DALLAS, Feb. 25, 2021 /PRNewswire/ -- Oncor Electric
Delivery Company LLC ("Oncor") today reported twelve months ended
December 31, 2020 net income of
$713 million compared to reported
twelve months ended December 31, 2019
net income of $651 million. The
$62 million year-over-year increase
was driven by increases in revenues contributing to earnings
primarily due to increases in base transmission and distribution
rate updates to reflect greater invested capital, customer
growth, the impacts of the assets acquired in the May 2019 acquisition of InfraREIT, Inc. and
favorable changes in other income and deductions, partially offset
by the impact on revenues of unfavorable weather, increases in
expenses attributable to ongoing invested capital (depreciation and
amortization, property taxes and interest expense) and an increase
in operation and maintenance expense.
"The year 2020 brought with it challenges at a scale never seen
before – both for our company and the state as a whole. Yet in the
face of this adversity, the men and women at Oncor continued to
step up and help turn in one of the strongest years we have ever
had, especially in areas where it matters most for our employees
and customers: safety and reliability. In fact, 2020 was the second
best safety year in the history of Oncor, and we achieved top
quartile reliability for our customers two years ahead of schedule.
We also had strong earnings and our service territory saw its best
organic growth rate in history at 2.1 percent – a testament to the
continued strength and growth of Texas, even in the midst of an ongoing global
pandemic," said Oncor CEO Allen Nye.
"Last week, we faced a new challenge: an unprecedented statewide
power emergency following the historic loss of generation capacity,
which triggered a load shed event that resulted in more than 1.3
million Oncor customers losing power for an extensive period of
time. While Oncor does not own or operate power generation plants
or assets, we saw firsthand the significant hardships this grid
crisis had for our customers, and we are fully committed to working
with elected officials, regulators, and market stakeholders to do
our part in helping to ensure nothing like this ever happens again.
Through it all, I have never been more proud to serve alongside the
men and women I work with at Oncor. I want to thank them for their
hard work, their dedication, and their commitment to our customers,
to safety, and to supporting growth and recovery across
Texas."
Oncor's fourth quarter 2020 net income increased to $148 million, up from $133
million in the fourth quarter of 2019. The improved
quarter-over-quarter results were driven by the impacts of interim
transmission and distribution rate updates, customer growth and
favorable changes in other income and deductions, partially offset
by the impact on revenues of unfavorable weather and increases in
expenses attributable to ongoing invested capital
(depreciation and amortization and property taxes).
Oncor's total distribution base revenues in the three and twelve
months ended December 31, 2020 as
compared to the prior year periods increased 2.1% (5.3% on a
weather normalized basis) and increased 0.6% (3.5% on a weather
normalized basis), respectively. The change in Oncor's total
distribution base revenues in the fourth quarter of 2020 included
an increase in revenues from residential customers of 3.2% (10.5%
on a weather normalized basis), which we believe is due to more
customers staying home as a result of the pandemic, and a decrease
in revenues from commercial and industrial customers of 1.3% as
compared to the fourth quarter of 2019. The change in Oncor's
total distribution base revenues in the twelve months ended
December 31, 2020 included an
increase in revenues from residential customers of 0.9% (7.0% on a
weather normalized basis), which we believe is attributable to the
pandemic, and a decrease in revenues from commercial and industrial
customers of 0.8% as compared to 2019. Financial and
operational results are provided in Tables A, B, C and D below.
Texas Winter
Storms
Beginning early the week of Feb. 7th,
Oncor began preparing for major winter storms that were predicted
to impact its service territory, and across the state of
Texas. In preparation, Oncor
pre-positioned personnel, equipment and resources, increased
staffing, brought on dozens of additional personnel and
contractors, and requested mutual assistance from out-of-state
utilities to bring additional resources onto the system. The first
storm hit Texas late Wednesday,
Feb. 10th with record snow, ice and cold temperatures.
