What are the expected financial impacts of the proposed settlement for Oncor?

The settlement proposes an approximately 8.8% increase in Oncor's annual revenue requirement, amounting to about $560 million, bringing the total to $6.975 billion. It also includes an increased authorized return on equity (9.75%) and authorized cost of debt (4.94%), which are expected to positively impact Oncor's future earnings, cash flow, and credit metrics.

What is the timeline for the PUCT's decision and the implementation of new rates?

Oncor expects the PUCT to issue a final order in the proceeding in the first half of 2026. New billing rates would be implemented after this final order. If the proposed new rates are approved as requested, Oncor will surcharge the difference between the new rates and current rates back to January 1, 2026.

Are there any changes to Oncor's self-insurance for storm costs?

Yes, the settlement provides for an increased self-insurance reserve with an annual accrual amount in rates of $200 million for storm costs and other self-insured losses. This is an increase from the current $122 million annual accrual amount recovered in rates.

SRE/SREA 8-K: Regulation FD

Q: What is the main purpose of this 8-K filing?

This 8-K filing is to inform investors about a comprehensive settlement reached by Oncor Electric Delivery Company LLC (Oncor), a subsidiary of Sempra, for its base rate review with the Public Utility Commission of Texas (PUCT). It details the proposed financial terms and operational adjustments that, if approved, are expected to impact Oncor's revenue and profitability.

Summary

Sempra Energy (SRE) announced via an 8-K filing on January 29, 2026, that its subsidiary, Oncor Electric Delivery Company LLC (Oncor), has reached a comprehensive settlement for its base rate review with the Public Utility Commission of Texas (PUCT) and other relevant parties. The proposed settlement, filed on the same day, aims to increase Oncor's annual revenue requirement by approximately 8.8%, or $560 million, bringing the total to $6.975 billion. This adjustment is a key development for investors as it signals a potential improvement in Oncor's financial performance and ability to fund operations and growth. The settlement also proposes adjustments to Oncor's regulatory capital structure, increasing the authorized return on equity (ROE) to 9.75% from 9.70% and the authorized cost of debt to 4.94% from 4.39%. Additionally, it includes an enhanced self-insurance reserve for storm costs and other self-insured losses. If approved by the PUCT, new rates are expected to be implemented after a final order in the first half of 2026, with potential back-billing to January 1, 2026. Sempra expects positive impacts on earnings, cash flow, and credit metrics.

Key Highlights

1Oncor Electric Delivery Company LLC (Oncor) has reached a comprehensive settlement for its base rate review with the Public Utility Commission of Texas (PUCT).
2The proposed settlement would increase Oncor's annual revenue requirement by approximately 8.8% ($560 million) to $6.975 billion.
3Key terms of the settlement include a revised regulatory capital structure (56.5% debt/43.5% equity) and an increased authorized return on equity (ROE) to 9.75%.
4Authorized cost of debt is proposed to increase to 4.94% from the current 4.39%.
5The settlement includes an increased annual accrual for a self-insurance reserve for storm costs and other self-insured losses, rising to $200 million from $122 million.
6Oncor anticipates positive impacts on future earnings, cash flow, and credit metrics if the settlement is approved as requested.
7A final order from the PUCT is expected in the first half of 2026, with new billing rates to follow; potential for interim rate surcharges to January 1, 2026.

SEMPRA 8-K Report, Regulation FD Disclosure (Jan 29, 2026)

Summary

Key Highlights

Frequently Asked Questions