HomeMy WebLinkAboutItem 05 - Oncor �- ,�_.�_.� .�=_�.n_
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MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER \�`
MEETING DATE: AUGUST 5, 2008
SUBJECT: ONCOR RATE INCREASE SUSPENSION
RECOMMENDATION:
City Council to consider suspension of a rate increase request made by Oncor Electric
Delivery.
BACKGROUND:
Oncor Electric Delivery Company filed a rate increase request at the end of June with
cities retaining original jurisdiction seeking to increase system-wide transmission and
distribution rates by $275 million. The Company asks the City to approve a 17.6%
increase in residential rates, a 9.1% increase 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 Steering Committee negotiated a comprehensive settlement in 2005 that called for
the Company to work with cities on ce�tain items of concern to cities including municipal
and street lighting rates, maintenance, undergrounding and relocation of TXU facilities,
and to make cash payments to the Steering Committee for distribution to all members.
In 2006, the Steering Committee voted to approve an agreement that extends the
benefits of the earlier settlement and increases value to Cities. The settlement terms
called for the Company to file a rate case in 2008 to allow for a full review of the
companies rates and rate of return.
The attached 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.
Mayor Pro Tem Wilbanks, as a member of the Utility Committee, concurs with this
recommendation.
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RESOLUTION NO. �j
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, 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 AND PROVIDING AN
EFFECTIVE DATE
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 Grapevine 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 Grapevine 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.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 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.
Section 2. That 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 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.
Section 3. That the City's reasonable rate case expenses shall be reimbursed
by Oncor.
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 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.
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Section 6. That this resolution shall take effect from and after the date of its
passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 5th day of August, 2008.
APPROVED:
ATTEST:
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RES NO. 2
APPROVED AS TO FORM:
RES NO. 3