Item 4JCITY OF
SOUTHLAKE
MEMORANDUM
January 19, 2011
To: Shana Yelverton, City Manager
From: Sharen Jackson, Finance Director
Subject: RESOLUTION NO. 11 -006, SUSPENDING THE FEBRUARY 14,
2011, EFFECTIVE DATE OF ONCOR ELECTRIC DELIVERY
COMPANY REQUESTED RATE CHANGE TO PERMIT THE CITY
TIME TO STUDY THE REQUEST AND TO ESTABLISH
REASONABLE RATES
Action
Requested: Approval of Resolution 11 -006, Suspending the February 14,
2011, effective date of Oncor Electric Delivery Company
requested rate change.
Background
Information: Oncor Electric Delivery Company ( "Oncor" or "the
Company ") filed an application on January 7, 2011 with cities
retaining original jurisdiction seeking to increase system-
wide transmission and distribution rates by $353 million.
The Company asks the City to approve a 14.6% increase in
residential rates, a 15.5% increases in commercial rates,
and a 25.9% increase in street lighting rates. According to
Oncor, annual rates would increase by approximately $60 for
an average residential customer.
The resolution suspends the 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 would otherwise be effective. If the
City fails to take some 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: Approve or deny resolution
Supporting
Documents: Resolution No. 11 -006
Staff
Recommendation: Approve Resolution No. 11 -006
RESOLUTION NO. 11 -006
RESOLUTION OF THE CITY OF SOUTHLAKE,
SUSPENDING THE FEBRUARY 14, 2011, EFFECTIVE
DATE OF ONCOR ELECTRIC DELIVERY COMPANY'S
REQUESTED RATE CHANGE TO PERMIT THE CITY
TIME TO STUDY THE REQUEST AND TO ESTABLISH
REASONABLE RATES; APPROVING COOPERATION
WITH THE STEERING COMMITTEE OF CITIES SERVED
BY ONCOR 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 January 7, 2011, Oncor Electric Delivery Company ( Oncor),
pursuant to PURA §§ 33.001 and 36.001 filed with the City of Southlake a Statement of Intent to
increase electric transmission and distribution rates in all municipalities exercising original
jurisdiction within its service area effective February 14, 2011; and
WHEREAS, the City of Southlake is a member of the Steering Committee of Cities
Served by Oncor ( "Steering Committee ") and will cooperate with the 146 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 prior to setting reasonable rates 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 February 14, 2011 effective date of the rate request submitted by Oncor
on or about January 7, 2011, be suspended for the maximum period allowed by law to permit
adequate time to review the proposed changes and to establish reasonable rates.
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2. As indicated in the City's resolution approving membership in the Steering
Committee, the Executive Committee of the Steering Committee is authorized to hire and direct
legal counsel and consultants, negotiate with the Company, make recommendations regarding
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 on a
monthly basis.
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 Autry Warren, Oncor
Electric Delivery Company, LLC, 1601 Bryan St., 23 Floor, Dallas, Texas 75201 and to
Geoffrey Gay, General Counsel to the Steering Committee, at Lloyd Gosselink Rochelle &
Townsend, P.C., P.O. Box 1725, Austin, Texas 78767 -1725.
Mayor, City of Southlake
ATTEST:
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