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HomeMy WebLinkAboutItem 14 - Oncor Electric RateMEMO TO: FROM: MEETING DATE: SUBJECT: RECOMMENDATION: ,m Illuilillom Pr HONORABLE MAYOR & MEMBERS OF THE CITY COUNCIL BRUNO RUMBELOW, CITY MANAGER JUNE 7, 2011 ONCOR ELECTRIC RATE SETTLEMENT City Council to consider a rate settlement ordinance with Oncor Electric delivery. BACKGROUND: The City, along with approximately 160 other cities served by Oncor Electric Delivery Company LLC ( "Oncor" or "Company "), is a member of the Steering Committee of Cities Served by Oncor ( "Steering Committee "). On or about January 7, 2011, Oncor filed with the City an application to increase electric rates. The Oncor filing sought a $353 million rate increase. The City worked with the Steering Committee to analyze the schedules and evidence offered by Oncor to support its request to increase rates. The ordinance is attached, and the complete tariff listing that is 350 pages long is available in the City Secretary's Office. The rates and tariffs are the result of negotiations between the Steering Committee and the Company to resolve issues raised by the Steering Committee and other interveners during the review and evaluation of the filing. The ordinance resolves the Company's filing by authorizing an increase in the Company's base rate of $136.7 million. The monthly bill impact for the average residential customer will be a $2.35 increase (as opposed to the $5.00 per bill increase as proposed in the Company's filing). Also, the settlement results in a system -wide rate increase of 6.1 %. Residential customers will see an increase of 6.2 %, much lower than Oncor's requested 14.6% increase. Street lighting rates will increase 13.8 %, which is also lower than Oncor's requested increase of 25.9 %. Oncor has agreed that it will not file another general base rate case prior to July 1, 2013. The alternative to a settlement of the filing would be a contested case proceeding before the Public Utility Commission of Texas on the Company's current application, would take several months and cost ratepayers millions of dollars in rate case expenses, and would not likely produce a result more favorable than that to be produced by the settlement. The Executive Committee and counsel for the Steering Committee recommend that Steering Committee member cities take action to approve the Ordinance authorizing new rate tariffs. The City Council Utility Committee and City Attorney have reviewed the proposed settlement agreement. JHlsgr ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, ( "CITY ") APPROVING A NEGOTIATED RESOLUTION BETWEEN THE STEERING COMMITTEE OF CITIES SERVED BY ONCOR ( "STEERING COMMITTEE ") AND ONCOR ELECTRIC DELIVERY COMPANY LLC ( "ONCOR" OR "COMPANY ") REGARDING THE COMPANY'S APPLICATION TO INCREASE ELECTRIC RATES IN ALL CITIES EXERCISING ORIGINAL JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE; REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE RATEMAKING EXPENSES; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT AND FINDING THE RATES TO BE SET BY THE ATTACHED TARIFFS TO BE JUST AND REASONABLE; APPROVING ONCOR'S PROOF OF REVENUES; ADOPTING A SAVINGS CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE STEERING COMMITTEE'S LEGAL COUNSEL. WHEREAS, the City of Grapevine, 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 ( "Steering Committee "), a coalition of approximately 160 similarly situated cities served by Oncor that have joined together to facilitate the review of and response to electric issues affecting rates charged in the Oncor service area; and WHEREAS, on or about January 7, 2011, Oncor filed with the City its application to increase electric base rates by approximately $353 million, such increase to be effective in every municipality within Oncor's service territory; and WHEREAS, the Steering Committee coordinated their review of Oncor's filing by designating an Executive Committee made up of Steering Committee representatives, assisted by Steering Committee attorneys and consultants, to resolve issues identified by the Steering Committee in the Company's filing; and WHEREAS, the Company has filed evidence that existing rates are unreasonable and should be changed; and WHEREAS, independent analysis by the Steering Committee's rate experts concluded that Oncor is able to justify an increase over current rates of $136.7 million; M-9 WHEREAS, the Steering Committee has entered a Settlement Agreement ( "Attachment C ") with Oncor to increase base rate revenues by $136.7 million; and WHEREAS, the Executive Committee of the Steering Committee, and the Steering Committee's lawyers and consultants recommend that Steering Committee members approve the attached rate tariffs ( "Attachment A" and "Attachment B" to this Ordinance), which will increase the Company's revenue requirement by $136.7 ; and WHEREAS, the attached tariffs implementing new rates are consistent with the negotiated resolution reached by the Steering Committee and are just, reasonable, and in public interest; and WHEREAS, it is the intention of the parties that if the City determines any rates, revenues, terms and conditions, or benefits resulting from a Final Order or subsequent negotiated settlement approved in any proceeding addressing the issues raised in the Company's filing would be more beneficial to the City than the terms of the attached ORD. NO. 2 tariff, then the more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to the City; and WHEREAS, the negotiated resolution of the Company's filing and the resulting rates are, as a whole, in the public interest. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS: Section 1. That the findings set forth in this Ordinance are hereby in all things approved. Section 2. That the City Council finds the existing rates for electric service provided by Oncor are unreasonable and new tariffs, which are attached hereto and incorporated herein as Attachments A and B, are jut and reasonable and are hereby adopted. Section 3. That Oncor shall reimburse the reasonable ratemaking expenses of the Steering Committee in processing the Company's rate application. Section 4. That to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Ordinance, it is hereby repealed. Section 5. That the meeting at which this Ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551, Section 6. That if any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance and the remaining provisions of the Ordinance shall be interpreted as if the offending section or clause never existed. ORD. NO. 3 Section 7. That if the City determines any rates, revenues, terms and conditions, or benefits resulting from a Final Order or subsequent negotiated settlement approved in any proceeding addressing the issues raised in the Company's filing would be more beneficial to the City than the terms of the attached tariffs, then the more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to the City. Section 8. That this Ordinance and Settlement Agreement ( "Attachment C ") shall become effective from and after its passage with rates authorized by attached Tariffs to be effective in two phases. Phase one tariffs (attached to this Ordinance as "Attachment A "), increasing Oncor's revenues by $93.7 million, are effective for bills rendered on or after July 1, 20110 Phase two tariffs (attached to this Ordinance as "Attachment B "), increasing Oncor's revenues by $43 million, are effective for bills rendered on or after January 1, 2012. Section 9. That a copy of this Ordinance shall be sent to Oncor, care of Autry Warren, Oncor Electric Delivery Company, LLC, 1601 Bryan St., 23rd Floor, Dallas, Texas 75201 and to Thomas Brocato, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767 -1725. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS on this the 7th day of June, 2011. APPROVED: ORD. NO. 4 ATTEST: APPROVED AS TO ORD. NO.