21 - Oncor Revenue IncreasepdfItem No. 21
TO: City Council
Grayson Path, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: ONCOR REVENUE INCREASE
DATE: May 24, 2021
BACKGROUND: On April 8, 2021, Oncor Electric Delivery Company LLC filed an Application
for Approval to Amend its Distribution Cost Recovery Factor in Public Utility Commission of
Texas Docket No. 49427. In the filing, Oncor is seeking an increase in distribution revenues of
$97,826,277 system wide.
STATUS OF ISSUE: The Oncor Cities Steering Committee, of which Paris is a member, has
engaged the services of a consultant to review the Oncor filing and identify adjustments that should
be made to reduce Oncor's request for increased revenues. In order for the consultant to have time
for the review, the City of Paris needs to deny Oncor's request for increased revenues. The staff
will bring this matter back to the Council after the review has been completed.
BUDGET: There will be no expense to the City because of this review process.
RECOMMENDATION: Motion to approve a resolution denying Oncor's requested revenue
increase.
MODEL STAFF REPORT REGARDING ONCOR'S DISTRIBUTION
COST RECOVERY FACTOR FILING
On April 8, 2021, Oncor Electric Delivery Company LLC ("Oncor" or "Company") filed
an Application for Approval to Amend its Distribution Cost Recovery Factor ("DCRF") to
Increase Distribution Rates with each of the cities in their service area. In the filing, the
Company asserts that it is seeking an increase in total distribution revenue requirement by
approximately $97,826,277.
The resolution authorizes the City to join with the Steering Committee of Cities Served
by Oncor ("OCSC") to evaluate the filing, determine whether the filing complies with law, and if
lawful, to determine what further strategy, including settlement, to pursue.
Pur ose of the Resolution:
The purpose of the Resolution is to deny the DCRF application proposed by Oncor.
Explanation of "Be It Resolved" Paragraphs:
1. This section authorizes the City to participate with OCSC as a party in the
Company's DCRF filing, PUC Docket No. 51996.
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. Additionally, it authorizes OCSC to direct any necessary administrative
proceedings or court litigation associated with an appeal of this application filed with the PUC.
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 Cities for their 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 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.
7. This section provides that 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.
1
SECTION 1. That the findings set out in the preamble to this resolution are hereby in
all things approved.
SECTION 2. That the City of Paris is authorized to participate with OCSC in
Commission Docket No. 51996.
SECTION 3. That, subject to the right to terminate employment at any time, the City
of Paris 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 4. That the rates proposed by Oncor to be recovered through its DCRF
charged to customers located within the City limits should be denied.
SECTION 5. That the Company should continue to charge its existing rates to
customers within the City.
SECTION 6. That the City's reasonable rate case expenses shall be reimbursed in full
by Oncor within 30 days of the adoption of this Resolution, and within 30 days of presenting
monthly bills to Oncor thereafter.
SECTION 7. 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 8. That a copy of this Resolution shall be sent to J. Michael Sherburne, Vice
President - Regulatory, Oncor Electric Delivery Company LLC, 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202; to Tab R. Urbantke, Hunton Andrews Kurth LLP, 1445 Ross
Avenue, Suite 3700, Dallas, Texas 7520; 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@lglawfirm.com.
PASSED, APPROVED AND ADOPTED on this 241h day of May, 2021.
Paula Portugal, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL 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 OCSC;
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; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the City of Paris, Texas ("City") is an electric utility customer of Oncor
Electric Delivery Company LLC ("Oncor" or "Company') with an interest in the rates and
charges of Oncor; and
WHEREAS, the Steering Committee of Cities Served by Oncor ("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 8,202 1, Oncor filed with the Commission an Application
for Approval to Amend its Distribution Cost Recovery Factor ("DCRF"), Commission Docket
No. 51996, seeking to increase its total distribution revenue requirement by approximately
$97,826,277; 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 Oncor's Application 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 who have
retained original jurisdiction over electric utility rates deny Oncor's DCRF.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
SECTION 1. That the findings set out in the preamble to this resolution are hereby in
all things approved.
SECTION 2. That the City of Paris is authorized to participate with OCSC in
Commission Docket No. 51996.
SECTION 3. That, subject to the right to terminate employment at any time, the City
of Paris 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 4. That the rates proposed by Oncor to be recovered through its DCRF
charged to customers located within the City limits should be denied.
SECTION 5. That the Company should continue to charge its existing rates to
customers within the City.
SECTION 6. That the City's reasonable rate case expenses shall be reimbursed in full
by Oncor within 30 days of the adoption of this Resolution, and within 30 days of presenting
monthly bills to Oncor thereafter.
SECTION 7. 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 8. That a copy of this Resolution shall be sent to J. Michael Sherburne, Vice
President - Regulatory, Oncor Electric Delivery Company LLC, 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202; to Tab R. Urbantke, Hunton Andrews Kurth LLP, 1445 Ross
Avenue, Suite 3700, Dallas, Texas 7520; 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@lglawfirm.com.
PASSED, APPROVED AND ADOPTED on this 241h day of May, 2021.
Paula Portugal, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney