PUCT review could reshape earnings, capital structure, and billing for Texas utility.

January 30, 2026

Broad Rate Adjustment Proposal Submitted to PUCT

Oncor is moving forward with a wide-ranging settlement proposal that, if approved, would significantly boost its revenue and realign key financial metrics. The company filed the agreement on January 29 with the Public Utility Commission of Texas (PUCT) and 210 cities across its service area. The filing seeks an 8.8% increase over current adjusted annualized revenues—equivalent to around $560 million annually —based on a proposed revenue requirement of $6.975 billion.

The settlement is the result of a rate review process Oncor launched in mid-2025. The proposal reflects months of negotiations and outlines several financial updates. Among them: a slightly lower debt-to-equity ratio, a modest bump in return on equity, and a higher cost of debt. The proposed capital structure moves from 57.5% debt / 42.5% equity to 56.5% debt / 43.5% equity. Return on equity would rise to 9.75%, while the cost of debt would increase to 4.94%.

Storm recovery funding is also getting a spotlight. Oncor plans to increase its self-insurance reserve to $200 million annually, up from the current $122 million. This reserve is used to cover storm-related and other self-insured losses. The proposal also sets a five-year amortization period for regulatory assets and liabilities— excluding certain categories like rate case costs, deferred resiliency spending from year-end 2024, and excess deferred income taxes.

Next Steps and Financial Impact

Oncor expects the PUCT to rule in the first half of 2026. If the commission approves the agreement as submitted, new billing rates would apply retroactively to January 1, 2026. Any difference between old and new rates would be recouped through a surcharge based on a previously approved interim settlement.

Internally, the company is preparing for the financial lift. If the terms move forward as proposed, Oncor anticipates:

• Stronger earnings


• Improved cash flow


• Healthier credit metrics

The proposal is designed to provide long-term financial stability, positioning the utility to navigate both operational demands and regulatory shifts more effectively.

Ongoing Risks and Considerations

The filing includes a standard set of forward-looking disclaimers, flagging risks such as weather, market conditions within the ERCOT region, supply chain volatility, and cyber or physical security threats. The company also pointed to external variables—from interest rate movements to changes in electricity demand—that could affect outcomes.

While the filing is currently unopposed, the final decision rests with the commission. Oncor’s next steps will depend on how regulators and local stakeholders respond to the terms on the table.