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Oncor Files Rate Review

Oncor Files Rate Review to Further Support Critical Investments in Texas

As Texas continues to experience extraordinary growth, Oncor is supporting the state’s energy needs through record construction and maintenance efforts, increased storm recovery efforts, and a continued focus on safety and reliability. On June 26, 2025, Oncor filed a request for a base rate review to help further support these critical efforts. The filing (Docket No.58306) was made with the Public Utility Commission of Texas (PUCT) and the 210 cities in the Oncor service area that have original jurisdiction over Oncor’s rates.

“Oncor has been entrusted with the extraordinary responsibility of helping power the unprecedented growth across Texas. 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. These efforts require Oncor to attract, train and maintain the safety of a large and active workforce and obtain materials and equipment on a record scale. Oncor’s construction and maintenance activities currently rely on about 5,500 employees and nearly 9,000 contractors who together help serve our customers. 
Our decision to file this request was not made lightly and we have done our best to absorb higher costs for several years. We recognize the potential impacts a rate increase will have on our customers and we do our best to balance these impacts with the company’s ability to continue to meet the needs of our growing state.”
Debbie Dennis, Senior Vice President, Chief Customer Officer and Chief HR Officer.
 

If approved by the PUCT, the new rates would result in an increase of approximately $7 per month for a residential customer using 1,000 kilowatt-hours (kWh) of electricity per month.

This represents an approximate 4.7% increase to that customer’s total monthly energy bill.

 

Oncor’s requested increase to base rates falls primarily into three categories:

THURS three categories - 1

Rate review proceedings are expected to last at least six to nine months. Oncor intends to ask for a partial interim adjustment of rates to begin to recover some of the increased costs while the case is pending, subject to refund to the final rates approved by the PUCT. Additional information on the rate review and customer updates will be available at Oncor.com/RateCase.

FREQUENTLY ASKED QUESTIONS

Oncor filed a request for a base rate review, including an increase to its base rates of approximately $834 million, on June 26, 2025. Oncor is requesting the rate adjustment primarily to recover significant past storm restoration costs and adjust future storm-related cost recovery to align with the higher costs Oncor has seen in recent years. The request also helps support the company’s financial integrity and creditworthiness and better overcome substantially rising costs due to historically high inflation and rising interest rates. Specifically, the drivers of the rate request are:

  • Recovering Storm-Related Costs: Over the past three years, Oncor experienced an average of 31 major storm events annually, or about one major storm event somewhere in its service territory every 12 days. 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. Approximately 45% of Oncor’s requested increase is for these costs.
  • Adjusting for Rising Costs and Inflation: Oncor's current rates are primarily based on the wages and other costs as they existed in 2021. Like many Texans, Oncor has seen its costs rise sharply. As of the end of 2024, the national inflation rate for goods and services, as well as the national wage inflation rate, were each up by approximately 13% and Oncor's insurance premiums were up by 500% compared to the end of 2021. Interest rates have also significantly increased. While Oncor has absorbed these higher costs since 2021, it is now critical to update rates to reflect current economic realities. These costs increases make up approximately 20% of Oncor's request. 
  • Helping Keep Debt Costs Low: Oncor is executing on the largest investment plan in its history to support Texas’ rapid growth and enhance grid reliability and capacity. To sustain these critical investments, it’s essential to maintain Oncor’s financial stability and creditworthiness to attract capital at competitive rates, which keeps Oncor’s cost of debt lower for ratepayers. Approximately 25% of Oncor’s requested increase is to support this effort.

The requested adjustments within this rate review filing are expected to help address those economic pressures and cost challenges and better support Oncor in continuing to provide safe and reliable electric service to the more than 13 million Texans served today, as well as the growing amount of expected future customers.

If approved by the PUCT, the new rates would result in an increase of approximately $7 per month for a residential customer using 1,000 kilowatt-hours (kWh) of electricity per month. This represents an approximate 4.7% increase to that customer’s total monthly energy bill.

Oncor does not generate power or bill retail customers directly. Customers buy electricity from their Retail Electric Provider (REP) and receive their bills from that REP. Oncor simply charges the REP for the delivery of that electricity. The REP directly bills customers for both the total cost of the electricity used and the Oncor delivery charges.

 

Oncor’s charges are often referred to as “delivery,” “wires,” or “transmission and distribution” charges on electric bills. A customer’s total bill is based on Oncor’s charges to deliver their electricity and the rate charged by their REP, which varies based on the REP and the rate plan the customer selected.

 

For residential customers under existing rates, Oncor’s charges to the REP for delivering electricity include two components: a fixed monthly amount of $4.23, and a charge for the amount of electricity (kilowatt hour; “kWh”) used by the customer (and delivered by Oncor) during the month. The number of kWhs used by the customer is multiplied by approximately 5 cents.

 

Under newly proposed rates, the fixed monthly amount would decrease to $4.06 and the number of kWhs used by the customer would be multiplied by approximately 6 cents.