On Friday, Feb. 12th, Governor Abbott issued a
disaster declaration for all counties in the state. On
Sunday, Feb. 14th, the Electric Reliability Council of
Texas ("ERCOT") announced that a
new winter peak demand of 69,150 MW had been reached and Oncor
opened and staffed its System Emergency Center.
As temperatures continued to drop, ERCOT began to warn of the
potential for short generation supply. Oncor controllers began
preparing for a controlled outage event. On Feb. 15th at 1:20
am, ERCOT instructed Oncor to shed its share of 1,000 MW, or
361 MW. Ultimately, ERCOT directed transmission and
distribution utilities in Texas to
shed approximately 20,000 MW, of which Oncor was responsible for
shedding approximately 7,200 MW.
Generation continued to be in short supply until late Wednesday,
Feb. 17th when ERCOT officially ended the
load shed event. Over 1.3 million premises in
Oncor's service territory alone were out of power and the vast
majority were the result of the load shedding. Oncor
personnel worked around the clock during these events to
restore customers who had lost power due to the winter storms and
the extreme cold.
Governor Abbott, the Texas
Legislature, the Public Utility Commission of Texas ("PUCT"), the Texas Attorney General's Office and other
governmental and regulatory bodies have launched inquiries or taken
other actions, including the PUCT's issuance on Sunday, Feb. 21st of a moratorium on
disconnections for customers' inability to pay.
Operational Highlights
2020 was an unprecedented year
for Oncor, on many fronts. Not only did COVID-19 force Oncor to
change the way it does business, altering its field operations and
sending its corporate center staff to work remotely, but it brought
on significant challenges for many of the customers Oncor
serves.
Safety is at the very core of everything Oncor employees do. On
the safety front, 2020 was one of the best safety years in the
history of the company. Oncor did not have a Lost Time Incident
(LTI) in 2020 – the last LTI was in late-2019 – and was able to
achieve industry top quartile performance in Days Away Restricted
or Transferred (DART) making 2020 the second best safety year in
Oncor's history.
Improved reliability of service continues to be a major focus
for Oncor. For the industry's primary benchmark for reliability,
System Average Interruption Duration Index (SAIDI-nonstorm), Oncor
improved significantly in the twelve months ended December 31, 2020 compared to the twelve months
ended December 31, 2019. On
average, Oncor's customers saw almost five minutes fewer of outage
over the year – an improvement of approximately 6%, and placing
Oncor in the industry top quartile for reliability two years ahead
of Oncor's previously announced expectations.
Additionally, Oncor's service territory continued to grow with
the connection of approximately 18,000 additional premises in the
fourth quarter of 2020 and approximately 77,000 additional premises
in 2020. This represents the best organic premise growth ever
experienced by Oncor and demonstrates the strength and economic
diversity of Oncor's service territory. On the transmission
side, Oncor also set a company record for the number of new
generation interconnection requests it received in 2020, driven by
strong movement in utility-scale generation activity, with a focus
on the renewable and utility-scale battery storage markets.
Even in the face of an unprecedented global pandemic, Oncor
maintained its strong development activity, constructing new
projects that support growth across the state of Texas and reliability for the ERCOT market. In
the fourth quarter, Oncor completed six major transmission projects
in West Texas totaling
approximately 260 circuit miles and approximately $300 million in investment. This milestone marks
the completion of a 345kV transmission infrastructure project in
far West Texas, providing a new
345kV transmission source to the Delaware Basin Region.
These accomplishments are a testament to the professionalism and
dedication of Oncor's employees who continued to perform their
duties when Oncor's customers and the state of Texas needed them most.
In the fourth quarter, after conducting an extensive nationwide
search, Oncor was pleased to hire a new Vice President for
Diversity, Equity and Inclusion ("DE&I"). Oncor's new Vice
President of DE&I will oversee all aspects of Oncor's DE&I
strategy, and lead the refinement and execution of the company's
training, programming and ongoing initiatives. Oncor is committed
to continuing to build a company where employees feel a true sense
of belonging, and continuing to foster an environment that provides
every person with equitable opportunities to realize their full
potential. This first ever officer-level hire will lead and work
closely with Oncor's established officer-level steering committee
to address DE&I activities across the company.
