Agenda

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Work Session and Regular Meeting

Meeting Date:	04/24/2018
Department:	City Manager
Pillars:	Gold Standard in Financial Health
Milestones:	Effectively utilize and promote the Silver Line development with a first mile/last mile solution

AGENDA CAPTION:

Consider Action to Approve a Resolution Finding that Oncor Electric Delivery Company LLC’s Application for Approval of a Distribution Cost Recovery Factor Pursuant to 16 Tex. Admin. Code § 25.243 to Increase Distribution Rates within the City Should be Denied; Finding that the City’s Reasonable Rate Case Expenses Shall be Reimbursed by the Company; 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.

BACKGROUND:

The purpose of this resolution is to deny the Distribution Cost Recovery Factor application filed by Oncor Electric Delivery Company LLC (Oncor) which will increase distribution rates for its customers. The Public Utility Commission (PUC) of Texas's rules allow for cities 60 days to act on this application. That deadline in June 4, 2018. This denial is standard practice as this time allows for our consultants adequate time to review the rate request.

On April 5, 2018, Oncor filed an application for approval of a Distribution Cost Recover Factor (DCRF) to increase distribution rates with each of the cities in their service area. In the filing, the Company asserts that it is seeking an increase in distribution revenues of $19,002,177 for the period of September 1, 2018 to August 31, 2019. The attached resolution authorizes the City to join with the Steering Committee of Cities Served by Oncor (Steering Committee) to hire a consultant to evaluate the filing, determine whether the filing complies with law, and if lawful, to determine what further strategy, including settlement, to pursue.

Listed below is an explanation of the actions that will be taken with the resolution:

Section 2: Authorizes the Town to participate with the Steering Committee as a party in the Oncor's DCRF filing, PUC Docket No. 48231. Negotiating clout and efficiency are enhanced by the Town when cooperating with the Steering Committee in a common review and purpose.
Section 3: Authorizes the Steering Committee to hire the firm of Lloyd, Gosselink, Rochelle & Townsend, P.C. and a rate expert consultant to review the filing. Rate case expenses are minimized when the Steering Committee hires one set of attorneys and experts who work under the guidance and control of the Executive Committee of the Steering Committee.
Section 4: Finds that Oncor's application for a rate increase to be unreasonable and should be denied. Once a case is filed with the PUC, cities have 60 days to act on a DCRF application. Denial of the application allows for the Steering Committee the ability to hire a rate expert consultant to review the filing and report their findings.
Section 5: States that Oncor will continue to charge its existing rates to customers until the rate filing is resolved.
Section 6: Oncor will reimburse the Steering Committee for its reasonable rate case expenses. Legal counsel and consultants approved by the Steering Committee will submit 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.
Section 7: This section recites that the Resolution was passed at a meeting that was open to the public and that the consideration of the Resolution was properly noticed.
Section 8: This section provides that both Oncor and Steering Committee counsel will be notified of the City's action by sending a copy of the approved and signed resolution to certain designated individuals.

RECOMMENDATION:

Administration recommends approval.

Attachments
Resolution- Oncor Denial
Oncor Steering Committee List of Cities