Oncor Electric Delivery Co. LLC shed more than one-third of the entire load shed across the state last week at the request of the Electric Reliability Council Of Texas Inc. to keep the entire ERCOT grid from collapsing, but the state's largest transmission and distribution provider does not expect to take a financial hit from the massive grid outages.
Instead, executives see the company, which is majority-owned by San Diego, Calif.-based Sempra Energy, as well-positioned to play a key role in hardening the state's electric grid against future extreme weather.
Along with its financial results, Oncor disclosed Feb. 25 that it was responsible for shedding about 7,200 MW of the approximately 20,000 MW of the load shed at the request of ERCOT to perform controlled outages initiated on Feb. 15 that left millions of Texans without power for days.
Oncor's primary role during the energy crisis last week was to execute the commands of ERCOT system operators seeking to avert monthslong statewide blackouts, Sempra CEO Jeffrey Martin explained on a fourth-quarter earnings call.
"As you see other participants that have an obligation to go procure gas or generate electricity or produce electricity, we're not involved in that business," Martin said. "We don't see any material issues of liquidity anywhere within the Sempra family of companies."
Martin noted that Oncor CEO Allen Nye is scheduled to testify before state lawmakers on Feb. 25 as policymakers search for solutions to avoid another winter storm-related disaster.
During the earnings call, Oncor Senior Vice President and CFO Don Clevenger cited ERCOT's brimming interconnection queue, which includes 5,000 MW of energy storage, 9,000 MW of wind capacity, and 25,000 MW of solar capacity to be sited within Oncor's service area alone.
"There's certainly a lot of opportunity for additional transmission and generation interconnection," Clevenger said.
Martin said he sees opportunities for "additional investments in the [transmission and distribution] space" as Texas, which is mostly isolated from the rest of the U.S. electric grid, works to avoid future blackouts. "I think what will happen from this is you'll probably find opportunities for the state to improve its resiliency," Martin said.
Sempra CFO Trevor Mihalik noted on the call that Oncor is already seeing record customer growth throughout its service territory, which includes the burgeoning Dallas-Forth Worth metropolitan region.
Oncor connected roughly 18,000 new premises over the fourth quarter, bringing its full-year total to approximately 77,000, a 20% year-over-year increase. That figure "reflects the best organic growth rate Oncor has ever experienced," Mihalik said.
Oncor reported net income of $148 million for the fourth quarter of 2020, up from $133 million in the comparable quarter of 2019. For the full year, Oncor reported net income of $713 million in 2020, up from $651 million in 2019.
