DALLAS – Dallas-based Oncor saw its quarterly profits soar by another $60 million, mostly as a result of a blistering summer heat wave that forced North Texans to crank up their air conditioners.
For the three-month period that ended Sept. 30, the utility’s net income rose to $318 million, compared to $258 million in the same quarter last year. Through nine months this year, its profits are up by $146 million.
It’s the second straight quarter that one of Texas’ hottest summers on record, combined with Dallas-Fort Worth’s growing population, drove up Oncor’s bottom line. Oncor is the utility that transmits electricity from power plants to homes and businesses.
“We’re in a very unique time at Oncor,” said CEO Allen Nye in a statement. “The Oncor service territory, and the entire state of Texas more broadly, is experiencing tremendous – and in many places record – levels of growth. This growth continues despite ongoing supply chain impacts on builders, higher interest rates, and signals of a national recession.”
Oncor said it connected about 14,000 new customers to the state’s electric grid in the quarter – an increase of about 1,000 over the same period last year. It expects to see 2% annual growth for the foreseeable future, which parent company Sempra Energy said is higher than the national average.
That growth required construction or upgrades to 300 miles of power lines, costing Oncor $80 million.
Asked if Oncor expects residential growth in Texas to continue with higher interest rates, Nye told analysts on a conference call Thursday that the company recorded its biggest month in history for new subdivisions in June.
“While there’s a little dip in premise growth so far this year, ... what we’re hearing is that is primarily supply chain and labor issues associated with the builders in our areas,” he said. “But the demand for lots, the demand for new subdivisions, we’re still seeing long term around 2%.”
For the year, the company’s revenue is up 10.5% to just under $4 billion.
In June and July, grid operator ERCOT set multiple new marks for peak demand. Residents and businesses set an all-time record of over 80,000 megawatts of electric use on July 20.
Oncor’s quarterly results come as communities in its service area are pushing back against a 4.5% base rate hike request pending before the Public Utilities Commission of Texas. The increase would boost Oncor’s annual revenue by $251 million. A decision is expected early next year.
Electricity prices are 31% higher this year than last year in Dallas-Fort Worth, according to the U.S. Bureau of Labor Statistics’ tracking of consumer costs.
Texas has the nation’s highest rate of households – 44.8% – reducing or skipping other expenses to pay their energy bill, according to Lending Tree’s analysis of U.S. Census Bureau data. Nationally, 34% of Americans indicate they’re cutting back on other expenses to afford cooling or heating costs.
