The city of Dallas, along with 168 other North Texas cities, is pushing back against Oncor’s request to raise its electric utility rates for residents.
In a meeting next week, Dallas City Council members are scheduled to vote on a resolution to oppose Oncor’s request for an 11% increase, which was initially filed in May.
The proposed spike would tack on an additional $6 to the average Texans’ electricity bills each month. Oncor operates power lines across Texas and is responsible for distributing power to more than 3.8 million homes and businesses. Oncor’s rates are part of the electricity bills from retail electric providers.
Despite reporting a revenue increase of $60 million last quarter, Oncor says the increase is necessary to “recover significant system investments” and meet growth needs across the state, according to its website. Since 2017, Oncor has invested more than $10 billion in upgrading infrastructure “in order to provide a safer and smarter electric grid.”
“Our investments support the state’s ongoing and expected growth, and we’re seeing growth in customers, in transmission interconnection requests, renewable generation as well as other interconnections,” spokeswoman Connie Piloto said. “The state is growing — this is going to help us meet the demand.”
She added that Oncor must also accommodate a flood of new residents moving to Texas, as well as companies, such as Samsung, moving their business to the utility’s purview.
The company last filed a rate review in 2017, which resulted in its current rates at a fixed monthly amount of $3.42 and a 4 cent multiplier for the amount of electricity used per month. Under the proposed rate case, Oncor’s fixed monthly rate will go up by 90 cents at $4.32, and the multiplier will go up to 4.4 cents.
According to its website, these rates represent some of “the lowest electric delivery rates” of any investor-owned utility in Texas.
“We’re focused on making the necessary investment and doing it in a way that is efficient and cost effective,” Piloto said. “We’re always evaluating changing business and operation needs to prioritize the appropriate programs and projects despite the significant growth in customers and infrastructure.”
The Public Utility Commission, the government agency responsible for regulating the state’s electricity programs, must approve the rate increase; however, regulatory authorities, such as the city of Dallas, are allowed to weigh in.
The city first took action in May by suspending Oncor’s rate request for 90 days. Dallas is a member of the Oncor Cities Steering Committee, a coalition of 169 cities in the Oncor service area, which represents municipalities in rate cases and other matters related to electricity.
In a presentation compiled by the city’s lead analyst, Nick Fehrenbach, committee consultants determined the requested rate increase was not justified and Oncor’s ask is excessive. While the City Hall vote next week will not stop Oncor’s rate case, it could send a message to the PUC about Oncor’s ask.
Walmart Inc., a major consumer of electricity at its stores in Texas, is one of several big consumers that intervened in the case. Kroger Co., the University of Texas System, Pioneer Natural Resources and other industrial and commercial groups, along with coalitions of cities, also intervened.
“Electricity is a significant operating cost for retailers such as Walmart. When electric rates increase, the increased cost to retailers can put pressure on consumer prices and on the other expenses required by a business to operate,” said Alex J. Kronauer, a senior manager for energy services at Walmart, in a document filed with the PUC as part of the rate case.
It could take up to a year for the PUC to make a final decision about the request. Several other cities in Oncor’s service area are expected to weigh in, and according to Piloto, Oncor is in “the middle of the process.”
CORRECTION, 8:09 p.m., Oct. 4, 2022: An earlier version of this story incorrectly said Oncor provides power to 3.8 million people. It provides power to 3.8 million homes and businesses. The story also said Samsung was moving its headquarters to Texas; it is building a new semiconductor plant.
