12 - Denial of Oncor's Proposed Rate IncreaseItem No. 12
TO: Mayor, Mayor Pro -Tem, and City Council
Grayson Path, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: DENIAL OF ONCOR'S PROPOSED RATE INCREASE
DATE: August 14,202-31
BACKGROUND: On June 30, 2023 Oncor Electric Delivery Company LLC ("Oncor" or
"Company") filed an application with cities retaining original jurisdiction seeking to amend its
Distribution Cost Recovery Factor and update Mobile Generation Riders. Oncor is seeking an
increase in distribution revenues of $152.78 million and $1.07 million from the updated Riders.
STATUS OF ISSUE: The City has 60 days from the filing date to act on this application. The City
Staff is bringing a resolution before you that would deny the requested increases. The resolution
also authorizes the Steering Committee of Cities Served by Oncor (OCSC) to review Oncor's filing
and determine what increase, if any, is justified.
Options available to the City Council are (1) to not approve the resolution thus allowing the rate
increases to go into effect or (2) approve the resolution denying the rate increase which will allow
OCSC to study the request and probably negotiate a smaller increase.
BUDGET: This action will not impact the City budget.
RECOMMENDATION: Motion to approve the resolution denying Oncor's proposed rate
increase.
MODEL STAFF REPORT REGARDING ONCOR ELECTRIC DELIVERY
COMPANY, LLC'S DISTRIBUTION COST RECOVERY FACTOR AND
MOBILE GENERATION RIDERS FILING
On June 30, 2023, Oncor Electric Delivery Company, LLC ("Oncor" or "Company")
filed an Application to Amend its Distribution Cost Recovery Factor ("DCRF") and Update its
Mobile Generation Riders to increase distribution rates within each of the cities in its service
area. In the filing, the Company asserts it is seeking an increase in distribution revenues of
approximately $152.78 million. The Company is also seeking to update its Rider Mobile
Generation and Rider Wholesale Mobile Generation to recover revenue related to mobile
generation unit leasing and operation. The Rider would recover approximately 1$1.07
[Rai]million.
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. 55190.
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 Cities 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 Cities 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.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS TEXAS
FINDING THAT ONCOR ELECTRIC DELIVERY COMPANY LLC'S
APPLICATION TO AMEND ITS DISTRIBUTION COST RECOVERY FACTOR
AND UPDATE GENERATION RIDERS TO INCREASE DISTRIBUTION
RATES WITHIN THE CITY SHOULD BE DENIED; AUTHORIZING
PARTICIPATION WITH THE STEERING COMMITTEE OF CITIES SERVED
BY ONCOR; AUTHORIZING HIRING OF LEGAL COUNSEL; 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
("OCSC"), a membership of similarly situated cities ("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 June 29, 2023, Oncor filed with the City an Application to
Amend its Distribution Cost Recovery Factor ("DCRF") and Update Mobile Generation
Riders, PUC Docket No. 55190, seeking to increase electric distribution rates by
approximately $152.78 million and update Oncor's Rider Mobile Generation and Rider
Wholesale Mobile Generation to recover $1.07 million related to mobile generation
facilities; and
WHEREAS, all electric utility customers residing in the City will be impacted by this
ratemaking proceeding if it is granted; and
WHEREAS, OCSC is coordinating its review of Oncor's DCRF filing with designated
attorneys and consultants to resolve issues in the Company's application; and
WHEREAS, OCSC members and attorneys recommend that members deny the
DCRF.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
Section 1. The findings set out in the preamble to this resolution are hereby in all
things approved.
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Section 2. That the City is authorized to participate with Cities in PUC Docket No.
55190.
Section 3. That subject to the right to terminate employment at any time, the
City hereby authorizes the hiring of the law firm of Lloyd Gosselink 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 of this application filed with the PUC.
Section 4. 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 5. That the Company shall 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 presentation of an invoice to Oncor.
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 75202; and to Thomas L. Brocato, General Counsel to
OCSC, at Lloyd Gosselink Rochelle & Townsend, 816 Congress Ave., Suite 1900, Austin,
Texas 78701.
PASSED AND APPROVED this 14th day of August, 2023.
Reginald B. Hughes, Mayor
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ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney