10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

____________________

FORM 10-Q

[√] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016

― OR ―

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

____________________

Commission File Number 333-100240

Oncor Electric Delivery Company LLC

(Exact Name of Registrant as Specified in its Charter)

Delaware	75-2967830
(State of Organization)	(I.R.S. Employer Identification No.)
1616 Woodall Rodgers Fwy., Dallas, TX  75202	(214) 486-2000
(Address of Principal Executive Offices)	(Registrant’s Telephone Number)

____________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YesNo √

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  √   No ____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ____    Accelerated filer ____    Non-Accelerated filer  √   (Do not check if a smaller reporting company)

Smaller reporting company___

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes___ No  √   

As of November 1, 2016,  80.03% of the outstanding membership interests in Oncor Electric Delivery Company LLC (Oncor) were directly held by Oncor Electric Delivery Holdings Company LLC and indirectly by Energy Future Holdings Corp., 19.75% of the outstanding membership interests were held by Texas Transmission Investment LLC and 0.22% of the outstanding membership interests were indirectly held by certain members of Oncor’s management and board of directors.  None of the membership interests are publicly traded.

TABLE OF CONTENTS

	Page
GLOSSARY	2
PART I.   FINANCIAL INFORMATION	5
Item 1.   Financial Statements (Unaudited)	5
Condensed Statements of Consolidated Income — Three and Nine Months Ended September 30, 2016 and 2015	5
Condensed Statements of Consolidated Comprehensive Income — Threeand Nine Months Ended September 30, 2016 and 2015	5
Condensed Statements of Consolidated Cash Flows — Nine Months Ended September 30, 2016 and 2015	6
Condensed Consolidated Balance Sheets — September 30, 2016 and December 31, 2015	7
Notes to Condensed Consolidated Financial Statements	8
Item 2.Management’s Discussion and Analysis of Financial Conditionand Results of Operations	28
Item 3.Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.Controls and Procedures	43
PART II.    OTHER INFORMATION	44
Item 1.Legal Proceedings	44
Item 1A.Risk Factors	44
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.Defaults Upon Senior Securities	44
Item 4. MINE SAFETY DISCLOSURES	44
Item 5.Other Information	44
Item 6.Exhibits	45
SIGNATURE	47

Oncor Electric Delivery Company LLC’s (Oncor) annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports are made available to the public, free of charge, on the Oncor website at http://www.oncor.com as soon as reasonably practicable after they have been filed with or furnished to the Securities and Exchange Commission.  The information on Oncor’s website or available by hyperlink from the website shall not be deemed a part of, or incorporated by reference into, this quarterly report on Form 10-Q.  The representations and warranties contained in any agreement that we have filed as an exhibit to this quarterly report on Form 10-Q or that we have or may publicly file in the future may contain representations and warranties made by and to the parties thereto as of specific dates.  Such representations and warranties may be subject to exceptions and qualifications contained in separate disclosure schedules, may represent the parties’ risk allocation in the particular transaction, or may be qualified by materiality standards that differ from what may be viewed as material for securities law purposes.

This Form 10-Q and other Securities and Exchange Commission filings of Oncor and its subsidiary occasionally make references to Oncor (or “we,” “our,” “us” or “the company”) when describing actions, rights or obligations of its subsidiary.  These references reflect the fact that the subsidiary is consolidated with Oncor for financial reporting purposes.  However, these references should not be interpreted to imply that Oncor is actually undertaking the action or has the rights or obligations of its subsidiary or that the subsidiary company is undertaking an action or has the rights or obligations of its parent company or of any other affiliate.

1

GLOSSARY

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below.
2015 Form 10-K	Oncor’s Annual Report on Form 10-K for the year ended December 31, 2015
AMS	advanced metering system
Bondco	Refers to Oncor Electric Delivery Transition Bond Company LLC, a wholly-owned consolidated bankruptcy-remote financing subsidiary of Oncor that issued securitization (transition) bonds to recover certain regulatory assets and other costs.
Contributed EFH Debtors	Certain Debtors that were subsidiaries of EFH and became subsidiaries of Reorganized TCEH and emerged from Chapter 11 at the time of the Reorganized TCEH Spin-Off
Deed of Trust	Deed of Trust, Security Agreement and Fixture Filing, dated as of May 15, 2008, made by Oncor to and for the benefit of The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York Mellon, formerly The Bank of New York), as collateral agent, as amended
Debtors	EFH Corp. and the majority of its direct and indirect subsidiaries at the time of the EFH Petition Date, including EFIH, EFCH and TCEH but excluding the Oncor Ring-Fenced Entities.  Prior to the Reorganized TCEH Spin-Off, also included the TCEH Debtors.
EECRF	energy efficiency cost recovery factor
EFCH	Refers to Energy Future Competitive Holdings Company LLC, a direct, wholly-owned subsidiary of EFH Corp. and prior to the Reorganized TCEH Spin-Off, the parent of TCEH, and/or its subsidiaries, depending on context.
EFH Bankruptcy Proceedings	Refers to voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code filed in US Bankruptcy Court for the District of Delaware on April 29, 2014 (EFH Petition Date) by EFH Corp. and the substantial majority of its direct and indirect subsidiaries, including EFIH, EFCH and TCEH.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.
EFH Corp.	Refers to Energy Future Holdings Corp., a holding company, and/or its subsidiaries, depending on context.  Its major subsidiaries include Oncor and TCEH.
EFH Debtors	EFH Corp. and its subsidiaries that are Debtors in the EFH Bankruptcy Proceedings, excluding the TCEH Debtors
EFH Petition Date	April 29, 2014.  See EFH Bankruptcy Proceedings above.
EFH Retirement Plan	Refers to a defined benefit pension plan sponsored by EFH Corp., prior to the Reorganized TCEH Spin-Off, and sponsored by Reorganized TCEH on and after that date.
EFIH	Refers to Energy Future Intermediate Holding Company LLC, a direct, wholly-owned subsidiary of EFH Corp. and the direct parent of Oncor Holdings.
ERCOT	Electric Reliability Council of Texas, Inc., the independent system operator and the regional coordinator of various electricity systems within Texas
ERISA		Employee Retirement Income Security Act of 1974, as amended
Fitch	Fitch Ratings, Ltd. (a credit rating agency)
GAAP	generally accepted accounting principles of the U.S.
Investment LLC	Refers to Oncor Management Investment LLC, a limited liability company and minority membership interest owner (approximately 0.22%) of Oncor, whose managing member is Oncor and whose Class B Interests are owned by certain members of the management team and independent directors of Oncor.
IRS	US Internal Revenue Service

2

LIBOR	London Interbank Offered Rate, an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market
Luminant	Refers to subsidiaries of Reorganized TCEH (which, prior to the Reorganized TCEH Spin-Off were subsidiaries of TCEH) engaged in competitive market activities consisting of electricity generation and wholesale energy sales and purchases as well as commodity risk management and trading activities, all largely in Texas.
Moody’s	Moody’s Investors Services, Inc. (a credit rating agency)
Oncor	Refers to Oncor Electric Delivery Company LLC, a direct, majority-owned subsidiary of Oncor Holdings, and/or its wholly-owned consolidated bankruptcy-remote financing subsidiary, Bondco, depending on context.
Oncor Holdings	Refers to Oncor Electric Delivery Holdings Company LLC, a direct, wholly-owned subsidiary of EFIH and the direct majority owner (approximately 80.03%) of Oncor, and/or its subsidiaries, depending on context.
Oncor OPEB Plan	Refers to a plan sponsored by Oncorthat offers certain postretirement health care and life insurance benefits to eligible Oncor retirees, certain eligible EFH Corp. retirees, and their eligible dependents.
Oncor Retirement Plan	Refers to the defined benefit pension plan sponsored by Oncor.
Oncor Ring-Fenced Entities	Refers to Oncor Holdings and its direct and indirect subsidiaries, including Oncor.
OPEB	other postretirement employee benefits
PUCT	Public Utility Commission of Texas
PURA	Texas Public Utility Regulatory Act
purchase accounting	The purchase method of accounting for a business combination as prescribed by  GAAP, whereby the cost or “purchase price” of a business combination, including the amount paid for the equity and direct transaction costs, are allocated to identifiable assets and liabilities (including intangible assets) based upon their fair values.  The excess of the purchase price over the fair values of assets and liabilities is recorded as goodwill.
Reorganized TCEH	TCEH Corp., and/or its subsidiaries, depending on context.  On October 3, 2016, the TCEH Debtors emerged from Chapter 11 and became subsidiaries of TCEH Corp.  Subsequent to the Reorganized TCEH Spin-Off, TCEH Corp. continued substantially the same operations as TCEH.
Reorganized TCEH Spin-Off	Refers to the completion of the TCEH Debtors’ reorganization under the Bankruptcy Code and emergence from the EFH Bankruptcy Proceedings effective October 3, 2016
REP	retail electric provider
S&P	Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc. (a credit rating agency)
SEC	US Securities and Exchange Commission
Sponsor Group	Refers collectively to certain investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (KKR), TPG Global, LLC (together with its affiliates, TPG) and GS Capital Partners, an affiliate of Goldman, Sachs & Co., that have an ownership interest in Texas Holdings.

3

TCEH	Refers to Texas Competitive Electric Holdings Company LLC, a direct, wholly-owned subsidiary of EFCH and, prior to the Reorganized TCEH Spin-Off, the parent company of the TCEH Debtors (other than the Contributed EFH Debtors), depending on the context, that were engaged in electricity generation and wholesale and retail energy market activities, and whose  major subsidiaries included Luminant and TXU Energy.  Subsequent to the Reorganized TCEH Spin-Off, TCEH Corp. continued substantially the same operations as TCEH.
TCEH Debtors	Refers to the subsidiaries of TCEH that were Debtors in the EFH Bankruptcy Proceedings (including Luminant and TXU Energy) and the Contributed EFH Debtors
TCOS	transmission cost of service
TCRF	transmission cost recovery factor
Texas Holdings	Refers to Texas Energy Future Holdings Limited Partnership, a limited partnership controlled by the Sponsor Group that owns substantially all of the common stock of EFH Corp.
Texas Holdings Group	Refers to Texas Holdings and its direct and indirect subsidiaries other than the Oncor Ring-Fenced Entities.
Texas margin tax	A privilege tax imposed on taxable entities chartered/organized or doing business in the State of Texas that, for accounting purposes, is reported as an income tax.
Texas Transmission	Refers to Texas Transmission Investment LLC, a limited liability company that owns a 19.75% equity interest in Oncor.  Texas Transmission is an entity indirectly owned by a private investment group led by OMERS Administration Corporation, acting through its infrastructure investment entity, Borealis Infrastructure Management Inc., and the Government of Singapore Investment Corporation, acting through its private equity and infrastructure arm, GIC Special Investments Pte Ltd.  Texas Transmission is not affiliated with EFH Corp., any of EFH Corp.’s subsidiaries or any member of the Sponsor Group.
TXU Energy	Refers to TXU Energy Retail Company LLC, a direct, wholly-owned subsidiary of Reorganized TCEH (and, prior to the Reorganized TCEH Spin-Off, a direct subsidiary of TCEH) engaged in the retail sale of electricity to residential and business customers.  TXU Energy is a REP in competitive areas of ERCOT.
U.S.	United States of America

4

PART I.  FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

ONCOR ELECTRIC DELIVERY COMPANY LLC

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
	(millions of dollars)
Operating revenues:
Nonaffiliates	$	806	$	793	$	2,262	$	2,218
Affiliates		265		279		700		739
Total operating revenues		1,071		1,072		2,962		2,957
Operating expenses:
Wholesale transmission service		224		201		663		595
Operation and maintenance (Note 10)		190		186		542		539
Depreciation and amortization		190		217		593		653
Provision in lieu of income taxes (Note 10)		99		99		211		214
Taxes other than amounts related to income taxes		118		116		338		336
Total operating expenses		821		819		2,347		2,337
Operating income		250		253		615		620
Other income and (deductions) - net (Note 11)		(3)		(9)		(11)		(17)
Nonoperating provision in lieu of income taxes		(1)		(3)		(3)		(6)
Interest expense and related charges (Note 11)		85		84		252		250
Net income	$	163	$	163	$	355	$	359

See Notes to Financial Statements.

CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
	(millions of dollars)
Net income	$	163	$	163	$	355	$	359
Other comprehensive income (loss):
Cash flow hedges – derivative value net loss recognized in net income (net of tax expense of $–, $–, $– and $–) (Note 1)		1		1		1		1
Defined benefit pension plans (net of tax benefit of $–, $–, $– and $–) (Note 9)		-		-		1		1
Total other comprehensive income		1		1		2		2
Comprehensive income	$	164	$	164	$	357	$	361

See Notes to Financial Statements.

5

ONCOR ELECTRIC DELIVERY COMPANY LLC

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2016		2015
	(millions of dollars)
Cash flows — operating activities:
Net income	$	355	$	359
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		629		686
Provision in lieu of deferred income taxes – net		166		(65)
Other – net		(3)		(2)
Changes in operating assets and liabilities:
Regulatory accounts related to reconcilable tariffs (Note 4)		(60)		41
Other operating assets and liabilities		(127)		34
Cash provided by operating activities		960		1,053
Cash flows — financing activities:
Issuances of long-term debt (Note 6)		175		725
Repayments of long-term debt (Note 6)		(41)		(594)
Net increase in short-term borrowings (Note 5)		40		(3)
Distributions to members (Note 8)		(189)		(283)
Debt discount, premium, financing and reacquisition expenses – net		11		(11)
Cash used in financing activities		(4)		(166)
Cash flows — investing activities:
Capital expenditures (Note 10)		(1,004)		(893)
Other – net		47		20
Cash used in investing activities		(957)		(873)
Net change in cash and cash equivalents		(1)		14
Cash and cash equivalents — beginning balance		25		4
Cash and cash equivalents — ending balance	$	24	$	18

See Notes to Financial Statements.

6

ONCOR ELECTRIC DELIVERY COMPANY LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	At September30,			At December 31,
	2016			2015
	(millions of dollars)
ASSETS
Current assets:
Cash and cash equivalents	$	24	$		25
Restricted cash — Bondco (Note 11)		-			38
Trade accounts receivable from nonaffiliates – net (Note 11)		450			388
Trade accounts and other receivables from affiliates – net (Note 10)		146			118
Amounts receivable from members related to income taxes (Note 10)		107			136
Materials and supplies inventories — at average cost		91			82
Prepayments and other current assets		97			89
Total current assets		915			876
Investments and other property (Note 11)		102			97
Property, plant and equipment – net (Note 11)		13,617			13,024
Goodwill (Note 11)		4,064			4,064
Regulatory assets – net (Note 4)		1,114			1,194
Other noncurrent assets		41			32
Total assets	$	19,853	$		19,287
LIABILITIES AND MEMBERSHIP INTERESTS
Current liabilities:
Short-term borrowings (Note 5)	$	880	$		840
Long-term debt due currently ― Oncor (Note 6)		324			-
Long-term debt due currently ― Bondco (Note 6)		-			41
Trade accounts payable (Note 10)		205			150
Amounts payable to members related to income taxes (Note 10)		15			20
Accrued taxes other than amounts related to income		156			181
Accrued interest		69			82
Other current liabilities		139			144
Total current liabilities		1,788			1,458
Long-term debt, less amounts due currently ― Oncor (Note 6)		5,513			5,646
Liability in lieu of deferred income taxes (Note 10)		2,773			2,612
Employee benefit obligations and other (Note 10 and 11)		2,103			2,063
Total liabilities		12,177			11,779
Commitments and contingencies (Note 7)
Membership interests (Note 8):
Capital account ― number of interests outstanding 2016 and 2015 – 635,000,000		7,787			7,621
Accumulated other comprehensive loss		(111)			(113)
Total membership interests		7,676			7,508
Total liabilities and membership interests	$	19,853	$		19,287

See Notes to Financial Statements.

7

ONCOR ELECTRIC DELIVERY COMPANY LLC

NOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

(Unaudited)

1.    BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

References in this report to “we,” “our,” “us” and “the company” are to Oncor and/or Bondco, its subsidiary as apparent in the context.  See “Glossary” for definition of terms and abbreviations.

We are a regulated electricity transmission and distribution company principally engaged in providing delivery services to REPsthat sell power in the north-central, eastern and western parts of Texas.  The services to REPs included subsidiaries of TCEH through the date of the Reorganized TCEH Spin-Off and subsidiaries of Reorganized TCEH after the date of the Reorganized TCEH Spin-Off.  Revenues from TCEH represented 24% and 25% of our total operating revenues for the nine months ended September 30, 2016 and 2015, respectively.  We are a direct, majority-owned subsidiary of Oncor Holdings, which is a direct, wholly-owned subsidiary of EFIH, a direct, wholly-owned subsidiary of EFH Corp.  EFH Corp. is a subsidiary of Texas Holdings, which is controlled by the Sponsor Group.  Oncor Holdings owns 80.03% of our membership interests, Texas Transmission owns 19.75% of our membership interests and certain members of our management team and board of directors indirectly own the remaining membership interests through Investment LLC.  We are managed as an integrated business; consequently, there are no separate reportable business segments.

Our consolidated financial statements include our wholly-owned, bankruptcy-remote financing subsidiary, Bondco, a variable interest entity.  This financing subsidiary was organized for the limited purpose of issuing certain transition bonds to recover generation-related regulatory asset stranded costs and other qualified costs under an order issued by the PUCT in 2002.  Bondco issued an aggregate $1.3 billion principal amount of transition bonds during 2003 and 2004.  The 2003 Series transition bonds matured and werepaid in fullin 2015 and the 2004 Series transition bondsmaturedand were paid in full in May 2016.  Final true-up proceedings and refunds of over-collected transition charges for the transition bonds are being conducted by Oncor and the PUCT during 2016 and are expected to have minimal or no net income impact.

Various “ring-fencing” measures have been taken to enhance the separateness between the Oncor Ring-Fenced Entities and the Texas Holdings Group and our credit quality.  These measures serve to mitigate our and Oncor Holdings’ credit exposure to the Texas Holdings Group and to reduce the risk that our assets and liabilities or those of Oncor Holdings would be substantively consolidated with the assets and liabilities of the Texas Holdings Group in connection with a bankruptcy of one or more of those entities, including the EFH Bankruptcy Proceedings discussed below.  Such measures include, among other things: our sale of a 19.75% equity interest to Texas Transmission in November 2008; maintenance of separate books and records for the Oncor Ring-Fenced Entities; our board of directors being comprised of a majority of independent directors; and prohibitions on the Oncor Ring-Fenced Entities providing credit support to, or receiving credit support from, any member of the Texas Holdings Group.  The assets and liabilities of the Oncor Ring-Fenced Entities are separate and distinct from those of the Texas Holdings Group, and none of the assets of the Oncor Ring-Fenced Entities are available to satisfy the debt or contractual obligations of any member of the Texas Holdings Group.  We do not bear any liability for debt or contractual obligations of the Texas Holdings Group, and vice versa.  Accordingly, our operations are conducted, and our cash flows are managed, independently from the Texas Holdings Group.

EFH Corp. Bankruptcy Proceedings

On the EFH Petition Date, the Debtorscommenced proceedings under Chapter 11 of the US Bankruptcy Code.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  We believe the “ring-fencing” measures discussed above mitigate our potential exposure to the EFH Bankruptcy Proceedings.  See Note 2 for a discussion of the potential impacts of the EFH Bankruptcy Proceedings on our financial statements.

8

Basis of Presentation

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes included in the 2015 Form 10-K.  In the opinion of Oncor management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations and financial position have been made.  All intercompany items and transactions have been eliminated in consolidation.The results of operations for an interim period may not give a true indication of results for a full year due to seasonality.  All dollar amounts in the financial statements and tables in the notes are stated in millions of U.S. dollars unless otherwise indicated.

Use of Estimates

Preparation of our financial statements requires management to make estimates and assumptions about future events that affect the reporting of assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense, including fair value measurements.  In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

Reconcilable Tariffs

The PUCT has designated certain tariffs (TCRF, EECRF surcharges, AMS surcharges and charges related to transition bonds) as reconcilable, which means the differences between amounts billed under these tariffs and the related incurred costs are deferred as either regulatory assets or regulatory liabilities.  Accordingly, at prescribed intervals, future tariffs are adjusted to either repay regulatory liabilities or collect regulatory assets.

Contingencies

We evaluate and account for contingencies using the best information available.  A loss contingency is accrued and disclosed when it is probable that an asset has been impaired or a liability incurred and the amount of the loss can be reasonably estimated.  If a range of probable loss is established, the minimum amount in the range is accrued, unless some other amount within the range appears to be a better estimate.  If the probable loss cannot be reasonably estimated, no accrual is recorded, but the loss contingency is disclosed to the effect that the probable loss cannot be reasonably estimated.  A loss contingency will be disclosed when it is reasonably possible that an asset has been impaired or a liability incurred.  If the likelihood that an impairment or incurrence is remote, the contingency is neither accrued nor disclosed.  Gain contingencies are recognized upon realization.

Changes in Accounting Standards

In February 2016, the Financial Accounting Standards Board(FASB) issued Accounting Standards Update 2016-2 (ASU 2016-2), Leases.ASU 2016-2 amends previous GAAP to require the balance sheet recognition of lease assets and liabilities for operating leases.  Oncor will be required to adopt ASU 2016-2 by January 1, 2019 and does not expect to early adopt.  Retrospective application to the 2017 and 2018 comparative periods presented will be required in the year of adoption.  We continue to evaluate the impact of ASU 2016-2 on our financial statements.

Since May 2014, the FASB has issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customersalong with other supplemental guidance (together, Topic 606).  Topic 606 introduces new, increased requirements for disclosure of revenue in financial statements and guidance that are intended to eliminate inconsistencies in the recognition of revenue.  Oncor will be required to adopt Topic 606by January 1, 2018and does not expect to early adopt.  We continue to evaluate the impact on our financial statements.  At this time, the adoption is not expected to have a material effect on our reported results of operations, financial condition or cash flows.

2.   EFH BANKRUPTCY PROCEEDINGS

On the EFH Petition Date, EFH Corp. and the substantial majority of its direct and indirect subsidiaries at the time, including EFIH, EFCH and TCEH, commenced proceedings under Chapter 11 of the US Bankruptcy Code.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  We believe the “ring-fencing”

9

measures discussed above mitigate our potential exposure to the EFH Bankruptcy Proceedings.  See Note 1 and below for further information regarding the EFH Bankruptcy Proceedings and the proposed change in control of our indirect majority owner in connection with such proceedings.

The US Bankruptcy Code automatically enjoined, or stayed, us from judicial or administrative proceedings or filing of other actions against our affiliates or their property to recover, collect or secure our claims arising prior to the EFH Petition Date.  Following the EFH Petition Date, EFH Corp. received approval from the bankruptcy court to pay or otherwise honor certain prepetition obligations generally designed to stabilize its operations.  Included in the approval were the obligations owed to us representing our prepetition electricity delivery fees.  As of the EFH Petition Date, we estimated that our receivables from the Texas Holdings Group totaled approximately $129 million.  As of September 30, 2016, we had collected $128 million of the prepetition amount.  We estimate any potential pre-tax loss resulting from the EFH Bankruptcy Proceedings to be immaterial.  A provision for uncollectible accounts from affiliates had not been established as of September 30, 2016.  As discussed below, the New Plan of Reorganization (defined below) provided for a spin-off of the TCEH Debtors from EFH Corp.  As a result of this  spin-off, Reorganized TCEH and its subsidiaries, including Luminant and TXU Energy, ceased to be affiliates of ours as of October 3, 2016.

The EFH Bankruptcy Proceedings continue to be a complex litigation matter and the full extent of potential impacts on us remain unknown.  We will continue to evaluate our affiliate transactions and contingencies throughout the EFH Bankruptcy Proceedings to determine any risks and resulting impacts on ourresults of operations, financial statements and cash flows.

See Note 10 for details of Oncor’s related-party transactions with members of the Texas Holdings Group.

Potential Change in Indirect Ownership of Oncor

As part of the EFH Bankruptcy Proceedings, the bankruptcy court confirmed the Debtors’ Sixth Amended Plan of Reorganization by order dated December 9, 2015. In general, among other things, the Sixth Amended Plan of Reorganization provided for a series of transactions to be effected pursuant to a merger and purchase agreement (Hunt Merger and Purchase Agreement) with an investor group consisting of certain unsecured creditors of TCEH and an affiliate of Hunt Consolidated, Inc. (Hunt), as well as certain other investors designated by Hunt (collectively, the Hunt Investor Group), that would have led to a significant change in the indirect equity ownership of Oncor.

The Debtors and certain creditors entered into a Plan Support Agreement (as amended, Plan Support Agreement) that provided for, among other things, their respective obligations to act and/or support Plans of Reorganization. On May 1, 2016, certain first lien creditors of TCEH delivered a written notice (Plan Support Termination Notice) to the Debtors and the other parties to the Plan Support Agreement notifying such parties of the occurrence of a Plan Support Termination Event (as defined in the Plan Support Agreement).  The delivery of the Plan Support Agreement Termination Notice caused the Sixth Amended Plan of Reorganization to become null and void.

On May 1, 2016, following receipt of the Plan Support Termination Notice, EFH Corp. and EFIH delivered a written notice (Merger and Purchase Agreement Termination Notice) to the Hunt Investor Group notifying the Hunt Investor Group that EFH Corp. and EFIH terminated the Hunt Merger and Purchase Agreement. The termination of the Hunt Merger and Purchase Agreement also caused the automatic termination (without the necessity of further action) of (i) certain agreements defining the investment obligations of certain Hunt Investor Group members, and (ii) a letter agreement between Oncor and the Hunt Investor Group.

Following the occurrence of the Plan Support Termination Event as described above, the Debtors filed a new joint Plan of Reorganization (New Plan of Reorganization) pursuant to Chapter 11 of the Bankruptcy Code and a related disclosure statement with the bankruptcy court on May 1, 2016.

In connection with the Sixth Amended Plan of Reorganization, EFH Corp. took the position that, unless the Hunt Investor Group had otherwise acquired, or entered into a definitive agreement with Texas Transmission for the acquisition of the equity interest in Oncor held by Texas Transmission at the consummation of the transactions,

10

certain of EFH Corp.’s  rights contained in the Investor Rights Agreement (Investor Rights Agreement), dated November 2008 among Oncor and certain of its direct and indirect equity holders, including EFH Corp. and Texas Transmission, would require Texas Transmission to sell its equity interest in Oncor to the Hunt Investor Group. In this regard, in October 2015, EFH Corp. filed a complaint against Texas Transmission alleging breach of Texas Transmission’s obligations under the Investor Rights Agreement for failing to agree to sell its equity interest in Oncor and, if found to be a valid drag right and a valid IPO Conversion (as defined in the Investor Rights Agreement), to cooperate with an IPO Conversion. 

The Hunt Investor Group intervened in the pending litigation.  On May 20, 2016, following the Plan Support Termination Notice, the bankruptcy court issued an order dismissing the action and related motions and retaining jurisdiction related to the interpretation and implementation of such order.  We cannot predict the ultimate outcome of any subsequent litigation relating to the Investor Rights Agreement and the impact of such litigation, particularly in light of the transactions discussed below.

The New Plan of Reorganization provides that the confirmation and effective date of the New Plan of Reorganization with respect to the TCEH Debtors may occur (and on October 3, 2016, it did occur) separate from, and independent of, the confirmation and effective date of the New Plan of Reorganization with respect to the EFH Debtors. The New Plan of Reorganization, subject to certain conditions and required regulatory approvals, provides for, among other things:

· with respect to the TCEH Debtors, either (a) a tax-free spin-off from EFH Corp., including a transaction that will result in a partial step-up in the tax basis of certain TCEH assets distributed to a newly formed entity wholly owned by TCEH, or (b) a taxable transaction that results in the assets of the TCEH Debtors being distributed to a newly formed entity wholly owned by Reorganized TCEH (TCEH Transactions), and

· with respect to the EFH Debtors, the reorganization of EFH Corp. and EFIH (Reorganized EFH) either pursuant to (a) an equity investment (which may be from existing creditors or third-party investors) or (b) pursuant to a standalone plan of reorganization, in which creditors receive shares of common stock of Reorganized EFH.

Solely as it pertains to the TCEH Debtors, the disclosure statement was approved by the bankruptcy court.  The bankruptcy court confirmed the New Plan of Reorganization with respect to the TCEH Debtors on August 26, 2016, and it became effective by its terms, and the Reorganized TCEH Spin-Off occurred effective October 3, 2016.

