06-C Settlement Agreement TXU
AGENDA INFORMATION SHEET
PURPOSE: The City of Paris is a member of a 1 09-member city coalition known as the Steering
Committee of Cities Served by TXU. The Steering Committee has negotiated a settlement
agreement with TXU Electric Delivery Company (TXU) to delay the filing of a rate case in
exchange for terms that benefit the City and the public. The purpose of this report is to seek
authorization for the City to ratify the settlement agreement between the Steering Committee and
TXU.
BACKGROUND: The Steering Committee has been in existence since the late 1980s. It took on
a formal structure in the early 1990s when cities served by TXU gave up their statutory right to rate
case expense reimbursement in exchange for higher franchise fee payments. Empowered by city
resolutions and funded by per capita assessments, the Steering Committee has been the primary
public interest advocate before the Public Utility Commission, the Courts, and the Legislature on
electric utility regulation matters dealing with TXU for nearly two decades.
DESCRIPTION: After months of consideration in 2004, the Steering Committee recommended
that TXU be forced into a full scale review of its historic cost of service, something that had not
occurred in more than a decade. In the fall of 2004, twenty Steering Committee cities passed
resolutions requiring TXU Electric Delivery to show cause why the non-bypassable transmission
and distribution charges should not be reduced.
The rate inquiry was justified by several factors. First, the PUC categorized municipal
accounts with broader commercial services accounts in the 2001 rate proceedings that led to the
deregulated environment. This led to application of unfair demand ratchets and higher charges for
municipal water pumping. It also led to extremely high charges for street lighting. Second, TXU
had filed earnings monitoring reports at the PUC that established the Company was over-earning.
Third, the Company had recently gone through massive reorganization and the hypothetical cost
structures the PUC had used to justify current rates in 2001 were no longer valid.
The Steering Committee and TXU reached a settlement in early 2005 to delay the filing of
rate information by TXU until the summer of 2006. The settlement terms called for TXU to work
with cities on certain items of concern and to make annual cash payments of $8 million to the
Steering Committee, which was then dispersed to member cities.
Over the past several months, TXU and the Steering Committee have been discussing the
possibility of modifying and extending the terms of the original settlement agreement and delaying
TXU's July 2006 rate case filing. After comparing the benefits to be derived from accepting the
settlement and delaying the rate case against the likelihood of success in achieving positive
outcomes for residential and city-specific issues in a rate case initiated in July 2006, the Steering
Committee approved acceptance of the settlement agreement earlier this month. Key items of the
Settlement Agreement are:
1. TXU will file a rate case in June 2008 with a December ending test year.
2. TXU will continue to make annual $8 million payments to the Steering Committee
until a final order is entered in the 2008 rate case, which probably will not be until
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the end of 2009. This is a two year extension to the previously negotiated
agreement. This reimburses Cities for excessive street lighting and water pumping
rates. It brings approximately $38 million in value to the Steering Committee
members between 2005 and 2009.
3. TXU will make two payments of $9 million to Steering Committee cities before
January 31, 2007 for "beneficial public use."
4. All unexpired provisions of the last agreement will be preserved and the task forces
referenced in the earlier agreement will still be created.
5. The Company will reimburse up to $40,000 per month to the Steering Committee for
participation at ERCOT and the PUC. This is worth over $2 million.
6. Separate from the rate settlement, but linked in benefit under the Settlement
Agreement, is the Company's commitment to increase franchise fee factors and
permit all Cities who desire to receive quarterly franchise fee payments as opposed
to annual payments to obtain that result. The franchise fee factor increase will
produce approximately $27 million in benefit to Steering Committee members
between 2006 and 2009 and approximately $12 million annually thereafter.
The Steering Committee concluded that delaying a comprehensive rate case until June 2008
and immediately capturing beneficial financial terms was the optimal course of action for the
reasons stated below.
Most residential customers remain on price to beat (PTB) rates and no rate relief from
successful prosecution of a rate case against the Company would flow to PTB customers. While the
current PTB structure terminates January 1,2007, policy makers at the Public Utility Commission
(PUC) and the Legislature are discussing extending some form ofPTB after January 1,2007.
