Sharyland customers – your nightmare electricity bills are officially coming to an end.
On July 24, 2017, Oncor announced that it had reached a definitive asset swap agreement with Sharyland Utilities (SU) valued at approximately $400 million. Upon PUCT approval and successful close of the transaction, Sharyland will receive approximately 258 miles of 345 kV transmission lines from Oncor, and Oncor will receive all of Sharyland’s distribution network and, following ERCOT transitioning, all of Sharyland’s retail delivery customers.
The Deal
Specific details of the proposed transaction include:
- Sharyland will transfer to Oncor their retail distribution assets and operations located in their Stanton, Brady, and Celeste (SBC) service territories, as well as their McAllen service territory.
- Oncor will transfer to Sharyland transmission lines of similar value located in West and Central Texas.
- Sharyland and will retain their transmission system in the Texas Panhandle and their transmission assets and substations in the Stanton and McAllen service territories. Essentially, Sharyland will become a transmission service provider.
- Once all required approvals are obtained and the transaction closes, after a brief transition period Sharyland’s retail distribution customers in all of its service territories will transfer to Oncor along with the more favorable Oncor delivery rates.
- Upon closing of the transaction, the rate case for Sharyland and it’s transmission company will be dismissed.
What does the Oncor purchase mean for Sharyland retail electricity customers?
It’s great news for Sharyland customers. The well-documented Sharyland electricity delivery fees have been the highest in the state since approximately 2010 when the Hunts created InfraREIT and transitioned their Sharyland Utility assets into a new structure.
The Oncor deal means significant savings in the delivery component (the cost of transmission and distribution) on your electricity bill. These utility delivery charges are updated twice a year (March 1 and September 1) and are regulated by the PUCT.
Before the deal, Sharyland’s delivery charges are $10.00 per month (fixed) plus 7.3846¢ per kWh of usage. After the deal, customers will transition to Oncor’s delivery charges which are $5.25 per month (fixed) plus 3.6513¢ per kWh of usage. On a 2000 kWh bill example, this savings amounts to $4.75 + $74.67 = $79.42 per month. Your actual savings will vary depending on how much electricity you use.
Note that your energy rate (the amount you pay for your electricity supply) is not impacted.
In addition, Oncor will install smart meters for Sharyland customers who currently do not have them.
Read Oncor’s Q&A regarding the transaction >>
Which Sharyland utility areas are affected?
All Sharyland retail delivery areas will be transitioned to Oncor. The three main Sharyland regions (McAllen, Greenville, west Texas) will all transition to Oncor. Specific cities include Midland, Big Spring, Stanton, Brady, Celeste, McAllen, and Greenville.
When will the Oncor purchase be finalized?
On October 11, 2017, the PUCT adopted final orders which give approval to the asset swap among Oncor and Sharyland Utilities. The deal officially gives Sharyland Utilities distribution assets (and retail customers) to Oncor (under Oncor’s distribution charges) in return for select Oncor transmission lines.
Although the transaction is still subject to closing, PUC approval on October 11 should permit the new system-wide Oncor rates to take effect on November 27, 2017, which provides REPs with 45 days notice of the rates.