On July 29, 2016, (i) the EFH Debtors entered into a Plan Support Agreement (NEE Plan Support Agreement) with NextEra Energy, Inc. (NEE)  to effect an agreed upon restructuring of the EFH Debtors pursuant to an amendment to the  New Plan of Reorganization (Amended New Plan) and (ii) EFH Corp. and EFIH entered into an Agreement and Plan of Merger (NEE Merger Agreement) with NEE and EFH Merger Co., LLC (Merger Sub), a wholly-owned subsidiary of NEE. Pursuant to the NEE Merger Agreement, at the effective time of the Amended New Plan with respect to the EFH Debtors, EFH Corp. will merge with and into Merger Sub (NEE Merger) with Merger Sub surviving as a wholly owned subsidiary of NEE. 

In August 2016, the EFH Debtors filed a motion seeking bankruptcy court approval of entry into the NEE Merger Agreement, a related termination fee and the NEE Plan Support Agreement. The NEE Merger Agreement includes various conditions precedent to consummation of the transactions contemplated thereby, including, among others, a condition that certain approvals and rulings be obtained, including from, among others, the PUCT and the IRS and a condition that the TCEH Transactions have occurred. NEE will not be required to consummate the NEE Merger if, among other items, the PUCT approval is obtained but with conditions, commitments or requirements that impose a Burdensome Condition (as defined in the NEE Merger Agreement). NEE’s and Merger Sub’s obligations under the NEE Merger Agreement are not subject to any financing condition.  The bankruptcy court approved EFH Corp. and EFIH’s entry into the NEE Merger Agreement, the related termination fee, and the NEE Plan Support Agreement by order dated September 19, 2016.

Following approval of the NEE Merger Agreement by the bankruptcy court and until confirmation of the Amended New Plan by the bankruptcy court, EFH and EFIH may continue or have discussions or negotiations with respect to acquisition proposals for Reorganized EFH (x) with persons that were in active negotiation at the time of

11

approval of the NEE Merger Agreement by the bankruptcy court and (y) with persons that submit an unsolicited acquisition proposal that is, or is reasonably likely to lead to, a Superior Proposal (as defined in the NEE Merger Agreement). 

The NEE Merger Agreement may be terminated upon certain events, including, among other things:

· by either party, if the NEE Merger is not consummated by March 26, 2017, subject to a 90-day extension under certain conditions; or

· by EFH Corp. or EFIH, until the entry of the confirmation order of the Amended New Plan with respect to the EFH Debtors, if their respective board of directors or managers determines after consultation with its independent financial advisors and outside legal counsel, and based on advice of such counsel, that the failure to terminate the NEE Merger Agreement is inconsistent with its fiduciary duties; provided that a material breach of EFH Corp.’s or EFIH’s obligations under certain provisions of the NEE Merger Agreement has not provided the basis for such determination.

If the NEE Merger Agreement is terminated for certain reasons set forth therein and an alternative transaction is consummated by EFH or EFIH in which neither NEE nor any of its affiliates obtains direct or indirect ownership of approximately 80% of Oncor, then EFH and EFIH will pay a termination fee of $275,000,000 to NEE.

Following the execution and delivery of the NEE Merger Agreement, EFIH requested, pursuant to the NEE Merger Agreement, that Oncor Holdings and Oncor enter into a letter agreement (NEE Letter Agreement) with NEE and Merger Sub. The NEE Letter Agreement was executed on August 4, 2016 and sets forth certain rights and obligations of the Oncor Ring-Fenced Entities, NEE and Merger Sub to cooperate in the manner set forth therein with respect to initial steps to be taken in connection with the acquisition of Reorganized EFH (EFH Acquisition) and the other transactions described in the NEE Merger Agreement.

The NEE Letter Agreement is not intended to give NEE or Merger Sub, directly or indirectly, the right to control or direct the operations of any of the Oncor Ring-Fenced Entities prior to the receipt of all approvals required by the bankruptcy court, the PUCT and other governmental entities and the consummation of the EFH Acquisition and related transactions (if and when such transactions are consummated). In addition, Oncor Holdings and Oncor have not endorsed or approved any restructuring involving Oncor Holdings or Oncor or any other transaction proposed by NEE or Merger Sub involving Oncor Holdings or Oncor.

On October 29, 2016, we entered into an Interest Purchase Agreement (OMI Agreement) with T & D Equity Acquisition, LLC, a wholly-owned subsidiary of NEE (T&D Equity Acquisition) and Investment LLC pursuant to which T&D Equity Acquisition would purchase the 1,396,008 limited liability company interests of Oncor that Investment LLC owns in exchange for a purchase price of approximately $27 million.The OMI Agreement contains various conditions precedent to consummation of the transactions contemplated thereby, including the consummation of the transactions contemplated by the NEE Merger Agreement.

On October 30, 2016, an affiliate of NEE entered into an Agreement and Plan of Merger (the TTI Merger Agreement) with Texas Transmission Holdings Corporation (the parent of Texas Transmission) and certain of its affiliates to purchase Texas Transmission's 19.75% equity interest in Oncor for approximately $2.4 billion.  The parties have agreed to use their best efforts to have the TTI Merger Agreement close contemporaneously with the NEE Merger. The TTI Merger Agreement also contains various conditions precedent to consummation of the transactions contemplated thereby, including a requirement that EFH Corp., subject to bankruptcy court approval, waive its rights of first refusal under the Investor Rights Agreement to purchase Texas Transmission's 19.75% equity interest in Oncor.

Notwithstanding these pending transactions, we cannot predict the ultimate outcome of the EFH Bankruptcy Proceedings, including whether the transactions contemplated by any Plan of Reorganization, including the EFH Acquisition, will (or when they will) close.  In this regard, we cannot predict how any reorganization of EFH Corp. and EFIH ultimately will impact Oncor or what form any change in indirect ownership of Oncor may take.  On September 19, 2016, the bankruptcy court approved the disclosure statement as it relates to the EFH Debtors.  The

12

confirmation hearing for the New Plan of Reorganization as it relates to the EFH Debtors is scheduled to commence on December 1, 2016.

Regulatory Matters Related to EFH Bankruptcy Proceedings

In September 2015, Oncor and the Hunt Investor Group filed in PUCT Docket No. 45188 a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Sixth Amended Plan of Reorganization.  On March 24, 2016, the PUCT issued an order conditionally approving the joint application.  On April 18, 2016, the Hunt Investor Group and certain interveners in PUCT Docket No. 45188 filed motions for rehearingand on May 19, 2016, the PUCT denied such motions and the order became final.  The Hunt Investor Group filed a petition with the Travis County District Court on June 17, 2016 seeking review of the order.  We cannot predict the results of the review or the ultimate disposition of PUCT Docket No. 45188, particularly in  light of the termination of the Sixth Amended Plan of Reorganization and the other pending transactions discussed above.

In connection with PUCT Docket No. 45188, certain cities that have retained original jurisdiction over electric utility rates passed resolutions directing Oncor to file rate review proceedings.  For more information, see Note 3 – “City Rate Reviews”.

The NEE Merger Agreement contemplates that Oncor and NEE file a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Amended New Plan.  On October 31, 2016, Oncor and NEE filed that joint application in PUCT Docket No. 46238.

Settlement Agreement

In connection with the EFH Bankruptcy Proceedings, the EFH Debtors and various creditor parties entered into a settlement agreement (the Settlement Agreement) in August 2015 (as amended in September 2015) to compromise and settle, among other things (a) intercompany claims among the EFH Debtors, (b) claims and causes of actions against holders of first lien claims against TCEH and the agents under the TCEH Senior Secured Facilities, (c) claims and causes of action against holders of interests in EFH Corp. and certain related entities and (d) claims and causes of action against each of the EFH Debtors' current and former directors, the Sponsor Group, managers and officers and other related entities. The Settlement Agreement contemplates a release of such claims upon approval of the Settlement Agreement by the bankruptcy court, which approval was obtained in December 2015.

The Settlement Agreement settles substantially all inter-debtor claims through the effective date of the Settlement Agreement.  These settled claims include potentially contentious inter-debtor claims, including various potential avoidance actions and claims arising under numerous debt agreements, tax sharing agreements, and contested property transfers.  The release provisions of the Settlement Agreement took effect immediately upon the entry of the bankruptcy court order approving the Settlement Agreement. In this regard, substantially all of the potential affiliate claims, derivative claims and other types of disputes among affiliates (including claims against Oncor) have been resolved by bankruptcy court order.  Accordingly, we believe the Settlement Agreement resolves all affiliate claims against Oncor and its assets existing as of the effective date of the Settlement Agreement.

3.    REGULATORY MATTERS

Change in Control Reviews

In September 2015, Oncor and the Hunt Investor Group filed in PUCT Docket No. 45188 a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Sixth Amended Plan of Reorganization.  On March 24, 2016, the PUCT issued an order conditionally approving the joint application.  On April 18, 2016, the Hunt Investor Group and certain interveners in PUCT Docket No. 45188 filed motions for rehearing and on May 19, 2016, the PUCT denied such motions and the order became final.  The Hunt Investor Group filed a petition with the Travis County District Court on June 17, 2016 seeking review of the order.  We cannot predict the results of the review or the ultimate disposition of PUCT Docket No. 45188, particularly in light of the termination of the Sixth Amended Plan of Reorganization and the other pending transactions discussed

13

in Note 2 to Financial Statements.For additional information regarding the Sixth Amended Plan of Reorganization and application for regulatory approval, see Note 2 to Financial Statements and “City Rate Reviews” below.

The NEE Merger Agreement contemplates that Oncor and NEE file a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Amended New Plan.  On October 31, 2016, Oncor and NEE filed that joint application in PUCT Docket No. 46238. For additional information regarding the Amended New Plan and application for regulatory approval, see Note 2 to Financial Statements.

City Rate Reviews

Oncor has received resolutions passed by approximately 58 cities with original jurisdiction over electric utility rates directing Oncor to file rate review proceedings.  The resolutions passed required Oncor to file a rate review with each city by September 1, 2016 based on a January 1, 2015 to December 31, 2015 test year.  However, Oncor has subsequently been notified by counsel representing these cities that these rate review proceedings have been abated indefinitely, pending resolution of Oncor ownership issues. The notice provides that ifand when the cities desire to proceed with a rate inquiry, cities will notify Oncor in writing and inform Oncor of a precise date of the rate case, which will be at least 120 days from receipt of the communication that lifts the abatement.

2008 Rate Review

In August 2009, the PUCT issued a final order with respect to our June 2008 rate review filing with the PUCT and 204 cities based on a test year ended December 31, 2007 (PUCT Docket No. 35717), and new rates were implemented in September 2009.  We and four other parties appealed various portions of the rate review final order to a state district court.  In January 2011, the district court signed its judgment reversing the PUCT with respect to two issues: the PUCT’s disallowance of certain franchise fees and the PUCT’s decision that PURA no longer requires imposition of a rate discount for state colleges and universities.  We filed an appeal with the Texas Third Court of Appeals (Austin Court of Appeals) in February 2011 with respect to the issues we appealed to the district court and did not prevail upon, as well as the district court’s decision to reverse the PUCT with respect to discounts for state colleges and universities.  In early August 2014, the Austin Court of Appeals reversed the district court and affirmed the PUCT with respect to the PUCT’s disallowance of certain franchise fees and the PUCT’s decision that PURA no longer requires imposition of a rate discount for state colleges and universities.  The Austin Court of Appeals also reversed the PUCT and district court’s rejection of a proposed consolidated tax savings adjustment arising out of EFH Corp.’s ability to offset our taxable income against losses from other investments and remanded the issue to the PUCT to determine the amount of the consolidated tax savings adjustment.  In late August 2014, we filed a motion on rehearing with the Austin Court of Appeals with respect to certain appeal issues on which we were not successful, including the consolidated tax savings adjustment.  In December 2014, the Austin Court of Appeals issued its opinion, clarifying that it was rendering judgment on the rate discount for state colleges and universities issue (affirming that PURA no longer requires imposition of the rate discount) rather than remanding it to the PUCT, and dismissing the motions for rehearing regarding the franchise fee issue and the consolidated tax savings adjustment.  We filed a petition for review with the Texas Supreme Court in February 2015.  The Texas Supreme Court granted the petition for review and heard oral arguments inSeptember 2016.  There is no deadline for the court to act.  If our appeals efforts are unsuccessful and the proposed consolidated tax savings adjustment is implemented, we estimate that on remand, the impact on earnings of the consolidated tax savings adjustment’s value could range from zero, as originally determined by the PUCT in Docket 35717, to a $135 million loss (after tax) including interest. Interest accrues at the PUCT approved rate for over-collections, which is 0.18% for 2016. We do not believe that any of the other issues ruled upon by the Austin Court of Appeals would result in a material impact to our results of operations or financial condition.

See Note 3 to Financial Statements in our 2015 Form 10-K for additional information regarding regulatory matters.

14

4.    REGULATORY ASSETS AND LIABILITIES

Recognition of regulatory assets and liabilities and the amortization periods over which they are expected to be recovered or refunded through rate regulation reflect the decisions of the PUCT.  Components of the regulatory assets and liabilities are provided in the table below.  Amounts not earning a return through rate regulation are noted.

	Remaining Rate Recovery/Amortization Period at	Carrying Amount At
	September 30, 2016	September 30, 2016		December 31, 2015
Regulatory assets:
Generation-related regulatory assets securitized by transition bonds (a)(d)	-	$	-	$	31
Employee retirement costs being amortized	3 years		27		38
Unrecovered employee retirement costs incurred since the last rate review period (b)	To be determined		318		291
Employee retirement liability (a)(b)(c)	To be determined		812		853
Self-insurance reserve (primarily storm recovery costs) being amortized ― net	3 years		72		95
Unrecovered self-insurance reserve incurred since the last rate review period ― net (b)	To be determined		374		332
Securities reacquisition costs (pre-industry restructure)	1 year or less		6		14
Securities reacquisition costs (post-industry restructure) ― net	Lives of related debt		10		9
Recoverable amounts in lieu of deferred income taxes ― net	Life of related asset or liability		3		12
Deferred conventional meter and metering facilities depreciation	Largely 4 years		83		100
Under-recovered AMS costs	To be determined		194		164
Energy efficiency performance bonus (a)	1 year or less		12		10
Under-recovered wholesale transmission service expense (a)	1 year or less		15		-
Other regulatory assets	Various		8		9
Total regulatory assets			1,934		1,958
Regulatory liabilities:
Estimated net removal costs	Lives of related assets		782		686
Investment tax credit and protected excess deferred taxes	Various		10		14
Over-collection of transition bond charges (a)(d)	1 year or less		6		29
Over-recovered wholesale transmission service expense (a)	1 year or less		-		24
Energy efficiency programs (a)	Not applicable		22		11
Total regulatory liabilities			820		764
Net regulatory asset		$	1,114	$	1,194

____________

(a) Not earning a return in the regulatory rate-setting process.

(b) Recovery is specifically authorized by statute or by the PUCT, subject to reasonableness review.

(c) Represents unfunded liabilities recorded in accordance with pension and OPEB accounting standards.

(d) Bondco net regulatory liabilities at September30, 2016were zero  (excludes$6 million of over-collections related to transition bonds assumed by Oncor for final settlement). Bondco net regulatory assets of $10 million at December 31, 2015 consisted of $31 million included in generation-related regulatory assets net of the regulatory liability for over-collection of transition bond revenues of $21 million (excludes $8 million of over-collections related to transition bonds assumed by Oncor for final settlement).

15

5.BORROWINGS UNDER CREDIT FACILITIES 

At September 30, 2016, we had a $2.0 billion secured revolving credit facility to be used for working capital and general corporate purposes, issuances of letters of credit and support for any commercial paper issuances.  In October 2016, we exercised the second of two one-year extensions available to us and extended the term of the revolving credit facility to October 2018.  The terms of the revolving credit facility allow us to request an increase in our borrowing capacity of $100 million in the aggregate provided certain conditions are met, including lender approval.

Borrowings under the revolving credit facility are classified as short-term on the balance sheet and are secured equally and ratably with all of our other secured indebtedness by a first priority lien on property we acquired or constructed for the transmission and distribution of electricity.  The property is mortgaged under the Deed of Trust.

At September 30, 2016, we had outstanding borrowings under the revolving credit facility totaling $880 million with an interest rate of 1.52% and outstanding letters of credit totaling $7 million.  At December 31, 2015, we had outstanding borrowings under the revolving credit facility totaling $840 million with an interest rate of 1.48% and outstanding letters of credit totaling $7 million.

Borrowings under the revolving credit facility bear interest at per annum rates equal to, at our option, (i) LIBOR plus a spread ranging from 1.00% to 1.75% depending on credit ratings assigned to our senior secured non-credit enhanced long-term debt or (ii) an alternate base rate (the highest of (1) the prime rate of JPMorgan Chase, (2) the federal funds effective rate plus 0.50%, and (3) daily one-month LIBOR plus 1.00%) plus a spread ranging from 0.00% to 0.75% depending on credit ratings assigned to our senior secured non-credit enhanced long-term debt.  At September 30, 2016, all outstanding borrowings bore interest at LIBOR plus 1.00%.  Amounts borrowed under the revolving credit facility, once repaid, can be borrowed again from time to time.

An unused commitment fee is payable quarterly in arrears and upon termination or commitment reduction at a rate equal to 0.100% to 0.275% (such spread depending on certain credit ratings assigned to our senior secured debt) of the daily unused commitments under the revolving credit facility.  Letter of credit fees on the stated amount of letters of credit issued under the revolving credit facility are payable to the lenders quarterly in arrears and upon termination at a rate per annum equal to the spread over adjusted LIBOR.  Customary fronting and administrative fees are also payable to letter of credit fronting banks.  At September 30, 2016, letters of credit bore interest at 1.20%, and a commitment fee (at a rate of 0.10% per annum) was payable on the unfunded commitments under the revolving credit facility, each based on our current credit ratings.

Subject to the limitations described below, borrowing capacity available under the revolving credit facility at September 30, 2016 and December 31, 2015 was $1.113 billion and $1.153 billion, respectively.  Generally, our indentures and revolving credit facility limit the incurrence of other secured indebtedness except for indebtedness secured equally and ratably with the indentures and revolving credit facility and certain permitted exceptions.  As described further in Note 6, the Deed of Trust permits us to secure indebtedness (including borrowings under our revolving credit facility) with the lien of the Deed of Trust.  At September 30, 2016, the available borrowing capacity of the revolving credit facility could be fully drawn.

The revolving credit facility contains customary covenants for facilities of this type, restricting, subject to certain exceptions, us and our subsidiaries from, among other things: incurring additional liens; entering into mergers and consolidations; and sales of substantial assets.  In addition, the revolving credit facility requires that we maintain a consolidated senior debt-to-capitalization ratio of no greater than 0.65 to 1.00 and observe certain customary reporting requirements and other affirmative covenants.  For purposes of the ratio, debt is calculated as indebtedness defined in the revolving credit facility (principally, the sum of long-term debt, any capital leases, short-term debt and debt due currently in accordance with GAAP).  The debt calculation excludes any outstanding transition bonds issued by Bondco, but includes any unamortized fair value discount related to Bondco.  Capitalization is calculated as membership interests determined in accordance with GAAP plus indebtedness described above.  At September 30, 2016, we were in compliance with this covenant and with all other covenants.

16

6.    LONG-TERM DEBT

At September 30, 2016 and December 31, 2015, our long-term debt consisted of the following:

	September 30,		December 31,
	2016		2015
Oncor (a):
5.000% Fixed Senior Notes due September 30, 2017	$	324	$	324
6.800% Fixed Senior Notes due September 1, 2018		550		550
2.150% Fixed Senior Notes due June 1, 2019		250		250
5.750% Fixed Senior Notes due September 30, 2020		126		126
4.100% Fixed Senior Notes due June 1, 2022		400		400
7.000% Fixed Debentures due September 1, 2022		800		800
2.950% Fixed Senior Notes due April 1, 2025		350		350
7.000% Fixed Senior Notes due May 1, 2032		500		500
7.250% Fixed Senior Notes due January 15, 2033		350		350
7.500% Fixed Senior Notes due September 1, 2038		300		300
5.250% Fixed Senior Notes due September 30, 2040		475		475
4.550% Fixed Senior Notes due December 1, 2041		400		400
5.300% Fixed Senior Notes due June 1, 2042		500		500
3.750% Fixed Senior Notes due April 1, 2045		550		375
Unamortized discount and debt issuance costs		(38)		(54)
Less amount due currently		(324)		-
Long-term debt, less amounts due currently — Oncor		5,513		5,646
Bondco (b):
5.290% Fixed Series 2004 Bonds due May 15, 2016		-		41
Total		-		41
Less amount due currently		-		(41)
Long-term debt, less amounts due currently — Bondco		-		-
Total long-term debt, less amounts due currently	$	5,513	$	5,646

__________

(a)   Secured by first priority lien on certain transmission and distribution assets equally and ratably with all of Oncor’s other secured indebtedness.  See “Deed of Trust” below for additional information.

(b)   The transition bonds were nonrecourse to Oncor and were issued to securitize a regulatory asset.

Debt-Related Activity in 2016

Debt Repayments

Repayments of long-term debt in the nine months ended September 30, 2016 totaled $41 million, representing the final transition bond principal payment at the scheduled maturity date.

Issuance of Senior Secured Notes

In August 2016, we completed the sale of $175 million aggregate principal amount of 3.75% senior secured notes maturing in April 2045 (Additional 2045 Notes).  The Additional 2045 Notes were an additional issuance of our 3.75% senior secured notes maturing in April 2045, $375 million aggregate principal amount of which were previously issued in March 2015 (2045 Notes).  The Additional 2045 Notes were issued as part of the same series as the 2045 Notes.  We used the net proceeds of approximately $185 million from the sale of the Additional 2045 Notes to repay borrowings under our revolving credit facility and for general corporate purposes.  The Additional

17

2045 Notes and 2045 Notes are secured by the first priority lien and are secured equally and ratably with all of our other secured indebtedness as discussed below.

Interest on the Additional 2045 Notes is payable in cash semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2016.  We may at our option redeem the Additional 2045 Notes, in whole or in part, at any time, at a price equal to 100% of their principal amount, plus accrued and unpaid interest and, until October 1, 2044, a make-whole premium.  The Additional 2045 Notes also contain customary events of default, including failure to pay principal or interest on the notes when due.

The Additional 2045 Notes were issued in a private placement and were not registered under the Securities Act of 1933, as amended.  We have agreed, subject to certain exceptions, to register with the SEC notes having substantially identical terms as the Additional 2045 Notes (except for provisions relating to the transfer restriction and payment of additional interest) as part of an offer to exchange freely tradable exchange notes for the Additional 2045 Notes.  We have agreed to use commercially reasonable efforts to cause the exchange offer to be completed within 315 days after the issue date of the Additional 2045 Notes.  If a registration statement for the exchange offer is not declared effective by the SEC within 270 days after the issue date of the Additional 2045 Notes or the exchange offer is not completed within 315 days after the issue date of the Additional 2045 Notes (an exchange default), then the annual interest rate on the Additional 2045 Notes will increase 50 basis points per annum until the earlier of the expiration of the exchange default or the second anniversary of the issue date of the Additional 2045 Notes.

Deed of Trust

Our secured indebtedness, including the revolving credit facility described in Note 5, is secured equally and ratably by a first priority lien on property we acquired or constructed for the transmission and distribution of electricity.  The property is mortgaged under the Deed of Trust.  The Deed of Trust permits us to secure indebtedness (including borrowings under our revolving credit facility) with the lien of the Deed of Trust up to the aggregate of (i) the amount of available bond credits, and (ii) 85% of the lower of the fair value or cost of certain property additions that could be certified to the Deed of Trust collateral agent.  At September 30, 2016, the amount of available bond credits was $2.534 billion and the amount of future debt we could secure with property additions, subject to those property additions being certified to the Deed of Trust collateral agent, was $1.586 billion.

Fair Value of Long-Term Debt

At September30, 2016 and December 31, 2015, the estimated fair value of our long-term debt (including current maturities, if any) totaled $7.112 billion and $6.287 billion, respectively, and the carrying amount totaled $5.837 billion and $5.687 billion, respectively.  The fair value is estimated using observable market data, representing Level 2 valuations under accounting standards related to the determination of fair value.

7.COMMITMENTS AND CONTINGENCIES

EFH Bankruptcy Proceedings

On the EFH Petition Date,  the EFH Debtorscommenced the EFH Bankruptcy Proceedings.The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  See Notes  2and 10 for  a  discussion of the potential impacts on us as a result of the EFH Bankruptcy Proceedings and our related-party transactions involving members of the Texas Holdings Group, respectively.

Legal/Regulatory Proceedings

We are involved in various legal and administrative proceedings in the normal course of business, the ultimate resolution of which, in the opinion of management, should not have a material effect upon our financial position, results of operations or cash flows.See Note 3 in this report and Note 8 to Financial Statements in our 2015 Form 10-K for additional informationregarding our legal and regulatory proceedings.

18

8.    MEMBERSHIP INTERESTS

Cash Distributions

Distributions are limited by our required regulatory capital structure to be at or below the assumed debt-to-equity ratio established periodically by the PUCT for ratemaking purposes, which is currently set at 60% debt to 40% equity.  At September30, 2016, $69 million was available for distribution to our members as our regulatory capitalization ratio was 59.6% debt to 40.4% equity.  The PUCT has the authority to determine what types of debt and equity are included in a utility’s debt-to-equity ratio.  For purposes of this ratio, debt is calculated as long-term debt plus unamortized gains on reacquired debt less unamortized issuance expenses, premiums and losses on reacquired debt.  Equity is calculated as membership interests determined in accordance with GAAP, excluding the effects of purchase accounting (which included recording the initial goodwill and fair value adjustments and the subsequent related impairments and amortization).

On October 26, 2016, our board of directors declared a cash distribution of $41 million, which was paid to our members on October 27,2016.  During the nine months ended September 30, 2016, our board of directors declared, and we paid, the following cash distributions to our members:

Declaration Date	Payment Date	Amount
July 27, 2016	August 11, 2016	$	68
April 27, 2016	May 11, 2016	$	65
February 24, 2016	February 25, 2016	$	56

19

Membership Interests

The following table presents the changes to membership interests during the ninemonths ended September30, 2016 and 2015:

	Capital Accounts		Accumulated Other Comprehensive Income (Loss)		Total Membership Interests
Balance at December 31, 2015	$	7,621	$	(113)	$	7,508
Net income		355		-		355
Distributions		(189)		-		(189)
Net effects of cash flow hedges (net of tax)		-		1		1
Defined benefit pension plans (net of tax)		-		1		1
Balance at September 30, 2016	$	7,787	$	(111)	$	7,676
Balance at December 31, 2014	$	7,625	$	(107)	$	7,518
Net income		359		-		359
Distributions		(283)		-		(283)
Net effects of cash flow hedges (net of tax)		-		1		1
Defined benefit pension plans (net of tax)		-		1		1
Balance at September 30, 2015	$	7,701	$	(105)	$	7,596

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes to accumulated other comprehensive income (loss) for the nine months ended September 30, 2016 and 2015:

	Cash Flow Hedges – Interest Rate Swap		Defined Benefit Pension and OPEB Plans		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2015	$	(22)	$	(91)	$	(113)
Defined benefit pension plans (net of tax)		-		1		1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges		1		-		1
Balance at September 30, 2016	$	(21)	$	(90)	$	(111)
Balance at December 31, 2014	$	(24)	$	(83)	$	(107)
Defined benefit pension plans (net of tax)		-		1		1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges		1		-		1
Balance at September 30, 2015	$	(23)	$	(82)	$	(105)

20

9.    PENSION AND OPEB PLANS

Pension Plans

We sponsor the Oncor Retirement Plan and also have liabilities under the EFH Retirement Plan, both of which are qualified pension plans under Section 401(a) of the Internal Revenue Code of 1986, as amended, and are subject to the provisions of ERISA.  Employees do not contribute to either plan.  We also have a supplemental pension plan for certain employees whose retirement benefits cannot be fully earned under the qualified retirement plans.  See Note 10 to Financial Statements in our 2015 Form 10-K for additional information regarding pension plans.