Oncor was also active on environmental, social and governance
("ESG") matters in 2020, earning a third-party ESG rating that
ranked in the top 7% of rated electric utilities. In September,
Oncor issued $450 million of its
0.55% Senior Secured Notes due 2025 pursuant to its sustainable
bond framework that is administered by the Oncor Sustainable
Finance Committee. Oncor intends to use the proceeds from the bond
issuance to finance or refinance expenditures with minority- and
women-owned business suppliers. Supporting businesses owned
by historically under-represented groups has been a long-standing
commitment of Oncor.
Capital Expenditure Program
Oncor's capital
expenditures totaled $2.5 billion in
2020, in line with its anticipated 2020 capital plan. In November,
Oncor announced its 2021–2025 capital plan. Today, Oncor and
its subsidiaries reaffirm expected capital expenditures of
$2.4 billion in 2021 and $2.4 billion to $2.5
billion in each of the years 2022 through 2025, for an
aggregate of approximately $12.2
billion during the 2021-2025 period. The approximately
$300 million increase over the
previous 2020-2024 capital plan is attributable to new growth
capital required across Oncor's system, increased maintenance on
the transmission system, including investments to enhance the
safety and reliability of Oncor's service, and continued investment
in technology and innovation. Approximately 97% of Oncor's
capital expenditures are eligible for recovery in rates through
trackers. In addition, management currently estimates the
growth in Oncor's service territory to result in an approximately
7% rate base compound annual growth rate for the 2020-2025 period,
with rate base in 2020 totaling $17.2
billion and projected rate base estimated at $18.6 billion in 2021, $20.1 billion in 2022, $21.4 billion in 2023, $22.6 billion in 2024 and $23.8 billion in 2025.
Ample Liquidity
Oncor's available liquidity consisting
of cash on hand and available credit capacity as of December 31, 2020, totaled $1.948 billion. Oncor expects cash flows from
operations combined with long-term debt issuances and term loans,
as well as availability under its credit facility and commercial
paper program, to provide sufficient liquidity to fund current
obligations, projected working capital requirements, maturities of
long-term debt and capital spending for at least the next twelve
months.
Sempra Energy Internet Broadcast Today
Sempra Energy
(NYSE: SRE) will broadcast a live discussion of its earnings
results over the Internet today at 12 p.m.
ET, which will include discussion of fourth quarter and
year-end 2020 results and other information relating to Oncor.
Oncor Senior Vice President and Chief Financial Officer
Don Clevenger will also participate
in the broadcast. Access is available by logging onto Sempra
Energy's website, sempra.com. An accompanying slide presentation
will also be posted at sempra.com. For those unable to participate
in the live webcast, a replay of Sempra Energy's call will be
available a few hours after its conclusion on Sempra Energy's
website or by dialing (888) 203-1112 and entering passcode
2095631.
Oncor's Annual Report on Form 10-K for the year ended
December 31, 2020 will be filed with
the U.S. Securities and Exchange Commission after Sempra Energy's
conference call and once filed, will be available on Oncor's
website, oncor.com. The annual financial statements of Oncor
Electric Delivery Holdings Company LLC (which holds 80.25% of
Oncor's outstanding equity interests and is indirectly wholly owned
by Sempra Energy) for the year ended December 31, 2020 will be included as an exhibit
to Sempra Energy's Annual Report on Form 10-K for the year ended
December 31, 2020.
