Two of Texas’ biggest transmission and distribution utilities reported sharply higher profits in the second quarter of 2026. Dallas-based Oncor Electric Delivery Company and CenterPoint Energy’s Texas subsidiary reported a 65% and 43% increase in profits respectively, for the three months ending June 30, compared to the same period in 2025.

Both utilities requested – and received – a higher return on equity (ROE) in their recent base rate cases filed in the past two years. ROE is the profit margin regulators allow a utility to earn on shareholder-funded investment in capital expenditures. Mark Ellis, a former chief of corporate strategy at Oncor’s parent company Sempra, has argued that authorized returns set well above the cost of capital are contributing to skyrocketing utility bills across the country. Ellis estimated that customers overpay for utility profits by $50 billion a year nationwide, or about $300 per household.  Other researchers have found directionally similar conclusions. A 2026 Energy and Policy Institute report reviewing financial filings for 110 investor-owned utilities – including CenterPoint and Sempra – found that the electric utilities reported approximately $186 billion in profit between 2021 and 2024. 

Most Texas utility customers in the competitive market overseen by the Electric Reliability Council of Texas (ERCOT) can choose their retail energy supplier. But customers cannot choose the transmission and distribution utility (TDU) that delivers their power, giving those utilities a monopoly over customers in their service territories. CenterPoint’s Houston Electric and Oncor are two of the biggest TDUs in Texas, with Oncor, the largest, serving 14 million people.

Oncor profits continue rising in 2026

In the first six months of 2026, Oncor reported $3.79 billion in revenue and $640 million in profits, a 45% increase over the $440 million profit it reported in the first half of 2025. Second quarter profits were higher than the first quarter, with Oncor reporting $428 million in profits, up 65% from $259 million the second quarter the previous year. 

Oncor attributed the increase in profits in part to its comprehensive base rate case that the Public Utility Commission (PUCT) approved in April, with new rates taking effect in June 2026, according to its quarterly filings. Oncor did not disclose how much its new rates contributed to its profit increase.

Oncor filed a base rate case in June 2025, that sought to raise its revenue requirement by $834 million, or 13%, and it asked to increase its ROE from 9.7% to 10.55%.

The transmission and distribution utility also requested an interim rate increase, claiming that “regulatory lag” – the lag between building infrastructure and recovering costs from customers – was a major reason why it wanted to raise some customer rates while its rate case was being reviewed by the PUCT.

Intervenors in the base rate case pushed back against the proposed interim rate increase,  noting the framework was similar to proposed legislation – HB 3157 – supported by Oncor and other transmission and distribution utilities including CenterPoint Energy, AEP Texas and Entergy Texas.

HB 3157 would have allowed ERCOT transmission and distribution utilities to start charging new rates 90 days after filing a rate case, using their own proposed cost figures but the return on equity from their last completed case, with any overcharges based on the PUCT’s decision subject to refund with interest. 

At the time, Mark Bell, CEO of the Association of Electric Companies of Texas, told the Houston Chronicle that HB 3157 would make utilities more attractive for investors. The bill ultimately failed to pass out of the 2025 Legislative session.

Administrative law judges at the State Office of Administrative Hearings approved Oncor’s interim rates in September 2025, setting them at the existing rate structure but allowing Oncor to recover the difference through a surcharge if final rates came in higher. 

In April 2026, the PUCT approved Oncor’s finalized base rate revenue increase at $560 million  with an ROE of 9.75% – lower than the 10.55% ROE Oncor initially sought, but still increased from its previous level – raising customer bills by 3 percent, according to the utility. The order also allowed Oncor to charge customers a surcharge to recover the difference in revenue between the pre-existing rates in January 2026 and the new rates that took effect on June 1 until the end of 2026. The surcharge took effect on August 1. 

Oncor noted in its quarterly report that it recognized $181 million of that surcharge in the second quarter alone: $155 million in distribution base revenue and $26 million in transmission revenue.  Oncor attributed the rest of the profit increase to new base rates and to higher revenue from its annual capital trackers, which let it recover transmission and distribution investments. 

CenterPoint’s Houston Electric posts big profits

CenterPoint’s Texas subsidiary reported $2.16 billion in revenue and $298 million in profits for the first six months of 2026, a 32% increase over the $225 million profit it earned in the same period last year, according to its second quarter financial filing. The second quarter accounted for most of its year-to-date profits, with Houston Electric recording $202 million in profit, a 43% increase from second quarter last year. 

CenterPoint Energy’s Texas subsidiary filed a comprehensive base rate case in March 2024, seeking to increase its revenues by $60 million annually and raise its return on equity from 9.4% to 10.4%, which would raise monthly customer bills by $1.25. Hurricane Beryl swept through Houston later that year, leaving more than 2 million residents without power for days afterwards. CenterPoint’s performance during the storm sparked public backlash and increased public scrutiny. 

CenterPoint Energy’s Texas subsidiary then withdrew its base rate case, but faced pressure to “withdraw its withdrawal” from Houston Mayor John Whitmire and Lt. Gov. Dan Patrick, according to the Houston Chronicle, after cities and consumer advocates said withdrawing the rate case would negate the opportunity to push for a rate decrease. Eventually the city, consumer advocates, and CenterPoint’s Texas subsidiary settled on an agreement approved by the PUCT in March 2025.

The settlement agreement raised the company’s ROE to 9.65% but cut its revenue requirement by $46.6 million, including $2.4 million in chief executive expenses, resulting in an $0.82 monthly reduction in monthly residential customer bills. A month later, CenterPoint Energy’s Texas subsidiary received regulatory approval to recover approximately $425 million in costs related to a windstorm and a derecho that both occurred in May 2024, increasing monthly customer bills by $1, canceling out the reduction customers had just won.