Even if Cities won a considerable victory by reducing TXU' s revenues by over $100 million,
numerous parties representing different types of customers would fight amongst themselves over
how the revenue reduction should be allocated to reduce rates for the various classes of customers.
There is no certainty that the residential and small commercial customers would receive any
meaningful rate reduction. In the only major rate case to be litigated since deregulation occurred
on January 1, 2002, the PUC found that the utility in question should have its overall revenues
reduced, but nonetheless raised residential rates. Furthermore, even if significant rate reductions
to residential and commercial tariffs could be achieved, benefits would not necessarily be passed
on to end-users by the retail electric providers (REPs) that serve customers who have entered the
deregulated market. Much of the benefit in cutting TXU Electric Delivery's rates would, under the
present market structure, simply flow to the TXU affiliated REP.
The Settlement Agreement provides $18 million for Cities to apply to "beneficial public use"
in lieu of very uncertain residential rate reductions stemming from litigation.
The annual $8 million payment to Steering Committee members was based upon a belief that
street lighting rates are excessive and that water pumping demand ratchets are inappropriate. While
the Company is obligated under the 2004 Settlement (approved by Steering Committee members
in 2005) to support reduction to street lighting and pumping rates consistent with the annual
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payments to Cities, there is no guarantee that the PUC would approve such proposal.
The proposed Settlement Agreement contains a number of benefits that would not be
available as relief in a litigated rate case. The PUC has no jurisdiction to increase franchise fee
factors or address when or how franchise fee payments are made. Cities unsuccessfully attempted
to achieve franchise fee escalation in the last two general sessions of the Legislature and a favorable
franchise fee change for Cities is unlikely to occur independent of the Settlement Agreement.
Additionally, the Commission is unable authorize payments to Cities or any consumer representative
for participation in ERCOT or market design matters.
The Settlement Agreement delays rather than terminates a rate review. The Settlement
Agreement obligates the Company to cooperate with Cities in reaching an understanding of
Company operations prior to the filing of a rate case, and further provides for reimbursement of
Cities' expenses associated with review of Company affiliated transactions.
The Steering Committee values the total benefits of the Settlement Agreement with
TXU at approximately $85 million for the period 2005 - 2009 (this includes the franchise fee
increases through 2009). Probabilities are less than 50 percent that the PUC in 2007 would reach
comparable value at the end of a rate case. Moreover, there is no certainty that residential customers
would receive any benefit even if the Commission ultimately reduced overall rates by $85 million.
RECOMMENDED ACTION: The Staff recommends adoption of the resolution ratifying the
Settlement Agreement. All Steering Committee member cities must take action to approve the
settlement in order for the benefits to flow to any member. All payments to be made by TXU will
not be released until the settlement is fully ratified.
STAFF CONTACT: Gene Anderson, Director of Finance and Tony Williams City Manager
COUNCIL DATE: To be considered at City Council Monday, February 13, 2006 Regular
Meeting.
DRAFT
F:ATTORNEY\RESWORK\CURREN1\ TXU - Ratifvinl! Settlemtn Al!reement Res 2006
February 3. 2006
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, RATIFYING THE ACCEPTANCE OF SETTLEMENT
AGREEMENT BETWEEN STEERING COMMITTEE OF CITIES
SERVED BY TXU AND TXU ELECTRIC DELIVERY; MAKING OTHER
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Paris, Paris, Texas, is a member of the Steering Committee of
Cities served by TXU (Steering Committee); and
WHEREAS, the Steering Committee did encourage certain member cities to initiate
show cause rate proceedings against TXU Electric Delivery (Electric Delivery); and
WHEREAS, Electric Delivery and the Steering Committee engaged in settlement
discussions regarding abatement of any full-scale rate investigation and interim relief that may
be available to Cities leading to a settlement in February 2005 that made Steering Committee
members whole for their alleged excess costs associated with street lighting and water pumping
in exchange for delay in Show-Cause filing requirements; and
WHEREAS, Electric Delivery has desired to further extend for two years the currently
scheduled June 2006 rate case filing in exchange for extension of payments to Cities under the
February 2005 Agreement and other benefits to Cities; and
WHEREAS, the Steering Committee and Electric Delivery have reached a Settlement
Agreement that extends the previously negotiated settlement terms by two years and adds