Oncor OPEB Plan

The OncorOPEB Plan covers our eligible current and future retirees as well as certain eligible retirees of EFH Corp. whose employment included service with both Oncor (or a predecessor regulated electric business) and a non-regulated business of EFH Corp.  At September 30, 2016, EFH Corp. retained its portion of the liability for retiree benefits related to those retirees.   As we are not responsible for EFH Corp.’s portion of the Oncor OPEB Plan’s unfunded liability, that amount is not reported on our balance sheet.  See Note 10 to Financial Statements in our 2015 Form 10-K for additional information.

Pension and OPEB Costs

Our net costs related to pension plans and the Oncor OPEB Plan for the three and ninemonths ended September 30, 2016 and 2015 were comprised of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Components of net allocated pension costs:
Service cost	$	6	$	6	$	18	$	18
Interest cost		33		33		101		99
Expected return on assets		(30)		(29)		(92)		(87)
Amortization of net loss		10		16		30		48
Net pension costs		19		26		57		78
Components of net OPEB costs:
Service cost		2		2		6		6
Interest cost		12		11		36		33
Expected return on assets		(2)		(3)		(6)		(9)
Amortization of prior service cost		(5)		(5)		(15)		(15)
Amortization of net loss		9		8		26		24
Net OPEB costs		16		13		47		39
Total net pension and OPEB costs		35		39		104		117
Less amounts deferred principally as property or a regulatory asset		(25)		(28)		(75)		(84)
Net amounts recognized as expense	$	10	$	11	$	29	$	33

The discount rates reflected in net pension and OPEB costs in 2016 are 4.28%,  4.57% and 4.60% for the Oncor Retirement Plan, the EFH Retirement Plan and the Oncor OPEB Plan, respectively.  The expected return on pension and OPEB plan assets reflected in the 2016 cost amounts are 5.53%,  5.64% and 6.30% for the Oncor Retirement Plan, the EFH Retirement Plan and the Oncor OPEB Plan, respectively.

21

Pension and OPEB Plans Cash Contributions

We made cash contributions to the pension plans and Oncor OPEB Plan of$3 million and $22 million, respectively, during the ninemonths ended September30, 2016.  We expect to make additional cash contributions to the pension plans and Oncor OPEB Plan of $1million and $16 million, respectively, during the remainder of 2016. Our aggregate pension plans and Oncor OPEB Plan funding is expected to total approximately $479 million and $160 million, respectively, in the 2016 to 2020 period based on the latest actuarial projections.

10.   RELATED-PARTY TRANSACTIONS

The following represent our significant related-party transactions at September 30, 2016.  See Note 2 for additional information regarding related-party contingencies resulting from the EFH Bankruptcy Proceedings  and information regarding the Reorganized TCEH Spin-Off. As a result of the Reorganized TCEH Spin-Off, Reorganized TCEH and its subsidiaries, including Luminant and TXU Energy, ceased to be related parties as of October 3, 2016.

.

· We recorded revenue from TCEH, principally for electricity delivery fees, which totaled $265 million and $279 million for the three months ended September 30, 2016 and 2015, respectively, and $700 million and $739 million for the nine months ended September 30, 2016 and 2015, respectively.  The fees are based on rates regulated by the PUCT that apply to all REPs.  These revenues included less than $1 million for each of the three- and nine-month periods ended September 30, 2016 and 2015 pursuant to a transformer maintenance agreement with TCEH.   

Trade accounts and other receivables from EFH Corp. affiliates – net reported on our balance sheet, primarily consisting of trade receivables from TCEH related to these electricity delivery fees, are as follows:

	At September 30,		At December 31,
	2016		2015
Trade accounts and other receivables from affiliates	$	149	$	120
Trade accounts and other payables to affiliates		(3)		(2)
Trade accounts and other receivables from affiliates – net	$	146	$	118

· EFH Corp. subsidiaries charge us for certain administrative services at cost.  Our payments to EFH Corp. subsidiaries for administrative services, which are primarily reported in operation and maintenance expenses, totaled less than $1million and $5 million for the three months ended September 30, 2016 and 2015, respectively, and less than $1 million and $14 million for the nine months ended September 30, 2016 and 2015, respectively.  We also charge each other for shared facilities at cost.  Our payments to EFH Corp. for shared facilities totaled $1 million for each of the three-month periods ended September 30, 2016 and 2015 and $3 million for each of the nine-month periods ended September 30, 2016 and 2015.Payments we received fromEFH Corp. subsidiaries related to shared facilities totaled $1 million and less than $1  million for the three-month periods ended September 30, 2016 and 2015, respectively,and  $1 million for each of the nine-month periods ended September 30, 2016 and 2015.

· We are not a member of EFH Corp.’s consolidated tax group, but EFH Corp.’s consolidated federal income tax return includes EFH Corp.’s portion of our results due to EFH Corp.’s equity ownership in us.  Under the terms of a tax sharing agreement among us, Oncor Holdings, Texas Transmission, Investment LLC and EFH Corp., we are generally obligated to make payments to Texas Transmission, Investment LLC and EFH Corp., pro rata in accordance with their respective membership interests, in an aggregate amount that is substantially equal to the amount of federal income taxes that we would have been required to pay if we were filing our own corporate income tax return.  For periods prior to the tax sharing agreement (entered into in October 2007 and amended and restated in November 2008), we are 22

responsible for our share, if any, of redetermined tax liability for the EFH Corp. consolidated tax group.  EFH Corp. also includes our results in its consolidated Texas margin tax payments, which are accounted for as income taxes and calculated as if we were filing our own return.  See discussion in Note 1 to Financial Statements in our 2015 Form 10-K under “Income Taxes.”  Under the “in lieu of” tax concept, all in lieu of tax assets and tax liabilities represent amounts that will eventually be settled with our members. In the unlikely event such amounts are not paid under the tax sharing agreement, it is probable that this regulatory liability will continue to be included in Oncor’s rate setting processes.

Amounts payable to (receivable from) members related to income taxes under the tax sharing agreement and reported on our balance sheet consisted of the following:

	At September 30, 2016						At December 31, 2015
	EFH Corp.		Texas Transmission		Total		EFH Corp.		Texas Transmission		Total
Federal income taxes receivable	$	(84)	$	(23)	$	(107)	$	(109)	$	(27)	$	(136)
Texas margin taxes payable		15		-		15		20		-		20
Net payable (receivable)	$	(69)	$	(23)	$	(92)	$	(89)	$	(27)	$	(116)

Cash payments made to members related to income taxes consisted of the following:

	Nine Months Ended September 30, 2016						Nine Months Ended September 30, 2015
	EFH Corp.		Texas Transmission		Total		EFH Corp.		Texas Transmission		Total
Federal income taxes	$	-	$	-	$	-	$	39	$	10	$	49
Texas margin taxes		20		-		20		24		-		24
Total payments	$	20	$	-	$	20	$	63	$	10	$	73

· Our PUCT-approved tariffs include requirements to assure adequate creditworthiness of any REP to support the REP’s obligation to collect transition bond-related charges on behalf of Bondco.  Under these tariffs, as a result of TCEH’s credit rating being below investment grade, TCEH was required to post collateral support in an amount equal to estimated transition charges over specified time periods.  Accordingly, TCEH had posted security in the amount of zero and $6 million for our benefitat September 30, 2016 and December 31, 2015, respectively.

· At September 30, 2016, Oncor held approximately $6 million of over-collected transition charges, which are being refunded to REPs.  An estimated $1 million of the over-collection was refunded to TCEH prior to the Reorganized TCEH Spin-Off, and an estimated $1 million of the over-collection will be refunded to Reorganized TCEH following the Reorganized TCEH Spin-Off. 

· Under Texas regulatory provisions, the trust fund for decommissioning TCEH’s Comanche Peak nuclear generation facility is funded by a delivery fee surcharge we collect from REPs and remit monthly, prior to the Reorganized TCEH Spin-Off,to TCEH, and after the Reorganized TCEH Spin-Off, to Reorganized TCEH.  Delivery fee surcharges totaled $6 million and $5 million for the three-month periods ended September 30, 2016 and 2015, respectively, and $15 million and $13 million for the nine-month periods ended September 30, 2016 and 2015, respectively.Our sole obligation with regard to nuclear decommissioning is as the collection agent of funds charged to ratepayers for nuclear decommissioning activities.  If, at the time of decommissioning, actual decommissioning costs exceed available trust funds, we would not be obligated to pay any shortfalls but would be required to collect any rates approved by the PUCT to recover any additional decommissioning costs.  Further, if there were to be a surplus when 23

decommissioning is complete, such surplus would be returned to ratepayers under terms prescribed by the PUCT.

· Related parties of the Sponsor Group have (1) sold, acquired or participated in the offerings of our debt or debt securities in open market transactions or through loan syndications, and (2) performed various financial advisory, dealer, commercial banking and investment banking services for us and certain of our affiliates for which they have received or will receive customary fees and expenses, and may from time to time in the future participate in any of the items in (1) and (2) above.  Also, as of September 30, 2016, 16.6% of the equity in an existing vendor of the company was held by a member of the Sponsor Group.  During 2016 and 2015, this vendor performed transmission and distribution system construction and maintenance services for us.  Cash payments were made for such services to this vendor totaling $138 million dollars for the nine months ended September 30, 2016 of which approximately $131 million was capitalized and $7 million recorded as an operation and maintenance expense.  At September 30, 2016, we had outstanding trade payables to this vendor of $7 million.

See Note 8 for information regarding distributions to members and Note 9 for information regarding our participation in the EFH Corp. pension plan and transactions with EFH Corp. involving employee benefit matters.

11.   SUPPLEMENTARY FINANCIAL INFORMATION

Major Customers

Revenues from TCEH represented  25% and 26% of our total operating revenues for the three months ended September 30, 2016 and 2015, respectively and 24% and 25% for the nine months ended September 30, 2016 and 2015, respectively.  Revenues from REP subsidiaries of a nonaffiliated entity collectively represented 19% and 18% of our total operating revenues for the three months ended September 30, 2016 and 2015, respectively, and 17% of our total operating revenues for each of the nine-month periods ended September 30, 2016 and 2015.  No other customer represented 10% or more of our total operating revenues.

Other Income and (Deductions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Accretion of fair value adjustment (discount) to regulatory assets due to purchase accounting	$	-	$	1	$	1	$	5
Professional fees		(3)		(7)		(11)		(14)
Non-recoverable pension and OPEB (Note 9)		-		(2)		(1)		(6)
Other		-		(1)		-		(2)
Total other income and (deductions) - net	$	(3)	$	(9)	$	(11)	$	(17)

Interest Expense and Related Charges

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Interest expense	$	86	$	85	$	256	$	251
Amortization of debt issuance costs and discounts		1		-		2		2
Allowance for funds used during construction – capitalized interest portion		(2)		(1)		(6)		(3)
Total interest expense and related charges	$	85	$	84	$	252	$	250

24

Restricted Cash

Restricted cash at September 30, 2016 was zero as a result of the maturity and payment in full of the 2004 Series transition bonds in May 2016.  Restricted cash reported on our balance sheet at December 31, 2015 related to the transition bonds.

Trade Accounts and Other Receivables

Trade accounts and other receivables reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Gross trade accounts and other receivables - net	$	600	$	509
Trade accounts and other receivables from affiliates - net		(146)		(118)
Allowance for uncollectible accounts		(4)		(3)
Trade accounts receivable from nonaffiliates – net	$	450	$	388

At September 30, 2016 and December 31, 2015, REP subsidiaries of a nonaffiliated entity, collectively represented approximately 17% and 13% of the nonaffiliated trade accounts receivable amount, respectively.

Under a PUCT rule relating to the Certification of Retail Electric Providers, write-offs of uncollectible amounts owed by REPs are deferred as a regulatory asset.  Due to commitments made to the PUCT in 2007, we are not allowed to recover bad debt expense, or certain other costs and expenses, from ratepayers in the event of a default or bankruptcy by anaffiliate REP.

Investments and Other Property

Investments and other property reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Assets related to employee benefit plans, including employee savings   programs	$	98	$	94
Land and other investments		4		3
Total investments and other property	$	102	$	97

Property, Plant and Equipment

Property, plant and equipment reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Total assets in service	$	19,719	$	19,072
Less accumulated depreciation		6,758		6,479
Net of accumulated depreciation		12,961		12,593
Construction work in progress		641		416
Held for future use		15		15
Property, plant and equipment – net	$	13,617	$	13,024

25

Intangible Assets

Intangible assets (other than goodwill) reported on our balance sheet consisted of the following:

	At September 30, 2016						At December 31, 2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Net		Amount		Amortization		Net
Identifiable intangible assets subject to amortization included in property, plant and equipment:
Land easements	$	480	$	94	$	386	$	467	$	91	$	376
Capitalized software		454		312		142		435		269		166
Total	$	934	$	406	$	528	$	902	$	360	$	542

Aggregate amortization expense for intangible assets totaled $14 million and $16 million for the three-month periods ended September 30, 2016 and 2015, respectively, and $46 million and $48 million for the nine-month periods ended September 30, 2016 and 2015, respectively.  The estimated aggregate amortization expense for each of the next five fiscal years is as follows:

Year	Amortization Expense
2016	$	61
2017		54
2018		48
2019		45
2020		44

At both September 30, 2016 and December 31, 2015, goodwill totaling $4.1 billion was reported on our balance sheet.  None of this goodwill is being deducted for tax purposes.

Employee Benefit Obligations and Other

Employee benefit obligations and other reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Retirement plans and other employee benefits	$	2,021	$	1,985
Uncertain tax positions (including accrued interest)		3		3
Investment tax credits		13		15
Other		66		60
Total employee benefit obligations and other	$	2,103	$	2,063

26

Supplemental Cash Flow Information

	Nine Months Ended September 30,
	2016		2015
Cash payments (receipts) related to:
Interest	$	266	$	277
Capitalized interest		(6)		(3)
Interest (net of amounts capitalized)	$	260	$	274
Amount in lieu of income taxes (a):
Federal		-		49
State		20		24
Total amount in lieu of income taxes	$	20	$	73
Noncash construction expenditures (b)	$	104	$	60

_____________

(a) See Note 10 for income tax related detail.

(b) Represents end-of-period accruals.

27

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the threeand ninemonths ended September 30, 2016 and 2015 should be read in conjunction with the condensed consolidated financial statements and the notes to those statementsas well as the Risk Factors contained in our 2015 Form 10-K.

All dollar amounts in the tables in the following discussion and analysis are stated in millions of U.S. dollars unless otherwise indicated.

BUSINESS

We are a regulated electricity transmission and distribution company principally engaged in providing delivery services to REPsthat sell power in the north-central, eastern and western parts of Texas.  The services to REPs included subsidiaries of TCEH through the date of the Reorganized TCEH Spin-Off and subsidiaries of Reorganized TCEH after the date of the Reorganized TCEH Spin-Off.Revenues from TCEH represented 25%  and 26%  of our reported total operating revenues for the three months ended September 30, 2016 and 2015, respectively and 24% and 25% of our reported total operating revenues for the nine months ended September 30, 2016 and 2015, respectively.  We are a majority-owned subsidiary of Oncor Holdings, which is a direct, wholly-owned subsidiary of EFIH, a direct, wholly-owned subsidiary of EFH Corp.  Oncor Holdings owns80.03% of ouroutstanding membership interests, Texas Transmission owns 19.75% of our outstanding membership interests and certain members of our management team and board of directors indirectly own the remaining 0.22% of the outstanding membership interests through Investment LLC.  We are managed as an integrated business; consequently, there are no separate reportable business segments.

Various “ring-fencing” measures have been taken to enhance the separateness between the Oncor Ring-Fenced Entities and the Texas Holdings Group and our credit quality.  These measures serve to mitigate our and Oncor Holdings’ credit exposure to the Texas Holdings Group and to reduce the risk that our assets and liabilities or those of Oncor Holdings would be substantively consolidated with the assets and liabilities of the Texas Holdings Group in connection with a bankruptcy of one or more of those entities, including the EFH Bankruptcy Proceedings discussed below.  Such measures include, among other things: our sale of a 19.75% equity interest to Texas Transmission in November 2008; maintenance of separate books and records for the Oncor Ring-Fenced Entities; our board of directors being comprised of a majority of independent directors; and prohibitions on the Oncor Ring-Fenced Entities providing credit support to, or receiving credit support from, any member of the Texas Holdings Group.  The assets and liabilities of the Oncor Ring-Fenced Entities are separate and distinct from those of the Texas Holdings Group, and none of the assets of the Oncor Ring-Fenced Entities are available to satisfy the debt or contractual obligations of any member of the Texas Holdings Group.  We do not bear any liability for debt or contractual obligations of the Texas Holdings Group, and vice versa.  Accordingly, our operations are conducted, and our cash flows are managed, independently from the Texas Holdings Group.

Significant Activities and Events

EFH Bankruptcy Proceedings — On the EFH Petition Date, the Debtors commenced proceedings under Chapter 11 of the US Bankruptcy Code.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  We believe the “ring-fencing” measures discussed above mitigate our potential exposure to the EFH Bankruptcy Proceedings.  See Note 2 to Financial Statements for a discussion of the potential impacts of the EFH Bankruptcy Proceedings on our financial statements,  a discussion of the proposed change in control of Oncor’s indirect majority owner in connection with such proceedings, and a discussion of the Reorganized TCEH Spin-Off. As a result of the Reorganized TCEH Spin-Off, Reorganized TCEH and its subsidiaries, including Luminant and TXU Energy, ceased to be affiliates of ours as of October 3, 2016.

The US Bankruptcy Code automatically enjoined, or stayed, us from judicial or administrative proceedings or filing of other actions against our affiliates or their property to recover, collect or secure our claims arising prior to the EFH Petition Date.  Following the EFH Petition Date, EFH Corp. received approval from the bankruptcy court to pay or otherwise honor certain prepetition obligations generally designed to stabilize its operations.  Included in the approval were the obligations owed to us representing our prepetition electricity delivery fees.  As of the EFH

28

Petition Date, we estimated that our receivables from the Texas Holdings Group totaled approximately $129 million.  As of September 30, 2016, we had collected $128 million of the prepetition amount.  We estimate any potential pre-tax loss resulting from the EFH Bankruptcy Proceedings to be immaterial.  A provision for uncollectible accounts from affiliates had not been established as of September30, 2016.  For more information on the EFH Bankruptcy Proceedings, see Note 2 to Financial Statements.

The EFH Bankruptcy Proceedings are a complex litigation matter and the full extent of potential exposure at this time is unknown.  We will continue to evaluate our affiliate transactions and contingencies throughout the EFH Bankruptcy Proceedings to determine any risks and resulting impacts on our results of operations, financial statements and cash flows. See Notes 2, 3, 7 and 10 to Financial Statements and “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for additional information.

For information regarding matters with the PUCT, see discussion below under “Regulation and Rates.”

29

RESULTS OF OPERATIONS

Operating Data

	Three Months Ended September 30,				%		Nine Months Ended September 30,				%
	2016		2015		Change		2016		2015		Change
Operating statistics:
Electric energy volumes (gigawatt-hours):
Residential	14,337		14,494		(1.1)		32,551		34,174		(4.7)
Other (a)	21,137		21,522		(1.8)		57,018		57,008		-
Total electric energy volumes	35,474		36,016		(1.5)		89,569		91,182		(1.8)
Reliability statistics (b):
System Average Interruption Duration Index (SAIDI) (nonstorm)								96.1		98.0		(1.9)
System Average Interruption Frequency Index (SAIFI) (nonstorm)								1.4		1.4		-
Customer Average Interruption Duration Index (CAIDI) (nonstorm)								68.4		71.4		(4.2)
Electricity points of delivery (end of period and in thousands):
Electricity distribution points of delivery (based on number of active meters)								3,422		3,367		1.6
	Three Months Ended September 30,				$		Nine Months Ended September 30,				$
		2016		2015	Change			2016		2015	Change
Operating revenues:
Distribution base revenues	$	545	$	552	$	(7)	$	1,401	$	1,434	$	(33)
Transmission base revenues (c)		227		214		13		680		632		48
Reconcilable rates:
TCRF (c)		305		277		28		908		820		88
Transition charges		-		30		(30)		22		99		(77)
AMS surcharges		32		34		(2)		99		107		(8)
EECRF and rate case expense surcharges		19		16		3		43		38		5
Other miscellaneous revenues		24		25		(1)		54		52		2
Intercompany eliminations (c)		(81)		(76)		(5)		(245)		(225)		(20)
Total operating revenues	$	1,071	$	1,072	$	(1)	$	2,962	$	2,957	$	5

________________

(a) Includes small business, large commercial and industrial and all other non-residential distribution points of delivery.

(b) SAIDI is the average number of minutes electric service is interrupted per consumer in a year.  SAIFI is the average number of electric service interruptions per consumer in a year.  CAIDI is the average duration in minutes per electric service interruption in a year.  The statistics presented are based on twelve months ended September30, 2016 and 2015 data.

(c) A portion of transmission base revenues (TCOS) is recovered from Oncor’s distribution customers through the TCRF rate. 30

Financial Results — Three Months Ended September30, 2016 Compared to Three Months Ended September  30, 2015

Total operating revenuesdecreased $1 millionto $1,071 million in 2016.  All revenue is billed under tariffs approved by the PUCT.  The change reflected:

· ADecrease in Distribution Base Revenues — Distribution base rates are set periodically in a rate review docket initiated by either us or the PUCT.  The present distribution base rates became effective on January 1, 2012.  The $7 million decrease in distribution base rate revenues includes a  $15 million decrease due to lower consumption primarily driven by milder summer weather conditions, partially offset by an $8 million increase due to growth in points of delivery.

· An Increase in Transmission Base Revenues — Transmission base revenues (or TCOS revenues) arecollected from load serving entities benefitting from our transmission system.  REPs serving customers in our service territory are billed through the TCRF mechanism discussed below, while other load serving entities are billed directly.  In order to reflect changes in our invested transmission capital, PUCT rules allow us to update our TCOS rates by filing up to two interim TCOS rate adjustments in a calendar year.  The $13 million increase in transmission base revenues primarily reflects interim rate increases to recover ongoing investment, including a return component, in the transmission system.  See TCOS Filings Table below for a listing of Transmission Interim Rate Update Applications impacting revenues for the three months ended September 30, 2016 and 2015, as well as filings that will impact revenues for the year ended December 31, 2016.

TCOS Filings Table

Docket No.	Filed	Effective	Annual Revenue Impact		Third-Party Wholesale Transmission		Included in TCRF
46210	July 2016	September 2016	$	14	$	9	$	5
44968	July 2015	September 2015	$	21	$	14	$	7
44363	January 2015	March 2015	$	35	$	23	$	12
42706	July 2014	September 2014	$	12	$	8	$	4

· A Decrease in Reconcilable Rates — The PUCT has designated certain tariffs (TCRF, EECRF surcharge, AMS surcharge and charges related to transition bonds) as reconcilable, which means the differences between amounts billed under these tariffs and the related incurred costs, including a return component where allowed, are deferred as either regulatory assets or regulatory liabilities.  Accordingly, at prescribed intervals, future applicable tariffs are adjusted to either repay regulatory liabilities or collect regulatory assets.  While changes in these tariffs affect revenues and the timing of cash flows, they do not impact operating income, except for the AMS return component.  See Note 1 to Financial Statements for a discussion of the accounting treatment of reconcilable tariffs.

- An Increase in TCRF — TCRF is a distribution rate charged to REPs to recover fees we pay to other transmission service providers under their TCOS rates and the retail portion of our own TCOS rate.  PUCT rules allow us to update the TCRF component of our retail delivery rates on March 1 and September 1 each year.  The $28 millionincrease in TCRF revenue reflects the pass through of a  $23 million increase in third-party wholesale transmission expense described below and a $5 million increase in our own TCOS rate to recover ongoing investment in our transmission system including a return component.  At September 30,  2016,$15 million was deferred as under-recovered wholesale transmission service expense (see Note 4 to Financial Statements).  See TCRF Filings Table below for a listing of TCRF filings impacting cash flows for the three months ended September 30, 2016 and 2015, as well as filings that will impact cash flows for the year ended December 31, 2016.

31

TCRF Filings Table

			Semi-Annual
			Billing Impact
Docket No.	Filed	Effective	Increase (Decrease)
46012	May 2016	September 2016 – February 2017	$	163
45406	December 2015	March 2016 – August 2016	$	(64)
44771	May 2015	September 2015 – February 2016	$	47
43858	December 2014	March 2015 – August 2015	$	(27)
42558	May 2014	September 2014 – February 2015	$	71

- A Decrease in Transition Charges —  Transition charge revenue is dedicated to paying the principal and interest of transition bonds.  We account for the difference between transition charge revenue recognized and cost related to the transition bonds as a regulatory asset or liability.  The $30 million decrease in charges related to transition bonds corresponds with an offsetting decrease in amortization and interest expense and primarily reflects the maturity of the 2003 Series transition bonds during 2015 and the maturity of the 2004 Series transition bonds in May 2016. Final true-up proceedings for the transition bonds are being conducted by Oncor and the PUCT during 2016 and are expected to have minimal or no net income impact.

- A  Decrease in AMS Surcharges — The PUCT has authorized monthly per customer advanced meter cost recovery factors designed to recover the cost of our initial AMS deployment over an eleven-year period ending in 2019.  We recognize revenues equal to reconcilable expenses incurred including depreciation net of calculated savings plus a return component on our investment.  The $2 million decrease in recognized AMS revenues is primarily due to $4 million lower reconcilable depreciation expense and a lower return due to the declining initial AMS investment balance, partially offset by $2 million in higher reconcilable operation and maintenance expense.

- An Increase in EECRF and Rate Case Expense Surcharges — The EECRF is a reconcilable rate designed to recover current energy efficiency program costs and performance bonuses earned by exceeding PUCT targets in prior years and recover or refund any over/under recovery of our costs in prior years.  We recognize the performance bonuses in other miscellaneous revenues upon approval by the PUCT.  PUCT rules require us to file an annual EECRF tariff update by the first business day in June of each year for implementation on March 1 of the next calendar year.  The $3 million increase in EECRF surcharges is offset in operation and maintenance expense.  See EECRF Filings Table below for a listing of EECRF filings impacting revenues for the three months ended September 30, 2016 and 2015, as well as filings that will impact revenues for the year ended December 31, 2016.

EECRF Filings Table

Docket No.	Filed	Effective	Average Monthly Charge per Residential Customer (a)		Program Costs		Performance Bonus		Under-/  (Over)- Recovery
46013	June 2016	March 2017	$	0.94	$	49	$	10	$	(4)
44784	June 2015	March 2016	$	1.19	$	61	$	10	$	(4)
42559	May 2014	March 2015	$	1.23	$	50	$	23	$	(5)

______________

(a)  As ofMarch 2014, average monthly charges are for a residential customer using 1,200 kWh, as the energy efficiency substantive rules require rates to be on a volumetric basis rather than a fixed monthly charge.

32

· A  Decreasein Other Miscellaneous Revenues  — Miscellaneous revenues include disconnect/reconnect fees and other discretionary revenues for services requested by REPs, services provided on a time and materials basis, rents, energy efficiency performance bonuses approved by the PUCT and other miscellaneous revenues.

Wholesale transmission service expense increased $23 million, or 11%, to $224 million in 2016 due to higher fees paid to other transmission entities.

Operation and maintenance expenseincreased $4 million, or2%, to $190 million in 2016.Operation and maintenance expense increased due to higher labor related costs of $4 million, higher energy efficiency expenses of $3 million and higher advanced meters expenses of $2 million,  partially offset by lower contractor costs of $4 million and lower vegetation management costs of $1 million. Operation and maintenance expense reflects fluctuations in expenses that are offsetby corresponding reconcilable rate revenues, including the $3 million increase related to the energy efficiency program and the $2 million related to advance meters discussed above.  Amortization of regulatory assets reported in operation and maintenance expense totaled $12 million foreach of the three months ended September30, 2016 and 2015.

Depreciation and amortizationdecreased $27 million, or 12%, to $190 million in 2016.  The decreasereflectslower amortization of regulatory assets of $29 million primarily related to the maturity of the transition bonds (with an offsetting decrease in revenues),  partially offset by a$2 million increase attributed to ongoing investments in property, plant and equipment.  

Taxes other than amounts related to income taxesincreased $2 million, or 2%, to $118 million in 2016.  The increase is primarily due to a  $1 million increase in local franchise fees and a $1 million increase in property taxes.

