12 - Oncor Rate IncreaseItem No. 12
memorandum
TO: Mayor & City Council
Grayson Path, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: ONCOR RATE INCREASE
DATE: May 3, 2020
BACKGROUND: On April 3, 2020, Oncor filed an application with the Public Utilities
Commission (PUC) to amend its Distribution Cost Recovery Factor (DCRF). The DCRF is a
limited issue/limited review rate case. In the filing, Oncor seeks to increase distribution rates by
$75.9 million annually (an approximately $0.88 increase to the average residential customer's bill).
The resolution being considered authorizes the City of Paris to join with other cities in the Oncor
Cities Steering Committee (OCSC) to evaluate the filing, determine whether the filing complies
with law, and if lawful, to determine what further strategy, including settlement, to pursue.
STATUS OF ISSUE: The City of Paris is already a member of the OCSC and adopting this
resolution will not result in any cost to the City. The PUC allows 60 days from the filing of the
rate increase for a city to challenge the rate increase, therefore, the City must act by June 2°d. Since
the second meeting in May has been cancelled, this is our only opportunity to act on this matter.
After the rate request has been reviewed, City staff will bring back OCSC's recommendation for
consideration by the City Council.
BUDGET: No impact.
RECOMMENDATION: The staff recommends adopting the resolution denying the Oncor rate
increase and joining OCSC in the reviewing of Oncor's request. If no action by the City is taken,
the rate increase goes into effect automatically.
MODEL STAFF REPORT REGARDING ONCOWS
APPLICATION TO AMEND ITS DISTRIBUTION COST RECOVERY
FACTOR
The City is an electric utility customer of Oncor Electric Delivery Company LLC
("Oncor" or "Company"). The Oncor Cities Steering Committee ("OCSC") is 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
in matters before the Public Utility Commission ( "PUC" or "Commission") and the courts.
On April 3, 2020, Oncor filed an Application to Amend its Distribution Cost Recovery
Factor ("DCRF") with each of the cities retaining original jurisdiction and with the Commission
in Docket No. 50734. In the filing, the Company sought to increase distribution rates by $75.9
million annually (an approximately $0.88 increase to the average residential customer's bill).
The resolution authorizes the City to join with OCSC to evaluate the filing, determine
whether the filing complies with law, and if lawful, to determine what further strategy, including
settlement, to pursue.
Purpose of the Resolution:
The purpose of the Resolution is to deny the DCRF amendment proposed by Oncor.
Ex lanation of "Be It Ordained" Sections:
1. This section authorizes the city to participate with OCSC as a party in the
Company's DCRF filing in PUC Docket No. 50734.
2. This section authorizes the hiring of Lloyd Gosselink and consultants to review
the filing, negotiate with the Company, and make recommendations to the City regarding
reasonable rates. It also authorizes OCSC to direct any necessary administrative proceedings or
court litigation associated with an appeal of this application filed with the Commission.
3. This paragraph finds that the Company's application is unreasonable and should
be denied.
4. This section states that the Company's current rates shall not be changed.
5. The Company will reimburse OCSC for its reasonable rate case expenses. Legal
counsel and consultants approved by OCSC will submit monthly invoices that will be forwarded
to Oncor for reimbursement.
6. 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.
1669/52/8041054
7. This section provides Oncor and counsel for OCSC will be notified of the City's
action by sending a copy of the approved and signed resolution to counsel.
