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Item 4I - MemoSOUCITY THLAI<E Item 41 MEMORANDUM October 4, 2022 To: Shana Yelverton, City Manager From: Daniel Cortez, Director of Economic Development & Tourism Subject: Resolution No. 22-028, denying Oncor Electric Delivery Company's application to increase system -wide transmission and distribution rates within the City of Southlake. Action Requested: Approval of Resolution No. 22-028, denying Oncor Electric Delivery Company's application to increase system -wide transmission and distribution rates within the City of Southlake. Background Information: Cities have been advocating on behalf of electricity consumers for many years — especially at the Public Utility Commission of Texas. One of the most important municipal coalitions currently active in electric utility cases is the Steering Committee of Cities Served by Oncor ("OCSC"), an organization of more than 156 cities in north and central Texas with residents served by the Oncor transmission and distribution utility. The City of Southlake, along with those other 156 cities, is part of the OCSC. The OCSC undertakes activities on behalf of its city members and their citizens such as participation in rate cases, rulemakings, advocacy, and legislative efforts that impact utility rates and costs. On May 13, 2022, Oncor filed an application with cities retaining original jurisdiction seeking to increase system -wide transmission and distribution rates by about $251 million or approximately 4.5% over present revenues. Oncor's request for approval is asking the City to approve an 11.2% increase in residential rates and a 1.6% increase in street lighting rates. The impact of this requested increase on an average residential customer using 1,300 kWh/month would be about $6.02 per month. In a prior City action, Oncor's rate request was suspended from taking effect for 90 days, the fullest extent permissible under the law. This time period has permitted the City, through its participation with the OCSC, to determine that the proposed rate increase is unreasonable. The OCSC and its legal counsel recommend that all cities adopt this resolution denying Oncor's application for approval to increase system -wide transmission and distribution rates. 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. 53601) currently pending at the Public Utility Commission. All cities with original jurisdiction, such as Southlake, will need to adopt this resolution prior to October 30, 2022. Financial Considerations: None Strategic Link: This item is specifically linked to the City's Strategy Map through 132: Collaborate with select partners to implement service solutions Legal Review: Lloyd Gosselink Rochelle & Townsend, P.C. has reviewed this resolution and recommends the City Council approve Resolution No. 22-028. Alternatives: Deny Resolution No. 22-028, denying Oncor Electric Delivery Company's application to increase system -wide transmission and distribution rates within the City of Southlake. Staff Recommendation: Approval of Resolution No. 22-028, denying Oncor Electric Delivery Company's application to increase system -wide transmission and distribution rates within the City of Southlake. Attachments: Resolution 22-028 Staff Contacts: Daniel Cortez (817) 748-8039 RESOLUTION NO. 22-028 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 May 13, 2022, Oncor filed with the City an application to increase system -wide transmission and distribution rates by $251 million or approximately 4.5% over present revenues. The Company asks the City to approve an 11.2% increase in residential rates and a 1.6% 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 RESOLVED 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. 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., 816 Congress Ave., Suite 1900, Austin, TX 78701. PASSED, APPROVED AND ADOPTED THIS 4TH DAY OF OCTOBER, 2022. ATTEST: Amy Shelley, TRMC City Secretary John Huffman, Mayor APPROVED AS TO FORM: City Attorney