Oncor customers: is there a rate hike in your future?
That’s the big question on the minds of some utility watchers as a deal draws near to transfer ownership of Oncor to Florida-based NextEra.
“It’s obviously a concern,” said Geoffrey Gay, an attorney monitoring the deal on behalf of a municipal group, the Steering Committee of Cities Served by Oncor.
NextEra filed regulatory paperwork Monday in which it seeks to take nearly 100 percent control over Oncor. NextEra claims that ratepayers will benefit from the deal, citing, among other reasons, a reduction of Oncor-related debt. In all, the transaction would be valued at more than $18.7 billion.
“The Proposed Transactions, if approved, will … place Oncor on more solid financial footing,” NextEra claimed in its Oct 31 filing before the Texas Public Utility Commission.
But Gay, speaking with a reporter from the Dallas Morning News, said there was more to the story. “They (will) want to claim almost immediately after they get commission approval that they need a rate increase because of the ‘generosity’ in paying off all this debt,” he said.
NextEra itself has acknowledged that if the deal is approved, it will return to the PUC by early next summer to seek new rates. Gay said the municipal group will oppose any rate hike.
Oncor, the state’s largest transmission and distribution utility, serves 10 million customers and operates approximately 119,000 miles in transmission and distribution lines. It went on the auction block after the current majority owner, Energy Future Holdings, declared bankruptcy in 2014. But the PUC is authorized to reject any ownership change that fails to serve the public interest.
NextEra has said it wants to close the deal by early 2017. If successful, Oncor’s transmission and distribution network will become affiliated with NextEra’s deregulated generating assets in Texas and with Florida Power & Light.
R.A. Dyer is a policy analyst for TCAP, a coalition of cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.