2008-054-RES 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

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STAFF REPORT ***ACTION MUST BE TAKEN TO SUSPEND THE EFFECTIVE DATE ON OR BEFORE AUGUST 8, 2008*** PURPOSE Oncor Electric Delivery Company ("Oncor" or "the Company") filed an application on or about June 27, 2008 with cities retaining original jurisdiction seeking to increase system-wide transmission and distribution rates by $27S million. (Until last year, Oncor was known as TXU Electric Delivery Company.) The Company asks the City to approve an 17.6% increase in residential rates, a 9.1 % increases in commercial rates, and a 5.8% increase in street lighting rates. According to Oncor, annua.l rates would increase by approximately $60 for an average residential customer. The resolution suspends the August 8, 2008 effective date of the Company's rate increase for the maximum period permitted by law to a11ow 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. The law provides that a rate request made by an electric utility cannot become effective until at least 35 days following the filing of the application to change rates. The law permits the City to suspend the rate change for 90 days after the date the rate change would otherwise be effective. If the City fails to take some action regarding the filing before the effective date, Oncor's rate request is deemed administratively approved. DISCUSSION The City of Paris, Texas is a member of a 109-city coalition known as 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 eaxly 1990s when Cities served by the former TXLJ 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 20 years. This filing is the result of a rate investigation started by the Steering Committee in 2004. That year, 20 members of the Steering Committee exercised their original jurisdiction to investigate the transmission and distribution rates charged by TXU. The 2004 rate inquiry was justified by several factors. First, the Company's rates charged had not been fully reviewed by the PUC since the early 1990s. Second, when the PUC "unbundled" the transmission and distribution rates from generation and retail costs during the transition to deregulation in 2002, municipal accounts were grouped within the broader category of commercial services. This led to application of unfair demand ratchets and higher charges for municipal accounts like water pumping. It also led to high charges for street lighting. Third, the Company's earnings