CC MEETING: July 11, 2017
DATE: July 5, 2017
TO: Erin Rinehart, City Manager
FROM: Laurie Garber, City Secretary/Admin. Services Director
Title
Consider A Resolution Finding That Oncor Electric Delivery Company LLC’s Application To Change 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.
Body
BACKGROUND:
The City of Carrollton, along with 158 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”). The Steering Committee has been in existence since the late 1980s. It took on a formal structure in the early 1990s when cities served by the former TXU gave up their statutory right to rate case expense reimbursement in exchange for higher franchise fee payments. Empowered by city resolutions and funded by per capita assessments, the Steering Committee has been the primary public interest advocate before the Public Utility Commission, the Courts, and the Legislature on electric utility regulation matters for the last 30 years.
On March 17, 2017, Oncor filed an application to change rates with cities retaining original jurisdiction. In the filing, the Company seeks to increase system-wide transmission and distribution rates by $317 million or approximately 7.5% over present revenues. The Company asks the City to approve an 11.8% increase in residential rates and a 0.5% increase in street lighting rates. If approved, a residential customer using 1000 kWh per month would see a bill increase of about $6.68 per month.
In March, the Steering Committee engaged the services of three consultants, Mr. Lane Kollen, Mr. Richard Baudino, and Mr. Karl Nalepa, to review the Company’s filing. The consultants identified numerous unreasonable expenses and propose significant reductions to the Company’s request. Accordingly, the Steering Committee’s attorneys recommend that all members adopt the Resolution denying the rate change. Once the Resolution is adopted, Oncor will have 30 days to appeal the decision to the Public Utility Commission of Texas where the appeal will be consolidated with Oncor’s filing (i.e. PUC Docket No. 46957) currently pending at the Commission.
Under the law, cities with original jurisdiction over this matter have 125 days from the initial filing to take final action on the application. By the agreement of the parties, this deadline was suspended until August 19, 2017. As such, all cities with original jurisdiction will need to adopt the resolution no later than August 19.
Purpose of the Resolution:
The purpose of the Resolution is to deny the rate application and consolidation proposed by Oncor.
Explanation of “Be It Ordained” Paragraphs:
1. This paragraph finds that the Company’s application is unreasonable and should be denied.
2. This section states that the Company’s current rates shall not be changed.
3. The Company will reimburse the cities for their reasonable rate case expenses. Legal counsel and consultants approved by the Cities will submit monthly invoices that will be forwarded to Oncor for reimbursement.
4. This section merely 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.
5. This section provides Oncor and counsel for the cities will be notified of the City’s action by sending a copy of the approved and signed resolution to counsel.