Oncor Rate Case: Shifting a $90 million tax burden onto Texas residents

Mon, 08/03/2009 - 18:36

Oncor customers could see their rates go up by about $130 million annually, according to an analysis of several preliminary decisions rendered by the Texas Public Utility Commission in the utility’s pending rate case.

The analysis also shows that as a consequence of just one PUC decision, the burden of paying about $90 million in corporate taxes would get shifted onto Oncor’s captive ratepayers. That single decision represents nearly two-thirds of the annual rate increase, according to the analysis.

“By shifting this tax burden onto Oncor’s customers, the PUC will be increasing the cost of electricity for millions of Texas residents,” said Geoffrey Gay, general counsel of the Steering Committee of Cities Served by Oncor that developed the analysis. He said evidence developed in the case shows that Oncor customers should be getting a rate cut, not a rate hike.

The Steering Committee of Cities Served by Oncor is a coalition of about 100 municipalities and political subdivisions that represents consumer interests before the PUC. The Steering Committee analyzed the potential effects of rate case decisions rendered by the PUC during a meeting on July 30th.

The regulated monopoly wants permission to hike rates by about $253.4 million annually. By contrast most other parties in the case — including the PUC’s own staff — have concluded that the company already collects too much and should instead lower rates. The Steering Committee estimates Oncor’s overearnings at about $175.4 million annually.

Oncor has about 7 million customers in Texas. It is the state’s largest transmission and distribution utility. Because it provides transmission services, all of its customers — regardless of their retail electric provider — would have to pay the higher rates.

The PUC’s three commissioners could render an official decision in the rate case later this month.

-- R.A. Dyer

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