Has Oncor systematically shortchanged its electric distribution system? That’s the question from Public Utility Commission Kenneth Anderson, who wrote in a recent memo that repeated outages in North Texas have him left wondering whether the company is doing enough to maintain reliability.
Oncor is the state’s largest transmission and distribution utility — a regulated monopoly with nearly 2 million captive electricity customers around the Dallas and Fort Worth Metroplex. Because the company has no competitors, it is left to the Texas Public Utility Commission and local municipal authorities to oversee its rates and service.
Anderson, in a Oct. 17 memo to his fellow commissioners, documented a nearly 5 percent drop in distribution system capital spending by Oncor between 2005 and 2013. He noted that this spending drop occurred even as Oncor’s customer base had increased by 9 percent. Anderson also specifically referenced the utility’s controversial tax sharing agreement with Energy Future Holdings, Oncor’s corporate parent. You can read more about that here.
Oncor responded quickly in the press, including with its publication of a full-page open “Letter to Our Customers” in the Austin newspaper. “Some people ask whether we are willing to spend the money to enhance reliability — of course we will, because we always have,” the company’s top executives wrote Nov. 6.
But Oncor made at least one claim in that open letter that appears to be at odds with published findings at the Public Utility Commission. In defending itself, Oncor claimed that the company’s “returns to our investors” are “well below our authorized returns.”
However PUC staff has found that far from being “well below” authorized levels, the company’s returns in 2013 were $47 million higher than those deemed reasonable. Oncor also has reported a healthy $432 million in profits during 2013. That’s a 20 percent increase from 2012.
In addition, Oncor boasted in its Nov. 6 open letter about the deployment of advanced meters across its system “because being there for a growing and innovative economy was important to our customers.”
Left unmentioned, however, was the company’s botched outlay of thousands of advanced meters prior to 2009. The company deployed those meters before the PUC had time to finalize the relevant standards. The new meters ended up not meeting those standards and so were almost immediately replaced — and all at ratepayer expense.
That is, Oncor’s captive customers ended up paying both for the white elephant meters and the replacements.
You can read about those white elephant meters here.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.