Item 4HM E M O R A N D U M
July 9, 2008
To:
Shana Yelverton, City Manager
From:
Sharen Jackson, Finance Director
Subject:
RESOLUTION NO. 08-028, SUSPENDING THE AUGUST 8, 2008,
EFFECTIVE DATE OF ONCOR ELECTRIC DELIVERY COMPANY
REQUESTED RATE CHANGE TO PERMIT THE CITY TIME TO
STUDY THE REQUEST AND TO ESTABLISH REASONABLE RATES;
APPROVING COOPERATION WITH ONCOR CITIES STEERING
COMMITTEE TO HIRE LEGAL AND CONSULTING SERVICES AND
TO NEGOTIATE WITH THE COMPANY AND DIRECT ANY
NECESSARY LITIGATION AND APPEALS; 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
FOR THE STEERING COMMITTEE
Action
Requested:
Approval of Resolution 08-028, Suspending the August 8, 2008,
effective date of Oncor Electric Delivery Company requested rate
change.
Background
Information:
Oncor Electric Delivery Company ("Oncor" or "the Company")
filed an application on or about June 27, 2008 with cities retaining
original jurisdiction seeking to increase system-wide transmission
and distribution rates by $275 million. (Until last year, Oncor was
known as TXU Electric Delivery Company.) The Company asks
the City to approve a 17.6% increase in residential rates, a 9.1%
increases in commercial rates, and a 5.8% increase in street
lighting rates. According to Oncor, annual rates would increase by
approximately $60 for an average residential customer.
The resolution suspends the August 8, 2008 effective date of the
Company's rate increase for the maximum period permitted by law
to allow the City, working in conjunction with the Steering
Committee of Cities Served by Oncor, to evaluate the filing,
determine whether the filing complies with law, and if lawful, to
determine what further strategy, including settlement, to pursue.
The law provides that a rate request made by an electric utility
cannot become effective until at least 35 days following the filing
of the application to change rates. The law permits the City to
suspend the rate change for 90 days after the date the rate change
If the City fails to take some
would otherwise be effective.
action regarding the filing before the effective date, Oncor's
rate request is deemed administratively approved.
Financial
Considerations:
Oncor will reimburse the Steering Committee for its reasonable
rate case expenses. Legal counsel and consultants approved by the
Executive Committee of the Steering Committee will submit
monthly invoices that will be forwarded to Oncor for
reimbursement. No individual city incurs liability for payment of
rate case expenses by adopting a suspension resolution.
Citizen Input/
Board Review:
None required
Legal Review:
Lloyd Gosselink Rochelle & Townsend, P.C. prepared the
resolution.
Alternatives:
Deny resolution
Supporting
Documents:
Resolution No. 08-028
Staff
Recommendation:
Approve Resolution No. 08-028
RESOLUTION NO. 08-028
RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS
SUSPENDING THE AUGUST 8, 2008, EFFECTIVE DATE
OF ONCOR ELECTRIC DELIVERY COMPANY
REQUESTED RATE CHANGE TO PERMIT THE CITY
TIME TO STUDY THE REQUEST AND TO ESTABLISH
REASONABLE RATES; APPROVING COOPERATION
WITH ONCOR CITIES STEERING COMMITTEE TO
HIRE LEGAL AND CONSULTING SERVICES AND TO
NEGOTIATE WITH THE COMPANY AND DIRECT ANY
NECESSARY LITIGATION AND APPEALS; 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 FOR THE
STEERING COMMITTEE
WHEREAS, on or about June 27, 2008, Oncor Electric Delivery Company (Oncor),
pursuant to PURA §§ 33.001 and 36.001 filed with the City of Southlake, Texas a Statement of
Intent to increase electric transmission and distribution rates by $275 million in all municipalities
exercising original jurisdiction within its service area effective August 8, 2008; and
WHEREAS, the City of Southlake, Texas is a member of the Oncor Cities Steering
Committee ("Steering Committee") and will cooperate with the 109 similarly situated city
members and other city participants in conducting a review of the Company’s application and to
hire and direct legal counsel and consultants and to prepare a common response and to negotiate
with the Company and direct any necessary litigation; and
WHEREAS, PURA § 36.108 grants local regulatory authorities the right to suspend the
effective date of proposed rate changes for ninety (90) days after the date the rate change would
otherwise be effective; and
WHEREAS, PURA § 33.023 provides that costs incurred by Cities in ratemaking
activities are to be reimbursed by the regulated utility.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE, TEXAS:
1. That the August 8, 2008 effective date of the rate request submitted by Oncor on
or about June 27, 2008, be suspended for the maximum period allowed by law to permit
adequate time to review the proposed changes and to establish reasonable rates.
2. As indicated in the City's resolution approving membership in the Steering
Committee, the Executive Committee of Steering Committee is authorized to hire and direct
legal counsel and consultants, negotiate with the Company, make recommendations regarding
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reasonable rates, and to intervene and direct any necessary administrative proceedings or court
litigation associated with an appeal of a rate ordinance and the rate case filed with the City or
Public Utility Commission.
3. That the City’s reasonable rate case expenses shall be reimbursed by Oncor.
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.
5. A copy of this resolution shall be sent to Oncor, care of Debra Anderson, Oncor
Electric Delivery Company, 1601 Bryan St., Suite 23-055C, Dallas, Texas 75201 and to Geoffrey
Gay, General Counsel to the Oncor Steering Committee, at Lloyd Gosselink Rochelle &
Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-1725.
____________________________________
Mayor, City of Southlake, Texas
ATTEST:
_____________________________
_____________________________
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