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Citing Declining Distribution System Investment, Anderson Questions Oncor Distributions to EFH
October 17,2014 Prompted by recent weather-related outages and restoration times, Texas Public Utility Commissioner Kenneth Anderson has noted declining investment by Oncor in its distribution system, and questioned whether Oncor has been distributing too much internally generated cash to its upstream affiliates. Citing data compiled by Staff, Anderson said in a memo in advance of today's open meeting that, "Much to my surprise, it appears as though Oncor has continuously and systematically reduced its investment in, and operational maintenance spending on, its distribution system infrastructure." "From 2005 to 2013, a nine year period, Oncor's capital expenditures on its distribution system dropped 4.6%, while its spending on distribution maintenance declined a problematic 24.2%. Equally surprising is that these reductions in distribution investment and maintenance spending occurred while Oncor's account base was increasing from 2,996,718 customers to 3,266,126 customers, a 9.0% increase. By comparison, during the same time period CenterPoint Energy Houston Electric, LLC (CenterPoint) increased its distribution capital expenditures by 21.2% and increased its distribution maintenance spending 74.8% (by trend line, excluding meters)," Anderson reported. In the memo, Anderson raises the question, "[H]as Oncor been distributing too much internally generated cash to its upstream affiliates, whether in the form of dividends or other payments such as those under its tax sharing agreement with Energy Future Holdings." "This is not a criticism or even a suggestion that Oncor's management have ignored either the letter or spirit of the 'ring fence.' I have absolutely no reason to believe any such action has occurred or will occur. It is simply a question of whether the money now being paid to its equity holders would be put to better use maintaining and upgrading Oncor's distribution system," Anderson said. Anderson stressed that, "nothing in this memorandum is intended nor should be construed as criticism of the hard work displayed by Oncor's management, employees and mutual assistance workers under very challenging circumstances to restore service once the first storm had passed. I believe that all concerned worked with diligence to restore service." Click here for Anderson's memo
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