2005-039-RES ACCEPTING A SETTLEMENT AGREEMENT WITH TXU ELECTRIC DELIVERY

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existing applicable franchise agreements to the contrary, Electric Delivery agrees to reimburse Cities for reaso1l8b1e and necessary expenses incurred in Electric Delivery's next rate case in an amount not 10 exceed S2,000,000. The rate case expense reimbursements will be made monthly, beginning with the first month after the consultants are hired. Cities further agree not to contest the recovery of Cities' rate case expenses and Electric'Delivery's reaB01l8b1e and necessary rate case expenses in Electric Delivery's next rate case. Electric Delivery further agrees to pay, and Cities agrees to accept, S150,000 in scttIement of all previously disputed regulatory expenses. Electric Delivery will not seek reimbursement of that S150,000 amount in Electric Delivery's rates. 13. Electric Delivery agrees that, in franchise negotiations, it will not seek to extend the prohibition on reimbursement of municipal rate case expenses beyond lune 2008. 14. Electric Delivery agrees that if the 2005 Texas Legislature considers the implementation of a nodal pricing system in ERCOT, then Electric Delivery will provide information to the Legislature concerning the importance of a vibrant electric transmission system and the benefits of the expansion of transmission facilities in helping'to reduce congestion costs. IS. Signatories acknowledge that Electric Delivery intends to offer certain terms of this Settlement Agreement to cities served by Electric Delivery that are not listed on Exhibit A ("Negotiations''). Electric Delivery agrees that all cities listed on Exlu'bit A are entitled to Most Favored Nations protection during those Negotiations and that any benefits that E1cctrin Delivery agrees to provide to any city during those Negotiations that are not already included in this Settlement Agreement will be offered to all cities listed on Exhibit A. Cities acknowledge and agree that to receive any additional benefits from Electric Delivery, additional consideration from Cities to Electric Delivery may be required. 16. The Signatories agree that the amounts paid by Electric Delivery to Cities pursuant to paragraphs 4, 10, and 12 of this Agreement are paid solely in consideration for Cities' abatement or dismissal of, and forbearance from filing or pursuing, Show Cause Actions against Electric Delivery and Cities' agreement to abide by the terms of this Agreement, and to reimburse Cities' expenses associated with the Show Cause Actions and other regulatory proceedings. To the extent that the amounts paid may be in excess of Cities' expenses, the excess is paid solely in order to settle the matters that are the subject of this Agreement Signatories recognize and agree that the payments specified in this Agreement are not a rate reduction,. refund, rebate, discount, preference or privilege of any kind for services provided by Electric Delivery or any of its affiliates or predecessors in interest under any tarill: whether in the past, now, or in the future. M such, the provision of electric delivery service to Cities by Electric Delivery or any affiliate or predecessor has been and will continue to be governed solely by the rates, terms, and conditions of the applicable tarifEl. 17. Cities agree that for a ten-day period following the date this Settlement Agreement is executed, neither Cities nor the cities listed on Exhibit A will make any public statements or take any public action concerning the existence of a scttIement or the terms of the Settlement Agreement . . ~.' 4