Oncor Analysis Finds Significant Benefit to Residential Customers From PUCT Proposed Ratemaking Reforms and Texas Transmission Expansion

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Oncor Analysis Finds Significant Benefit to Residential Customers From PUCT Proposed Ratemaking Reforms and Texas Transmission Expansion

$1.2 billion residential benefit over 10 years based on examination of critical transmission investment, associated load growth and proposed PUCT reforms

DALLAS (Nov. 11, 2026) - Oncor today released a comprehensive analysis examining how major transmission investments identified in ERCOT's 2024 Regional Transmission Plan (RTP), associated growth and transmission ratemaking reforms proposed by the Public Utility Commission of Texas (PUCT) could affect residential customers. Ultimately, the analysis finds that under the rules proposed by the PUCT, the new large loads causing the need for transmission expansion will not only cover the costs of those investments, but also help reduce impacts on residential rates.

"Oncor recognizes that affordability is a very real concern for Texas families, and policymakers and customers deserve an accurate picture of what the investments required to support our state's growth could mean for their bills," said Brian Lloyd, Oncor Vice President of Regulatory Policy. "Focusing only on the cost of new transmission does not account for the additional customers who will use and pay for the new infrastructure. By accounting for the benefits of growth along with the PUCT's proposed ratemaking reforms, this analysis shows how Texas can put downward pressure on residential rates while simultaneously upgrading our grid."

What the Analysis Found:

· Even with major new transmission investment, modeled residential transmission costs remain below the 2026 baseline.
The analysis uses a 2026 baseline of approximately $21.18 per month in transmission costs for an average Oncor residential customer, before accounting for the new transmission investment, associated large-load growth and proposed PUCT reforms. When approximately $33 billion in investment is modeled with 60 gigawatts (GW) of new large load and the PUCT's proposed reforms, modeled residential transmission costs fall by around $35 per year below the baseline, holding all other factors constant. Over 10 years, that would result in an approximately $1.2 billion benefit for Oncor residential customers. A second, lower-growth scenario, pairs approximately $24 billion in investment with 35 GW of new demand, and modeled residential transmission costs fall by around $15.50 per year below the baseline.

• New large loads pay for the transmission built to serve them.
  ERCOT's 2024 RTP identified the transmission needed to serve a system reaching approximately 150 GW of peak demand. While serving that growth requires new investment, it also adds customers that help share the cost of that investment as well as the cost of current grid. Holding all other factors constant, new large-load customers are actually expected to cover the entirety of the modeled 2024 RTP costs, under the PUCT's proposed reforms.
  
  
• The PUCT's proposed reforms would assign a greater share of transmission costs to large loads.
  Texas Senate Bill 6, authored by Senator Phil King, mandates that the PUCT create rules requiring large-load customers to contribute directly to the recovery of system interconnection and transmission upgrade costs, thereby protecting residential ratepayers from bearing the cost burden. Project No. 58000 proposes changes to how transmission costs are allocated. This includes moving from a methodology based on four summer peak periods, known as 4 CP, to peak demand measured across all 12 months, or 12 CP. It also proposes a "contractual take-or-pay" framework requiring new large loads above 75 MW to pay transmission costs based on contracted capacity once that capacity is available, rather than waiting until it is used. Under the proposed rules, the obligation begins when the transmission capacity is available and continues for 20 years. Oncor's modeling finds that these changes would assign a greater share of transmission costs to large-load customers and create substantial downward pressure to residential rates.
  
  

ERCOT developed the 2024 RTP to identify the transmission infrastructure needed to serve approximately 150 GW of peak demand, equivalent to the electricity needed to power approximately 37.5 million homes during ERCOT peak demand hours. The approximately $33 billion plan includes the Permian Basin Reliability Plan (PBRP), the 765 kV Strategic Transmission Expansion Plan (STEP) and numerous other 69 kV, 138 kV and 345 kV transmission projects and system upgrades. The $33 billion therefore represents the broader 2024 RTP investment analyzed by ERCOT, not the cost of 765 kV alone.

This relationship between investment and new load is increasingly important as Texas experiences rapid growth from oil and gas operations, manufacturing, data centers and other large customers seeking to connect to the grid. The investment needed to serve that growth cannot be separated from the customers driving the need and helping pay for it. Oncor's analysis also notes that this shift is already occurring. Large commercial and industrial customers paid for approximately 19% of Oncor transmission costs in 2021, rising to 26% in Oncor's recent interim investment filing. Compared with the latest allocation used in Oncor's last full rate case, the amount assigned to residential customers will fall by more than $34 million over the next 12 months.

It is important to note that this analysis is not a rate forecast. It holds other factors constant to isolate the potential residential impacts of the 2024 RTP transmission investment, associated new load and proposed Project No. 58000 ratemaking reforms. It does not account for other transmission investment underway or in planning, additional future system needs or other changes that could affect customer bills nor does it account for the benefit of upgrading older infrastructure that would be needed anyway. At the same time, the transmission identified in the 2024 RTP is also expected to create other benefits for Texas customers through reduced congestion costs and more efficient transfer of power across the ERCOT region.

The full Oncor analysis includes detailed methodology, ratemaking assumptions, scenario modeling, tables and supporting information. Read the full analysis here.

About Oncor

Headquartered in Dallas, Oncor is a regulated electricity transmission and distribution business that uses superior asset management skills to provide reliable electricity delivery to consumers. Oncor (together with its subsidiaries) operates the largest transmission and distribution system in Texas, delivering electricity to more than 4.1 million homes and businesses and operating more than 145,000 circuit miles of transmission and distribution lines in Texas. While Oncor is owned by two investors (indirect majority owner, Sempra, and minority owner, Texas Transmission Investment LLC), Oncor is managed by its Board of Directors, which is comprised of a majority of disinterested directors.