Oncor Electric
Delivery Company LLC
Table A –
Statements of Consolidated Net Income
Three and Twelve
Months Ended December 31, 2020 and 2019; $ millions
|
|
|
|
Q4
'20
|
|
Q4
'19
|
|
TME
'20
|
|
TME
'19
|
|
|
|
Operating
revenues
|
|
$
|
1,117
|
|
$
|
1,079
|
|
$
|
4,511
|
|
$
|
4,347
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale transmission
service
|
|
|
252
|
|
|
246
|
|
|
975
|
|
|
1,005
|
Operation and
maintenance
|
|
|
249
|
|
|
252
|
|
|
925
|
|
|
899
|
Depreciation and
amortization
|
|
|
197
|
|
|
187
|
|
|
786
|
|
|
723
|
Provision in lieu of
income taxes
|
|
|
30
|
|
|
27
|
|
|
148
|
|
|
138
|
Taxes other than
amounts related to income taxes
|
|
|
139
|
|
|
131
|
|
|
538
|
|
|
508
|
Total operating
expenses
|
|
|
867
|
|
|
843
|
|
|
3,372
|
|
|
3,273
|
Operating
income
|
|
|
250
|
|
|
236
|
|
|
1,139
|
|
|
1,074
|
Other deductions and
(income) – net
|
|
|
5
|
|
|
7
|
|
|
33
|
|
|
63
|
Nonoperating benefit
in lieu of income taxes
|
|
|
(3)
|
|
|
(3)
|
|
|
(12)
|
|
|
(15)
|
Interest expense and
related charges
|
|
|
100
|
|
|
99
|
|
|
405
|
|
|
375
|
Net income
|
|
$
|
148
|
|
$
|
133
|
|
$
|
713
|
|
$
|
651
|
Oncor Electric
Delivery Company LLC
Table B –
Statements of Consolidated Cash Flows
Twelve Months
Ended December 31, 2020 and 2019; $ millions
|
|
|
|
TME
'20
|
|
TME
'19
|
|
|
|
|
|
Cash flows —
operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
713
|
|
$
|
651
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization, including regulatory amortization
|
|
|
866
|
|
|
806
|
Provision in lieu of
deferred income taxes – net
|
|
|
32
|
|
|
55
|
Other –
net
|
|
|
(1)
|
|
|
(3)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable –
trade
|
|
|
(78)
|
|
|
(53)
|
Inventories
|
|
|
4
|
|
|
(30)
|
Accounts payable –
trade
|
|
|
(29)
|
|
|
21
|
Regulatory accounts
related to reconcilable tariffs
|
|
|
33
|
|
|
(44)
|
Other –
assets
|
|
|
(71)
|
|
|
(204)
|
Other –
liabilities
|
|
|
56
|
|
|
76
|
Cash provided by
operating activities
|
|
|
1,525
|
|
|
1,275
|
Cash flows —
financing activities:
|
|
|
|
|
|
|
Issuances of
long-term debt
|
|
|
1,810
|
|
|
2,460
|
Repayments of
long-term debt
|
|
|
(1,164)
|
|
|
(1,094)
|
Proceeds of business
acquisition bridge loan
|
|
|
-
|
|
|
600
|
Repayment of business
acquisition bridge loan
|
|
|
-
|
|
|
(600)
|
Net increase
(decrease) in short-term borrowings
|
|
|
24
|
|
|
(882)
|
Capital contributions
from members
|
|
|
788
|
|
|
1,978
|
Distributions to
members
|
|
|
(356)
|
|
|
(319)
|
Debt discount,
premium, financing and reacquisition costs – net
|
|
|
(54)
|
|
|
(39)
|
Cash provided by
financing activities
|
|
|
1,048
|
|
|
2,104
|
Cash flows —
investing activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(2,540)
|
|
|
(2,097)
|
Business
acquisition
|
|
|
-
|
|
|
(1,324)
|
Expenditures for
third party in joint venture
|
|
|
(96)
|
|
|
-
|
Reimbursement from
third party in joint project
|
|
|
66
|
|
|
-
|
Other –
net
|
|
|
20
|
|
|
43
|
Cash used in
investing activities
|
|
|
(2,550)
|
|
|
(3,378)
|
Net change in cash
and cash equivalents
|
|
|
23
|
|
|
1
|
Cash and cash
equivalents — beginning balance
|
|
|
4
|
|
|
3
|
Cash and cash
equivalents — ending balance
|
|
$
|
27
|
|
$
|
4
|
Oncor Electric
Delivery Company LLC
Table C –
Consolidated Balance Sheets
At December 31,
2020 and 2019; $ millions
|
|
|
|
At
12/31/20
|
|
At
12/31/19
|
