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Item 4J Resolution 17-033, denying Oncor Electric Delivery Company LLC requested rate change Item 4J Good evening Mayor and members of the City Council. I am presenting item 4J Resolution 17-033. 1 Requested Action Consider Resolution 17-033 Deny Oncor requested rate change $317 Million 11.8% resident rate increase $6.68 monthly increase (1000kwh) The purpose of this item is to seek Council approval of Resolution No. 17-033 to deny Oncor’s requested rate change. The increase equates to a $317 million dollar rise in Oncor’s service revenue. The impact to residential rates is 11.8% and street lighting will increase a half percent a residential customer using 1000 kwh per month will see an additional $6.68 on their monthly electric bill. 2 Background Information Member of Steering Committee of Cities Served by Oncor (“Steering Committee”) Rate increase March 17, 2017 Resolution 17-021 April 18, 2017 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”). 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. 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 law and if lawful, to determine what further strategy, including settlement, to pursue. 3 Background Information Steering Committee Consultants Review of supporting documentation Identified numerous unreasonable expenses Legal Counsel Deny rate request Public Utility Commission Of Texas Appeal process 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. 4 Resolution provisions Deny the requested rate increase Outlines reimbursement of expenses Approval of the resolution is the formal required action to deny Oncor’s rate increase. The resolution includes a provision that Oncor will reimburses the cities for their reasonable rate case expenses within 30 days of the adoption of the resolution. No individual city will incur liability for payment of rate case expenses by adopting a denial resolution 5 City of Southlake Strategy Map The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing efficiency, fiscal responsibility, transparency, and sustainability. C1 Achieve the highest standards of safety & security C2 Provide travel convenience within City & region C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment Serve our Customers Manage the Business B1 Achieve best-in-class status in all City disciplines B2 Collaborate with select partners to implement service solutions B3 Enhance resident quality of life & business vitality through tourism B4 Provide high quality services through sustainable business practices B5 Enhance service delivery through continual process improvement B6 Optimize use of technology Provide Financial Stewardship Promote Learning and Growth F1 Adhere to financial management principles & budget F2 Invest to provide & maintain high quality public assets F3 Achieve fiscal wellness standards F4 Establish & maintain effective internal controls L1 Ensure our people understand the strategy & how they contribute to it L2 Enhance leadership capabilities to deliver results L3 Attract, develop & retain a skilled workforce L4 Recognize & reward high performers L5 Empower informed decision-making at all levels in the organization C6 Enhance the sense of community by providing excellent customer service and citizen engagement opportunities L6 Foster positive employee engagement Deliver on Our Focus Areas C5 Promote opportunities for partnerships & volunteer involvement C3 Provide attractive & unique spaces for enjoyment of personal interests Our membership with the Steering Committee and the group’s evaluation of the proposed rates aligns this item with the Southlake Strategic Objective B2 Collaborate with select partners to implement service solutions. 6 Questions? 7 Thank you for your consideration of this recommendation. I am available for questions.