Other income and (deductions) – netimproved $6 million in 2016.  The change primarily reflects a reduction in non-recoverable pension and OPEB costs and lower professional fees.  See Note 11 to Financial Statements for more details.

Provision in lieu of income taxes totaled $98 million (including a $1 million benefit related to nonoperating income) in 2016 compared to $96 million (including a $3 million benefit related to nonoperating income) in 2015.  The effective income tax rate on pretax income was 37.5% and 37.1%  for the years 2016and 2015, respectively.  The effective income tax rate on pretax income differs from the U.S. federal statutory rate of 35% primarily due to the effect of the Texas margin tax and the filing of the 2015 partnership income tax return.

Interest expense and related chargeswas $85 million and $84 million for 2016 and 2015, respectively.  The current period includes a  $3 million increase due to higher average borrowings, partially offset by a $2 million decrease due to lower average interest rates.

Net incomewas $163 million for each of the three months ended September 30, 2016 and 2015.  Revenues for the current period included increases due to growth in points of delivery and increases in transmission investment,  offset by decreased revenues due to lower consumption, primarily driven by milder summer weather conditions. Operating expenseand interest expense were slightly up but were offset by lower other deductions.

33

Financial Results — Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015

Total operating revenues increased $5 million to  $2,962 million in 2016.  All revenue is billed under tariffs approved by the PUCT.  The change reflected:

· A  Decrease in Distribution Base Revenues — Distribution base rates are set periodically in a rate review docket initiated by either us or the PUCT.  The present distribution base rates became effective on January 1, 2012.  The $33 million decrease in distribution base rate revenues consisted of an estimated $52 million impact due to lower average consumption primarily driven by milder winter,  spring and summer weather, partially offset by an effect of growth in points of delivery of $19 million.

· An Increase in Transmission Base Revenues — Transmission base revenues (or TCOS revenues) are collected from load serving entities benefitting from our transmission system.  REPs serving customers in our service territory are billed through the TCRF mechanism discussed below while other load serving entities are billed directly.  In order to reflect changes in our invested transmission capital, PUCT rules allow us to update our TCOS rates by filing up to two interim TCOS rate adjustments in a calendar year.  The $48 million increase in transmission base revenues primarily reflects interim rate increases to recover ongoing investment, including a return component, in the transmission system.  See TCOS Filings Table above for a listing of Transmission Interim Rate Update Applications impacting revenues for the nine months ended September 30, 2016 and 2015, as well as filings that will impact revenues for the year ended December 31, 2016.

· An Increase in Reconcilable Rates — The PUCT has designated certain tariffs (TCRF, EECRF surcharge, AMS surcharge and charges related to transition bonds) as reconcilable, which means the differences between amounts billed under these tariffs and the related incurred costs, including a return component where allowed, are deferred as either regulatory assets or regulatory liabilities.  Accordingly, at prescribed intervals, future applicable tariffs are adjusted to either repay regulatory liabilities or collect regulatory assets.  While changes in these tariffs affect revenues and the timing of cash flows, they do not impact operating income, except for the AMS return component.  See Note 1 to Financial Statements for accounting treatment of reconcilable tariffs.

- An Increase in TCRF — TCRF is a distribution rate charged to REPs to recover fees we pay to other transmission service providers under their TCOS rates and the retail portion of our own TCOS rate.  PUCT rules allow us to update the TCRF component of our retail delivery rates on March 1 and September 1 each year.  The $88 million increase in TCRF revenue reflects the pass through of a $68 million increase in third-party wholesale transmission expense described below and a $20 million increase in our own TCOS rate to recover ongoing investment in our transmission system including a return component.  At September 30, 2016, $15 million was deferred as under-recovered wholesale transmission service expense (see Note 4 to Financial Statements).  See TCRF Filings Table above for a listing of TCRF filings impacting cash flows for the nine months ended September 30, 2016 and 2015, as well as filings that will impact cash flows for the year ended December 31, 2016.

- A Decrease in Transition Charges — Transition charge revenue is dedicated to paying the principal and interest of transition bonds.  We account for the difference between transition charge revenue recognized and cost related to the transition bonds as a regulatory liability.  The $77 million decrease in charges related to transition bonds corresponds with an offsetting decrease in amortization and interest expense and primarily reflects the maturity of the 2003 Series transition bonds during 2015 and the maturity of the 2004 Series transition bonds in May 2016.  Final true-up proceedings for the transition bonds are being conducted by Oncor and the PUCT during 2016 and are expected to have minimal or no net income impact.

- A Decrease in AMS Surcharges — The PUCT has authorized monthly per customer advanced meter cost recovery factors designed to recover the cost of our initial AMS deployment over an eleven-year period ending in 2019.  We recognize revenues equal to reconcilable expenses incurred including 34

depreciation net of calculated savings plus a return component on our investment.  AMS revenues decreased $8 million primarily due to a  $10 million decrease attributable to lower reconcilable depreciation expense and a lower return due to the declining initial AMS investment balance, partially offset by $2 million in higher reconcilable operation and maintenance expense.

- An Increase in EECRF Surcharges — The EECRF is a reconcilable rate designed to recover current energy efficiency program costs and performance bonuses earned by exceeding PUCT targets in prior years and recover or refund any over/under recovery of our costs in prior years.  We recognize the performance bonuses in other miscellaneous revenues upon approval by the PUCT.  PUCT rules require us to file an annual EECRF tariff update by the first business day in June of each year for implementation on March 1 of the next calendar year.  The $5 million increase in EECRF surcharges is offset in operation and maintenance expense.  See EECRF Filings Table above for a listing of EECRF filings impacting revenues for the nine months ended September 30, 2016 and 2015, as well as filings that will impact revenues for the year ended December 31, 2016.

· An Increase in Other Miscellaneous Revenues — Miscellaneous revenues include disconnect/reconnect fees and other discretionary revenues for services requested by REPs, services provided on a time and materials basis, rents, energy efficiency performance bonuses approved by the PUCT and other miscellaneous revenues. The $2 million increase includes higher discretionary services revenue.

Wholesale transmission serviceexpense increased $68 million, or 11%, to $663 million in 2016 due to higher fees paid to other transmission entities.

Operation and maintenance expenseincreased $3 million, or 1%, to $542 million in 2016.  The change included $7 million in higher labor related costs, $5 million in higher energy efficiency program cost and $2 million in higher advanced meter expenses, partially offset by lower contractor costs of $8 million, lower vegetationmanagement costs of $2 million and $1 million lower regulatory amortization expense. Operation and maintenance expense reflects fluctuations in expenses that are offset by corresponding reconcilable rate revenues, including the  $5 million increase related to the energy efficiency program and the $2 million increase related to advanced meters discussed above.  Amortization of regulatory assets reported in operation and maintenance expense totaled $37 million and $38 million for the nine months ended September 30, 2016 and 2015, respectively.

Depreciation and amortizationdecreased $60 million, or 9%, to $593million in 2016.  The decrease reflects $75million in lower amortization of regulatory assets primarily associated with transition bonds (with an offsetting decrease in revenues), partially offset by $15million increase attributed to ongoing investments in property, plant and equipment.

Taxes other than amounts related to income taxesincreased $2 million, or 1%, to $338 million in 2016.  The change includes a $4 million increase in property taxes and a $1 million increase in payroll taxes, partially offset by a $3 million decrease in local franchise fees.  

Other income and (deductions) – netimproved $6 million in 2016.  The change primarily reflects a reduction in non-recoverable pension and OPEB costs and lower professional fees, partially offset by lower accretion of the transition bond fair value adjustment related to purchase accounting. See Note 11 to Financial Statements for more details.

Provision in lieu of income taxes totaled $208 million (including a $3 million benefit related to nonoperating income) in 2016 compared to $208 million (including a  $6 million benefit related to nonoperating income) in 2015.  The effective income tax rate on pretax income was 36.9% in 2016 and 36.7% in 2015.  The 2016 effective income tax rate on pretax income differs from the US federal statutory rate of 35% primarily due to the effect of the Texas margin tax and the filing of the 2015 partnership income tax return.

Interest expense and related chargesincreased $2 million, or 1% to $252 million in 2016.  The change was  driven by a $8 million increase attributable to higher average borrowings reflecting ongoing capital investments, partially offset by a  $3 million decrease attributable to lower average interest rates and a $3 million decrease attributable to higher capitalized interest.

35

Net income decreased $4 million, or 1%, to $355 million in 2016.  Revenues for the current period reflect decreased revenues due to lower consumption, primarily driven by milder winter, spring and summer weather conditions, partially offset by increases due to growth in points of delivery and increases in transmission investment.  Operating expense and interest expense were slightly higher, partially offset by lower other deductions.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows — NineMonths Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015

Cash provided by operating activities totaled $960 million and $1,053 million in 2016 and 2015, respectively. The $93 million decrease is primarily the result of a $139 million decrease in transmission and distribution receipts attributable to under-recovered wholesale transmission service expense, lower transition bond revenue and mild winter, spring and summer weather,  a $25 million increase in prepayments, a $17 million increase in cash purchases of materials and supplies and $13million of refunds related to over-collected transition bond charges.These items are partially offset by a $53 million decrease in tax payments, a $34 million decrease in storm related repairs and an $18 million change in customer deposits held.  The decrease in tax payments is related to the recoupment of tax overpayments made in the prior period.

Cash used in financing activities totaled $4 million and $166 million in 2016 and 2015, respectively.  The $162 million change primarily reflects  adecrease of $553 million of debt repayments, a decrease in distributions to our members of $94 million,an increase in short-term borrowings of $43 million and a decrease in debt issuance costs of $22 million, partially offset by $550 million in lower debt issuances.  See Notes 6 and 8 to Financial Statements for additional information regarding long-term debt activity and distributions to our members, respectively.

Cash used in investing activities, which consists primarily of capital expenditures, totaled $957 million and $873 million in 2016 and 2015, respectively.  The 2016 activityreflected increases in capital expenditures for transmission and distribution facilities to serve new customers and infrastructure capital maintenance spending, partially offset by a  $38 million release of Bondco restrictedcash due to the maturity of the final transition bonds.  This is reflected in the Other caption under investing activities.

Depreciation and amortization expense reported in the statements of consolidated cash flows was$36 million and $33 million more than the amounts reported in the statements of consolidated income in the ninemonths ended September 30, 2016 and 2015, respectively.  The differences result from amortization reported in the following different lines items in the statements of consolidated income: regulatory asset amortization (reported in operation and maintenance expense), the accretion of the adjustment (discount) to regulatory assets (reported in other income) and the amortization of debt fair value discount (reported in interest expense and related charges).

Long-Term Debt Activity  —Repayments of long-term debt in the nine months ended September 30, 2016 totaled $41 million representing the final transition bond principal payment at the scheduled maturity date.

In August 2016, we completed the sale of $175 million aggregate principal amount of 3.75% senior secured notes maturing in April 2045 (Additional 2045 Notes).  The Additional 2045 Notes were an additional issuance of our 3.75% senior secured notes maturing in April 2045, $375 million aggregate principal amount of which were previously issued in March 2015 (2045 Notes).  The Additional 2045 Notes were issued as part of the same series as the 2045 Notes.  We used the net proceeds of approximately $185 million from the sale of the Additional 2045 Notes to repay borrowings under our revolving credit facility and for general corporate purposes.  The Additional 2045 Notes and 2045 Notes are secured by the first priority lien and are secured equally and ratably with all of our other secured indebtedness as discussed below.

See Note 6 to Financial Statements for additional information regarding long-term debt.

Available Liquidity/Credit Facility —Our primary source of liquidity, aside from operating cash flows, is our ability to borrow under our revolving credit facility.  At September30, 2016, we had a $2.0 billion secured

36

revolving credit facility. In October 2016, we exercised the second of two one-year extensions available to us and extended the term of the revolving credit facility to October 2018. Subject to the limitations described below, available borrowing capacity under our revolving credit facility totaled $1.113billion and $1.153 billion at September 30, 2016 and December 31, 2015, respectively.  We may request an increase in our borrowing capacity of $100 million in the aggregate provided certain conditions are met, including lender approval.

The revolving credit facility contains a senior debt-to-capitalization ratio covenant that effectively limits our ability to incur indebtedness in the future.  At September 30, 2016, we were in compliance with the covenant.  See “Financial Covenants, Credit Rating Provisions and Cross Default Provisions” below for additional information on this covenant and the calculation of this ratio.The revolving credit facility and the senior notes and debentures issued by us are secured by the Deed of Trust, which permits us to secure other indebtedness with the lien of the Deed of Trust up to the aggregate of (i) the amount of available bond credits, and (ii) 85% of the lower of the fair value or cost of certain property additions that have been certified to the Deed of Trust collateral agent.  Accordingly, the availability under our revolving credit facility is limited by the amount of available bond credits and any property additions certified to the Deed of Trust collateral agent in connection with the revolving credit facility borrowings.To the extent we continue to issue debt securities secured by the Deed of Trust, those debt securities would also be limited by the amount of available bond credits and any property additions that have been certified to the Deed of Trust collateral agent.  At September 30, 2016, the available bond credits totaled $2.534 billion, and the amount of additional potential indebtedness that could be secured by property additions, subject to the completion of a certification process, totaled $1.586 billion.  At September 30, 2016, the available borrowing capacity of the revolving credit facility could be fully drawn.

Under the terms of our revolving credit facility, the commitments of the lenders to make loans to us are several and not joint.  Accordingly, if any lender fails to make loans to us, our available liquidity could be reduced by an amount up to the aggregate amount of such lender’s commitments under the facility.  See Note 5 to Financial Statements for additional information regarding the revolving credit facility.

Cash and cash equivalents totaled $24 million and $25 million at September 30, 2016 and December 31, 2015, respectively.  Available liquidity (cash and available revolving credit facility capacity) at September 30, 2016 totaled $1.137billion, reflecting a  decrease of $41 million from December 31, 2015.  The decrease reflects the ongoing capital investment in transmission and distribution infrastructure.

We also committed to the PUCT that we would maintain a regulatory capital structure at or below the assumed debt-to-equity ratio established periodically by the PUCT for ratemaking purposes, which is currently set at 60% debt to 40% equity.  At September 30, 2016 and December 31, 2015, our regulatory capitalization ratios were 59.6% debt to40.4% equityand 59.8% debt to  40.2% equity, respectively.  See Note 8 to Financial Statements for discussion of the regulatory capitalization ratio.

Liquidity Needs, Including Capital Expenditures —Our board of directors, which annually approves capital expenditure estimates for the following year, has approved capital expenditures totaling $1.5 billion in 2017.Management currently expects to recommend to our board of directors capital expenditures of approximately $1.6 billion in each of the years2018 through 2021.  These capital expenditures are expected to be used for investment in transmission and distribution infrastructure.

We expect cash flows from operations, combined with availability under the revolving credit facility, to provide sufficient liquidity to fund current obligations, projected working capital requirements, maturities of long-term debt and capital spending for at least the next twelve months.  We do not anticipate the EFH Bankruptcy Proceedings to have a material impact on our liquidity.  Should additional liquidity or capital requirements arise, we may need to access capital markets, generate equity capital or preserve equity through reductions or suspension of distributions to members.  In addition, we may also consider new debt issuances, repurchases, exchange offers and other transactions in order to refinance or manage our long-term debt.  The inability to raise capital on favorable terms or failure of counterparties to perform under credit or other financial agreements, particularly during any uncertainty in the financial markets, could impact our ability to sustain and grow the business and would likely increase capital costs that may not be recoverable through rates.

37

Distributions — On October 26, 2016, our board of directors declared a cash distribution of $41 million, which was paid to our members on October 27, 2016.  During the nine months ended September 30, 2016, our board of directors declared and we paid the following cash distributions to our members: 

Declaration Date	Payment Date	Amount
July 27, 2016	August 11, 2016	$	68
April 27, 2016	May 11, 2016	$	65
February 24, 2016	February 25, 2016	$	56

See Note 8 to Financial Statements for discussion of the distribution restriction.

Pension and OPEB Plan Funding — Our funding for the pension plans and the Oncor OPEB Plan in the calendar year 2016 is expected to total $4 million and $38 million, respectively.  In the ninemonths ended September 30, 2016, we made cash contributions to the pension plans and the Oncor OPEB Plan of $3 million and$22 million, respectively.

Financial Covenants, Credit Rating Provisions and Cross Default Provisions —Our revolving credit facility contains a financial covenant that requires maintenance of a consolidated senior debt-to-capitalization ratio of no greater than 0.65 to 1.00.  For purposes of this ratio, debt is calculated as indebtedness defined in the revolving credit facility (principally, the sum of long-term debt, any capital leases, short-term debt and debt due currently in accordance with GAAP).  The debt calculation excludes any outstanding transition bonds issued by Bondco, but includes any unamortized fair value discount related to Bondco.  Capitalization is calculated as membership interests determined in accordance with GAAP plus indebtedness described above.  At September 30, 2016, we were in compliance with this covenant.

Impact on Liquidity of Credit Ratings — The rating agencies assign credit ratings to certain of our debt securities.  Our access to capital markets and cost of debt could be directly affected by our credit ratings.  Any adverse action with respect to our credit ratings could generally cause borrowing costs to increase and the potential pool of investors and funding sources to decrease.  In particular, a decline in credit ratings would increase the cost of our revolving credit facility (as discussed below).  In the event any adverse action with respect to our credit ratings takes place and causes borrowing costs to increase, we may not be able to recover such increased costs if they exceed our PUCT-approved cost of debt determined in our most recent rate review or subsequent rate reviews.

Most of our large suppliers and counterparties require an expected level of creditworthiness in order for them to enter into transactions with us.  If our credit ratings decline, the costs to operate our business could increase because counterparties could require the posting of collateral in the form of cash-related instruments, or counterparties could decline to do business with us.

In July 2016, Moody’s upgraded our senior secured rating to A3 from Baa1 and changed our outlook to “rating under review for further upgrade” from “positive”.  In August 2016, Fitch changed our outlook to “rating watch positive” from “stable” and S&P revised its outlook to “positive” from “developing”.  These rating actions follow the July 29, 2016 announcement that NEE and EFH Corp. had entered into the NEE Merger Agreement (see Note 2 to Financial Statements for information regarding the NEE Merger Agreement and the EFH Bankruptcy Proceedings).

Presented below are the credit ratings assigned for our debt securities at November 1, 2016.

	Senior Secured
S&P	A
Moody’s	A3
Fitch	BBB+

38

As described in Note 7 to Financial Statements in our 2015 Form 10-K, our long-term debt, excluding any Bondco related non-recourse debt, is currently secured pursuant to the Deed of Trust by a first priority lien on certain of our transmission and distribution assets and is considered senior secured debt.

A rating reflects only the view of a rating agency, and is not a recommendation to buy, sell or hold securities.  Ratings can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change.

Material Credit Rating Covenants — Our revolving credit facility contains terms pursuant to which the interest rates charged under the agreement may be adjusted depending on credit ratings.  Borrowings under the revolving credit facility bear interest at per annum rates equal to, at our option, (i) LIBOR plus a spread ranging from 1.00% to 1.75% depending on credit ratings assigned to our senior secured non-credit enhanced long-term debt or (ii) an alternate base rate (the highest of (1) the prime rate of JPMorgan Chase, (2) the federal funds effective rate plus 0.50%, and (3) daily one-month LIBOR plus 1.00%) plus a spread ranging from 0.00% to 0.75% depending on credit ratings assigned to our senior secured non-credit enhanced long-term debt.  Based on the current ratings assigned to our debt securities at November 1, 2016, our borrowings are generally LIBOR-based and will bear interest at LIBOR plus 1.00%.  A decline in credit ratings would increase the cost of our revolving credit facility and likely increase the cost of any debt issuances and additional credit facilities.

Material Cross Default Provisions — Certain financing arrangements contain provisions that may result in an event of default if there was a failure under other financing arrangements to meet payment terms or to observe other covenants that could result in an acceleration of payments due.  Such provisions are referred to as “cross default” provisions.

Under our revolving credit facility, a default by us in respect of indebtedness in a principal amount in excess of $100 million or any judgments for the payment of money in excess of $50 million that are not discharged within 60 days may cause the maturity of outstanding balances ($880million in short-term borrowings and $7 million in letters of credit at September 30, 2016) under that facility to be accelerated.  Additionally, under the Deed of Trust, an event of default under either our revolving credit facility or our indentures would permit our lenders and the holders of our senior secured notes to exercise their remedies under the Deed of Trust.

Guarantees — At September 30, 2016, we did not have any material guarantees.

OFF-BALANCE SHEET ARRANGEMENTS

At September 30, 2016, we did not have any material off-balance sheet arrangements with special purpose entities or variable interest entities.

COMMITMENTS AND CONTINGENCIES

See Note 7 to Financial Statements for discussion of commitments and contingencies.

CHANGES IN ACCOUNTING STANDARDS

See Note 1 to Financial Statements for discussion of changes in accounting standards.

REGULATION AND RATES

Matters with the PUCT

Change in Control Review (PUCT Docket No. 45188)-  In September 2015, Oncor and the Hunt Investor Group filed in PUCT Docket No. 45188 a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Sixth Amended Plan of Reorganization.  On March 24, 2016, the PUCT issued an order conditionally approving the joint application.  On April 18, 2016, the Hunt Investor Group and certain interveners in PUCT Docket No. 45188 filed motions for rehearing and on May 19, 2016, the PUCT denied such motions and the order became final.  The Hunt Investor Group filed a petition with the Travis County

39

District Court on June 17, 2016 seeking review of the order.  We cannot predict the results of the review or the ultimate disposition of PUCT Docket No. 45188, particularly in light of the termination of the Sixth Amended Plan of Reorganization and the other pending transactions discussed in Note 2 to Financial Statements.  For additional information regarding the Sixth Amended Plan of Reorganization and application for regulatory approval, see Note 2 to Financial Statements and “City Rate Reviews” below.

Change in Control Review (PUCT Docket No. 46238)-  The NEE Merger Agreement contemplates that Oncor and NEE file a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Amended New Plan.  On October 31, 2016, Oncor and NEE filed that joint application in PUCT Docket No. 46238. For additional information regarding the Amended New Plan and application for regulatory approval, see Note 2 to Financial Statements.

City Rate Reviews  -Oncor has received resolutions passed by approximately 58 cities with original jurisdiction over electric utility rates directing Oncor to file rate review proceedings.  The resolutions passed required Oncor to file a rate review with each city by September 1, 2016 based on a January 1, 2015 to December 31, 2015 test year.   However, Oncor has subsequently been notified by counsel representing these cities that these rate review proceedings have been abated indefinitely, pending resolution of Oncor ownership issues. The notice provides that if and when the cities desire to proceed with a rate inquiry, cities will notify Oncor in writing and inform Oncor of a precise date of the rate case, which will be at least 120 days from receipt of the communication that lifts the abatement.

2008 Rate Review (PUCT Docket No. 35717) - In August 2009, the PUCT issued a final order with respect to our June 2008 rate review filing with the PUCT and 204 cities based on a test year ended December 31, 2007 (PUCT Docket No. 35717), and new rates were implemented in September 2009.  We and four other parties appealed various portions of the rate review final order to a state district court.  In January 2011, the district court signed its judgment reversing the PUCT with respect to two issues: the PUCT’s disallowance of certain franchise fees and the PUCT’s decision that PURA no longer requires imposition of a rate discount for state colleges and universities.  We filed an appeal with the Texas Third Court of Appeals (Austin Court of Appeals) in February 2011 with respect to the issues we appealed to the district court and did not prevail upon, as well as the district court’s decision to reverse the PUCT with respect to discounts for state colleges and universities.  In early August 2014, the Austin Court of Appeals reversed the district court and affirmed the PUCT with respect to the PUCT’s disallowance of certain franchise fees and the PUCT’s decision that PURA no longer requires imposition of a rate discount for state colleges and universities.  The Austin Court of Appeals also reversed the PUCT and district court’s rejection of a proposed consolidated tax savings adjustment arising out of EFH Corp.’s ability to offset our taxable income against losses from other investments and remanded the issue to the PUCT to determine the amount of the consolidated tax savings adjustment.  In late August 2014, we filed a motion on rehearing with the Austin Court of Appeals with respect to certain appeal issues on which we were not successful, including the consolidated tax savings adjustment.  In December 2014, the Austin Court of Appeals issued its opinion, clarifying that it was rendering judgment on the rate discount for state colleges and universities issue (affirming that PURA no longer requires imposition of the rate discount) rather than remanding it to the PUCT, and dismissing the motions for rehearing regarding the franchise fee issue and the consolidated tax savings adjustment.  We filed a petition for review with the Texas Supreme Court in February 2015.  The Texas Supreme Court granted the petition for review and heard oral arguments inSeptember 2016.  There is no deadline for the court to act.  If our appeals efforts are unsuccessful and the proposed consolidated tax savings adjustment is implemented, we estimate that on remand, the impact on earnings of the consolidated tax savings adjustment’s value could range from zero, as originally determined by the PUCT in Docket 35717, to a $135 million loss (after tax) including interest. Interest accrues at the PUCT approved rate for over-collections, which is 0.18% for 2016. We do not believe that any of the other issues ruled upon by the Austin Court of Appeals would result in a material impact to our results of operations or financial condition.

Summary

We cannot predict future regulatory or legislative actions or any changes in economic and securities market conditions.  Such actions or changes could significantly alter our basic financial position, results of operations or cash flows.

40

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Market risk is the risk that we may experience a loss in value as a result of changes in market conditions such as interest rates that may be experienced in the ordinary course of business.  We may transact in financial instruments to hedge interest rate risk related to our debt, but there are currently no such hedges in place.  All of our long-term debt at September 30, 2016and December 31, 2015 carried fixed interest rates.

Except as discussed below, the information required hereunder is not significantly different from the information set forth in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2015 Form 10-K and is therefore not presented herein.

Credit Risk

Credit risk relates to the risk of loss associated with nonperformance by counterparties.  Our customers consist primarily of REPs.  As a prerequisite for obtaining and maintaining certification, a REP must meet the financial resource standards established by the PUCT.  Meeting these standards does not guarantee that a REP will be able to perform its obligations.  REP certificates granted by the PUCT are subject to suspension and revocation for significant violation of PURA and PUCT rules.  Significant violations include failure to timely remit payments for invoiced charges to a transmission and distribution utility pursuant to the terms of tariffs approved by the PUCT.  We believe PUCT rules that allow for the recovery of uncollectible amounts due from nonaffiliated REPs through rates significantly reduce our credit risk.

Our net exposure to credit risk associated with trade accounts and other receivables from affiliates totaled $146 million at September 30, 2016,  of which $3million has been offset with trade accounts and other payables.  Our credit risk exposure associated with receivables from members related to income taxes totaled $92 million at September 30, 2016.  Due to commitments made to the PUCT, this concentration of accounts receivable from affiliates increases the risk that a default could have a material effect on earnings and cash flows.  See Notes 2, 7 and 10 to Financial Statements for additional information regarding the potential impacts of the EFH Bankruptcy Proceedings on our transactions with affiliates and for additional information regarding our transactions involving members of the Texas Holdings Group and the Reorganized TCEH Spin-Off.  As a result of the Reorganized TCEH Spin-Off, Reorganized TCEH and its subsidiaries, including Luminant and TXU Energy, ceased to be affiliates of ours as of October 3, 2016.

Our exposure to credit risk associated with trade accounts receivable from nonaffiliates totaled $454 million at September 30, 2016.  The nonaffiliated receivable amount is before the allowance for uncollectible accounts, which totaled $4 million at September 30, 2016.  The nonaffiliated exposure includes trade accounts receivable from REPs totaling $349 million, which are almost entirely noninvestment grade.  At September 30, 2016, REP subsidiaries ofNRG Energy, Inc., a nonaffiliated entity collectively represented approximately 17% of the nonaffiliated trade receivable amount.  No single other nonaffiliated party represented 10% or more of the total trade accounts receivable amount.  We view our exposure to this customer to be within an acceptable level of risk tolerance considering PUCT rules and regulations; however, this concentration increases the risk that a default could have a material effect on cash flows.

