Dive Brief:

• Oncor Electric said Thursday that it will ask Texas regulators to increase its base rates by approximately $834 million to support Texas investments that include the utility’s $36 billion five-year capital spending plan — though that spending figure is likely to climb, officials said.
• In February, Oncor announced a plan to support system growth from 2025 to 2029 that included transmission and distribution upgrades and investments in technology. Now the utility said it has identified an additional $12 billion in projects that could be included. “It is likely that Oncor’s capital investments over the next five years will soar well beyond” the initial estimate, the utility said.
• The largest portion of Oncor’s proposed rate increase, about 45%, would go to recover storm-related damages. If approved by the Public Utility Commission of Texas, an average customer would see monthly bills rise 4.7%.

Dive Insight:

Oncor has seen about one major storm in its service territory every 12 days — or about 31 weather events annually — over the past three years.

“The largest portion of the requested increase arises from the need to recover costs already spent on storm-related damages over this time. It also increases the amount in rates for storm-related damages as well as other self-insured losses in the future,” the utility said.

About 20% of the proposed increase would go to address rising costs and inflation, and 25% would go to address debt costs.

Oncor’s current rates are largely based on wages and costs from 2021. “Like many Texans, Oncor has seen its costs rise sharply,” the utility said.

“We are requesting this rate review as we’re executing on our approximately $36 billion five-year capital plan as we seek to minimize the impacts of increased storms on our customers,” Oncor Senior Vice President and Chief Customer Officer Debbie Dennis said in a statement.

“Our decision to file this request was not made lightly and we have done our best to absorb higher costs for several years,” Dennis said.

Oncor’s five-year plan includes its System Resiliency Plan, Permian Basin Reliability Plan, transmission projects, distribution system upgrades and the interconnection of generation and large commercial and industrial customers.

And the company says its capital expenditures are likely to rise significantly “due to incremental opportunities that were subject to regulatory approvals and/or customer commitments as of the February 2025 announcement of its five-year capital plan.”

The original plan only included the company’s anticipated spending on major transmission projects that had obtained all regulatory approvals as of February 2025, Oncor said. And it only included large commercial and industrial projects for which it had already signed interconnection agreements.

“With this in mind, Oncor has identified potential additional capital opportunities from 2025-2029 that are likely to exceed $12 billion,” the utility said.