Item 4C - Memo
M E M O R A N D U M
August 15th, 2023
To: Shana Yelverton, City Manager
From: Nick Cornelius, Management Assistant, Finance
Subject: Resolution No. 23-016, denying Oncor Electric Delivery Company’s application
to amend its Distribution Cost Recovery Factor and update its Mobile
Generation Riders
Action
Requested: Approval of Resolution No. 23-016, denying Oncor Electric Delivery Company’s
application to amend its Distribution Cost Recovery Factor and update its
Mobile Generation Riders.
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 June 29th, 2023, Oncor filed an application with cities retaining original
jurisdiction seeking to increase the company’s Distribution Cost Recovery
Factor (DCRF) and update its Mobile Generation Riders by $152.78 million and
$1.07 million, respectively. In accordance with the Public Utility Commission’s
60-day timeline, the OCSC is asking all cities to respond by Monday, August
28th.
The OCSC and its legal counsel recommend that all cities adopt this resolution
denying Oncor’s application for approval to increase the DCRF and Mobile
Generation Rider rates. The OCSC will then engage the services of a utilities
consultant, who will conduct discovery and review Oncor’s application for
potential cost saving adjustments.
Financial
Considerations: None
Strategic Link: This item is specifically linked to the City’s Strategy Map through B2:
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. 23-016.
Alternatives: Deny Resolution No. 23-016, denying Oncor Electric Delivery Company’s
application to amend its Distribution Cost Recovery Factor and update its
Mobile Generation Riders
Staff
Recommendation: Approve Resolution No. 23-016, denying Oncor Electric Delivery Company’s
application to amend its Distribution Cost Recovery Factor and update its
Mobile Generation Riders.
Attachments: Resolution 23-016
Staff Contacts: Nick Cornelius (817) 748-8286
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RESOLUTION NO. 23-016
A RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS
FINDING THAT ONCOR ELECTRIC DELIVERY
COMPANY LLC’S APPLICATION TO AMEND ITS
DISTRIBUTION COST RECOVERY FACTOR AND
UPDATE GENERATION RIDERS TO INCREASE
DISTRIBUTION RATES WITHIN THE CITY SHOULD BE
DENIED; AUTHORIZING PARTICIPATION WITH THE
STEERING COMMITTEE OF CITIES SERVED BY
ONCOR; AUTHORIZING HIRING OF LEGAL COUNSEL;
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
(“OCSC”), a membership 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 June 29, 2023, Oncor filed with the City an Application to
Amend its Distribution Cost Recovery Factor and Update Mobile Generation Riders, PUC
Docket No. 55190, seeking to increase electric distribution rates by approximately $152.78
million and update Oncor’s Rider Mobile Generation and Rider Wholesale Mobile Generation to
recover $1.07 million related to mobile generation facilities; and
WHEREAS, all electric utility customers residing in the City will be impacted by this
ratemaking proceeding if it is granted; and
WHEREAS, OCSC is coordinating its review of Oncor’s DCRF filing with designated
attorneys and consultants to resolve issues in the Company’s application; and
WHEREAS, OCSC members and attorneys recommend that members deny the DCRF.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS:
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Section 1. That the City is authorized to participate with Cities in PUC Docket No.
55190.
Section 2. That subject to the right to terminate employment at any time, the City
hereby authorizes the hiring of the law firm of Lloyd Gosselink and consultants to negotiate with
the Company, make recommendations to the City regarding reasonable rates, and to direct any
necessary administrative proceedings or court litigation associated with an appeal of this
application filed with the PUC.
Section 3. That the rates proposed by Oncor to be recovered through its DCRF
charged to customers located within the City limits, are hereby found to be unreasonable and
shall be denied.
Section 4. That the Company shall continue to charge its existing rates to customers
within the City.
Section 5. That the City’s reasonable rate case expenses shall be reimbursed in full
by Oncor within 30 days of presentation of an invoice to Oncor.
Section 6. 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 7. That a copy of this Resolution shall be sent to J. Michael Sherburne, Vice
President – Regulatory, Oncor Electric Delivery Company LLC, 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202; to Tab R. Urbantke, Hunton Andrews Kurth LLP, 1445 Ross
Avenue, Suite 3700, Dallas, Texas 75202; and to Thomas L. Brocato, General Counsel to OCSC,
at Lloyd Gosselink Rochelle & Townsend, 816 Congress Ave., Suite 1900, Austin, Texas 78701.
PASSED AND APPROVED this 15th day of August, 2023.
_________________________________
John Huffman, Mayor
ATTEST:
__________________________________
Amy Shelley, TRMC
City Secretary
APPROVED AS TO FORM:
___________________________________
City Attorney