Dive Brief:
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Oncor has received 80 GW worth of new service requests from large commercial and industrial customers, as it builds out infrastructure in what the company believes may be the top U.S. market for colocation data centers, CEO Allen Nye said Tuesday during a second quarter earnings call with parent company Sempra.
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Three-fourths of those new requests, or 59 GW, come from planned data centers, Nye said, adding that total requests from potential customers rose 13% year-over-year in the second quarter.
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The Electric Reliability Council of Texas projects load in the region could peak at 152 GW by 2030, and Oncor anticipates providing electricity delivery service to 40% of that future load, Nye said.
Dive Insight:
Rapid load growth in Texas will likely mean new transmission projects for Dallas-based Oncor, Nye said.
A transmission plan released in late July by ERCOT outlined billions in potential transmission projects to be built by 2038, and many of those projects could be sited within Oncor's service territory, Nye said.
“Given the scope of our operations in those areas, the amount of substations or end points that we own that could be utilized...we would be a heavy participant in the $13 billion to $15 billion, depending on where it comes out,” Nye said.
Oncor has seen a 13% leap in interconnection requests since the second quarter of 2023, Nye said. About 25% of those requests, he said, come from “large load customers” that will individually require 100 MW or more for their operations — and the company expects to see even more based on the new projections from ERCOT.
“I have been around the utility business for roughly 30 years, going back to 1992,” Jeff Martin, chairman and CEO of parent company Sempra, said. “And in my career, I've never seen an evolving growth story like we see in Texas.”
The company will need a few months to process the new requests before it can draft a capital plan to serve the new load, Nye said. He said Oncor expects to release an update in the fourth quarter of this year.
In California, Sempra's San Diego Gas & Electric remains focused on wildfire mitigation and grid hardening, said Karen Sedgwick, executive vice president and chief financial officer for Sempra. The California utility's second quarter earnings were lower than expected on account of decreased income tax benefits and regulatory awards and higher expenses, Sedgwick said. Oncor has also seen increases in its insurance costs related to increased wildfire risk, Martin said, and the company is debating whether to open a new rate case to help cover the additional costs.