41

FORWARD-LOOKING STATEMENTS

This report and other presentations made by us contain “forward-looking statements.”  All statements, other than statements of historical facts, that are included in this report, or made in presentations, in response to questions or otherwise, that address activities, events or developments that we expect or anticipate to occur in the future, including such matters as projections, capital allocation, future capital expenditures, business strategy, competitive strengths, goals, future acquisitions or dispositions, development or operation of facilities, market and industry developments and the growth of our business and operations (often, but not always, through the use of words or phrases such as “intends,” “plans,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “should,” “projection,” “target,” “goal,” “objective” and “outlook”), are forward-looking statements.  Although we believe that in making any such forward-looking statement our expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and is qualified in its entirety by reference to the discussion of risk factors under “Item 1A.  Risk Factors” and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2015 Form 10-K, “Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations" in this report and the following important factors, among others, that could cause actual results to differ materially from those projected in such forward-looking statements:

· prevailing governmental policies and regulatory actions, including those of the US Congress, the Texas Legislature, the Governor of Texas, the US Federal Energy Regulatory Commission, the PUCT, the North American Energy Regulatory Corporation, the Texas Reliability Entity, Inc., the Environmental Protection Agency, and the Texas Commission on Environmental Quality, with respect to:

- allowed rate of return;

- permitted capital structure;

- industry, market and rate structure;

- recovery of investments;

- acquisition and disposal of assets and facilities;

- operation and construction of facilities;

- changes in tax laws and policies, and

- changes in and compliance with environmental, reliability and safety laws and policies;

· legal and administrative proceedings and settlements, including the exercise of equitable powers by courts;

· any impacts on us as a result of the EFH Bankruptcy Proceedings and the change in indirect ownership of Oncor proposed in such proceedings;

· weather conditions and other natural phenomena;

· acts of sabotage, wars or terrorist or cyber security threats or activities;

· economic conditions, including the impact of a recessionary environment;

· unanticipated population growth or decline, or changes in market demand and demographic patterns, particularly in ERCOT;

· changes in business strategy, development plans or vendor relationships;

· unanticipated changes in interest rates or rates of inflation;

· unanticipated changes in operating expenses, liquidity needs and capital expenditures;

· inability of various counterparties to meet their financial obligations to us, including failure of counterparties to perform under agreements;

· general industry trends;

· hazards customary to the industry and the possibility that we may not have adequate insurance to cover losses resulting from such hazards;

· changes in technology used by and services offered by us;

· significant changes in our relationship with our employees, including the availability of qualified personnel, and the potential adverse effects if labor disputes or grievances were to occur;

· changes in assumptions used to estimate costs of providing employee benefits, including pension and OPEB, and future funding requirements related thereto;

· significant changes in critical accounting policies material to us;

42

· commercial bank and financial market conditions, access to capital, the cost of such capital, and the results of financing and refinancing efforts, including availability of funds in the capital markets and the potential impact of disruptions in US credit markets;

· circumstances which may contribute to future impairment of goodwill, intangible or other long-lived assets;

· financial restrictions under our revolving credit facility and indentures governing our debt instruments;

· our ability to generate sufficient cash flow to make interest payments on our debt instruments;

· actions by credit rating agencies, and

· our ability to effectively execute our operational strategy.

Any forward-looking statement speaks only at the date on which it is made, and, except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.  New factors emerge from time to time, and it is not possible for us to predict all of them; nor can we assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.  As such, you should not unduly rely on such forward-looking statements.

ITEM 4.CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the disclosure controls and procedures in effect at the end of the current period included in this quarterly report.  Based on the evaluation performed, our management, including the principal executive officer and principal financial officer, concluded that the disclosure controls and procedures were effective. During the most recent fiscal quarter covered by this report, no changes in internal controls over financial reporting have occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

43

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Reference is made to the discussion in Notes 3 and 7 to Financial Statements regarding legal and regulatory proceedings.

ITEM 1A.   RISK FACTORS

There are numerous factors that affect our business and results of operations, many of which are beyond our control.  In addition to the other information set forth in this report, including “Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations,” you should carefully consider the factors discussed in “Part I, Item 1A.  Risk Factors” in our 2015 Form 10-K, which could materially affect our business, financial condition or future results.  The risks described in such reports are not the only risks we face.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.   OTHER INFORMATION

None.

44

ITEM 6.EXHIBITS

(a)   Exhibits provided as part of Part II are:
Exhibits	Previously Filed*	As
	With File Number	Exhibit
(4)	Instruments Defining the Rights of Security Holders, Including Indentures.
4(a)	333-100240 Form 8-K (filed August 24, 2016)	4.1	—	Registration Rights Agreement, dated August 18, 2016, among Oncor and the representatives of the initial purchasers of Oncor’s additional issuance of 3.750% Senior Secured Notes due 2045.
(31)	Rule 13a – 14(a)/15d – 14(a) Certifications.
31(a)			—	Certification of Robert S. Shapard, chief executive of Oncor Electric Delivery Company LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(b)			—	Certification of David M. Davis, senior vice president and chief financial officer of Oncor Electric Delivery Company LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Section 1350 Certifications.
32(a)			—	Certification of Robert S. Shapard, chief executive of Oncor Electric Delivery Company LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32(b)			—	Certification of David M. Davis, senior vice president and chief financial officer of Oncor Electric Delivery Company LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(99)	Additional Exhibits.
99(a)	333-100240 Form 8-K (filed August 10, 2016)	99.1	—	Letter Agreement, dated August 4, 2016, by and among NextEra Energy, Inc., EFH Merger Co., LLC, Oncor Electric Delivery Holdings Company LLC and Oncor Electric Delivery Company LLC.
99(b)			—	Condensed Statement of Consolidated Income – Twelve Months Ended September 30, 2016.

45

	XBRL Data Files.
101.INS		—	XBRL Instance Document
101.SCH		—	XBRL Taxonomy Extension Schema Document
101.CAL		—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		—	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		—	XBRL Taxonomy Extension Presentation Linkbase Document

__________________

*   Incorporated herein by reference.

46

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ONCOR ELECTRIC DELIVERY COMPANY LLC

!!
By:	/s/ David M. Davis
	David M. Davis
	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)

Date:  November 1, 2016

47

EXHIBIT INDEX

(a)   Exhibits provided as part of Part II are:

Exhibits	Previously Filed*	As
	With File Number	Exhibit
(4)	Instruments Defining the Rights of Security Holders, Including Indentures.
4(a)	333-100240 Form 8-K (filed August 24, 2016)	4.1	—	Registration Rights Agreement, dated August 18, 2016, among Oncor and the representatives of the initial purchasers of Oncor’s additional issuance of 3.750% Senior Secured Notes due 2045.
(31)	Rule 13a – 14(a)/15d – 14(a) Certifications.
31(a)			—	Certification of Robert S. Shapard, chief executive of Oncor Electric Delivery Company LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(b)			—	Certification of David M. Davis, senior vice president and chief financial officer of Oncor Electric Delivery Company LLC, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Section 1350 Certifications.
32(a)			—	Certification of Robert S. Shapard, chief executive of Oncor Electric Delivery Company LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32(b)			—	Certification of David M. Davis, senior vice president and chief financial officer of Oncor Electric Delivery Company LLC, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(99)	Additional Exhibits.
99(a)	333-100240 Form 8-K (filed August 10, 2016)	99.1	—	Letter Agreement, dated August 4, 2016, by and among NextEra Energy, Inc., EFH Merger Co., LLC, Oncor Electric Delivery Holdings Company LLC and Oncor Electric Delivery Company LLC.
99(b)			—	Condensed Statement of Consolidated Income – Twelve Months Ended September 30, 2016.

48

	XBRL Data Files.
101.INS		—	XBRL Instance Document
101.SCH		—	XBRL Taxonomy Extension Schema Document
101.CAL		—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		—	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		—	XBRL Taxonomy Extension Presentation Linkbase Document

__________________

*   Incorporated herein by reference.

49

EX-31.A

Exhibit 31(a)

ONCOR ELECTRIC DELIVERY COMPANY LLC

Certificate of Chief Executive Officer

Pursuant to Section 302 of Sarbanes – Oxley Act of 2002

I, Robert S. Shapard, certify that:

1. I have reviewed this quarterly report on Form 10-Qof Oncor Electric Delivery Company LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 1, 2016		/s/ Robert S. Shapard
	Name:	Robert S. Shapard
	Title:	Chief Executive

EX-31.B

Exhibit 31(b)

ONCOR ELECTRIC DELIVERY COMPANY LLC

Certificate of Chief Financial Officer

Pursuant to Section 302 of Sarbanes – Oxley Act of 2002

I, David M. Davis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Oncor Electric Delivery Company LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 1, 2016		/s/ David M. Davis
	Name:	David M. Davis
	Title:	Senior Vice President and Chief Financial Officer

EX-32.A

Exhibit 32(a)

ONCOR ELECTRIC DELIVERY COMPANY LLC

Certificate of Chief Executive Officer

Pursuant to Section 906of Sarbanes – Oxley Act of 2002

The undersigned, Robert S. Shapard, Chief Executive of Oncor Electric Delivery Company LLC (the “Company”), DOES HEREBY CERTIFY that:

1. The Company’s QuarterlyReport on Form 10-Q for the period ended September 30, 2016 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed this 1st day of November2016.

	/s/ Robert S. Shapard
Name:	Robert S. Shapard
Title:	Chief Executive

A signed original of this written statement required by Section 906 has been provided to Oncor Electric Delivery Company LLC and will be retained by Oncor Electric Delivery Company LLC and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

Exhibit 32(b)

ONCOR ELECTRIC DELIVERY COMPANY LLC

Certificate of Chief Financial Officer

Pursuant to Section 906of Sarbanes – Oxley Act of 2002

The undersigned, David M. Davis, Senior Vice President and Chief Financial Officer of Oncor Electric Delivery Company LLC (the “Company”), DOES HEREBY CERTIFY that:

1. The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2016 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed this 1st day of November, 2016.

	/s/ David M. Davis
Name:	David M. Davis
Title:	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Oncor Electric Delivery Company LLC and will be retained by Oncor Electric Delivery Company LLC and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99

Exhibit 99

ONCOR ELECTRIC DELIVERY COMPANY LLC

CONDENSED STATEMENT OF CONSOLIDATED INCOME

(Unaudited)

	Twelve Months Ended
	September 30, 2016
	(millions of dollars)
Operating revenues:
Nonaffiliates	$	2,967
Affiliates		916
Total operating revenues		3,883
Operating expenses:
Wholesale transmission service		870
Operation and maintenance		727
Depreciation and amortization		803
Provision in lieu of income taxes		257
Taxes other than amounts related to income taxes		452
Total operating expenses		3,109
Operating income		774
Other income and (deductions) - net		(16)
Nonoperating provision in lieu of income taxes		(5)
Interest expense and related charges		335
Net income	$	428

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Entity Registrant Name	ONCOR ELECTRIC DELIVERY CO LLC
Entity Central Index Key	0001193311
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		0
Oncor's Management and Board of Directors [Member]
Entity Outstanding Membership Interests		0.22%
Oncor Electric Delivery Holdings Company LLC [Member]
Entity Outstanding Membership Interests		80.03%
Texas Transmission [Member]
Entity Outstanding Membership Interests		19.75%

XML

Condensed Statements of Consolidated Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating revenues:
Nonaffiliates	$ 806	$ 793	$ 2,262	$ 2,218
Affiliates	265	279	700	739
Total operating revenues	1,071	1,072	2,962	2,957
Operating expenses:
Wholesale transmission service	224	201	663	595
Operation and maintenance (Note 10)	190	186	542	539
Depreciation and amortization	190	217	593	653
Provision in lieu of income taxes (Note 10)	99	99	211	214
Taxes other than amounts related to income taxes	118	116	338	336
Total operating expenses	821	819	2,347	2,337
Operating income	250	253	615	620
Other income and (deductions) - net (Note 11)	(3)	(9)	(11)	(17)
Nonoperating provision in lieu of income taxes	(1)	(3)	(3)	(6)
Interest expense and related charges (Note 11)	85	84	252	250
Net income	$ 163	$ 163	$ 355	$ 359

XML

Condensed Statements of Consolidated Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Statements Of Consolidated Comprehensive Income [Abstract]
Net income	$ 163	$ 163	$ 355	$ 359
Other comprehensive income (loss):
Cash flow hedges – derivative value net loss recognized in net income (net of tax expense of $–, $–, $– and $–) (Note 1)	1	1	1	1
Defined benefit pension plans (net of tax benefit of $–, $–, $– and $–) (Note 9)			1	1
Total other comprehensive income	1	1	2	2
Comprehensive income	$ 164	$ 164	$ 357	$ 361

XML

Condensed Statements Of Consolidated Comprehensive Income (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Statements Of Consolidated Comprehensive Income [Abstract]
Cash flow hedges - derivative value net loss recognized in net income, tax expense
Defined benefit pension plans- net tax benefit

XML

Condensed Statements Of Consolidated Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows - operating activities:
Net income	$ 355	$ 359
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	629	686
Provision in lieu of deferred income taxes - net	166	(65)
Other - net	(3)	(2)
Changes in operating assets and liabilities:
Regulatory accounts related to reconcilable tariffs (Note 4)	(60)	41
Other operating assets and liabilities	(127)	34
Cash provided by operating activities	960	1,053
Cash flows - financing activities:
Issuances of long-term debt (Note 6)	175	725
Repayments of long-term debt (Note 6)	(41)	(594)
Net increase in short-term borrowings (Note 5)	40	(3)
Distributions to members (Note 8)	(189)	(283)
Debt discount, premium, financing and reacquisition expenses - net	11	(11)
Cash used in financing activities	(4)	(166)
Cash flows - investing activities:
Capital expenditures (Note 10)	(1,004)	(893)
Other - net	47	20
Cash used in investing activities	(957)	(873)
Net change in cash and cash equivalents	(1)	14
Cash and cash equivalents - beginning balance	25	4
Cash and cash equivalents - ending balance	$ 24	$ 18

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions		Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents		$ 24	$ 25
Restricted cash - Bondco (Note 11)		0	38
Trade accounts receivable from nonaffiliates - net (Note 11)		450	388
Trade accounts and other receivables from affiliates - net (Note 10)		146	118
Amounts receivable from members related to income taxes (Note 10)		107	136
Materials and supplies inventories - at average cost		91	82
Prepayments and other current assets		97	89
Total current assets		915	876
Investments and other property (Note 11)		102	97
Property, plant and equipment - net (Note 11)		13,617	13,024
Goodwill (Notes 11)		4,064	4,064
Regulatory assets - net (Note 4)		1,114	1,194
Other noncurrent assets		41	32
Total assets		19,853	19,287
Current liabilities:
Short-term borrowings (Note 5)		880	840
Long-term debt due currently (Note 6)	[1]	324
Trade accounts payable (Note 10)		205	150
Amounts payable to members related to income taxes (Note 10)		15	20
Accrued taxes other than amounts related to income		156	181
Accrued interest		69	82
Other current liabilities		139	144
Total current liabilities		1,788	1,458
Long-term debt, less amounts due currently (Note 6)	[1]	5,513	5,646
Liability in lieu of deferred income taxes (Note 10)		2,773	2,612
Employee benefit obligations and other (Note 10 and 11)		2,103	2,063
Total liabilities		12,177	11,779
Commitments and contingencies (Note 7)
Membership interests (Note 8):
Capital account — number of interests outstanding 2016 and 2015 - 635,000,000		7,787	7,621
Accumulated other comprehensive loss		(111)	(113)
Total membership interests		7,676	7,508
Total liabilities and membership interests		$ 19,853	19,287
Bondco [Member]
Current liabilities:
Long-term debt due currently (Note 6)	[2]		$ 41

[1] Secured by first priority lien on certain transmission and distribution assets equally and ratably with all of Oncor's other secured indebtedness. See "Deed of Trust" below for additional information.

[2] The transition bonds were nonrecourse to Oncor and were issued to securitize a regulatory asset.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - shares	Sep. 30, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets [Abstract]
Capital account, interests outstanding	635,000,000	635,000,000

XML

Business and Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Business And Significant Accounting Policies [Abstract]

BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

1.    BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

References in this report to “we,” “our,” “us” and “the company” are to Oncor and/or Bondco, its subsidiary as apparent in the context.  See “Glossary” for definition of terms and abbreviations.

We are a regulated electricity transmission and distribution company principally engaged in providing delivery services to REPs that sell power in the north-central, eastern and western parts of Texas.  The services to REPs included subsidiaries of TCEH through the date of the Reorganized TCEH Spin-Off and subsidiaries of Reorganized TCEH after the date of the Reorganized TCEH Spin-Off.  Revenues from TCEH represented 24% and 25% of our total operating revenues for the nine months ended September 30, 2016 and 2015, respectively.  We are a direct, majority-owned subsidiary of Oncor Holdings, which is a direct, wholly-owned subsidiary of EFIH, a direct, wholly-owned subsidiary of EFH Corp.  EFH Corp. is a subsidiary of Texas Holdings, which is controlled by the Sponsor Group.  Oncor Holdings owns 80.03% of our membership interests, Texas Transmission owns 19.75% of our membership interests and certain members of our management team and board of directors indirectly own the remaining membership interests through Investment LLC.  We are managed as an integrated business; consequently, there are no separate reportable business segments.

Our consolidated financial statements include our wholly-owned, bankruptcy-remote financing subsidiary, Bondco, a variable interest entity.  This financing subsidiary was organized for the limited purpose of issuing certain transition bonds to recover generation-related regulatory asset stranded costs and other qualified costs under an order issued by the PUCT in 2002.  Bondco issued an aggregate $1.3 billion principal amount of transition bonds during 2003 and 2004.  The 2003 Series transition bonds matured and were paid in full in 2015 and the 2004 Series transition bonds matured and were paid in full in May 2016.  Final true-up proceedings and refunds of over-collected transition charges for the transition bonds are being conducted by Oncor and the PUCT during 2016 and are expected to have minimal or no net income impact.

Various “ring-fencing” measures have been taken to enhance the separateness between the Oncor Ring-Fenced Entities and the Texas Holdings Group and our credit quality.  These measures serve to mitigate our and Oncor Holdings’ credit exposure to the Texas Holdings Group and to reduce the risk that our assets and liabilities or those of Oncor Holdings would be substantively consolidated with the assets and liabilities of the Texas Holdings Group in connection with a bankruptcy of one or more of those entities, including the EFH Bankruptcy Proceedings discussed below.  Such measures include, among other things: our sale of a 19.75% equity interest to Texas Transmission in November 2008; maintenance of separate books and records for the Oncor Ring-Fenced Entities; our board of directors being comprised of a majority of independent directors; and prohibitions on the Oncor Ring-Fenced Entities providing credit support to, or receiving credit support from, any member of the Texas Holdings Group.  The assets and liabilities of the Oncor Ring-Fenced Entities are separate and distinct from those of the Texas Holdings Group, and none of the assets of the Oncor Ring-Fenced Entities are available to satisfy the debt or contractual obligations of any member of the Texas Holdings Group.  We do not bear any liability for debt or contractual obligations of the Texas Holdings Group, and vice versa.  Accordingly, our operations are conducted, and our cash flows are managed, independently from the Texas Holdings Group.

EFH Corp. Bankruptcy Proceedings

On the EFH Petition Date, the Debtorscommenced proceedings under Chapter 11 of the US Bankruptcy Code.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  We believe the “ring-fencing” measures discussed above mitigate our potential exposure to the EFH Bankruptcy Proceedings.  See Note 2 for a discussion of the potential impacts of the EFH Bankruptcy Proceedings on our financial statements.

Basis of Presentation

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes included in the 2015 Form 10-K.  In the opinion of Oncor management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations and financial position have been made.  All intercompany items and transactions have been eliminated in consolidation.  The results of operations for an interim period may not give a true indication of results for a full year due to seasonality.  All dollar amounts in the financial statements and tables in the notes are stated in millions of U.S. dollars unless otherwise indicated.

Use of Estimates

Preparation of our financial statements requires management to make estimates and assumptions about future events that affect the reporting of assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense, including fair value measurements.  In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

Reconcilable Tariffs

The PUCT has designated certain tariffs (TCRF, EECRF surcharges, AMS surcharges and charges related to transition bonds) as reconcilable, which means the differences between amounts billed under these tariffs and the related incurred costs are deferred as either regulatory assets or regulatory liabilities.  Accordingly, at prescribed intervals, future tariffs are adjusted to either repay regulatory liabilities or collect regulatory assets.

Contingencies

We evaluate and account for contingencies using the best information available.  A loss contingency is accrued and disclosed when it is probable that an asset has been impaired or a liability incurred and the amount of the loss can be reasonably estimated.  If a range of probable loss is established, the minimum amount in the range is accrued, unless some other amount within the range appears to be a better estimate.  If the probable loss cannot be reasonably estimated, no accrual is recorded, but the loss contingency is disclosed to the effect that the probable loss cannot be reasonably estimated.  A loss contingency will be disclosed when it is reasonably possible that an asset has been impaired or a liability incurred.  If the likelihood that an impairment or incurrence is remote, the contingency is neither accrued nor disclosed.  Gain contingencies are recognized upon realization.

Changes in Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-2 (ASU 2016-2), Leases.  ASU 2016-2 amends previous GAAP to require the balance sheet recognition of lease assets and liabilities for operating leases.  Oncor will be required to adopt ASU 2016-2 by January 1, 2019 and does not expect to early adopt.  Retrospective application to the 2017 and 2018 comparative periods presented will be required in the year of adoption.  We continue to evaluate the impact of ASU 2016-2 on our financial statements.

Since May 2014, the FASB has issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers along with other supplemental guidance (together, Topic 606).  Topic 606 introduces new, increased requirements for disclosure of revenue in financial statements and guidance that are intended to eliminate inconsistencies in the recognition of revenue.  Oncor will be required to adopt Topic 606 by January 1, 2018 and does not expect to early adopt.  We continue to evaluate the impact on our financial statements.  At this time, the adoption is not expected to have a material effect on our reported results of operations, financial condition or cash flows.

XML

EFH Bankruptcy Proceedings

9 Months Ended

Sep. 30, 2016

EFH Bankruptcy Proceedings [Abstract]

EFH BANKRUPTCY PROCEEDINGS

2.   EFH BANKRUPTCY PROCEEDINGS

On the EFH Petition Date, EFH Corp. and the substantial majority of its direct and indirect subsidiaries at the time, including EFIH, EFCH and TCEH, commenced proceedings under Chapter 11 of the US Bankruptcy Code.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  We believe the “ring-fencing” measures discussed above mitigate our potential exposure to the EFH Bankruptcy Proceedings.  See Note 1 and below for further information regarding the EFH Bankruptcy Proceedings and the proposed change in control of our indirect majority owner in connection with such proceedings.

The US Bankruptcy Code automatically enjoined, or stayed, us from judicial or administrative proceedings or filing of other actions against our affiliates or their property to recover, collect or secure our claims arising prior to the EFH Petition Date.  Following the EFH Petition Date, EFH Corp. received approval from the bankruptcy court to pay or otherwise honor certain prepetition obligations generally designed to stabilize its operations.  Included in the approval were the obligations owed to us representing our prepetition electricity delivery fees.  As of the EFH Petition Date, we estimated that our receivables from the Texas Holdings Group totaled approximately $129 million.  As of September 30, 2016, we had collected $128 million of the prepetition amount.  We estimate any potential pre-tax loss resulting from the EFH Bankruptcy Proceedings to be immaterial.  A provision for uncollectible accounts from affiliates had not been established as of September 30, 2016.  As discussed below, the New Plan of Reorganization (defined below) provided for a spin-off of the TCEH Debtors from EFH Corp.  As a result of this  spin-off, Reorganized TCEH and its subsidiaries, including Luminant and TXU Energy, ceased to be affiliates of ours as of October 3, 2016.

The EFH Bankruptcy Proceedings continue to be a complex litigation matter and the full extent of potential impacts on us remain unknown.  We will continue to evaluate our affiliate transactions and contingencies throughout the EFH Bankruptcy Proceedings to determine any risks and resulting impacts on ourresults of operations, financial statements and cash flows.

See Note 10 for details of Oncor’s related-party transactions with members of the Texas Holdings Group.

Potential Change in Indirect Ownership of Oncor

As part of the EFH Bankruptcy Proceedings, the bankruptcy court confirmed the Debtors’ Sixth Amended Plan of Reorganization by order dated December 9, 2015.  In general, among other things, the Sixth Amended Plan of Reorganization provided for a series of transactions to be effected pursuant to a merger and purchase agreement (Hunt Merger and Purchase Agreement) with an investor group consisting of certain unsecured creditors of TCEH and an affiliate of Hunt Consolidated, Inc. (Hunt), as well as certain other investors designated by Hunt (collectively, the Hunt Investor Group), that would have led to a significant change in the indirect equity ownership of Oncor.

The Debtors and certain creditors entered into a Plan Support Agreement (as amended, Plan Support Agreement) that provided for, among other things, their respective obligations to act and/or support Plans of Reorganization. On May 1, 2016, certain first lien creditors of TCEH delivered a written notice (Plan Support Termination Notice) to the Debtors and the other parties to the Plan Support Agreement notifying such parties of the occurrence of a Plan Support Termination Event (as defined in the Plan Support Agreement).  The delivery of the Plan Support Agreement Termination Notice caused the Sixth Amended Plan of Reorganization to become null and void.

On May 1, 2016, following receipt of the Plan Support Termination Notice, EFH Corp. and EFIH delivered a written notice (Merger and Purchase Agreement Termination Notice) to the Hunt Investor Group notifying the Hunt Investor Group that EFH Corp. and EFIH terminated the Hunt Merger and Purchase Agreement. The termination of the Hunt Merger and Purchase Agreement also caused the automatic termination (without the necessity of further action) of (i) certain agreements defining the investment obligations of certain Hunt Investor Group members, and (ii) a letter agreement between Oncor and the Hunt Investor Group.

Following the occurrence of the Plan Support Termination Event as described above, the Debtors filed a new joint Plan of Reorganization (New Plan of Reorganization) pursuant to Chapter 11 of the Bankruptcy Code and a related disclosure statement with the bankruptcy court on May 1, 2016.

In connection with the Sixth Amended Plan of Reorganization, EFH Corp. took the position that, unless the Hunt Investor Group had otherwise acquired, or entered into a definitive agreement with Texas Transmission for the acquisition of the equity interest in Oncor held by Texas Transmission at the consummation of the transactions, certain of EFH Corp.’s  rights contained in the Investor Rights Agreement (Investor Rights Agreement), dated November 2008 among Oncor and certain of its direct and indirect equity holders, including EFH Corp. and Texas Transmission, would require Texas Transmission to sell its equity interest in Oncor to the Hunt Investor Group. In this regard, in October 2015, EFH Corp. filed a complaint against Texas Transmission alleging breach of Texas Transmission’s obligations under the Investor Rights Agreement for failing to agree to sell its equity interest in Oncor and, if found to be a valid drag right and a valid IPO Conversion (as defined in the Investor Rights Agreement), to cooperate with an IPO Conversion. 

The Hunt Investor Group intervened in the pending litigation.  On May 20, 2016, following the Plan Support Termination Notice, the bankruptcy court issued an order dismissing the action and related motions and retaining jurisdiction related to the interpretation and implementation of such order.  We cannot predict the ultimate outcome of any subsequent litigation relating to the Investor Rights Agreement and the impact of such litigation, particularly in light of the transactions discussed below.

The New Plan of Reorganization provides that the confirmation and effective date of the New Plan of Reorganization with respect to the TCEH Debtors may occur (and on October 3, 2016, it did occur) separate from, and independent of, the confirmation and effective date of the New Plan of Reorganization with respect to the EFH Debtors. The New Plan of Reorganization, subject to certain conditions and required regulatory approvals, provides for, among other things:

· with respect to the TCEH Debtors, either (a) a tax-free spin-off from EFH Corp., including a transaction that will result in a partial step-up in the tax basis of certain TCEH assets distributed to a newly formed entity wholly owned by TCEH, or (b) a taxable transaction that results in the assets of the TCEH Debtors being distributed to a newly formed entity wholly owned by Reorganized TCEH (TCEH Transactions), and

· with respect to the EFH Debtors, the reorganization of EFH Corp. and EFIH (Reorganized EFH) either pursuant to (a) an equity investment (which may be from existing creditors or third-party investors) or (b) pursuant to a standalone plan of reorganization, in which creditors receive shares of common stock of Reorganized EFH.

Solely as it pertains to the TCEH Debtors, the disclosure statement was approved by the bankruptcy court.  The bankruptcy court confirmed the New Plan of Reorganization with respect to the TCEH Debtors on August 26, 2016, and it became effective by its terms, and the Reorganized TCEH Spin-Off occurred effective October 3, 2016.

