Dive Brief:
- Oncor Electric has agreed to drop a proposed minimum charge on customers with distributed energy resources greater than 2 kW in an effort to advance its $317 million rate increase.
- Energy Choice Matters reports the largest utility in Texas reached the stipulation with a wide range of stakeholders, including staff of the Public Utility Commission of Texas, the Solar Energy Industries Association and Texas Solar Power Association.
- Oncor's rate case continues to move forward, alongside negotiations over a new owner for the utility. In July, Warren Buffett's Berkshire Hathaway Energy announced a $9 billion all-cash deal to purchase Oncor's bankrupt parent, Energy Future Holdings.
Dive Insight:
As the search for a new Oncor owner chugs along, the utility is continuing with business as usual. That includes a 7.5% rate hike the utility says is needed to pay for grid investments.
But in order to get approval for the rate case, Oncor officials have agreed to drop a proposed minimum fee that would primarily impact solar customers with arrays capable of generating 2 kW or greater. The company's distribution charge would move to about $0.021/kWh, up from about $.0185/kWh, under the stipulation agreed to by more than a dozen stakeholders.
If approved, the new rates would become effective in November. The proposal would bring the utility's total revenue requirement to approximately $4.5 billion.
Oncor could possibly have a new owner around the time the new rates go into effect. Berkshire Hathaway has indicated that it expects the deal to close in the final quarter of this year — provided it can secure state, federal and court approvals.
In 2016, the Public Utilities Commission of Texas rejected a bid by Hunt Consolidated to purchase Oncor and manage it as a Real Estate Investment Trust. Earlier this year, regulators rejected a bid by NextEra energy as well.
The acquisition would align with Buffett's energy goals, according to The Wall Street Journal. The company continues to purchase regulated utilities as a way to boost its overall credit rating, and its energy unit contributed roughly 9.5% to its $24.07 billion in earnings last year.
