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MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ROGER NELSON, CITY MANAGER
MEETING DATE: MAY 2, 2000
SUBJECT: TXU ELECTRIC — RESOLUTION FOR PARTICPATION IN
STEERING COMMITTEE AND INTERVENTION IN RATE CASE
RECOMMENDATION:
City Council approve a resolution authorizing the City to participate in the Standing
Steering committee of Cities served by TXU Electric, and authorizing intervention in TXU
Electric Company's transmission and distribution rate case, and take any necessary
action.
FUNDING SOURCE:
The City of Grapevine will pay a participation fee of $3,980 (which represents 10 cents
per capita) to support the costs for hiring rate case attorneys and consultants. Funds
are available in Account No. 100-44540-120-1, Professional Services.
BACKGROUND:
SB 7 is an electric restructuring law passed during the 1999 Texas Legislative Session.
The City of Grapevine and a coalition of approximately 100 Texas cities have
participated in many of the on-going proceedings before the PUC designed to implement
the provisions of the bill.
One strategy is to deregulate the electric generation component of the retail electric
industry by the year 2002. The electric transmission and distribution components are to
remain regulated and will continue to be performed by the local wires company, TXU
Electric. The PUC has recently finished deciding how much TXU has in terms of
stranded (uneconomic) costs. It will now turn its attention to setting the "wires charge"
(transmission and distribution components) which must be paid by each end use electric
customer.
April 25, 2000 (4:43PM)
The wires charge will remain regulated because the wires company will still operate as a
monopoly. The wires charge will be set using traditional cost of service rate -making
principles.
Participation by the cities in this rate case is important to assure the wires charge rate is
just and reasonable and will not discourage competition in the retail electric market.
Participation and funding is available through the Standing Steering Committee of Cities
Served by TXU Electric.
The Staff and City Attorney recommend approval of the resolution in order to help
ensure that our residents and TXU customers receive fair and reasonable rates.
ML
April 27, 2000 (9:48AM)
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RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS AUTHORIZING INTERVENTION BY
THE CITY COUNCIL OF THE CITY OF GRAPEVINE IN
TXU ELECTRIC COMPANY'S TRANSMISSION AND
DISTRIBUTION RATE CASE; AUTHORIZING
PARTICIPATION WITH THE STANDING STEERING
COMMITTEE OF CITIES SERVED BY TXU ELECTRIC;
AUTHORIZING THE HIRING OF RATE CASE ATTORNEYS
AND CONSULTANTS THROUGH THE STANDING
STEERING COMMITTEE; AND AUTHORIZING THE
PAYMENT OF 10 CENTS PER CAPITA TO THE
STANDING STEERING COMMITTEE TO FUND THIS AND
OTHER TXU ELECTRIC AND SB 7 RELATED CASES AND
DOCKETS AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Grapevine is a regulatory authority under the Public Utility
Regulatory Act (PURA) and has exclusive original jurisdiction over the rates and
services of TXU Electric Company (TXU Electric) within the municipal boundaries of the
city; and
WHEREAS, pursuant to PURA § 39.201, TXU Electric is required to file
proposed tariffs for its transmission and distribution utility on or before April 1, 2000; and
WHEREAS, the PURA requires TXU Electric to include supporting data for
determination of nonbypassable delivery charges, including a competition transition
charge to collect estimated stranded costs associated with the Comanche Peak nuclear
plant; and
WHEREAS, TXU Electric's filing will result in transmission and distribution
charges to go into effect as of January 1, 2002; and
WHEREAS, the charges established by the Public Utility Commission (PUC)
have the potential to hinder competition in TXU Electric's service territory; and
WHEREAS, the Steering Committee of Cities served by TXU Electric has
historically intervened in TXU Electric rate proceedings to protect the interests of
municipalities and electric customers residing within municipal boundaries; and
WHEREAS, pursuant to PURA § 33.025, the City of Grapevine has standing to
intervene in PUC proceedings relating to the provision of electric service to the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That all matters stated in the preamble are found to be true and
correct and are incorporated herein as if copied in their entirety.
Section 2. That the City is authorized to intervene in TXU Electric's
transmission and distribution rate case filed at the Public Utility Commission of Texas on
or before April 1, 2000.
Section 3. That the City is authorized to join the Standing Steering Committee
of Cities Served by TXU Electric to protect the interests of the City of Grapevine and
protect the interests of TXU Electric's customers residing and conducting business with
the City limits.
Section 4. That the City hereby authorizes the Executive Committee of the
Standing Steering Committee to hire necessary attorneys and rate case consultants to
review TXU Electric's filing, to represent the City at the PUC and to prosecute any
appeals as directed by the Steering Committee.
Section 5. It is further authorized to pay to the Standing Steering Committee
10 cents per capita based on the population figures for the City shown in the latest TML
Directory of City Officials.
Section 6. A copy of this resolution shall be sent to Mr. Jay Doegey, City
Attorney for the City of Arlington and Chairman of the Standing Steering Committee of
Cities Served By TXU Electric and to the local TXU Electric manager.
Section 7. That this resolution shall take effect from and after the date of its
passage.
PASSED AND APPROVED BY THE CITY COUNCIL CITY OF THE CITY OF
GRAPEVINE on this the 2nd day of May, 2000.
APPROVED:
RES. NO. 2