2006-009T
OFFICIAL RECORD
RESOLUTION NO. 06-009
RESOLUTION ACCEPTING SETTLEMENT WITH
TXU ELECTRIC DELIVERY
WHEREAS the City of Southlake, is a member of the Steering Committee of Cities served by
TXU (Steering Committee); and
WHEREAS the Steering Committee did encourage certain member cities to initiate show
cause rate proceedings against TXU Electric Delivery (Electric Delivery); and
WHEREAS Electric Delivery and the Steering Committee engaged in settlement discussions
regarding abatement of any full-scale rate investigation and interim relief that
may be available to Cities leading to a settlement in February 2005 that made
Steering Committee members whole for their alleged excess costs associated with
street lighting and water pumping in exchange for delay in Show -Cause filing
requirements; and
WHEREAS Electric Delivery has desired to further extend for two years the currently
scheduled June 2006 rate case filing in exchange for extension of payments to
Cities under the February 2005 Agreement and other benefits to Cities; and
WHEREAS the Steering Committee and Electric Delivery have reached a Settlement
Agreement that extends the previously negotiated settlement terms by two years
and adds benefits to Cities, including reimbursement for participation in ERCOT
and market development activities and $18 million in funds for beneficial public
use as may be determined in the discretion of Steering Committee member cities
and which may include, but which is not limited to, energy education for citizens,
reductions in rates for city services, investments in community facilities, and
investment in energy efficiency measures; and
WHEREAS current electric market constraints make it impractical to pass the potential
benefits of rate reductions on to residential ratepayers, because most consumers
remain on price to beat rates which are fixed by statute and rule, and the minority
of consumers who have switched to service from a competitive retail electric
supplier may only realize rate reduction benefits if their REP contract requires a
pass-through of such rate reduction; and
WHEREAS the Steering Committee and Electric Delivery have reached a separate agreement
wherein the Company will increase franchise fee factors over a four-year period
producing increased revenues for each member city; and
WHEREAS Electric Delivery has committed to the Steering Committee during the period of
rate case abatement to share information on certain company operations and
procedures that should enhance the Cities' ability to appropriately exercise
regulatory responsibilities in the rate proceeding that Electric Delivery has agreed
to file on or before July 1, 2008;
WHEREAS the Settlement Agreement calls for immediate and long-term benefits to flow to
all city members of the Steering Committee which in turn have indirect but
positive benefit to all city residents and public safety in general; and
WHEREAS the Steering Committee values the benefits of settlement to Cities at
approximately $85 million between 2005 and 2009 and comparable value is
unlikely to be achieved through litigation.
THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
Southlake, Texas that:
1. The Extension and Modification of Settlement Agreement and Agreement to
Resolve Outstanding Franchise Issues, both dated January 19, 2006, between the Cities' Steering
Committee and TXU Electric Delivery is hereby ratified.
Approved this e4t day of Fet(Uaruf , 2006.
1
Attest:
Mayor