||||||
Q2 '23 | Q2 '22 | YTD '23 | YTD '22 | ||||||||||||||||||||||||
Operating statistics: | |||||||||||||||||||||||||||
Electric energy volumes (gigawatt-hours): | |||||||||||||||||||||||||||
Residential | 10,807 | 12,148 | 20,492 | 23,524 | |||||||||||||||||||||||
Commercial, industrial, small business and other | 27,249 | 25,681 | 52,343 | 48,016 | |||||||||||||||||||||||
Total electric energy volumes | 38,056 | 37,829 | 72,835 | 71,540 | |||||||||||||||||||||||
Operating revenues ($ millions): | |||||||||||||||||||||||||||
Revenues contributing to earnings: | |||||||||||||||||||||||||||
Distribution base revenues (a) | $ 614 | $ 600 | $ 1,165 | $ 1,178 | |||||||||||||||||||||||
Transmission base revenues (TCOS revenues) | |||||||||||||||||||||||||||
Billed to third-party wholesale customers | 238 | 237 | 488 | 470 | |||||||||||||||||||||||
Billed to REPs serving Oncor distribution customers, through TCRF | 133 | 132 | 274 | 262 | |||||||||||||||||||||||
Total transmission base revenues | 371 | 369 | 762 | 732 | |||||||||||||||||||||||
Other miscellaneous revenues | 25 | 22 | 42 | 40 | |||||||||||||||||||||||
Total revenues contributing to earnings | 1,010 | 991 | 1,969 | 1,950 | |||||||||||||||||||||||
Revenues collected for pass-through expenses: | |||||||||||||||||||||||||||
TCRF – third-party wholesale transmission service | 322 | 290 | 643 | 571 | |||||||||||||||||||||||
EECRF and other | 11 | 12 | 23 | 21 | |||||||||||||||||||||||
Total revenues collected for pass-through expenses | 333 | 302 | 666 | 592 | |||||||||||||||||||||||
Total operating revenues | $ 1,343 | $ 1,293 | $ 2,635 | $ 2,542 | |||||||||||||||||||||||
Residential system weighted weather data (b): | |||||||||||||||||||||||||||
Cooling degree days | 552 | 766 | 582 | 781 | |||||||||||||||||||||||
Heating degree days | 11 | 1 | 386 | 611 | |||||||||||||||||||||||
Reliability statistics (c): | TME '23 | TME '22 | |||||||||||||||||||||||||
System Average Interruption Duration Index (SAIDI) (non-storm) | 69.4 | 79.4 | |||||||||||||||||||||||||
System Average Interruption Frequency Index (SAIFI) (non-storm) | 1.1 | 1.3 | |||||||||||||||||||||||||
Customer Average Interruption Duration Index (CAIDI) (non-storm) | 63.6 | 59.3 | |||||||||||||||||||||||||
Electricity distribution points of delivery (based on number of active meters) ― end of period and in thousands | 3,933 | 3,867 |
(a) | In general, distribution revenues from residential and small business users are based on actual monthly consumption (kWh), and, depending | ||||||||
(b) | Degree days are measures of how warm or cold it is throughout our service territory. A degree day compares the average of the hourly | ||||||||
(c) | SAIDI is the average number of minutes electric service is interrupted per consumer in 12 months. SAIFI is the average number of electric |
Headquartered in
Forward-Looking Statements
This news release contains forward-looking statements relating to Oncor within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. All statements, other than statements of historical facts, that are included in this news release, as well as statements made in presentations, in response to questions or otherwise, that address activities, events or developments that Oncor expects or anticipates to occur in the future, including such matters as projections, capital allocation, future capital expenditures, business strategy, competitive strengths, goals, future acquisitions or dispositions, development or operation of facilities, market and industry developments and the growth of our business and operations (often, but not always, through the use of words or phrases such as "intends," "plans," "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "should," "projection," "target," "goal," "objective" and "outlook"), are forward-looking statements. Although Oncor believes that in making any such forward-looking statement its expectations are based on reasonable assumptions, any such forward-looking statement involves risks, uncertainties and assumptions. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: legislation, governmental policies and orders, and regulatory actions; legal and administrative proceedings and settlements, including the exercise of equitable powers by courts; weather conditions and other natural phenomena, including any weather impacts due to climate change; acts of sabotage, wars or terrorist or cyber security threats or activities; actions by credit rating agencies; health epidemics and pandemics, including their impact on Oncor's business and the economy in general; loss of key technology platforms; economic conditions, including the impact of a recessionary environment, inflation, supply chain shortages, and labor availability and cost; unanticipated population growth or decline, or changes in market demand and demographic patterns; Electric Reliability Council of
Further discussion of risks and uncertainties that could cause actual results to differ materially from management's current projections, forecasts, estimates and expectations is contained in filings made by Oncor with the
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SOURCE Oncor Electric Delivery Company, LLC
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