Texas cities denying nearly $98 million rate hike requested by Oncor

Published: May. 4, 2021 at 9:41 PM CDT
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SHERMAN, Texas (KXII) - Oncor is asking for a nearly $98 million dollar rate hike, which would increase an average customer’s bills around $1.35 per month.

That’s about a 30 percent increase from what they requested last year.

Attorney Thomas Brocato represents Steering Committee of Cities Served by Oncor, who makes sure costs stay reasonable and service stays reliable.

The 163 cities in the committee include Sherman, Denison, Paris, Honey Grove and Howe.

Both Sherman and Denison City Councils denied Oncor’s increase, which Brocato says is significantly higher than years past.

“One of the questions on our mind will be what’s driving that significant increase,” Brocato said.

Brocato said Oncor’s request to raise rates happens every April.

Each year, he helps cities get reasonable rates lower than what they propose.

“So they have a large utility and they have a lot of growth. And in order to maintain that system and to meet the needs of customers, they’ve got to make a lot of investment into their system,” Brocato said.

Compared to around $30 million in 2019 and $76 million last year, this year, they’re requesting nearly $98 million.

For an average customer, that’s a proposed increase of 34 cents per month two years ago to now, $1.35.

Oncor invested around $860 million dollars in 2020 for transformers and meters, replacements and upgrades of substation and distribution facilities, and updated computer hardware and software.

But they said it’s too early to have details on the rates involving the winter storm, so this rate spike isn’t affected by that, even though customers statewide were impacted dramatically.

“Many of them have faced very high bills and will face high bills in the future because of the storm,” Brocato said.

An Oncor spokesperson said this request doesn’t include all the money they spent on damage from the winter freeze.

That will be made up in another rate hike next April.

After cities routinely deny Oncor requests, it heads to the Public Utility Commission of Texas.

“And then ultimately the commission will set rates that will be charged system wide,” Brocato said.

Brocato said typically the cases settle for less than the requested rate, so he expects that to happen here too.

Cities have until next month to deny the rate increase, before the case heads to the PUC.

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