What's Happening?
Oncor Electric Delivery Company has reported a substantial increase in interconnection requests, totaling approximately 200 GW. These requests include 186 GW from data centers, 7 GW from traditional commercial and industrial customers, 5 GW from cryptocurrency facilities, and 4 GW from oil and gas operations. Oncor CEO Allen Nye highlighted that about 20% of this potential demand has signed contracts or is considered 'high confidence load.' The company is considering adding more than $12 billion to its existing $36 billion capital plan to accommodate this growth. Sempra, Oncor's parent company, is also planning to sell assets to fund this expansion, including a stake in Sempra Infrastructure and Ecogas Mexico.
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Why It's Important?
The surge in interconnection requests reflects the growing demand for electricity in Texas, driven by data centers and other industries. This expansion could significantly impact the state's energy infrastructure, requiring substantial investment and development. Sempra's strategic shift towards a utility-focused business model aims to capitalize on this demand, potentially improving earnings and reducing investor risk. The planned asset sales are crucial for funding Oncor's expansion, which could enhance the company's market position and contribute to Texas's economic growth.
What's Next?
Oncor is expected to revise its capital plan next year to incorporate the additional $12 billion investment. The sales of Sempra's assets are anticipated to close by mid-2026, providing the necessary funds for Oncor's expansion. The company will continue to monitor and update its interconnection queue, with potential impacts on its service territory and earnings. Stakeholders, including investors and industry analysts, will be closely watching these developments.
