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<br /> <br /> <br /> <br /> <br /> <br /> Purpose of the Ordinance: <br /> <br /> Rates cannot change and the Settlement Agreement with Oncor cannot be implemented <br /> without passage of rate ordinances by cities. The purpose of the Ordinance is to approve rate <br /> tariffs ("Attachment A" and "Attachment B") that reflect the negotiated rate changes pursuant to <br /> the process and to ratify a Settlement Agreement recommended by the Steering Committee. <br /> <br /> As a result of the negotiations, the Steering Committee was able to reduce the Company's <br /> requested $353 million increase to $136.7 million (a decrease of over 60% of the Company's <br /> request). Approval of the Ordinance will result in the implementation of new rates that increase <br /> Oncor's revenues in two phases: by $93.7 million effective July 1, 2011 (i.e. "Attachment A") <br /> and by $43 million effective January 1, 2012 ("Attachment B"). <br /> <br /> Reasons Justifying Approval of the Negotiated Resolution: <br /> <br /> During the time that the City has retained original jurisdiction in this case, consultants <br /> working on behalf of the Steering Committee have investigated the support for the Company's <br /> requested rate increase. While the evidence does not support the $353 million increase requested <br /> by the Company, the Steering Committee consultants agree that the Company can justify an <br /> increase in revenues of $136.7 million. The agreement on $136.7 million is a compromise <br /> between the positions of the parties. <br /> The alternative to a settlement of the filing would be a contested case proceeding before <br /> the Public Utility Commission of Texas on the Company's current application, would take <br /> several months and cost ratepayers millions of dollars in rate case expenses, and would not likely <br /> produce a result more favorable than that to be produced by the settlement. The Executive <br /> Committee and counsel for the Steering Committee recommend that Steering Committee <br /> member cities take action to approve the Ordinance authorizing new rate tariffs. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> Oncor Settlement Ordinance Staff Report 2 <br /> 163 <br />