Oncor’s 2025-2029 capital plan is the largest five-year capital plan in company history; it calls for Oncor to invest approximately $36.1 billion over the next five years to fund projects that would support the unprecedented population, economic and load growth across Texas. For reference, $36.1 billion is more than four times greater than the amount of Oncor’s five-year capital plan in 2018, and more than double Oncor’s five-year capital plan in 2022.

 

Some of the major components of Oncor’s latest five-year capital plan include:

·       Oncor’s first-ever System Resiliency Plan;

·       Projects in the Permian Basin Reliability Plan;

·       Transmission projects in the Delaware Basin Load Integration Plan and West Texas 345 kV Infrastructure Plan;

·       Interconnection of generation and large commercial and industrial (LC&I) customers with executed agreements; and

·       Distribution upgrades and other capital needs.

 

It is worth noting that Oncor anticipates its capital plan will grow further over the 2025 through 2029 period 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.

 

For instance, Oncor’s 2025-2029 capital plan only includes the company’s expected spend for major transmission projects that had obtained all regulatory approvals as of February 2025. Additionally, it only includes LC&I projects for which interconnection agreements with Oncor had already been executed as of February 2025. With this in mind, Oncor has identified potential additional capital opportunities from 2025-2029 that are likely to exceed $12 billion. In other words, it is likely that Oncor’s capital investments over the next five years will soar well beyond $36.1 billion.

In recent years, Oncor has placed heightened emphasis on improving the resiliency of its electric grid. Oncor has made several significant technology investments that have positioned its system to better withstand and recover from major events, such as severe weather and cyberattacks.

 

These investments include distribution automation and other Smart Grid technologies that enable Oncor devices to automatically sense local operating conditions and make adjustments to minimize outage impacts. As of the beginning of 2025, Oncor has deployed automated devices across 70 % of its distribution system with a plan to reach 90 %. Oncor has also implemented enhanced storm restoration tools and processes that have improved its ability to respond to weather-induced outage events. 

 

Oncor is also making progress on implementing its first-ever System Resiliency Plan (SRP), which aims to substantially reduce the impact and duration of severe weather outages and mitigate other risks to our electric grid. Oncor was the first utility to receive PUCT approval for its SRP.

 

While no utility can economically deliver electricity without interruption, Oncor has a strong record for continuity of service and responding swiftly when service interruptions do occur. We recognize that an outage of any length is a challenge to our customers, and our teams work around the clock, year-round to respond to outages and implement preventative measures that prevent or reduce outage impacts. Oncor uses the System Average Interruption Duration Index (SAIDI), a well-known and widely used metric in the utility industry, to measure its reliability performance. SAIDI measures the average time that a customer is out of service in a year due to outages of a non-major event. Oncor’s SAIDI performance has been trending positively and currently compares favorably to other Texas utilities.

The SRP, as approved by the Public Utility Commission of Texas (PUCT) in November 2024, is Oncor’s plan to invest approximately $3 billion in the resiliency of our distribution system through 2028. The accelerated grid upgrades and enhancements implemented through the plan are designed to allow our system to better withstand and more quickly recover from a range of extreme weather and other events.

 

Most notably, these efforts should help decrease the amount of infrastructure damage that can lead to customer outages, and improve our ability to get power back on faster after an outage. Additionally, they should decrease long-term costs for customers by reducing expensive emergency repairs after severe weather events.

 

Oncor’s rate request is based on 2024 cost data and therefore only includes a very small portion of SRP costs. 

Oncor’s service area covers nearly one-third of the state and includes a highly variable range of geographic, climatic, and vegetative regions. This can result in a diverse possibility of extreme weather conditions, including extreme heat and extreme cold, thunderstorms, tornadoes, ice storms, wildfires, floods and hail events. While the company works year-round to prepare for and respond to potential weather and seasonal impacts, any major storm or severe weather event can result in restoration costs for transmission and distribution utilities (TDUs) like Oncor, such as covering what is needed to repair and restore service.

 

These costs are recovered in customer rates through Oncor’s self-insurance reserve fund. Oncor currently recovers $122 million in rates every year to pay for storm-related costs and other self-insured losses, with expenses over that amount funded by Oncor’s investors and held for future recovery as a deficit in the fund. This fund serves to smooth the rate impact of such losses because the costs are recovered from ratepayers over time as opposed to immediately following a severe weather or other event.

 

From 2021 to 2024, Oncor spent an average of over $350 million each year on these costs, leading to a significant cumulative deficit of more than $750 million. In light of the fact that over the past three years, Oncor has experienced an average of 31 major storm events annually or about one major storm event somewhere in the Oncor service territory every 12 days, Oncor has also requested an increase of $231 million in rates going forward to better align actual storm restoration experience with what is collected in rates and prevent large deficits from continuing to accrue each year. 

Oncor’s mission has long been to provide safe and reliable electric delivery service, and to provide that service in an efficient and cost-effective manner. We recognize the pressures that rising utility bills may have on our customers and make every decision regarding rate adjustments with that potential impact in mind.

