Item 4J CITY OF
SOUTHLAKE
MEMORANDUM Item 4J
July 25, 2017
To: Shana Yelverton, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Resolution No. 17-033, denying Oncor Electric Delivery
Company LLC requested rate change
Action
Requested: Approval of Resolution No. 17-033, denying Oncor Electric
Delivery Company LLC ("Oncor") requested rate change.
Background
Information: The City, along with over 158 other cities served by Oncor is
a member of the Steering Committee of Cities Served by
Oncor ("Steering Committee"). The Steering Committee has
been in existence since the late 1980s. It took on a formal
structure in the early 1990s when cities served by the former
TXU gave up their statutory right to rate case expense
reimbursement in exchange for higher franchise fee
payments. Empowered by city resolutions and funded by
per capita assessments, the Steering Committee has been
the primary public interest advocate before the Public Utility
Commission, the Courts, and the Legislature on electric
utility regulation matters for the last 30 years.
On March 17, 2017, Oncor filed with the City an application
seeking to increase system-wide transmission and
distribution rates by $317 million or approximately 7.5% over
present revenues.
The rate request included the following:
• 0.5% increase in street lighting rates;
• 11 .8% increase in residential rates.
If approved, a residential customer using 1000 kWh per
month would have seen a bill increase of about $6.68 per
month.
On April 18, 2017, City Council approved Resolution 17-021
to suspend the effective date of the rate increase to allow
staff working in conjunction with the Steering Committee to
evaluate the filing, determine whether the filing complies with
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law and if lawful, to determine what further strategy,
including settlement, to pursue.
The Steering Committee engaged the services of three
consultants to review Oncor's filing. The consultants
identified numerous unreasonable expenses and propose
significant reductions to Oncor's request. Accordingly, the
Steering Committee's attorneys recommend that all
members adopt the Resolution denying the rate change.
Once the Resolution is adopted, Oncor will have 30 days to
appeal the decision to the Public Utility Commission of
Texas where the appeal will be consolidated with Oncor's
filing (i.e. PUC Docket No. 46957) currently pending at the
Commission.
Financial
Considerations: Oncor will reimburse the cities for their reasonable rate case
expenses within 30 days of the adoption of this Resolution.
No individual city incurs liability for payment of rate case
expenses by adopting a denial resolution.
Strategic Link: 132: Collaborate with select partners to implement service
solutions
Citizen Input/
Board Review: None required
Legal Review: Lloyd Gosselink Rochelle & Townsend, P.C. prepared the
resolution.
Alternatives: Approve or deny resolution
Supporting
Documents: Resolution No. 17-033
Staff
Recommendation: Approval of Resolution No. 17-033
RESOLUTION NO. 17-033
A RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS
FINDING THAT ONCOR ELECTRIC DELIVERY
COMPANY LLC'S ("ONCOR" OR "COMPANY")
APPLICATION TO CHANGE RATES WITHIN THE CITY
SHOULD BE DENIED; FINDING THAT THE CITY'S
REASONABLE RATE CASE EXPENSES SHALL BE
REIMBURSED BY THE COMPANY; FINDING THAT THE
MEETING AT WHICH THIS RESOLUTION IS PASSED IS
OPEN TO THE PUBLIC AS REQUIRED BY LAW;
REQUIRING NOTICE OF THIS RESOLUTION TO THE
COMPANY AND LEGAL COUNSEL.
WHEREAS, the City of Southlake, Texas ("City") is an electric utility customer of Oncor
Electric Delivery Company LLC ("Oncor" or "Company"), and a regulatory authority with an
interest in the rates and charges of Oncor; and
WHEREAS, the City is a member of the Steering Committee of Cities Served by Oncor
("Steering Committee"), a coalition of similarly situated cities served by Oncor that have joined
together to efficiently and cost effectively review and respond to electric issues affecting rates
charged in Oncor's service area; and
WHEREAS, on or about March 17, 2017, Oncor filed with the City an application to
increase system-wide transmission and distribution rates by $317 million or approximately 7.5%
over present revenues. The Company asks the City to approve an 11.8% increase in residential
rates and a 0.5% increase in street lighting rates; and
WHEREAS, the Steering Committee is coordinating its review of Oncor's application
and working with the designated attorneys and consultants to resolve issues in the Company's
filing; and
WHEREAS, through review of the application, the Steering Committee's consultants
determined that Oncor's proposed rates are excessive; and
WHEREAS, the Steering Committee's members and attorneys recommend that members
deny the Application; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS:
Section 1. That the rates proposed by Oncor to be recovered through its electric rates
charged to customers located within the City limits, are hereby found to be unreasonable and
shall be denied.
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Section 2. That the Company shall continue to charge its existing rates to customers
within the City.
Section 3. That the City's reasonable rate case expenses shall be reimbursed in full
by Oncor within 30 days of the adoption of this Resolution.
Section 4. That it is hereby officially found and determined that the meeting at which
this Resolution is passed is open to the public as required by law and the public notice of the
time,place, and purpose of said meeting was given as required.
Section 5. That a copy of this Resolution shall be sent to Oncor, Care of Howard
Fisher, Oncor Electric Delivery Company, LLC, 1616 Woodall Rodgers Freeway, Dallas, Texas
75202 and to Thomas Brocato, Counsel to the Steering Committee, at Lloyd Gosselink Rochelle
& Townsend, P.C., P.O. Box 1725,Austin, Texas 78767-1725.
PASSED AND APPROVED this day of ) 2017.
Mayor
ATTEST:
City Secretary
APPROVED AS TO FORM:
City Attorney
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