benefits to Cities, including reimbursement for participation in ERCOT and market development
activities and $18 million in funds for beneficial public use as may be determined in the
discretion of Steering Committee member cities and which may include, but which is not limited
to, energy education for citizens, reductions in rates for city services, investments in community
facilities, and investment in energy efficiency measures; and
WHEREAS, current electric market constraints make it impractical to pass the potential
benefits of rate reductions on to residential ratepayers, because most consumers remain on price
to beat rates which are fixed by statute and rule, and the minority of consumers who have
switched to service from a competitive retail electric supplier may only realize rate reduction
benefits if their REP contract requires a pass-through of such rate reduction; and
WHEREAS, the Steering Committee and Electric Delivery have reached a separate
agreement wherein the Company will increase franchise fee factors over a four-year period
producing increased revenues for each member city; and
WHEREAS, Electric Delivery has committed to the Steering Committee during the
period of rate case abatement to share information on certain company operations and
procedures that should enhance the Cities' ability to appropriately exercise regulatory
responsibilities in the rate proceeding that Electric Delivery has agreed to file on or before July
I, 2008;
WHEREAS, the Settlement Agreement calls for immediate and long-term benefits to
flow to all city members of the Steering Committee which in turn have indirect but positive
benefit to all city residents and public safety in general; and
WHEREAS, the Steering Committee values the benefits of settlement to Cities at
approximately $85 million between 2005 and 2009 and comparable value is unlikely to be
achieved through litigation; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, 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 Extension and Modification of Settlement Agreement and
Agreement to Resolve Outstanding Franchise Issues, both dated January 19, 2006, between the
Cities' Steering Committee and TXU Electric Delivery is hereby ratified.
Section 3. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 13th day of February, 2006.
Curtis Fendley, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
John D. Lestock, Assistant Attorney
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AGREEMENT TO RESOLVE OUTSTANDING FRANCHISE ISSUES
This Agreement To Resolve Outstanding Franchise Issues ("Agreement") is made and
entered into between TXU Electric Delivery Company ("Electric Delivery") and the Steering
Committee of Cities Served by TXU Electric Delivery Company on behalf of all cities listed on
Exhibit A to this Agreement ("Cities"), hereinafter referred to jointly herein as "Signatories."
The cities listed on Exhibit A to this Agreement are hereinafter referred to as "Member Cities."
WHEREAS, several Member Cities have expressed concern about the increasing cost and
complexity of managing utilities in public rights-of-way and the desire to receive increased
compensation from utilities for their use of such rights-of-way;
WHEREAS, several Member Cities who receive their franchise fee payments from
Electric Delivery on a prospective yearly basis have expressed interest in transitioning to
prospective quarterly payments;
WHEREAS, the Signatories desire to resolve outstanding issues related to franchises; and
WHEREAS, after extensive negotiations, the Signatories have reached a resolution of
those issues.
NOW, THEREFORE, the Signatories, through their undersigned representatives, hereby
agree to the following:
1. The Signatories agree that this Agreement shall become effective only upon the execution
of this Agreement and of the Extension and Modification of Settlement Agreement between the
Signatories dated January~, 2006. The effectiveness ofthis Agreement shall be accomplished
pursuant to the terms of paragraphs 4 and 19 of the Extension and Modification Settlement
Agreement.
2. To recognize the increasing cost and complexity of managing utilities in public rights-of-
way, Electric Delivery agrees to increase the franchise fee factor for each Member City on
January 1, 2006, by 2%. The franchise fee factor is the amount per kilowatt hour which is
multiplied times the number of kilowatt hours of electricity delivered by Electric Delivery to
each retail customer whose consuming facility's point of delivery is located within the Member
City's municipal boundaries. Electric Delivery will also increase the franchise fee factor to be
paid to the Member Cities an additional 1% on January 1, 2007, on January 1, 2008, and on
January 1, 2009, for a total potential increase of 5% above the franchise fee factor in effect on
December 31, 2005. Exhibit B to this Agreement reflects the franchise fee factors in effect for
all Member Cities in 2005, and the increased franchise fee factors for Member Cities provided by
this paragraph for 2006,2007,2008, and 2009.
