Dive Brief:
- Oncor Electric Delivery on Monday filed a System Resiliency Plan with Texas regulators, proposing $2.9 billion in capital expenditures and $520 million in operations and maintenance expenses to harden and modernize its grid, including addressing wildfire and cybersecurity risks.
- If approved by the Public Utility Commission of Texas, Oncor said it plans to make the investments over a three-year period beginning in 2025.
- The utility announced its first-quarter 2024 earnings Tuesday morning, reporting $225 million in net income compared with $103 million in the same period last year. The increase reflected new rates, increases in transmission revenues, customer growth and higher electricity consumption partially related to weather, the utility said.
Dive Insight:
Oncor is seeing significant growth in its territory, contributing to the company’s bottom line along with the need for system expansion and modernization, officials said Tuesday.
“This plan is not just an investment in infrastructure; it's an investment in creating a more secure and more intelligent grid that is better able to withstand and more quickly recover from the wide range of threats impacting our customers,” Oncor CEO Allen Nye said in a statement.
Oncor’s strategic plan includes more than $1.8 billion to harden and automate its legacy overhead and underground systems; approximately $510 million to optimize, expand and automate its distribution system; and $285 million to expand vegetation management efforts.
Another $525 million will go to cybersecurity, including to “enhance and secure Oncor’s digital backbone infrastructure and other measures,” the utility said. And $80 million is proposed for improvements to physical security, “including video and event correlation systems and asset protection.”
Approximately $900 million of the total system resiliency plan plan will enhance Oncor’s wildfire mitigation efforts, including $182 million in specific mitigation measures.
The strategic plan will allow Oncor “to advance and accelerate its wildfire mitigation strategies through additional investments in fire safe device deployment, advanced wildfire risk modeling, and strengthening, modernization and protection of assets in wildfire mitigation zones,” the utility said.
The plan “reflects our commitment to fortifying our infrastructure for the future,” Nye said. “This plan is not just an investment in infrastructure; it's an investment in creating a more secure and more intelligent grid that is better able to withstand and more quickly recover from the wide range of threats impacting our customers.”
Population and business growth in the state, and within Oncor’s service territory, “continues to be a driver of operational activity,” the utility said.
The Electric Reliability Council of Texas is anticipating about 152 GW of new load by 2030, driven by data centers, industrial electrification, electric vehicles and other sources, the grid operator said last month. Oncor said it anticipates approximately 40% of that new load to be located in its service territory.
In the first quarter, the utility said it added 18,000 locations served, compared with 17,000 in the same period last year. Oncor serves more than 4 million residences and businesses.
The utility also placed approximately $161 million of transmission projects into service in the first quarter of this year, compared with approximately $94 million in the same period a year ago.
“The continued growth across Oncor’s service territory resulted in the construction or upgrading of approximately 24 circuit miles of transmission lines and included 9 major substation projects and 3 major switching station projects, all being placed into service in the first quarter of 2024,” the utility said.
Oncor is majority-owned by Sempra Energy, which also reported first-quarter earnings Tuesday. Sempra, which also owns Southern California Gas and San Diego Gas & Electric, reported first quarter 2024 earnings of $801 million compared with $969 million in the same period last year.
