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13 - DENIAL OF PROPOSED ONCOR ELECTRIC RATE INCREASESItem No. 13 memorandum TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: DENIAL OF PROPOSED ONCOR ELECTRIC RATE INCREASE DATE: June 12, 2017 BACKGROUND: Oncor Electric Delivery Company filed an application on or about March 17, 2017 to increase system -wide rates by $317 million or approximately 7.5 %. Oncor's increased rates would allow an 11.8% increase in residential rates and a 0.5% increase in street lighting rates. A residential customer using 1000 kWh per month would see a bill increase of about $6.68 per month. In March 2017, the City passed a resolution suspending the effective date of the Company's rate increase for 90 days past the original April 17, 2017 effective date to allow the City, working in conjunction with the Steering Committee of Cities Served by Oncor, to evaluate the filing. The consultants hired to review Oncor's filing identified numerous unreasonable expenses and propose significant reductions to Oncor's request. The Steering Committee's attorneys recommend adopting a resolution denying the rate change. STATUS OF ISSUE: Once the resolution is adopted, Oncor will have 30 days to appeal the decision to the Public Utility Commission where the appeal will be consolidated with Oncor's rate filing currently pending at the Commission. If the City fails to take action regarding the filing by August 19, 2017, Oncor's rate request would be deemed administratively approved. RECOMMENDATION: A motion to approve the resolution denying the proposed electrical rate increase. DRAFT RESOLUTION NO. A RESOLUTION OF THE CITY OF PARIS, TEXAS FINDING THAT ONCOR ELECTRIC DELIVERY COMPANY, LLC'S ( "ONCOR" OR "COMPANY ") 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. WHEREAS, the City of Paris, Texas ( "City ") is an electric utility customer of Oncor Electric Delivery Company, LLC ( "Oncor" or "Company "), and a regulatory authority with an interest in the rates and charges of Oncor; and WHEREAS, the City is a member of the Steering Committee of Cities Served by Oncor ( "Steering Committee "), a coalition of similarly situated cities served by Oncor that have joined together to efficiently and cost effectively review and respond to electric issues affecting rates charged in Oncor's service area; and WHEREAS, on or about March 17, 2017, Oncor filed with the City an application 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; and WHEREAS, the Steering Committee is coordinating its review of Oncor's application and working with the designated attorneys and consultants to resolve issues in the Company's filing; and WHEREAS, through review of the application, the Steering Committee's consultants determined that Oncor's proposed rates are excessive; and WHEREAS, the Steering Committee's members and attorneys recommend that members deny the Application; and NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That the rates proposed by Oncor to be recovered through its electric rates charged to customers located within the City limits, are hereby found to be unreasonable and shall be denied. 1 Section 2. That the Company shall continue to charge its existing rates to customers within the City. Section 3. That the City's reasonable rate case expenses shall be reimbursed in full by Oncor within 30 days of the adoption of this Resolution. Section 4. That it is hereby officially found and determined that the meeting at which this Resolution is passed is open to the public as required by law and the public notice of the time, place, and purpose of said meeting was given as required. Section 5. That a copy of this Resolution shall be sent to Oncor, Care of Howard Fisher, Oncor Electric Delivery Company, LLC, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202 and to Thomas Brocato, Counsel to the Steering Committee, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767 -1725. PASSED AND APPROVED this 10th day of July, 2017. ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney 4 Cleonne Drake, Mayor Pro -Tem