On July 29, 2016, (i) the EFH Debtors entered into a Plan Support Agreement (NEE Plan Support Agreement) with NextEra Energy, Inc. (NEE)  to effect an agreed upon restructuring of the EFH Debtors pursuant to an amendment to the  New Plan of Reorganization (Amended New Plan) and (ii) EFH Corp. and EFIH entered into an Agreement and Plan of Merger (NEE Merger Agreement) with NEE and EFH Merger Co., LLC (Merger Sub), a wholly-owned subsidiary of NEE. Pursuant to the NEE Merger Agreement, at the effective time of the Amended New Plan with respect to the EFH Debtors, EFH Corp. will merge with and into Merger Sub (NEE Merger) with Merger Sub surviving as a wholly owned subsidiary of NEE. 

In August 2016, the EFH Debtors filed a motion seeking bankruptcy court approval of entry into the NEE Merger Agreement, a related termination fee and the NEE Plan Support Agreement. The NEE Merger Agreement includes various conditions precedent to consummation of the transactions contemplated thereby, including, among others, a condition that certain approvals and rulings be obtained, including from, among others, the PUCT and the IRS and a condition that the TCEH Transactions have occurred. NEE will not be required to consummate the NEE Merger if, among other items, the PUCT approval is obtained but with conditions, commitments or requirements that impose a Burdensome Condition (as defined in the NEE Merger Agreement). NEE’s and Merger Sub’s obligations under the NEE Merger Agreement are not subject to any financing condition.  The bankruptcy court approved EFH Corp. and EFIH’s entry into the NEE Merger Agreement, the related termination fee, and the NEE Plan Support Agreement by order dated September 19, 2016.

Following approval of the NEE Merger Agreement by the bankruptcy court and until confirmation of the Amended New Plan by the bankruptcy court, EFH and EFIH may continue or have discussions or negotiations with respect to acquisition proposals for Reorganized EFH (x) with persons that were in active negotiation at the time of approval of the NEE Merger Agreement by the bankruptcy court and (y) with persons that submit an unsolicited acquisition proposal that is, or is reasonably likely to lead to, a Superior Proposal (as defined in the NEE Merger Agreement). 

The NEE Merger Agreement may be terminated upon certain events, including, among other things:

· by either party, if the NEE Merger is not consummated by March 26, 2017, subject to a 90-day extension under certain conditions; or

· by EFH Corp. or EFIH, until the entry of the confirmation order of the Amended New Plan with respect to the EFH Debtors, if their respective board of directors or managers determines after consultation with its independent financial advisors and outside legal counsel, and based on advice of such counsel, that the failure to terminate the NEE Merger Agreement is inconsistent with its fiduciary duties; provided that a material breach of EFH Corp.’s or EFIH’s obligations under certain provisions of the NEE Merger Agreement has not provided the basis for such determination.

If the NEE Merger Agreement is terminated for certain reasons set forth therein and an alternative transaction is consummated by EFH or EFIH in which neither NEE nor any of its affiliates obtains direct or indirect ownership of approximately 80% of Oncor, then EFH and EFIH will pay a termination fee of $275,000,000 to NEE.

Following the execution and delivery of the NEE Merger Agreement, EFIH requested, pursuant to the NEE Merger Agreement, that Oncor Holdings and Oncor enter into a letter agreement (NEE Letter Agreement) with NEE and Merger Sub. The NEE Letter Agreement was executed on August 4, 2016 and sets forth certain rights and obligations of the Oncor Ring-Fenced Entities, NEE and Merger Sub to cooperate in the manner set forth therein with respect to initial steps to be taken in connection with the acquisition of Reorganized EFH (EFH Acquisition) and the other transactions described in the NEE Merger Agreement.

The NEE Letter Agreement is not intended to give NEE or Merger Sub, directly or indirectly, the right to control or direct the operations of any of the Oncor Ring-Fenced Entities prior to the receipt of all approvals required by the bankruptcy court, the PUCT and other governmental entities and the consummation of the EFH Acquisition and related transactions (if and when such transactions are consummated). In addition, Oncor Holdings and Oncor have not endorsed or approved any restructuring involving Oncor Holdings or Oncor or any other transaction proposed by NEE or Merger Sub involving Oncor Holdings or Oncor.

On October 29, 2016, we entered into an Interest Purchase Agreement (OMI Agreement) with T & D Equity Acquisition, LLC, a wholly-owned subsidiary of NEE (T&D Equity Acquisition) and Investment LLC pursuant to which T&D Equity Acquisition would purchase the 1,396,008 limited liability company interests of Oncor that Investment LLC owns in exchange for a purchase price of approximately $27 million.  The OMI Agreement contains various conditions precedent to consummation of the transactions contemplated thereby, including the consummation of the transactions contemplated by the NEE Merger Agreement.

On October 30, 2016, an affiliate of NEE entered into an Agreement and Plan of Merger (the TTI Merger Agreement) with Texas Transmission Holdings Corporation (the parent of Texas Transmission) and certain of its affiliates to purchase Texas Transmission's 19.75% equity interest in Oncor for approximately $2.4 billion.  The parties have agreed to use their best efforts to have the TTI Merger Agreement close contemporaneously with the NEE Merger. The TTI Merger Agreement also contains various conditions precedent to consummation of the transactions contemplated thereby, including a requirement that EFH Corp., subject to bankruptcy court approval, waive its rights of first refusal under the Investor Rights Agreement to purchase Texas Transmission's 19.75% equity interest in Oncor.

Notwithstanding these pending transactions, we cannot predict the ultimate outcome of the EFH Bankruptcy Proceedings, including whether the transactions contemplated by any Plan of Reorganization, including the EFH Acquisition, will (or when they will) close.  In this regard, we cannot predict how any reorganization of EFH Corp. and EFIH ultimately will impact Oncor or what form any change in indirect ownership of Oncor may take.  On September 19, 2016, the bankruptcy court approved the disclosure statement as it relates to the EFH Debtors.  The confirmation hearing for the New Plan of Reorganization as it relates to the EFH Debtors is scheduled to commence on December 1, 2016.

Regulatory Matters Related to EFH Bankruptcy Proceedings

In September 2015, Oncor and the Hunt Investor Group filed in PUCT Docket No. 45188 a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Sixth Amended Plan of Reorganization.  On March 24, 2016, the PUCT issued an order conditionally approving the joint application.  On April 18, 2016, the Hunt Investor Group and certain interveners in PUCT Docket No. 45188 filed motions for rehearing and on May 19, 2016, the PUCT denied such motions and the order became final.  The Hunt Investor Group filed a petition with the Travis County District Court on June 17, 2016 seeking review of the order.  We cannot predict the results of the review or the ultimate disposition of PUCT Docket No. 45188, particularly in  light of the termination of the Sixth Amended Plan of Reorganization and the other pending transactions discussed above.  

In connection with PUCT Docket No. 45188, certain cities that have retained original jurisdiction over electric utility rates passed resolutions directing Oncor to file rate review proceedings.  For more information, see Note 3 – “City Rate Reviews”.

The NEE Merger Agreement contemplates that Oncor and NEE file a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Amended New Plan.  On October 31, 2016, Oncor and NEE filed that joint application in PUCT Docket No. 46238.

Settlement Agreement

In connection with the EFH Bankruptcy Proceedings, the EFH Debtors and various creditor parties entered into a settlement agreement (the Settlement Agreement) in August 2015 (as amended in September 2015) to compromise and settle, among other things (a) intercompany claims among the EFH Debtors, (b) claims and causes of actions against holders of first lien claims against TCEH and the agents under the TCEH Senior Secured Facilities, (c) claims and causes of action against holders of interests in EFH Corp. and certain related entities and (d) claims and causes of action against each of the EFH Debtors' current and former directors, the Sponsor Group, managers and officers and other related entities. The Settlement Agreement contemplates a release of such claims upon approval of the Settlement Agreement by the bankruptcy court, which approval was obtained in December 2015.

The Settlement Agreement settles substantially all inter-debtor claims through the effective date of the Settlement Agreement.  These settled claims include potentially contentious inter-debtor claims, including various potential avoidance actions and claims arising under numerous debt agreements, tax sharing agreements, and contested property transfers.  The release provisions of the Settlement Agreement took effect immediately upon the entry of the bankruptcy court order approving the Settlement Agreement. In this regard, substantially all of the potential affiliate claims, derivative claims and other types of disputes among affiliates (including claims against Oncor) have been resolved by bankruptcy court order.  Accordingly, we believe the Settlement Agreement resolves all affiliate claims against Oncor and its assets existing as of the effective date of the Settlement Agreement.

XML

Regulatory Matters

9 Months Ended

Sep. 30, 2016

Regulatory Matters [Abstract]

REGULATORY MATTERS

3.    REGULATORY MATTERS

Change in Control Reviews

In September 2015, Oncor and the Hunt Investor Group filed in PUCT Docket No. 45188 a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Sixth Amended Plan of Reorganization.  On March 24, 2016, the PUCT issued an order conditionally approving the joint application.  On April 18, 2016, the Hunt Investor Group and certain interveners in PUCT Docket No. 45188 filed motions for rehearing and on May 19, 2016, the PUCT denied such motions and the order became final.  The Hunt Investor Group filed a petition with the Travis County District Court on June 17, 2016 seeking review of the order.  We cannot predict the results of the review or the ultimate disposition of PUCT Docket No. 45188, particularly in light of the termination of the Sixth Amended Plan of Reorganization and the other pending transactions discussed in Note 2 to Financial Statements.  For additional information regarding the Sixth Amended Plan of Reorganization and application for regulatory approval, see Note 2 to Financial Statements and “City Rate Reviews” below.

The NEE Merger Agreement contemplates that Oncor and NEE file a joint application with the PUCT seeking certain regulatory approvals with respect to the transactions contemplated by the Amended New Plan.  On October 31, 2016, Oncor and NEE filed that joint application in PUCT Docket No. 46238. For additional information regarding the Amended New Plan and application for regulatory approval, see Note 2 to Financial Statements.

City Rate Reviews

Oncor has received resolutions passed by approximately 58 cities with original jurisdiction over electric utility rates directing Oncor to file rate review proceedings.  The resolutions passed required Oncor to file a rate review with each city by September 1, 2016 based on a January 1, 2015 to December 31, 2015 test year.  However, Oncor has subsequently been notified by counsel representing these cities that these rate review proceedings have been abated indefinitely, pending resolution of Oncor ownership issues. The notice provides that if and when the cities desire to proceed with a rate inquiry, cities will notify Oncor in writing and inform Oncor of a precise date of the rate case, which will be at least 120 days from receipt of the communication that lifts the abatement.

2008 Rate Review

In August 2009, the PUCT issued a final order with respect to our June 2008 rate review filing with the PUCT and 204 cities based on a test year ended December 31, 2007 (PUCT Docket No. 35717), and new rates were implemented in September 2009.  We and four other parties appealed various portions of the rate review final order to a state district court.  In January 2011, the district court signed its judgment reversing the PUCT with respect to two issues: the PUCT’s disallowance of certain franchise fees and the PUCT’s decision that PURA no longer requires imposition of a rate discount for state colleges and universities.  We filed an appeal with the Texas Third Court of Appeals (Austin Court of Appeals) in February 2011 with respect to the issues we appealed to the district court and did not prevail upon, as well as the district court’s decision to reverse the PUCT with respect to discounts for state colleges and universities.  In early August 2014, the Austin Court of Appeals reversed the district court and affirmed the PUCT with respect to the PUCT’s disallowance of certain franchise fees and the PUCT’s decision that PURA no longer requires imposition of a rate discount for state colleges and universities.  The Austin Court of Appeals also reversed the PUCT and district court’s rejection of a proposed consolidated tax savings adjustment arising out of EFH Corp.’s ability to offset our taxable income against losses from other investments and remanded the issue to the PUCT to determine the amount of the consolidated tax savings adjustment.  In late August 2014, we filed a motion on rehearing with the Austin Court of Appeals with respect to certain appeal issues on which we were not successful, including the consolidated tax savings adjustment.  In December 2014, the Austin Court of Appeals issued its opinion, clarifying that it was rendering judgment on the rate discount for state colleges and universities issue (affirming that PURA no longer requires imposition of the rate discount) rather than remanding it to the PUCT, and dismissing the motions for rehearing regarding the franchise fee issue and the consolidated tax savings adjustment.  We filed a petition for review with the Texas Supreme Court in February 2015.  The Texas Supreme Court granted the petition for review and heard oral arguments in September 2016.  There is no deadline for the court to act.  If our appeals efforts are unsuccessful and the proposed consolidated tax savings adjustment is implemented, we estimate that on remand, the impact on earnings of the consolidated tax savings adjustment’s value could range from zero, as originally determined by the PUCT in Docket 35717, to a $135 million loss (after tax) including interest. Interest accrues at the PUCT approved rate for over-collections, which is 0.18% for 2016. We do not believe that any of the other issues ruled upon by the Austin Court of Appeals would result in a material impact to our results of operations or financial condition.

See Note 3 to Financial Statements in our 2015 Form 10-K for additional information regarding regulatory matters.

XML

Regulatory Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Regulatory Assets and Liabilities [Abstract]

REGULATORY ASSETS AND LIABILITIES

4.    REGULATORY ASSETS AND LIABILITIES

Recognition of regulatory assets and liabilities and the amortization periods over which they are expected to be recovered or refunded through rate regulation reflect the decisions of the PUCT.  Components of the regulatory assets and liabilities are provided in the table below.  Amounts not earning a return through rate regulation are noted.

	Remaining Rate Recovery/Amortization Period at	Carrying Amount At
	September 30, 2016	September 30, 2016		December 31, 2015
Regulatory assets:
Generation-related regulatory assets securitized by transition bonds (a)(d)	-	$	-	$	31
Employee retirement costs being amortized	3 years		27		38
Unrecovered employee retirement costs incurred since the last rate review period (b)	To be determined		318		291
Employee retirement liability (a)(b)(c)	To be determined		812		853
Self-insurance reserve (primarily storm recovery costs) being amortized ― net	3 years		72		95
Unrecovered self-insurance reserve incurred since the last rate review period ― net (b)	To be determined		374		332
Securities reacquisition costs (pre-industry restructure)	1 year or less		6		14
Securities reacquisition costs (post-industry restructure) ― net	Lives of related debt		10		9
Recoverable amounts in lieu of deferred income taxes ― net	Life of related asset or liability		3		12
Deferred conventional meter and metering facilities depreciation	Largely 4 years		83		100
Under-recovered AMS costs	To be determined		194		164
Energy efficiency performance bonus (a)	1 year or less		12		10
Under-recovered wholesale transmission service expense (a)	1 year or less		15		-
Other regulatory assets	Various		8		9
Total regulatory assets			1,934		1,958
Regulatory liabilities:
Estimated net removal costs	Lives of related assets		782		686
Investment tax credit and protected excess deferred taxes	Various		10		14
Over-collection of transition bond charges (a)(d)	1 year or less		6		29
Over-recovered wholesale transmission service expense (a)	1 year or less		-		24
Energy efficiency programs (a)	Not applicable		22		11
Total regulatory liabilities			820		764
Net regulatory asset		$	1,114	$	1,194

____________

(a) Not earning a return in the regulatory rate-setting process.

(b) Recovery is specifically authorized by statute or by the PUCT, subject to reasonableness review.

(c) Represents unfunded liabilities recorded in accordance with pension and OPEB accounting standards.

(d) Bondco net regulatory liabilities at September 30, 2016 were zero  (excludes $6 million of over-collections related to transition bonds assumed by Oncor for final settlement). Bondco net regulatory assets of $10 million at December 31, 2015 consisted of $31 million included in generation-related regulatory assets net of the regulatory liability for over-collection of transition bond revenues of $21 million (excludes $8 million of over-collections related to transition bonds assumed by Oncor for final settlement).

XML

Borrowings Under Credit Facilities

9 Months Ended

Sep. 30, 2016

Borrowings Under Credit Facilities [Abstract]

BORROWINGS UNDER CREDIT FACILITIES

5.BORROWINGS UNDER CREDIT FACILITIES 

At September 30, 2016, we had a $2.0 billion secured revolving credit facility to be used for working capital and general corporate purposes, issuances of letters of credit and support for any commercial paper issuances.  In October 2016, we exercised the second of twoone-year extensions available to us and extended the term of the revolving credit facility to October 2018.  The terms of the revolving credit facility allow us to request an increase in our borrowing capacity of $100 million in the aggregate provided certain conditions are met, including lender approval.

Borrowings under the revolving credit facility are classified as short-term on the balance sheet and are secured equally and ratably with all of our other secured indebtedness by a first priority lien on property we acquired or constructed for the transmission and distribution of electricity.  The property is mortgaged under the Deed of Trust.

At September 30, 2016, we had outstanding borrowings under the revolving credit facility totaling $880 million with an interest rate of 1.52% and outstanding letters of credit totaling $7 million.  At December 31, 2015, we had outstanding borrowings under the revolving credit facility totaling $840 million with an interest rate of 1.48% and outstanding letters of credit totaling $7 million.

Borrowings under the revolving credit facility bear interest at per annum rates equal to, at our option, (i) LIBOR plus a spread ranging from 1.00% to 1.75% depending on credit ratings assigned to our senior secured non-credit enhanced long-term debt or (ii) an alternate base rate (the highest of (1) the prime rate of JPMorgan Chase, (2) the federal funds effective rate plus 0.50%, and (3) daily one-month LIBOR plus 1.00%) plus a spread ranging from 0.00% to 0.75% depending on credit ratings assigned to our senior secured non-credit enhanced long-term debt.  At September 30, 2016, all outstanding borrowings bore interest at LIBOR plus 1.00%.  Amounts borrowed under the revolving credit facility, once repaid, can be borrowed again from time to time.

An unused commitment fee is payable quarterly in arrears and upon termination or commitment reduction at a rate equal to 0.100% to 0.275% (such spread depending on certain credit ratings assigned to our senior secured debt) of the daily unused commitments under the revolving credit facility.  Letter of credit fees on the stated amount of letters of credit issued under the revolving credit facility are payable to the lenders quarterly in arrears and upon termination at a rate per annum equal to the spread over adjusted LIBOR.  Customary fronting and administrative fees are also payable to letter of credit fronting banks.  At September 30, 2016, letters of credit bore interest at 1.20%, and a commitment fee (at a rate of 0.10% per annum) was payable on the unfunded commitments under the revolving credit facility, each based on our current credit ratings.

Subject to the limitations described below, borrowing capacity available under the revolving credit facility at September 30, 2016 and December 31, 2015 was $1.113 billion and $1.153 billion, respectively.  Generally, our indentures and revolving credit facility limit the incurrence of other secured indebtedness except for indebtedness secured equally and ratably with the indentures and revolving credit facility and certain permitted exceptions.  As described further in Note 6, the Deed of Trust permits us to secure indebtedness (including borrowings under our revolving credit facility) with the lien of the Deed of Trust.  At September 30, 2016, the available borrowing capacity of the revolving credit facility could be fully drawn.

The revolving credit facility contains customary covenants for facilities of this type, restricting, subject to certain exceptions, us and our subsidiaries from, among other things: incurring additional liens; entering into mergers and consolidations; and sales of substantial assets.  In addition, the revolving credit facility requires that we maintain a consolidated senior debt-to-capitalization ratio of no greater than 0.65 to 1.00 and observe certain customary reporting requirements and other affirmative covenants.  For purposes of the ratio, debt is calculated as indebtedness defined in the revolving credit facility (principally, the sum of long-term debt, any capital leases, short-term debt and debt due currently in accordance with GAAP).  The debt calculation excludes any outstanding transition bonds issued by Bondco, but includes any unamortized fair value discount related to Bondco.  Capitalization is calculated as membership interests determined in accordance with GAAP plus indebtedness described above.  At September 30, 2016, we were in compliance with this covenant and with all other covenants.

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2016

Long-Term Debt [Abstract]

LONG-TERM DEBT

6.    LONG-TERM DEBT

At September 30, 2016 and December 31, 2015, our long-term debt consisted of the following:

	September 30,		December 31,
	2016		2015
Oncor (a):
5.000% Fixed Senior Notes due September 30, 2017	$	324	$	324
6.800% Fixed Senior Notes due September 1, 2018		550		550
2.150% Fixed Senior Notes due June 1, 2019		250		250
5.750% Fixed Senior Notes due September 30, 2020		126		126
4.100% Fixed Senior Notes due June 1, 2022		400		400
7.000% Fixed Debentures due September 1, 2022		800		800
2.950% Fixed Senior Notes due April 1, 2025		350		350
7.000% Fixed Senior Notes due May 1, 2032		500		500
7.250% Fixed Senior Notes due January 15, 2033		350		350
7.500% Fixed Senior Notes due September 1, 2038		300		300
5.250% Fixed Senior Notes due September 30, 2040		475		475
4.550% Fixed Senior Notes due December 1, 2041		400		400
5.300% Fixed Senior Notes due June 1, 2042		500		500
3.750% Fixed Senior Notes due April 1, 2045		550		375
Unamortized discount and debt issuance costs		(38)		(54)
Less amount due currently		(324)		-
Long-term debt, less amounts due currently — Oncor		5,513		5,646
Bondco (b):
5.290% Fixed Series 2004 Bonds due May 15, 2016		-		41
Total		-		41
Less amount due currently		-		(41)
Long-term debt, less amounts due currently — Bondco		-		-
Total long-term debt, less amounts due currently	$	5,513	$	5,646

__________

(a)   Secured by first priority lien on certain transmission and distribution assets equally and ratably with all of Oncor’s other secured indebtedness.  See “Deed of Trust” below for additional information.

(b)   The transition bonds were nonrecourse to Oncor and were issued to securitize a regulatory asset.

Debt-Related Activity in 2016

Debt Repayments

Repayments of long-term debt in the nine months ended September 30, 2016 totaled $41 million, representing the final transition bond principal payment at the scheduled maturity date.

Issuance of Senior Secured Notes

In August 2016, we completed the sale of $175 million aggregate principal amount of 3.75% senior secured notes maturing in April 2045 (Additional 2045 Notes).  The Additional 2045 Notes were an additional issuance of our 3.75% senior secured notes maturing in April 2045, $375 million aggregate principal amount of which were previously issued in March 2015 (2045 Notes).  The Additional 2045 Notes were issued as part of the same series as the 2045 Notes.  We used the net proceeds of approximately $185 million from the sale of the Additional 2045 Notes to repay borrowings under our revolving credit facility and for general corporate purposes.  The Additional 2045 Notes and 2045 Notes are secured by the first priority lien and are secured equally and ratably with all of our other secured indebtedness as discussed below.

Interest on the Additional 2045 Notes is payable in cash semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2016.  We may at our option redeem the Additional 2045 Notes, in whole or in part, at any time, at a price equal to 100% of their principal amount, plus accrued and unpaid interest and, until October 1, 2044, a make-whole premium.  The Additional 2045 Notes also contain customary events of default, including failure to pay principal or interest on the notes when due.

The Additional 2045 Notes were issued in a private placement and were not registered under the Securities Act of 1933, as amended.  We have agreed, subject to certain exceptions, to register with the SEC notes having substantially identical terms as the Additional 2045 Notes (except for provisions relating to the transfer restriction and payment of additional interest) as part of an offer to exchange freely tradable exchange notes for the Additional 2045 Notes.  We have agreed to use commercially reasonable efforts to cause the exchange offer to be completed within 315 days after the issue date of the Additional 2045 Notes.  If a registration statement for the exchange offer is not declared effective by the SEC within 270 days after the issue date of the Additional 2045 Notes or the exchange offer is not completed within 315 days after the issue date of the Additional 2045 Notes (an exchange default), then the annual interest rate on the Additional 2045 Notes will increase 50 basis points per annum until the earlier of the expiration of the exchange default or the second anniversary of the issue date of the Additional 2045 Notes.

Deed of Trust

Our secured indebtedness, including the revolving credit facility described in Note 5, is secured equally and ratably by a first priority lien on property we acquired or constructed for the transmission and distribution of electricity.  The property is mortgaged under the Deed of Trust.  The Deed of Trust permits us to secure indebtedness (including borrowings under our revolving credit facility) with the lien of the Deed of Trust up to the aggregate of (i) the amount of available bond credits, and (ii) 85% of the lower of the fair value or cost of certain property additions that could be certified to the Deed of Trust collateral agent.  At September 30, 2016, the amount of available bond credits was $2.534 billion and the amount of future debt we could secure with property additions, subject to those property additions being certified to the Deed of Trust collateral agent, was $1.586 billion.

Fair Value of Long-Term Debt

At September 30, 2016 and December 31, 2015, the estimated fair value of our long-term debt (including current maturities, if any) totaled $7.112 billion and $6.287 billion, respectively, and the carrying amount totaled $5.837 billion and $5.687 billion, respectively.  The fair value is estimated using observable market data, representing Level 2 valuations under accounting standards related to the determination of fair value.

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

7.    COMMITMENTS AND CONTINGENCIES

EFH Bankruptcy Proceedings

On the EFH Petition Date, the EFH Debtorscommenced the EFH Bankruptcy Proceedings.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  See Notes 2 and 10 for a discussion of the potential impacts on us as a result of the EFH Bankruptcy Proceedings and our related-party transactions involving members of the Texas Holdings Group, respectively.

Legal/Regulatory Proceedings

We are involved in various legal and administrative proceedings in the normal course of business, the ultimate resolution of which, in the opinion of management, should not have a material effect upon our financial position, results of operations or cash flows.  See Note 3 in this report and Note 8 to Financial Statements in our 2015 Form 10-K for additional information regarding our legal and regulatory proceedings.

XML

Membership Interests

9 Months Ended

Sep. 30, 2016

Membership Interests [Abstract]

MEMBERSHIP INTERESTS

8.    MEMBERSHIP INTERESTS

Cash Distributions

Distributions are limited by our required regulatory capital structure to be at or below the assumed debt-to-equity ratio established periodically by the PUCT for ratemaking purposes, which is currently set at 60% debt to 40% equity.  At September 30, 2016, $69 million was available for distribution to our members as our regulatory capitalization ratio was 59.6% debt to 40.4% equity.  The PUCT has the authority to determine what types of debt and equity are included in a utility’s debt-to-equity ratio.  For purposes of this ratio, debt is calculated as long-term debt plus unamortized gains on reacquired debt less unamortized issuance expenses, premiums and losses on reacquired debt.  Equity is calculated as membership interests determined in accordance with GAAP, excluding the effects of purchase accounting (which included recording the initial goodwill and fair value adjustments and the subsequent related impairments and amortization).

On October 26, 2016, our board of directors declared a cash distribution of $41 million, which was paid to our members on October 27, 2016.  During the nine months ended September 30, 2016, our board of directors declared, and we paid, the following cash distributions to our members:

Declaration Date	Payment Date	Amount
July 27, 2016	August 11, 2016	$	68
April 27, 2016	May 11, 2016	$	65
February 24, 2016	February 25, 2016	$	56

Membership Interests

The following table presents the changes to membership interests during the nine months ended September 30, 2016 and 2015:

	Capital Accounts		Accumulated Other Comprehensive Income (Loss)		Total Membership Interests
Balance at December 31, 2015	$	7,621	$	(113)	$	7,508
Net income		355		-		355
Distributions		(189)		-		(189)
Net effects of cash flow hedges (net of tax)		-		1		1
Defined benefit pension plans (net of tax)		-		1		1
Balance at September 30, 2016	$	7,787	$	(111)	$	7,676
Balance at December 31, 2014	$	7,625	$	(107)	$	7,518
Net income		359		-		359
Distributions		(283)		-		(283)
Net effects of cash flow hedges (net of tax)		-		1		1
Defined benefit pension plans (net of tax)		-		1		1
Balance at September 30, 2015	$	7,701	$	(105)	$	7,596

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes to accumulated other comprehensive income (loss) for the nine months ended September 30, 2016 and 2015:

	Cash Flow Hedges – Interest Rate Swap		Defined Benefit Pension and OPEB Plans		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2015	$	(22)	$	(91)	$	(113)
Defined benefit pension plans (net of tax)		-		1		1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges		1		-		1
Balance at September 30, 2016	$	(21)	$	(90)	$	(111)
Balance at December 31, 2014	$	(24)	$	(83)	$	(107)
Defined benefit pension plans (net of tax)		-		1		1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges		1		-		1
Balance at September 30, 2015	$	(23)	$	(82)	$	(105)

XML

Pension and OPEB Plans

9 Months Ended

Sep. 30, 2016

Pension And Other Postretirement Employee Benefits Plans [Abstract]

PENSION AND OPEB PLANS

9.    PENSION AND OPEB PLANS

Pension Plans

We sponsor the Oncor Retirement Plan and also have liabilities under the EFH Retirement Plan, both of which are qualified pension plans under Section 401(a) of the Internal Revenue Code of 1986, as amended, and are subject to the provisions of ERISA.  Employees do not contribute to either plan.  We also have a supplemental pension plan for certain employees whose retirement benefits cannot be fully earned under the qualified retirement plans.  See Note 10 to Financial Statements in our 2015 Form 10-K for additional information regarding pension plans.