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
27
|
|
$
|
4
|
Trade accounts
receivable – net
|
|
|
760
|
|
|
661
|
Amounts receivable from
members related to income taxes
|
|
|
7
|
|
|
3
|
Materials and supplies
inventories — at average cost
|
|
|
144
|
|
|
148
|
Prepayments and other
current assets
|
|
|
100
|
|
|
96
|
Total current
assets
|
|
|
1,038
|
|
|
912
|
Investments and other
property
|
|
|
142
|
|
|
133
|
Property, plant and
equipment – net
|
|
|
21,225
|
|
|
19,370
|
Goodwill
|
|
|
4,740
|
|
|
4,740
|
Regulatory
assets
|
|
|
1,779
|
|
|
1,775
|
Operating lease ROU,
third-party joint project and other assets
|
|
|
248
|
|
|
106
|
Total
assets
|
|
$
|
29,172
|
|
$
|
27,036
|
LIABILITIES AND
MEMBERSHIP INTERESTS
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
70
|
|
$
|
46
|
Long-term debt due
currently
|
|
|
-
|
|
|
608
|
Trade accounts
payable
|
|
|
392
|
|
|
394
|
Amounts payable to
members related to income taxes
|
|
|
23
|
|
|
22
|
Accrued taxes other
than amounts related to income
|
|
|
269
|
|
|
236
|
Accrued
interest
|
|
|
87
|
|
|
83
|
Operating lease and
other current liabilities
|
|
|
279
|
|
|
237
|
Total current
liabilities
|
|
|
1,120
|
|
|
1,626
|
Long-term debt, less
amounts due currently
|
|
|
9,229
|
|
|
8,017
|
Liability in lieu of
deferred income taxes
|
|
|
1,923
|
|
|
1,821
|
Regulatory
liabilities
|
|
|
2,855
|
|
|
2,793
|
Employee benefit
obligations
|
|
|
1,808
|
|
|
1,834
|
Operating lease,
third-party joint project and other obligations
|
|
|
305
|
|
|
146
|
Total
liabilities
|
|
|
17,240
|
|
|
16,237
|
Commitments and
contingencies
|
|
|
|
|
|
|
Membership
interests:
|
|
|
|
|
|
|
Capital account ―
number of units outstanding 2020 and 2019 – 635,000,000
|
|
|
12,083
|
|
|
10,938
|
Accumulated other
comprehensive loss
|
|
|
(151)
|
|
|
(139)
|
Total membership
interests
|
|
|
11,932
|
|
|
10,799
|
Total liabilities and
membership interests
|
|
$
|
29,172
|
|
$
|
27,036
|
Oncor Electric
Delivery Company LLC
Table D –
Operating Statistics
Three and Twelve
Months Ended December 31, 2020 and 2019; mixed
measures
|
|
|
|
Q4
'20
|
|
Q4
'19
|
|
TME
'20
|
|
TME
'19
|
Operating
statistics:
|
|
|
|
|
|
|
|
|
Electric energy volumes
(gigawatt-hours):
|
|
|
|
|
|
|
|
|
Residential
|
|
9,470
|
|
9,562
|
|
44,628
|
|
45,340
|
Commercial, industrial,
small business and other
|
|
21,145
|
|
21,354
|
|
86,529
|
|
88,038
|
Total electric energy
volumes
|
|
30,615
|
|
30,916
|
|
131,157
|
|
133,378
|
Reliability
statistics (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
System Average
Interruption Duration Index (SAIDI) (nonstorm)
|
|
|
|
|
|
|
|
|
79.4
|
|
|
84.1
|
System Average
Interruption Frequency Index
(SAIFI) (nonstorm)
|
|
|
|
|
|
|
|
|
1.3
|
|
|
1.3
|
Customer Average
Interruption Duration Index
(CAIDI) (nonstorm)
|
|
|
|
|
|
|
|
|
63.5
|
|
|
67.2
|
Electricity
distribution points of delivery (based on
number of active meters) ― end of period and in
thousands
|
|
|
|
|
|
|
|
|
3,762
|
|
|
3,685
|
|
|
|
|
|
|
|
|
|
(a)
|
SAIDI is the average
number of minutes electric service is interrupted per consumer in a
year. SAIFI is the average number of electric service interruptions
per consumer in a year. CAIDI is the average duration in minutes
per electric service interruption in a year. The statistics
presented are based on twelve months ended December 31, 2020 and
2019 data.