 

Furthermore, even as Oncor faces unprecedented growth in electricity demand and works to improve the resiliency of its system, we maintain operation and maintenance (O&M) costs that compare favorably to other utilities in the industry. Oncor’s O&M cost per customer is well below the industry median, and our O&M cost per megawatt-hour (MWh) delivered is low compared to other utilities.

Some cities in Oncor’s service territory have retained original jurisdiction over Oncor’s rates, and some cities have ceded that jurisdiction to the PUCT. The PUCT also has jurisdiction over Oncor’s rates in areas outside a municipality, and has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction.

Rate review proceedings are expected to last at least six to nine months. On July 8, 2025, Oncor filed a request for a partial interim adjustment of rates to begin to recover some of the increased costs while the case is pending, subject to refund or surcharge to the extent the interim rates differ from the final rates approved by the PUCT.

About Oncor

Headquartered in Dallas, Oncor Electric Delivery Company LLC is a regulated electricity transmission and distribution business that uses superior asset management skills to provide reliable electricity delivery to consumers. Oncor (together with its subsidiaries) operates the largest transmission and distribution system in Texas, delivering electricity to more than 4 million homes and businesses and operating more than 144,000 circuit miles of transmission and distribution lines in Texas. While Oncor is owned by two investors (indirect majority owner, Sempra, and minority owner, Texas Transmission Investment LLC), Oncor is managed by its Board of Directors, which is comprised of a majority of disinterested directors.

 

 

Forward-Looking Statements

 

This website 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 website, 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 Oncor’s business and operations (often, but not always, through the use of words or phrases such as  “intends,” “plans,” “will likely result,” “expects,” “is expected to,” “will continue,” “is anticipated,” “estimated,” “forecast,” “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 Oncor’s 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 severe weather events, natural disasters or wildfires; cyber-attacks on Oncor or Oncor’s third-party vendors; changes in expected Electric Reliability Council of Texas, Inc. (“ERCOT”) and service territory growth; changes in, or cancellations of, anticipated projects, including customer requested interconnection projects; physical attacks on Oncor’s system, acts of sabotage, wars, terrorist activities, wildfires, fires, explosions, natural disasters, hazards customary to the industry, or other emergency events; Oncor’s ability to obtain adequate insurance on reasonable terms and the possibility that it may not have adequate insurance to cover all losses incurred by Oncor or third-party liabilities; adverse actions by credit rating agencies; health epidemics and pandemics, including their impact on Oncor’s business and the economy in general; interrupted or degraded service on key technology platforms, facilities failures, or equipment interruptions; economic conditions, including the impact of a recessionary environment, inflation, foreign policy and global trade restrictions; supply chain disruptions, including as a result of tariffs, global trade disruptions, competition for goods and services, and service provider availability; unanticipated changes in electricity demand in ERCOT or Oncor’s service territory; ERCOT grid needs and ERCOT market conditions, including insufficient electricity generation within the ERCOT market or disruptions at power generation facilities that supply power within the ERCOT market; changes in business strategy, development plans or vendor relationships; changes in interest rates, foreign currency exchange rates, or rates of inflation; significant changes in operating expenses, liquidity needs and/or capital expenditures; inability of various counterparties to meet their financial and other obligations to Oncor, including failure of counterparties to timely perform under agreements; general industry and ERCOT trends; significant decreases in demand or consumption of electricity delivered by Oncor, including as a result of increased consumer use of third-party distributed energy resources or other technologies; changes in technology used by and services offered by Oncor; changes in employee and contractor labor availability and cost; significant changes in Oncor’s relationship with its employees, and the potential adverse effects if labor disputes or grievances were to occur; changes in assumptions used to estimate costs of providing employee benefits, including pension and other postretirement employee benefits, and future funding requirements related thereto; significant changes in accounting policies or critical accounting estimates material to Oncor; commercial bank and financial market conditions, macroeconomic conditions, access to capital, the cost of such capital, and the results of financing and refinancing efforts, including availability of funds and the potential impact of any disruptions in U.S. or foreign capital and credit markets; financial market volatility and the impact of volatile financial markets on investments, including investments held by Oncor’s pension and other postretirement employee benefit plans; circumstances which may contribute to future impairment of goodwill, intangible or other long-lived assets; Oncor’s adoption and deployment of artificial intelligence; financial and other restrictions under Oncor’s debt agreements; Oncor’s ability to generate sufficient cash flow to make interest payments on its debt instruments; and Oncor’s ability to effectively execute its operational and financing strategy.

 

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 U.S. Securities and Exchange Commission. Specifically, Oncor makes reference to the section entitled “Risk Factors” in its annual and quarterly reports. Any forward-looking statement speaks only as of the date on which it is made, and, except as may be required by law, Oncor undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for Oncor to predict all of them; nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.  As such, you should not unduly rely on such forward-looking statements.

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