Oncor OPEB Plan

The OncorOPEB Plan covers our eligible current and future retirees as well as certain eligible retirees of EFH Corp. whose employment included service with both Oncor (or a predecessor regulated electric business) and a non-regulated business of EFH Corp.  At September 30, 2016, EFH Corp. retained its portion of the liability for retiree benefits related to those retirees.   As we are not responsible for EFH Corp.’s portion of the Oncor OPEB Plan’s unfunded liability, that amount is not reported on our balance sheet.  See Note 10 to Financial Statements in our 2015 Form 10-K for additional information.

Pension and OPEB Costs

Our net costs related to pension plans and the Oncor OPEB Plan for the three and nine months ended September 30, 2016 and 2015 were comprised of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Components of net allocated pension costs:
Service cost	$	6	$	6	$	18	$	18
Interest cost		33		33		101		99
Expected return on assets		(30)		(29)		(92)		(87)
Amortization of net loss		10		16		30		48
Net pension costs		19		26		57		78
Components of net OPEB costs:
Service cost		2		2		6		6
Interest cost		12		11		36		33
Expected return on assets		(2)		(3)		(6)		(9)
Amortization of prior service cost		(5)		(5)		(15)		(15)
Amortization of net loss		9		8		26		24
Net OPEB costs		16		13		47		39
Total net pension and OPEB costs		35		39		104		117
Less amounts deferred principally as property or a regulatory asset		(25)		(28)		(75)		(84)
Net amounts recognized as expense	$	10	$	11	$	29	$	33

The discount rates reflected in net pension and OPEB costs in 2016 are 4.28%,  4.57% and 4.60% for the Oncor Retirement Plan, the EFH Retirement Plan and the Oncor OPEB Plan, respectively.  The expected return on pension and OPEB plan assets reflected in the 2016 cost amounts are 5.53%,  5.64% and 6.30% for the Oncor Retirement Plan, the EFH Retirement Plan and the Oncor OPEB Plan, respectively.

Pension and OPEB Plans Cash Contributions

We made cash contributions to the pension plans and Oncor OPEB Plan of $3 million and $22 million, respectively, during the nine months ended September 30, 2016.  We expect to make additional cash contributions to the pension plans and Oncor OPEB Plan of $1million and $16 million, respectively, during the remainder of 2016. Our aggregate pension plans and Oncor OPEB Plan funding is expected to total approximately $479 million and $160 million, respectively, in the 2016 to 2020 period based on the latest actuarial projections.

XML

Related-Party Transactions

9 Months Ended

Sep. 30, 2016

Related-Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS

10.   RELATED-PARTY TRANSACTIONS

The following represent our significant related-party transactions at September 30, 2016.  See Note 2 for additional information regarding related-party contingencies resulting from the EFH Bankruptcy Proceedings  and information regarding the Reorganized TCEH Spin-Off. As a result of the Reorganized TCEH Spin-Off, Reorganized TCEH and its subsidiaries, including Luminant and TXU Energy, ceased to be related parties as of October 3, 2016.

.

· We recorded revenue from TCEH, principally for electricity delivery fees, which totaled $265 million and $279 million for the three months ended September 30, 2016 and 2015, respectively, and $700 million and $739 million for the nine months ended September 30, 2016 and 2015, respectively.  The fees are based on rates regulated by the PUCT that apply to all REPs.  These revenues included less than $1 million for each of the three- and nine-month periods ended September 30, 2016 and 2015 pursuant to a transformer maintenance agreement with TCEH.   

Trade accounts and other receivables from EFH Corp. affiliates – net reported on our balance sheet, primarily consisting of trade receivables from TCEH related to these electricity delivery fees, are as follows:

	At September 30,		At December 31,
	2016		2015
Trade accounts and other receivables from affiliates	$	149	$	120
Trade accounts and other payables to affiliates		(3)		(2)
Trade accounts and other receivables from affiliates – net	$	146	$	118

· EFH Corp. subsidiaries charge us for certain administrative services at cost.  Our payments to EFH Corp. subsidiaries for administrative services, which are primarily reported in operation and maintenance expenses, totaled less than $1million and $5 million for the three months ended September 30, 2016 and 2015, respectively, and less than $1 million and $14 million for the nine months ended September 30, 2016 and 2015, respectively.  We also charge each other for shared facilities at cost.  Our payments to EFH Corp. for shared facilities totaled $1 million for each of the three-month periods ended September 30, 2016 and 2015 and $3 million for each of the nine-month periods ended September 30, 2016 and 2015.Payments we received fromEFH Corp. subsidiaries related to shared facilities totaled $1 million and less than $1  million for the three-month periods ended September 30, 2016 and 2015, respectively,and  $1 million for each of the nine-month periods ended September 30, 2016 and 2015.

· We are not a member of EFH Corp.’s consolidated tax group, but EFH Corp.’s consolidated federal income tax return includes EFH Corp.’s portion of our results due to EFH Corp.’s equity ownership in us.  Under the terms of a tax sharing agreement among us, Oncor Holdings, Texas Transmission, Investment LLC and EFH Corp., we are generally obligated to make payments to Texas Transmission, Investment LLC and EFH Corp., pro rata in accordance with their respective membership interests, in an aggregate amount that is substantially equal to the amount of federal income taxes that we would have been required to pay if we were filing our own corporate income tax return.  For periods prior to the tax sharing agreement (entered into in October 2007 and amended and restated in November 2008), we are responsible for our share, if any, of redetermined tax liability for the EFH Corp. consolidated tax group.  EFH Corp. also includes our results in its consolidated Texas margin tax payments, which are accounted for as income taxes and calculated as if we were filing our own return.  See discussion in Note 1 to Financial Statements in our 2015 Form 10-K under “Income Taxes.”  Under the “in lieu of” tax concept, all in lieu of tax assets and tax liabilities represent amounts that will eventually be settled with our members. In the unlikely event such amounts are not paid under the tax sharing agreement, it is probable that this regulatory liability will continue to be included in Oncor’s rate setting processes.

Amounts payable to (receivable from) members related to income taxes under the tax sharing agreement and reported on our balance sheet consisted of the following:

	At September 30, 2016						At December 31, 2015
	EFH Corp.		Texas Transmission		Total		EFH Corp.		Texas Transmission		Total
Federal income taxes receivable	$	(84)	$	(23)	$	(107)	$	(109)	$	(27)	$	(136)
Texas margin taxes payable		15		-		15		20		-		20
Net payable (receivable)	$	(69)	$	(23)	$	(92)	$	(89)	$	(27)	$	(116)

Cash payments made to members related to income taxes consisted of the following:

	Nine Months Ended September 30, 2016						Nine Months Ended September 30, 2015
	EFH Corp.		Texas Transmission		Total		EFH Corp.		Texas Transmission		Total
Federal income taxes	$	-	$	-	$	-	$	39	$	10	$	49
Texas margin taxes		20		-		20		24		-		24
Total payments	$	20	$	-	$	20	$	63	$	10	$	73

· Our PUCT-approved tariffs include requirements to assure adequate creditworthiness of any REP to support the REP’s obligation to collect transition bond-related charges on behalf of Bondco.  Under these tariffs, as a result of TCEH’s credit rating being below investment grade, TCEH was required to post collateral support in an amount equal to estimated transition charges over specified time periods.  Accordingly, TCEH had posted security in the amount of zero and $6 million for our benefitat September 30, 2016 and December 31, 2015, respectively.

· At September 30, 2016, Oncor held approximately $6 million of over-collected transition charges, which are being refunded to REPs.  An estimated $1 million of the over-collection was refunded to TCEH prior to the Reorganized TCEH Spin-Off, and an estimated $1 million of the over-collection will be refunded to Reorganized TCEH following the Reorganized TCEH Spin-Off.   

· Under Texas regulatory provisions, the trust fund for decommissioning TCEH’s Comanche Peak nuclear generation facility is funded by a delivery fee surcharge we collect from REPs and remit monthly, prior to the Reorganized TCEH Spin-Off, to TCEH, and after the Reorganized TCEH Spin-Off, to Reorganized TCEH.  Delivery fee surcharges totaled $6 million and $5 million for the three-month periods ended September 30, 2016 and 2015, respectively, and $15 million and $13 million for the nine-month periods ended September 30, 2016 and 2015, respectively.Our sole obligation with regard to nuclear decommissioning is as the collection agent of funds charged to ratepayers for nuclear decommissioning activities.  If, at the time of decommissioning, actual decommissioning costs exceed available trust funds, we would not be obligated to pay any shortfalls but would be required to collect any rates approved by the PUCT to recover any additional decommissioning costs.  Further, if there were to be a surplus when decommissioning is complete, such surplus would be returned to ratepayers under terms prescribed by the PUCT.

· Related parties of the Sponsor Group have (1) sold, acquired or participated in the offerings of our debt or debt securities in open market transactions or through loan syndications, and (2) performed various financial advisory, dealer, commercial banking and investment banking services for us and certain of our affiliates for which they have received or will receive customary fees and expenses, and may from time to time in the future participate in any of the items in (1) and (2) above.  Also, as of September 30, 2016, 16.6% of the equity in an existing vendor of the company was held by a member of the Sponsor Group.  During 2016 and 2015, this vendor performed transmission and distribution system construction and maintenance services for us.  Cash payments were made for such services to this vendor totaling $138 million dollars for the nine months ended September 30, 2016 of which approximately $131 million was capitalized and $7 million recorded as an operation and maintenance expense.  At September 30, 2016, we had outstanding trade payables to this vendor of $7 million.

See Note 8 for information regarding distributions to members and Note 9 for information regarding our participation in the EFH Corp. pension plan and transactions with EFH Corp. involving employee benefit matters.

XML

Supplementary Financial Information

9 Months Ended

Sep. 30, 2016

Supplementary Financial Information [Abstract]

SUPPLEMENTARY FINANCIAL INFORMATION

11.   SUPPLEMENTARY FINANCIAL INFORMATION

Major Customers

Revenues from TCEH represented  25% and 26% of our total operating revenues for the three months ended September 30, 2016 and 2015, respectively and 24% and 25% for the nine months ended September 30, 2016 and 2015, respectively.  Revenues from REP subsidiaries of a nonaffiliated entity collectively represented 19% and 18% of our total operating revenues for the three months ended September 30, 2016 and 2015, respectively, and 17% of our total operating revenues for each of the nine-month periods ended September 30, 2016 and 2015.  No other customer represented 10% or more of our total operating revenues.

Other Income and (Deductions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Accretion of fair value adjustment (discount) to regulatory assets due to purchase accounting	$	-	$	1	$	1	$	5
Professional fees		(3)		(7)		(11)		(14)
Non-recoverable pension and OPEB (Note 9)		-		(2)		(1)		(6)
Other		-		(1)		-		(2)
Total other income and (deductions) - net	$	(3)	$	(9)	$	(11)	$	(17)

Interest Expense and Related Charges

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Interest expense	$	86	$	85	$	256	$	251
Amortization of debt issuance costs and discounts		1		-		2		2
Allowance for funds used during construction – capitalized interest portion		(2)		(1)		(6)		(3)
Total interest expense and related charges	$	85	$	84	$	252	$	250

Restricted Cash

Restricted cash at September 30, 2016 was zero as a result of the maturity and payment in full of the 2004 Series transition bonds in May 2016.  Restricted cash reported on our balance sheet at December 31, 2015 related to the transition bonds.

Trade Accounts and Other Receivables

Trade accounts and other receivables reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Gross trade accounts and other receivables - net	$	600	$	509
Trade accounts and other receivables from affiliates - net		(146)		(118)
Allowance for uncollectible accounts		(4)		(3)
Trade accounts receivable from nonaffiliates – net	$	450	$	388

At September 30, 2016 and December 31, 2015, REP subsidiaries of a nonaffiliated entity, collectively represented approximately 17% and 13% of the nonaffiliated trade accounts receivable amount, respectively.

Under a PUCT rule relating to the Certification of Retail Electric Providers, write-offs of uncollectible amounts owed by REPs are deferred as a regulatory asset.  Due to commitments made to the PUCT in 2007, we are not allowed to recover bad debt expense, or certain other costs and expenses, from ratepayers in the event of a default or bankruptcy by an affiliate REP.

Investments and Other Property

Investments and other property reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Assets related to employee benefit plans, including employee savings   programs	$	98	$	94
Land and other investments		4		3
Total investments and other property	$	102	$	97

Property, Plant and Equipment

Property, plant and equipment reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Total assets in service	$	19,719	$	19,072
Less accumulated depreciation		6,758		6,479
Net of accumulated depreciation		12,961		12,593
Construction work in progress		641		416
Held for future use		15		15
Property, plant and equipment – net	$	13,617	$	13,024

Intangible Assets

Intangible assets (other than goodwill) reported on our balance sheet consisted of the following:

	At September 30, 2016						At December 31, 2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Net		Amount		Amortization		Net
Identifiable intangible assets subject to amortization included in property, plant and equipment:
Land easements	$	480	$	94	$	386	$	467	$	91	$	376
Capitalized software		454		312		142		435		269		166
Total	$	934	$	406	$	528	$	902	$	360	$	542

Aggregate amortization expense for intangible assets totaled $14 million and $16 million for the three-month periods ended September 30, 2016 and 2015, respectively, and $46 million and $48 million for the nine-month periods ended September 30, 2016 and 2015, respectively.  The estimated aggregate amortization expense for each of the next five fiscal years is as follows:

Year	Amortization Expense
2016	$	61
2017		54
2018		48
2019		45
2020		44

At both September 30, 2016 and December 31, 2015, goodwill totaling $4.1billion was reported on our balance sheet.  None of this goodwill is being deducted for tax purposes.

Employee Benefit Obligations and Other

Employee benefit obligations and other reported on our balance sheet consisted of the following:

	At September 30,		At December 31,
	2016		2015
Retirement plans and other employee benefits	$	2,021	$	1,985
Uncertain tax positions (including accrued interest)		3		3
Investment tax credits		13		15
Other		66		60
Total employee benefit obligations and other	$	2,103	$	2,063

Supplemental Cash Flow Information

	Nine Months Ended September 30,
	2016		2015
Cash payments (receipts) related to:
Interest	$	266	$	277
Capitalized interest		(6)		(3)
Interest (net of amounts capitalized)	$	260	$	274
Amount in lieu of income taxes (a):
Federal		-		49
State		20		24
Total amount in lieu of income taxes	$	20	$	73
Noncash construction expenditures (b)	$	104	$	60

_____________

(a) See Note 10 for income tax related detail.

(b) Represents end-of-period accruals.

XML

Business and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Business And Significant Accounting Policies [Abstract]

Description Of Business

Description of Business

References in this report to “we,” “our,” “us” and “the company” are to Oncor and/or Bondco, its subsidiary as apparent in the context.  See “Glossary” for definition of terms and abbreviations.

We are a regulated electricity transmission and distribution company principally engaged in providing delivery services to REPs that sell power in the north-central, eastern and western parts of Texas.  The services to REPs included subsidiaries of TCEH through the date of the Reorganized TCEH Spin-Off and subsidiaries of Reorganized TCEH after the date of the Reorganized TCEH Spin-Off.  Revenues from TCEH represented 24% and 25% of our total operating revenues for the nine months ended September 30, 2016 and 2015, respectively.  We are a direct, majority-owned subsidiary of Oncor Holdings, which is a direct, wholly-owned subsidiary of EFIH, a direct, wholly-owned subsidiary of EFH Corp.  EFH Corp. is a subsidiary of Texas Holdings, which is controlled by the Sponsor Group.  Oncor Holdings owns 80.03% of our membership interests, Texas Transmission owns 19.75% of our membership interests and certain members of our management team and board of directors indirectly own the remaining membership interests through Investment LLC.  We are managed as an integrated business; consequently, there are no separate reportable business segments.

Our consolidated financial statements include our wholly-owned, bankruptcy-remote financing subsidiary, Bondco, a variable interest entity.  This financing subsidiary was organized for the limited purpose of issuing certain transition bonds to recover generation-related regulatory asset stranded costs and other qualified costs under an order issued by the PUCT in 2002.  Bondco issued an aggregate $1.3 billion principal amount of transition bonds during 2003 and 2004.  The 2003 Series transition bonds matured and were paid in full in 2015 and the 2004 Series transition bonds matured and were paid in full in May 2016.  Final true-up proceedings and refunds of over-collected transition charges for the transition bonds are being conducted by Oncor and the PUCT during 2016 and are expected to have minimal or no net income impact.

Various “ring-fencing” measures have been taken to enhance the separateness between the Oncor Ring-Fenced Entities and the Texas Holdings Group and our credit quality.  These measures serve to mitigate our and Oncor Holdings’ credit exposure to the Texas Holdings Group and to reduce the risk that our assets and liabilities or those of Oncor Holdings would be substantively consolidated with the assets and liabilities of the Texas Holdings Group in connection with a bankruptcy of one or more of those entities, including the EFH Bankruptcy Proceedings discussed below.  Such measures include, among other things: our sale of a 19.75% equity interest to Texas Transmission in November 2008; maintenance of separate books and records for the Oncor Ring-Fenced Entities; our board of directors being comprised of a majority of independent directors; and prohibitions on the Oncor Ring-Fenced Entities providing credit support to, or receiving credit support from, any member of the Texas Holdings Group.  The assets and liabilities of the Oncor Ring-Fenced Entities are separate and distinct from those of the Texas Holdings Group, and none of the assets of the Oncor Ring-Fenced Entities are available to satisfy the debt or contractual obligations of any member of the Texas Holdings Group.  We do not bear any liability for debt or contractual obligations of the Texas Holdings Group, and vice versa.  Accordingly, our operations are conducted, and our cash flows are managed, independently from the Texas Holdings Group.

EFH Corp. Bankruptcy Proceedings

EFH Corp. Bankruptcy Proceedings

On the EFH Petition Date, the Debtorscommenced proceedings under Chapter 11 of the US Bankruptcy Code.  The Oncor Ring-Fenced Entities are not parties to the EFH Bankruptcy Proceedings.  We believe the “ring-fencing” measures discussed above mitigate our potential exposure to the EFH Bankruptcy Proceedings.  See Note 2 for a discussion of the potential impacts of the EFH Bankruptcy Proceedings on our financial statements.

Basis Of Presentation

Basis of Presentation

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes included in the 2015 Form 10-K.  In the opinion of Oncor management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations and financial position have been made.  All intercompany items and transactions have been eliminated in consolidation.  The results of operations for an interim period may not give a true indication of results for a full year due to seasonality.  All dollar amounts in the financial statements and tables in the notes are stated in millions of U.S. dollars unless otherwise indicated.

Use Of Estimates

Use of Estimates

Preparation of our financial statements requires management to make estimates and assumptions about future events that affect the reporting of assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense, including fair value measurements.  In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

Reconcilable Tariffs

Reconcilable Tariffs

The PUCT has designated certain tariffs (TCRF, EECRF surcharges, AMS surcharges and charges related to transition bonds) as reconcilable, which means the differences between amounts billed under these tariffs and the related incurred costs are deferred as either regulatory assets or regulatory liabilities.  Accordingly, at prescribed intervals, future tariffs are adjusted to either repay regulatory liabilities or collect regulatory assets.

Contingencies

Contingencies

We evaluate and account for contingencies using the best information available.  A loss contingency is accrued and disclosed when it is probable that an asset has been impaired or a liability incurred and the amount of the loss can be reasonably estimated.  If a range of probable loss is established, the minimum amount in the range is accrued, unless some other amount within the range appears to be a better estimate.  If the probable loss cannot be reasonably estimated, no accrual is recorded, but the loss contingency is disclosed to the effect that the probable loss cannot be reasonably estimated.  A loss contingency will be disclosed when it is reasonably possible that an asset has been impaired or a liability incurred.  If the likelihood that an impairment or incurrence is remote, the contingency is neither accrued nor disclosed.  Gain contingencies are recognized upon realization.

Changes In Accounting Standards

Changes in Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-2 (ASU 2016-2), Leases.  ASU 2016-2 amends previous GAAP to require the balance sheet recognition of lease assets and liabilities for operating leases.  Oncor will be required to adopt ASU 2016-2 by January 1, 2019 and does not expect to early adopt.  Retrospective application to the 2017 and 2018 comparative periods presented will be required in the year of adoption.  We continue to evaluate the impact of ASU 2016-2 on our financial statements.

Since May 2014, the FASB has issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers along with other supplemental guidance (together, Topic 606).  Topic 606 introduces new, increased requirements for disclosure of revenue in financial statements and guidance that are intended to eliminate inconsistencies in the recognition of revenue.  Oncor will be required to adopt Topic 606 by January 1, 2018 and does not expect to early adopt.  We continue to evaluate the impact on our financial statements.  At this time, the adoption is not expected to have a material effect on our reported results of operations, financial condition or cash flows.

XML

Regulatory Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Regulatory Assets and Liabilities [Abstract]

Components Of Regulatory Assets And Liabilities

	Remaining Rate Recovery/Amortization Period at	Carrying Amount At
	September 30, 2016	September 30, 2016		December 31, 2015
Regulatory assets:
Generation-related regulatory assets securitized by transition bonds (a)(d)	-	$	-	$	31
Employee retirement costs being amortized	3 years		27		38
Unrecovered employee retirement costs incurred since the last rate review period (b)	To be determined		318		291
Employee retirement liability (a)(b)(c)	To be determined		812		853
Self-insurance reserve (primarily storm recovery costs) being amortized ― net	3 years		72		95
Unrecovered self-insurance reserve incurred since the last rate review period ― net (b)	To be determined		374		332
Securities reacquisition costs (pre-industry restructure)	1 year or less		6		14
Securities reacquisition costs (post-industry restructure) ― net	Lives of related debt		10		9
Recoverable amounts in lieu of deferred income taxes ― net	Life of related asset or liability		3		12
Deferred conventional meter and metering facilities depreciation	Largely 4 years		83		100
Under-recovered AMS costs	To be determined		194		164
Energy efficiency performance bonus (a)	1 year or less		12		10
Under-recovered wholesale transmission service expense (a)	1 year or less		15		-
Other regulatory assets	Various		8		9
Total regulatory assets			1,934		1,958
Regulatory liabilities:
Estimated net removal costs	Lives of related assets		782		686
Investment tax credit and protected excess deferred taxes	Various		10		14
Over-collection of transition bond charges (a)(d)	1 year or less		6		29
Over-recovered wholesale transmission service expense (a)	1 year or less		-		24
Energy efficiency programs (a)	Not applicable		22		11
Total regulatory liabilities			820		764
Net regulatory asset		$	1,114	$	1,194

____________

(a) Not earning a return in the regulatory rate-setting process.

(b) Recovery is specifically authorized by statute or by the PUCT, subject to reasonableness review.

(c) Represents unfunded liabilities recorded in accordance with pension and OPEB accounting standards.

(d) Bondco net regulatory liabilities at September 30, 2016 were zero  (excludes $6 million of over-collections related to transition bonds assumed by Oncor for final settlement). Bondco net regulatory assets of $10 million at December 31, 2015 consisted of $31 million included in generation-related regulatory assets net of the regulatory liability for over-collection of transition bond revenues of $21 million (excludes $8 million of over-collections related to transition bonds assumed by Oncor for final settlement).

XML

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2016

Long-Term Debt [Abstract]

Schedule Of Long-Term Debt

	September 30,		December 31,
	2016		2015
Oncor (a):
5.000% Fixed Senior Notes due September 30, 2017	$	324	$	324
6.800% Fixed Senior Notes due September 1, 2018		550		550
2.150% Fixed Senior Notes due June 1, 2019		250		250
5.750% Fixed Senior Notes due September 30, 2020		126		126
4.100% Fixed Senior Notes due June 1, 2022		400		400
7.000% Fixed Debentures due September 1, 2022		800		800
2.950% Fixed Senior Notes due April 1, 2025		350		350
7.000% Fixed Senior Notes due May 1, 2032		500		500
7.250% Fixed Senior Notes due January 15, 2033		350		350
7.500% Fixed Senior Notes due September 1, 2038		300		300
5.250% Fixed Senior Notes due September 30, 2040		475		475
4.550% Fixed Senior Notes due December 1, 2041		400		400
5.300% Fixed Senior Notes due June 1, 2042		500		500
3.750% Fixed Senior Notes due April 1, 2045		550		375
Unamortized discount and debt issuance costs		(38)		(54)
Less amount due currently		(324)		-
Long-term debt, less amounts due currently — Oncor		5,513		5,646
Bondco (b):
5.290% Fixed Series 2004 Bonds due May 15, 2016		-		41
Total		-		41
Less amount due currently		-		(41)
Long-term debt, less amounts due currently — Bondco		-		-
Total long-term debt, less amounts due currently	$	5,513	$	5,646

__________

(a)   Secured by first priority lien on certain transmission and distribution assets equally and ratably with all of Oncor’s other secured indebtedness.  See “Deed of Trust” below for additional information.

(b)   The transition bonds were nonrecourse to Oncor and were issued to securitize a regulatory asset.