|
Headquartered in Dallas, Oncor
Electric Delivery Company LLC is a regulated electricity
distribution and transmission business that uses superior asset
management skills to provide reliable electricity delivery to
consumers. Oncor (together with its subsidiaries) operates the
largest distribution and transmission system in Texas, delivering power to more than 3.7
million homes and businesses and operating more than 139,000 miles
of transmission and distribution lines in Texas. While Oncor is owned by two investors
(indirect majority owner, Sempra Energy, and minority owner, Texas
Transmission Investment LLC), Oncor is managed by its Board of
Directors, which is comprised of a majority of disinterested
directors.
Forward-Looking Statements
This news release contains forward-looking statements
relating to Oncor within the meaning of the Private Securities
Litigation Reform Act of 1995, which are subject to risks and
uncertainties. All statements in this news release, other than
statements of historical facts (often, but not always, through the
use of words or phrases such as "expects," "estimates,"
"projected," "intends," "plans," "will likely result," "are
expected to," "will continue," "is anticipated," "should,"
"target," "goal," "objective" and "outlook"), are
forward-looking statements. They involve risks,
uncertainties and assumptions. Factors that could cause
actual results to differ materially from those projected in such
forward-looking statements include: legislation, governmental
policies and orders and regulatory actions; legal and
administrative proceedings and settlements, including the exercise
of equitable powers by courts; weather conditions and other natural
phenomena; health epidemics and pandemics, including the evolving
COVID-19 pandemic and its impact on Oncor's business and the
economy in general; acts of sabotage, wars or terrorist or cyber
security threats or activities; economic conditions, including the
impact of a recessionary environment; unanticipated population
growth or decline, or changes in market demand and demographic
patterns; changes in business strategy, development plans or vendor
relationships; unanticipated changes in interest rates or rates of
inflation; unanticipated changes in operating expenses, liquidity
needs and capital expenditures; inability of various counterparties
to meet their financial obligations to us, including failure of
counterparties to perform under agreements; general industry
trends; hazards customary to the industry and the possibility that
we may not have adequate insurance to cover losses resulting from
such hazards; changes in technology used by and services offered by
us; significant changes in our relationship with our employees,
including the availability of qualified personnel, and the
potential adverse effects if labor disputes or grievances were to
occur; changes in assumptions used to estimate costs of providing
employee benefits, including pension and retiree benefits, and
future funding requirements related thereto; significant changes in
critical accounting policies material to us; commercial bank and
financial market conditions, access to capital, the cost of such
capital, and the results of financing and refinancing efforts,
including availability of funds in the capital markets and the
potential impact of disruptions in U.S. credit markets;
circumstances which may contribute to future impairment of
goodwill, intangible or other long-lived assets; financial and
other restrictions under our debt agreements; our ability to
generate sufficient cash flow to make interest payments on our debt
instruments; actions by credit rating agencies; and our ability to
effectively execute our operational strategy.
Further discussion of risks and uncertainties that could
cause actual results to differ materially from management's current
projections, forecasts, estimates and expectations is contained in
filings made by Oncor with the U.S. Securities and Exchange
Commission. Specifically, Oncor makes reference to the section
entitled "Risk Factors" in its annual and quarterly reports. Any
forward-looking statement speaks only as of the date on which it is
made, and Oncor undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which it is made or to reflect the occurrence of
unanticipated events.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/oncor-reports-2020-results-301235235.html
SOURCE Oncor Electric Delivery Company, LLC