0
1669/52/8041054 2
46957 - EXHIBIT 2
PAGE 1 OF 2
ONCOR CITIES THAT HAVE CEDED ORIGINAL JURISDICTION
Abbott
Crowley
Jewett
Alma
Cumby
Jolly
Alvarado
Cushing
Josephine
Alvord
Dawson
Joshua
Angus
Dean
Justin
Anna
Dorchester
Kaufman
Annetta North
Dublin
Keene
Annetta South
Ector
Kemp
Annona
Edgecliff Village
Kerens
Appleby
Edgewood
Knollwood
Argyle
Edom
Krum
Athens
Elgin
Ladonia
Aurora
Elkhart
Lake Bridgeport
Bangs
Emhouse
Lake Dallas
Barry
Enchanted Oaks
Lakeside City
Bartlett
Eureka
Latexo
Bellevue
Eustace
Lavon
Blanket
Everman
Leona
Blooming Grove
Forney
Leroy
Boyd
Frost
Lindsay
Brownsboro
Garrett
Lipan
Buckholts
Gholson
Lorena
Buffalo
Godley
Lovelady
Burke
Golinda
Lowry Crossing
Bynum
Goodlow
Lucas
Caddo Mills
Gorman
Mabank
Cameron
Grandfalls
Malakoff
Campbell
Grandview
Malone
Caney City
Granger
Marquez
Canton
Grapeland
McGregor
Carbon
Gun Barrel City
Melissa
Centerville
Gunter
Mertens
Chico
Hebron
Milano
Chireno
Hewitt
Mildred
Clarksville
Hickory Creek
Milford
Cockrell Hill
Hideaway
Millsap
Collinsville
Holland
Mobile City
Comanche
Honey Grove
Moody
Como
Hubbard
Morgan's Point Resort
Cool
Hudson
Mount Calm
Corinth
Huntington
Murchison
Corsicana
Hutto
Mustang
Crandall
Italy
Nacogdoches
Crockett
Itasca
Navarro
7365699.1
46957 - EXHIBIT 2
PAGE 2 OF 2
ONCOR CITIES THAT HAVE CEDED ORIGINAL JURISDICTION
Nevada
Streetman
New Chapel Hill
Taylor
New Fairview
Terrell
Newark
Thorndale
Neylandville
Thorntonville
Northlake
Thrall
Oak Grove
Tira
Oak Leaf
Tool
Oak Valley
Trinidad
Oakwood
Valley View
Oglesby
Van Alstyne
Ovilla
Venus
Payne Springs
Weir
Pecan Gap
Wells
Pecan Hill
West
Penelope
Westbrook
Pflugerville
Wickett
Pleasant Valley
Wills Point
Ponder
Windom
Post Oak Bend
Wolfe City
Powell
Yantis
Poynor
Zavalla
Princeton
Pyote
Quinlan
Ranger
Reno - Lamar County
Reno - Parker County
Retreat
Rhome
Rice
Richland
Rockdale
Rogers
Rosser
Roxton
Royse City
Runaway Bay
Sadler
Savoy
Shady Shores
Southmayd
Springtown
St. Paul
7365699.1
RESOLUTION NO.
A RESOLUTION OF THE CITY OF PARIS, TEXAS FINDING
THAT ONCOR ELECTRIC DELIVERY COMPANY LLC'S
APPLICATION FOR APPROVAL TO AMEND ITS
DISTRIBUTION COST RECOVERY FACTOR TO INCREASE
DISTRIBUTION RATES WITHIN THE CITY SHOULD BE
DENIED; AUTHORIZING PARTICIPATION WITH ONCOR
CITIES STEERING COMMITTEE; AUTHORIZING THE HIRING
OF LEGAL COUNSEL AND CONSULTING SERVICES; 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 Oncor Cities Steering Committee ("OCSC") is 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 in
matters before the Public Utility Commission ("Commission") and the courts; and
WHEREAS, on or about April 3, 2020, Oncor filed with the Commission an Application
to Amend its Distribution Cost Recovery Factor ("DCRF"), Commission Docket No. 50734,
seeking to increase distribution rates by $75.9 million annually (an approximately $0.88
increase to the average residential customer's bill); and
WHEREAS, the City of Paris, Texas will cooperate with OCSC in coordinating their
review of Oncor's DCRF filing with designated attorneys and consultants, prepare a common
response, negotiate with the Company, and direct any necessary litigation, to resolve issues
in the Company's filing; and
WHEREAS, all electric utility customers residing in the City will be impacted by this
ratemaking proceeding if it is granted; and
WHEREAS, working with the OCSC to review the rates charged by Oncor allows
members to accomplish more collectively than each city could do acting alone; and
WHEREAS, OCSC's members and attorneys recommend that members deny Oncor's
DCRF.
1669/52/8041053
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
SECTION 1. That the City is authorized to participate with OCSC in Commission
Docket No. 50734.
SECTION 2. That, subject to the right to terminate employment at anytime, the City
of Paris, Texas hereby authorizes the hiring of the law firm of Lloyd Gosselink Rochelle &
Townsend, P.C. and consultants to negotiate with the Company, make recommendations to
the City regarding reasonable rates, and to direct any necessary administrative proceedings
or court litigation associated with an appeal Oncor's DCRF application.
SECTION 3. That the rates proposed by Oncor to be recovered through its DCRF
charged to customers located within the City limits, are hereby found to be unreasonable and
shall be denied.
SECTION 4. That the Company shall continue to charge its existing rates to
customers within the City.
SECTION 5. 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 6. 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 7. That a copy of this Resolution shall be sent to Tab Urbantke, Attorney
for Oncor, at Hunton Andrews Kurth LLP, 1445 Ross Avenue, Suite 3700, Dallas, Texas
75202, and to Thomas Brocato, General Counsel to OCSC, at Lloyd Gosselink Rochelle &
Townsend, P.C., P.O. Box 1725, Austin, TX 78767-1725, or tbrocato@iglawfirm.com.
PASSED AND APPROVED this 11th day of May, 2020.
Steven J. Clifford, M.D., Mayor
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ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
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