Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 89

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 89
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 capital allowed by the PUCT, particularly during periods of increased capital spending, high inflation or increases in interest rates resulting in increased costs relative to the utility’s most recent base rate review.

2024 Form 10-K  |  31

PUCT rules provide that a transmission and distribution utility must file a comprehensive base rate review within four years of the last order in its most recent comprehensive rate proceeding unless an extension is otherwise approved by the PUCT. However, the PUCT or any city retaining original jurisdiction over rates may direct the utility to file a base rate review, or the utility may voluntarily file a base rate review, any time prior to that deadline. Pursuant to these rules, Oncor’s next base rate review must be filed no later than June 2027. 

We discuss Oncor’s most recent comprehensive base rate proceeding in “Part II – Item 7. MD&A – Capital Resources and Liquidity – Sempra Texas Utilities.”

Sharyland Utilities’ 2020 rate case became effective in July 2021 and remains effective until the next rate case is finalized, which we expect could be in late 2025.

In addition, PUCT rules allow Texas electric utilities providing wholesale or retail distribution service to file up to two interim rate adjustment applications per year to recover distribution-related investments placed into service between base rate review proceedings. PUCT rules also allow the Texas utilities to file up to two interim rate adjustment applications per year to reflect changes in transmission-related invested capital. These applications for interim rate adjustments between base rate reviews, known as “capital tracker” provisions, are intended to encourage transmission and distribution investments in the electric system to help ensure reliability and efficiency by helping to shorten the time period between a utility’s investment in transmission and distribution infrastructure and its ability to start recovering and earning a return on such investments. However, all investments included in a capital tracker are ultimately subject to prudence review by the PUCT in the next base rate review, after such assets are put into service.

Capital Structure and Return on Equity 

In April 2023, the PUCT issued a final order in Oncor’s comprehensive base rate review that set Oncor’s authorized ROE at 9.7%, a decrease from its previously authorized ROE of 9.8%, and maintained Oncor’s authorized regulatory capital structure at 57.5% debt to 42.5% equity.

Sharyland Utilities’ PUCT-authorized ROE is 9.38% and its authorized regulatory capital structure is 60% debt to