XML

Membership Interests (Tables)

9 Months Ended

Sep. 30, 2016

Membership Interests [Abstract]

Schedule Of Distributions Paid

Declaration Date	Payment Date	Amount
July 27, 2016	August 11, 2016	$	68
April 27, 2016	May 11, 2016	$	65
February 24, 2016	February 25, 2016	$	56

Schedule Of Changes To Membership Interests

	Capital Accounts		Accumulated Other Comprehensive Income (Loss)		Total Membership Interests
Balance at December 31, 2015	$	7,621	$	(113)	$	7,508
Net income		355		-		355
Distributions		(189)		-		(189)
Net effects of cash flow hedges (net of tax)		-		1		1
Defined benefit pension plans (net of tax)		-		1		1
Balance at September 30, 2016	$	7,787	$	(111)	$	7,676
Balance at December 31, 2014	$	7,625	$	(107)	$	7,518
Net income		359		-		359
Distributions		(283)		-		(283)
Net effects of cash flow hedges (net of tax)		-		1		1
Defined benefit pension plans (net of tax)		-		1		1
Balance at September 30, 2015	$	7,701	$	(105)	$	7,596

Schedule Of Changes To Accumulated Other Comprehensive Income (Loss)

	Cash Flow Hedges – Interest Rate Swap		Defined Benefit Pension and OPEB Plans		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2015	$	(22)	$	(91)	$	(113)
Defined benefit pension plans (net of tax)		-		1		1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges		1		-		1
Balance at September 30, 2016	$	(21)	$	(90)	$	(111)
Balance at December 31, 2014	$	(24)	$	(83)	$	(107)
Defined benefit pension plans (net of tax)		-		1		1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges		1		-		1
Balance at September 30, 2015	$	(23)	$	(82)	$	(105)

XML

Pension and OPEB Plans (Tables)

9 Months Ended

Sep. 30, 2016

Pension And Other Postretirement Employee Benefits Plans [Abstract]

Schedule Of Pension And OPEB Plan Costs

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Components of net allocated pension costs:
Service cost	$	6	$	6	$	18	$	18
Interest cost		33		33		101		99
Expected return on assets		(30)		(29)		(92)		(87)
Amortization of net loss		10		16		30		48
Net pension costs		19		26		57		78
Components of net OPEB costs:
Service cost		2		2		6		6
Interest cost		12		11		36		33
Expected return on assets		(2)		(3)		(6)		(9)
Amortization of prior service cost		(5)		(5)		(15)		(15)
Amortization of net loss		9		8		26		24
Net OPEB costs		16		13		47		39
Total net pension and OPEB costs		35		39		104		117
Less amounts deferred principally as property or a regulatory asset		(25)		(28)		(75)		(84)
Net amounts recognized as expense	$	10	$	11	$	29	$	33

XML

Related-Party Transactions (Tables)

9 Months Ended

Sep. 30, 2016

Related-Party Transactions [Abstract]

Schedule Of Trade Accounts And Other Receivables From Related Parties

	At September 30,		At December 31,
	2016		2015
Trade accounts and other receivables from affiliates	$	149	$	120
Trade accounts and other payables to affiliates		(3)		(2)
Trade accounts and other receivables from affiliates – net	$	146	$	118

Schedule Of Related Party Transactions

Amounts payable to (receivable from) members related to income taxes under the tax sharing agreement and reported on our balance sheet consisted of the following:

	At September 30, 2016						At December 31, 2015
	EFH Corp.		Texas Transmission		Total		EFH Corp.		Texas Transmission		Total
Federal income taxes receivable	$	(84)	$	(23)	$	(107)	$	(109)	$	(27)	$	(136)
Texas margin taxes payable		15		-		15		20		-		20
Net payable (receivable)	$	(69)	$	(23)	$	(92)	$	(89)	$	(27)	$	(116)

Cash payments made to members related to income taxes consisted of the following:

	Nine Months Ended September 30, 2016						Nine Months Ended September 30, 2015
	EFH Corp.		Texas Transmission		Total		EFH Corp.		Texas Transmission		Total
Federal income taxes	$	-	$	-	$	-	$	39	$	10	$	49
Texas margin taxes		20		-		20		24		-		24
Total payments	$	20	$	-	$	20	$	63	$	10	$	73

XML

Supplementary Financial Information (Tables)

9 Months Ended

Sep. 30, 2016

Supplementary Financial Information [Abstract]

Schedule Of Other Income And (Deductions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Accretion of fair value adjustment (discount) to regulatory assets due to purchase accounting	$	-	$	1	$	1	$	5
Professional fees		(3)		(7)		(11)		(14)
Non-recoverable pension and OPEB (Note 9)		-		(2)		(1)		(6)
Other		-		(1)		-		(2)
Total other income and (deductions) - net	$	(3)	$	(9)	$	(11)	$	(17)

Schedule Of Interest Expense And Related Charges

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Interest expense	$	86	$	85	$	256	$	251
Amortization of debt issuance costs and discounts		1		-		2		2
Allowance for funds used during construction – capitalized interest portion		(2)		(1)		(6)		(3)
Total interest expense and related charges	$	85	$	84	$	252	$	250

Schedule Of Trade Accounts And Other Receivables

	At September 30,		At December 31,
	2016		2015
Gross trade accounts and other receivables - net	$	600	$	509
Trade accounts and other receivables from affiliates - net		(146)		(118)
Allowance for uncollectible accounts		(4)		(3)
Trade accounts receivable from nonaffiliates – net	$	450	$	388

Summary of Investments And Other Property

	At September 30,		At December 31,
	2016		2015
Assets related to employee benefit plans, including employee savings   programs	$	98	$	94
Land and other investments		4		3
Total investments and other property	$	102	$	97

Schedule Of Property, Plant And Equipment

	At September 30,		At December 31,
	2016		2015
Total assets in service	$	19,719	$	19,072
Less accumulated depreciation		6,758		6,479
Net of accumulated depreciation		12,961		12,593
Construction work in progress		641		416
Held for future use		15		15
Property, plant and equipment – net	$	13,617	$	13,024

Schedule Of Intangible Assets

	At September 30, 2016						At December 31, 2015
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
	Amount		Amortization		Net		Amount		Amortization		Net
Identifiable intangible assets subject to amortization included in property, plant and equipment:
Land easements	$	480	$	94	$	386	$	467	$	91	$	376
Capitalized software		454		312		142		435		269		166
Total	$	934	$	406	$	528	$	902	$	360	$	542

Schedule Of Estimated Aggregate Amortization Expenses

Year	Amortization Expense
2016	$	61
2017		54
2018		48
2019		45
2020		44

Schedule Of Employee Benefit Obligations And Other

	At September 30,		At December 31,
	2016		2015
Retirement plans and other employee benefits	$	2,021	$	1,985
Uncertain tax positions (including accrued interest)		3		3
Investment tax credits		13		15
Other		66		60
Total employee benefit obligations and other	$	2,103	$	2,063

Schedule Of Supplemental Cash Flow Information

	Nine Months Ended September 30,
	2016		2015
Cash payments (receipts) related to:
Interest	$	266	$	277
Capitalized interest		(6)		(3)
Interest (net of amounts capitalized)	$	260	$	274
Amount in lieu of income taxes (a):
Federal		-		49
State		20		24
Total amount in lieu of income taxes	$	20	$	73
Noncash construction expenditures (b)	$	104	$	60

_____________

(a) See Note 10 for income tax related detail.

(b) Represents end-of-period accruals.

XML

Business And Significant Accounting Policies (Details) $ in Billions	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2008	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016 entity	Sep. 30, 2015	Dec. 31, 2004 USD ($)	Dec. 31, 2003 USD ($)
Business And Significant Accounting Polices [Line Items]
Number of entities that would possibly be bankrupt | entity				1
Principal amount of transition bonds issued | $						$ 1.3	$ 1.3
Percentage of equity interest sold in the event of bankruptcy	19.75%
Oncor Holdings [Member]
Business And Significant Accounting Polices [Line Items]
Ownership		80.03%		80.03%
Texas Transmission [Member]
Business And Significant Accounting Polices [Line Items]
Percentage of membership interest owned by non-controlling owners		19.75%		19.75%
Sales [Member] | TCEH [Member]
Business And Significant Accounting Polices [Line Items]
Concentration Risk Percentage		25.00%	26.00%	24.00%	25.00%

XML

EFH Bankruptcy Proceedings (Details) - USD ($) $ in Millions		9 Months Ended
	Oct. 30, 2016	Sep. 30, 2016	Oct. 29, 2016	Apr. 28, 2014
Bankruptcy [Line Items]
Amount receivable from related party				$ 129
Amount collected from related party		$ 128
Subsequent Event [Member]
Bankruptcy [Line Items]
Purchase price	$ 2,400
OMI Agreement [Member] | Subsequent Event [Member]
Bankruptcy [Line Items]
Limited liability company interests, shares			1,396,008
Limited liability company interests, value			$ 27
EFH Corp [Member] | NEE Merger Agreement [Member]
Bankruptcy [Line Items]
Agreement extension period		90 days
Percent of outstanding equity interests required		80.00%
Termination fee		$ 275
Texas Holdings Group [Member] | TTI Merger Agreement [Member] | Subsequent Event [Member]
Bankruptcy [Line Items]
Percent of outstanding equity interests required	19.75%

XML

Regulatory Matters (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) item
Number of cities resolutions passed over electric utility rates	58
Number of original jurisdiction cities	204
Number of other parties appealed various portions of rate review final order to state district court	4
Number of issues revised judgment	2
Rate at which interest accrues for over-collections	0.18%
Maximum [Member]
Estimated impact on earnings | $	$ 135
Minimum [Member]
Estimated impact on earnings | $	$ 0

XML

Regulatory Assets And Liabilities (Details) - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2016	Dec. 31, 2015
Regulatory Assets And Liabilities [Line Items]
Carrying Amount, Regulatory Assets		$ 1,934	$ 1,958
Carrying Amount, Regulatory Liabilities		820	764
Net regulatory asset		1,114	1,194
Bondco [Member]
Regulatory Assets And Liabilities [Line Items]
Carrying Amount, Regulatory Liabilities		$ 0
Net regulatory asset			10
Estimated Net Removal Costs [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		Lives of related assets
Carrying Amount, Regulatory Liabilities		$ 782	686
Investment Tax Credit and Protected Excess Deferred Taxes [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		Various
Carrying Amount, Regulatory Liabilities		$ 10	14
Over-Collection Of Transition Bond Charges [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[1],[2]	1 year or less
Carrying Amount, Regulatory Liabilities	[1],[2]	$ 6	29
Over-Collection Of Transition Bond Charges [Member] | Bondco [Member]
Regulatory Assets And Liabilities [Line Items]
Carrying Amount, Regulatory Liabilities		$ 6	21
Over-Recovered Wholesale Transmission Service Expense - Net [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[2]	1 year or less
Carrying Amount, Regulatory Liabilities	[2]		24
Energy Efficiency Programs [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[2]	Not applicable
Carrying Amount, Regulatory Liabilities	[2]	$ 22	11
Excluded Over-Collected Series 2003-1 Transition Bond Revenues [Member] | Bondco [Member]
Regulatory Assets And Liabilities [Line Items]
Net regulatory asset			8
Generation Related Regulatory Assets Securitized by Transition Bonds [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[1],[2]	-
Carrying Amount, Regulatory Assets	[1],[2]		31
Generation Related Regulatory Assets Securitized by Transition Bonds [Member] | Bondco [Member]
Regulatory Assets And Liabilities [Line Items]
Carrying Amount, Regulatory Assets			31
Employee Retirement Costs Being Amortized [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		3 years
Carrying Amount, Regulatory Assets		$ 27	38
Unrecovered Employee Retirement Costs Incurred Since The Last Rate Review Period [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[3]	To be determined
Carrying Amount, Regulatory Assets	[3]	$ 318	291
Employee Retirement Liability [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[2],[3],[4]	To be determined
Carrying Amount, Regulatory Assets	[2],[3],[4]	$ 812	853
Self Insurance Reserve (Primarily Storm Recovery Costs) Being Amortized - Net [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		3 years
Carrying Amount, Regulatory Assets		$ 72	95
Unrecovered Self-Insurance Reserve Incurred Since The Last Rate Review Period - Net [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[3]	To be determined
Carrying Amount, Regulatory Assets	[3]	$ 374	332
Securities Reacquisition Costs (Pre-Industry Restructure) [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		1 year or less
Carrying Amount, Regulatory Assets		$ 6	14
Securities Reacquisition Costs (Post-Industry Restructure) - Net [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		Lives of related debt
Carrying Amount, Regulatory Assets		$ 10	9
Recoverable Amounts In Lieu Of Deferred Income Taxes - Net [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		Life of related asset or liability
Carrying Amount, Regulatory Assets		$ 3	12
Deferred Conventional Meter And Metering Facilities Depreciation [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		Largely 4 years
Carrying Amount, Regulatory Assets		$ 83	100
Under-recovered AMS Costs [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		To be determined
Carrying Amount, Regulatory Assets		$ 194	164
Energy Efficiency Performance Bonus [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[2]	1 year or less
Carrying Amount, Regulatory Assets	[2]	$ 12	10
Under-Recovered Wholesale Transmission Service Expense - Net [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period	[2]	1 year or less
Carrying Amount, Regulatory Assets	[2]	$ 15
Other Regulatory Assets [Member]
Regulatory Assets And Liabilities [Line Items]
Remaining Rate Recovery/Amortization Period		Various
Carrying Amount, Regulatory Assets		$ 8	$ 9

[1] Bondco net regulatory liabilities at September 30, 2016 were zero (excludes $6 million of over-collections related to transition bonds assumed by Oncor for final settlement). Bondco net regulatory assets of $10 million at December 31, 2015 consisted of $31 million included in generation-related regulatory assets net of the regulatory liability for over-collection of transition bond revenues of $21 million (excludes $8 million of over-collections related to transition bonds assumed by Oncor for final settlement).

[2] Not earning a return in the regulatory rate-setting process.

[3] Recovery is specifically authorized by statute or by the PUCT, subject to reasonableness review.

[4] Represents unfunded liabilities recorded in accordance with pension and OPEB accounting standards.

XML

Borrowings Under Credit Facilities (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($)
Line of Credit Facility [Line Items]
Outstanding borrowing under the revolving credit facility	$ 880,000	$ 840
Outstanding borrowing, interest rate	1.52%	1.48%
Letters of credit	$ 7	$ 7
Commitment fee	0.10%
Borrowing capacity available under the credit facility	$ 1,113	$ 1,153
Maximum [Member]
Line of Credit Facility [Line Items]
Commitment rate reduction under the revolving credit facility	0.275%
Debt-to-capitalization ratio	1.00
Minimum [Member]
Line of Credit Facility [Line Items]
Commitment rate reduction under the revolving credit facility	0.10%
Debt-to-capitalization ratio	0.65
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Outstanding borrowing, interest rate	1.20%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 2,000
Number of revolving credit facilities extension options | item	2
Extension period for revolving line of credit	1 year
Expiration of revolving credit facility	Oct. 31, 2018
Additional increase in borrowing capacity amount	$ 100
London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	1.00%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	1.75%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	1.00%
Federal Funds Effective Rate [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	0.50%
One-Month London Interbank Offered Rate [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	1.00%
One-Month London Interbank Offered Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	0.75%
One-Month London Interbank Offered Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Spread over variable rate	0.00%

XML

Long-Term Debt (Narrative) (Details) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Aug. 31, 2016	Mar. 31, 2015
Long-Term Debt [Line Items]
Repayments of long-term debt	$ 41,000,000	$ 594,000,000
Percentage of fair value of cost of property additions certified to the Deed of Trust collateral agent	85.00%
Available bond credits	$ 2,534,000,000
Future debt subject to property additions to the Deed of Trust	1,586,000,000
Estimated fair value of our long-term debt including current maturities	7,112,000,000		$ 6,287,000,000
Carrying amount	$ 5,837,000,000		$ 5,687,000,000
3.750% Fixed Senior Notes due April 1, 2045 [Member]
Long-Term Debt [Line Items]
Interest percentage	3.75%		3.75%
Due date	Apr. 01, 2045		Apr. 01, 2045
Additional 2045 Notes [Member]
Long-Term Debt [Line Items]
Debt issuance of long-term debt				$ 175,000,000	$ 375,000,000
Due date	Oct. 01, 2044
Proceeds from sale of Notes	$ 185,000,000
Date of first payment	Oct. 01, 2016
Percentage of principal amount plus accrued and unpaid interest and make-whole premium	100.00%
Increase in annual interest rate	0.50%
Transition Bond [Member]
Long-Term Debt [Line Items]
Repayments of long-term debt	$ 41,000,000

XML

Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions		9 Months Ended	12 Months Ended
		Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Unamortized discount and debt issuance costs	[1]	$ (38)	$ (54)
Less amount due currently	[1]	(324)
Total long-term debt, less amounts due currently	[1]	5,513	5,646
5.000% Fixed Senior Notes Due September 30, 2017 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 324	$ 324
Interest percentage		5.00%	5.00%
Due date		Sep. 30, 2017	Sep. 30, 2017
6.800% Fixed Senior Notes Due September 1, 2018 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 550	$ 550
Interest percentage		6.80%	6.80%
Due date		Sep. 01, 2018	Sep. 01, 2018
2.150% Fixed Senior Notes Due June 1, 2019 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 250	$ 250
Interest percentage		2.15%	2.15%
Due date		Jun. 01, 2019	Jun. 01, 2019
5.750% Fixed Senior Notes Due September 30, 2020 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 126	$ 126
Interest percentage		5.75%	5.75%
Due date		Sep. 30, 2020	Sep. 30, 2020
4.100% Fixed Senior Notes Due June 1, 2022 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 400	$ 400
Interest percentage		4.10%	4.10%
Due date		Jun. 01, 2022	Jun. 01, 2022
7.000% Fixed Debentures Due September 1, 2022 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 800	$ 800
Interest percentage		7.00%	7.00%
Due date		Sep. 01, 2022	Sep. 01, 2022
2.950% Fixed Senior Notes due April 1, 2025 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 350	$ 350
Interest percentage		2.95%	2.95%
Due date		Apr. 01, 2025	Apr. 01, 2025
7.000% Fixed Senior Notes Due May 1, 2032 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 500	$ 500
Interest percentage		7.00%	7.00%
Due date		May 01, 2032	May 01, 2032
7.250% Fixed Senior Notes Due January 15, 2033 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 350	$ 350
Interest percentage		7.25%	7.25%
Due date		Jan. 15, 2033	Jan. 15, 2033
7.500% Fixed Senior Notes Due September 1, 2038 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 300	$ 300
Interest percentage		7.50%	7.50%
Due date		Sep. 01, 2038	Sep. 01, 2038
5.250% Fixed Senior Notes Due September 30, 2040 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 475	$ 475
Interest percentage		5.25%	5.25%
Due date		Sep. 30, 2040	Sep. 30, 2040
4.550% Fixed Senior Notes Due December 1, 2041 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 400	$ 400
Interest percentage		4.55%	4.55%
Due date		Dec. 01, 2041	Dec. 01, 2041
5.300% Fixed Senior Notes Due June 1, 2042 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 500	$ 500
Interest percentage		5.30%	5.30%
Due date		Jun. 01, 2042	Jun. 01, 2042
3.750% Fixed Senior Notes due April 1, 2045 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[1]	$ 550	$ 375
Interest percentage		3.75%	3.75%
Due date		Apr. 01, 2045	Apr. 01, 2045
Bondco [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[2]		$ 41
Less amount due currently	[2]		(41)
Bondco [Member] | 5.290% Fixed Series 2004 Bonds Due May 15, 2016 [Member]
Debt Instrument [Line Items]
Fixed Senior Note	[2]		$ 41
Interest percentage		5.29%	5.29%
Due date		May 15, 2016	May 15, 2016

[1] Secured by first priority lien on certain transmission and distribution assets equally and ratably with all of Oncor's other secured indebtedness. See "Deed of Trust" below for additional information.

[2] The transition bonds were nonrecourse to Oncor and were issued to securitize a regulatory asset.

XML

Membership Interests (Narrative) (Details) - USD ($) $ in Millions		9 Months Ended
	Jul. 27, 2016	Sep. 30, 2016	Sep. 30, 2015
Subsequent Event [Line Items]
Cash distribution to members		$ 189	$ 283
Assumed debt to equity ratio, debt		60.00%
Assumed debt to equity ratio, equity		40.00%
Regulatory capitalization ratio, debt		59.60%
Regulatory capitalization ratio, equity		40.40%
Cash available for distribution under the capital structure restriction		$ 69
Subsequent Event [Member]
Subsequent Event [Line Items]
Cash distribution to members	$ 41

XML

Membership Interests (Schedule Of Distributions Paid) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Dividends Payable [Line Items]
Amount	$ 189	$ 283
Payment One FY 2016 [Member]
Dividends Payable [Line Items]
Declaration Date	Jul. 27, 2016
Payment Date	Aug. 11, 2016
Amount	$ 68
Payment Two FY 2016 [Member]
Dividends Payable [Line Items]
Declaration Date	Apr. 27, 2016
Payment Date	May 11, 2016
Amount	$ 65
Payment Three FY 2016 [Member]
Dividends Payable [Line Items]
Declaration Date	Feb. 24, 2016
Payment Date	Feb. 25, 2016
Amount	$ 56

XML

Membership Interests (Schedule Of Changes To Membership Interests) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Balance			$ 7,508	$ 7,518
Net income	$ 163	$ 163	355	359
Distributions			(189)	(283)
Net effects of cash flow hedges (net of tax)	1	1	1	1
Defined benefit pension plans (net of tax)			1	1
Balance	7,676	7,596	7,676	7,596
Capital Accounts [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Balance			7,621	7,625
Net income			355	359
Distributions			(189)	(283)
Net effects of cash flow hedges (net of tax)
Defined benefit pension plans (net of tax)
Balance	7,787	7,701	7,787	7,701
Accumulated Other Comprehensive Income (Loss) [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Balance			(113)	(107)
Net income
Distributions
Net effects of cash flow hedges (net of tax)			1	1
Defined benefit pension plans (net of tax)			1	1
Balance	$ (111)	$ (105)	$ (111)	$ (105)

XML

Membership Interests (Schedule Of Changes To Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	$ (113)
Balance at end of period	(111)
Cash Flow Hedges - Interest Rate Swap [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(22)	$ (24)
Defined benefit pension plans (net of tax)
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges	1	1
Balance at end of period	(21)	(23)
Defined Benefit Pension and OPEB Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(91)	(83)
Defined benefit pension plans (net of tax)	1	1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges
Balance at end of period	(90)	(82)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(113)	(107)
Defined benefit pension plans (net of tax)	1	1
Amounts reclassified from accumulated other comprehensive income (loss) and reported in interest expense and related charges	1	1
Balance at end of period	$ (111)	$ (105)

XML

Pension And OPEB Plans (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($)
Oncor Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.28%
Expected return on plan assets	5.53%
EFH Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.57%
Expected return on plan assets	5.64%
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash contributions	$ 3
Additional cash contributions	1
Additional cash contributions, next five years	$ 479
OPEB Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.60%
Expected return on plan assets	6.30%
Cash contributions	$ 22
Additional cash contributions	16
Additional cash contributions, next five years	$ 160

XML

Pension And OPEB Plans (Schedule Of Pension And OPEB Plan Costs) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Defined Benefit Plan Disclosure [Line Items]
Net costs	$ 35	$ 39	$ 104	$ 117
Less amounts deferred principally as property or a regulatory asset	(25)	(28)	(75)	(84)
Net amounts recognized as expense	10	11	29	33
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	6	6	18	18
Interest cost	33	33	101	99
Expected return on assets	(30)	(29)	(92)	(87)
Amortization of net loss	10	16	30	48
Net costs	19	26	57	78
OPEB [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	2	2	6	6
Interest cost	12	11	36	33
Expected return on assets	(2)	(3)	(6)	(9)
Amortization of prior service cost	(5)	(5)	(15)	(15)
Amortization of net loss	9	8	26	24
Net costs	$ 16	$ 13	$ 47	$ 39

XML

Related-Party Transactions (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Revenues from electricity delivery fees	$ 265	$ 279	$ 700	$ 739
TCEH [Member]
Related Party Transaction [Line Items]
Revenues from electricity delivery fees	265	279	700	739
Posted security amount	0		0		$ 6
Over-collection of transition charges to be refunded	1		1
Delivery fee surcharges	6	5	15	13
EFH Corp [Member]
Related Party Transaction [Line Items]
Administrative and services costs		5		14
Shared facilities expense	1	1	3	3
Shared facilities payments received	1		1	1
Over-collection of transition charges to be refunded	3		3		$ 2
REPs [Member]
Related Party Transaction [Line Items]
Over-collection of transition charges to be refunded	6		6
Reorganized TCEH [Member]
Related Party Transaction [Line Items]
Over-collection of transition charges to be refunded	$ 1		$ 1
Sponsor Group [Member]
Related Party Transaction [Line Items]
Equity in existing vendor	16.60%		16.60%
Cash payments to vendors			$ 138
Trade payables related parties	$ 7		7
Sponsor Group [Member] | Capitalized [Member]
Related Party Transaction [Line Items]
Cash payments to vendors			131
Sponsor Group [Member] | Operation And Maintenance Expense [Member]
Related Party Transaction [Line Items]
Cash payments to vendors			7
Maximum [Member] | TCEH [Member]
Related Party Transaction [Line Items]
Transformer maintenance revenue	1	1	1	$ 1
Maximum [Member] | EFH Corp [Member]
Related Party Transaction [Line Items]
Administrative and services costs	$ 1		$ 1
Shared facilities payments received		$ 1

XML

Related-Party Transactions (Schedule Of Trade Accounts And Other Receivables From Related Parties) (Details) - EFH Corp [Member] - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Trade accounts and other receivables from affiliates	$ 149	$ 120
Trade accounts and other payables to affiliates	(3)	(2)
Trade accounts and other receivables from affiliates - net	$ 146	$ 118

XML

Related-Party Transactions (Schedule Of Amounts Payable To (Receivable From) Members In Lieu Of Income Taxes) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Federal income taxes receivable	$ (107)	$ (136)
Texas margin taxes payable	15	20
Net payable (receivable)	(92)	(116)
EFH Corp [Member]
Related Party Transaction [Line Items]
Federal income taxes receivable	(84)	(109)
Texas margin taxes payable	15	20
Net payable (receivable)	(69)	(89)
Texas Transmission [Member]
Related Party Transaction [Line Items]
Federal income taxes receivable	(23)	(27)
Net payable (receivable)	$ (23)	$ (27)

XML

Related-Party Transactions (Cash Payments Made To (Received From) Members In Lieu Of Income Taxes) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Related Party Transaction [Line Items]
Federal income taxes		$ 49
Texas margin taxes	$ 20	24
Total payments	20	73
EFH Corp [Member]
Related Party Transaction [Line Items]
Federal income taxes		39
Texas margin taxes	20	24
Total payments	$ 20	63
Texas Transmission [Member]
Related Party Transaction [Line Items]
Federal income taxes		10
Total payments		$ 10

XML

Supplementary Financial Information (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Supplemental Financial Information [Line Items]
Restricted cash	$ 0		$ 0		$ 38
Aggregate amortization expenses	14	$ 16	46	$ 48
Goodwill	$ 4,064		$ 4,064		$ 4,064
Sales [Member] | TCEH [Member]
Supplemental Financial Information [Line Items]
Concentration Risk Percentage	25.00%	26.00%	24.00%	25.00%
Sales [Member] | Nonaffiliated REP [Member]
Supplemental Financial Information [Line Items]
Concentration Risk Percentage	19.00%	18.00%	17.00%	17.00%
Nonaffiliated Trade Accounts Receivable [Member] | Nonaffiliated REP [Member]
Supplemental Financial Information [Line Items]
Concentration Risk Percentage			17.00%		13.00%

XML

Supplementary Financial Information (Schedule Of Other Income And (Deductions)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Supplementary Financial Information [Abstract]
Accretion of fair value adjustment (discount) to regulatory assets due to purchase accounting		$ 1	$ 1	$ 5
Professional fees	(3)	(7)	(11)	(14)
Non-recoverable pension and OPEB (Note 9)		(2)	(1)	(6)
Other		(1)		(2)
Total other income and (deductions) - net	$ (3)	$ (9)	$ (11)	$ (17)

XML

Supplementary Financial Information (Schedule Of Interest Expense And Related Charges) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Supplementary Financial Information [Abstract]
Interest expense	$ 86	$ 85	$ 256	$ 251
Amortization of debt issuance costs and discounts	1		2	2
Allowance for funds used during construction — capitalized interest portion	(2)	(1)	(6)	(3)
Total interest expense and related charges	$ 85	$ 84	$ 252	$ 250

XML

Supplementary Financial Information (Schedule Of Trade Accounts And Other Receivables) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Supplementary Financial Information [Abstract]
Gross trade accounts and other receivables - net	$ 600	$ 509
Trade accounts and other receivables from affiliates - net	(146)	(118)
Allowance for uncollectible accounts	(4)	(3)
Trade accounts receivable from nonaffiliates - net	$ 450	$ 388

XML

Supplementary Financial Information (Summary of Investments And Other Property) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Supplementary Financial Information [Abstract]
Assets related to employee benefit plans, including employee savings programs	$ 98	$ 94
Land and other investments	4	3
Total investments and other property	$ 102	$ 97

XML

Supplementary Financial Information (Schedule Of Property, Plant And Equipment) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Supplementary Financial Information [Abstract]
Total assets in service	$ 19,719	$ 19,072
Less accumulated depreciation	6,758	6,479
Net of accumulated depreciation	12,961	12,593
Construction work in progress	641	416
Held for future use	15	15
Property, plant and equipment - net	$ 13,617	$ 13,024

XML

Supplementary Financial Information (Schedule Of Intangible Assets) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 934	$ 902
Accumulated Amortization	406	360
Net	528	542
Land Easements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	480	467
Accumulated Amortization	94	91
Net	386	376
Capitalized Software [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	454	435
Accumulated Amortization	312	269
Net	$ 142	$ 166

XML

Supplementary Financial Information (Schedule Of Estimated Aggregate Amortization Expenses) (Details) $ in Millions	Sep. 30, 2016 USD ($)
Supplementary Financial Information [Abstract]
2016	$ 61
2017	54
2018	48
2019	45
2020	$ 44

XML

Supplementary Financial Information (Schedule Of Employee Benefit Obligations And Other) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Supplementary Financial Information [Abstract]
Retirement plans and other employee benefits	$ 2,021	$ 1,985
Uncertain tax positions (including accrued interest)	3	3
Investment tax credits	13	15
Other	66	60
Total employee benefit obligations and other	$ 2,103	$ 2,063

XML

Supplementary Financial Information (Schedule Of Supplemental Cash Flow Information) (Details) - USD ($) $ in Millions		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015
Supplementary Financial Information [Abstract]
Interest		$ 266	$ 277
Capitalized interest		(6)	(3)
Interest (net of amounts capitalized)		260	274
Federal			49
State	[1]	20	24
Total amount in lieu of income taxes	[1]	20	73
Noncash construction expenditures	[2]	$ 104	$ 60

[1] See Note 10 for income tax related detail.

[2] Represents end-of-period accruals.