3. Electric Delivery's obligation to increase its franchise fee payments to reflect the
increased franchise fee factors described in paragraph 2 ceases on the date upon which: (1)
Electric Delivery is called in for a rate case by any municipality; (2) a proceeding concerning
Electric Delivery's rates is initiated under Subchapters C or D of the Public Utility Regulatory
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Act, Tex. Util. Code Title 2 ("PURA") Chapter 36; (3) a proceeding affecting Electric Delivery's
rates is initiated as a result of a settlement; or (4) legislation becomes effective that modifies the
franchise fee authorized by PURA.
4. The Signatories agree that if the Public Utility Commission of Texas denies recovery in
Electric Delivery's rates of the fees associated with the increased franchise fee factors described
in paragraph 2, then the franchise fee factors immediately revert to the franchise fee factors in
effect on December 31, 2005. Electric Delivery will not seek to impose a refund or credit
obligation on Member Cities for franchise fees already paid under the increased franchise fee
factors.
5. Electric Delivery agrees to amend its existing franchise agreements with those Member
Cities who receive their annual franchise fee payments from Electric Delivery on a prospective
basis, and who wish to receive franchise fee payments on a quarterly basis, to reflect the
following points. Implementation of this amendment will be at each eligible Member City's
option. Exhibit C is a list of Member Cities who are eligible to take advantage of this provision.
For the purposes of this Agreement, "privilege period" is the period during which Electric
Delivery will have the right to use the public rights-of-way to deliver electricity to a retail
customer. "Basis period" is the period during which kWh delivered to each retail customer
whose consuming facility's point of delivery is located within the Member City's municipal
boundaries is used for the payment calculation.
(a.) In calendar year 2006, the annual payment to be made by Electric Delivery to the
eligible Member Cities will be paid in full on the date required by the applicable
franchise agreement.
(b.) Electric Delivery agrees to amend the franchise of eligible Member Cities to make
quarterly payments on a prospective basis in lieu of the annual prospective
payments as follows:
(i.) A quarterly payment schedule will be established with the first quarterly
payment due three months after the 2006 annual payment date in the
existing franchise.
(ii.) If the franchise amendment reflecting this Agreement is not effective prior
to the first quarterly payment date, Electric Delivery will pay any quarterly
payments due within 30 days of the effective date of the amendment.
Subsequent payments will be made in accordance with the schedule
established in the franchise amendment.
(iii.) The basis period used in determining the first quarterly payment will be
the three-month period immediately following the end of the basis period
designated in the existing franchise agreement that corresponds to the last
annual payment made in 2006. The basis period used in determining each
subsequent quarterly payment will be the subsequent three-month period.
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(iv.) The privilege period covered by the first quarterly payment will be the
three-month period immediately following the end of the privilege period
designated in the existing franchise agreement that corresponds to the last
annual payment made in 2006. The privilege period for each subsequent
quarterly payment will be the subsequent three-month period.
(c.) For an eligible Member City that chooses to amend its franchise agreement with
Electric Delivery in this mannert Electric Delivery will cease to make annual
franchise fee payments after December 31, 2006.
(d.) In no instance will Electric Delivery agree to payment provisions that would
require payment for the same privilege period twice.
(e.) The franchise amendment must extend the term of the amended franchise
agreement for at least five years beyond its current expiration date.
(f.) Since the quarterly franchise payments will correspond to a privilege period that
is more than 12 months beyond the date of the payment, no franchise payments
will be made during the final year of the franchise term unless the franchise is
extended as set out herein. The amended franchise agreement will include a
provision allowing Electric Delivery to elect to make one or more quarterly
payments during the final year of the franchise term that will prepay in full the
corresponding number of quarterly franchise periods that extend beyond what
would otherwise be the term of the franchise agreement. The amended franchise
agreement will include a provision requiring that any subsequent franchise
agreement must recognize that any quarterly payments made during the fmal year
of the amended franchise agreement term constitute full payment for the relevant
quarterly franchise periods.
(g.) Unless the existing franchise agreement is due to expire within 12 months of the
date this Agreement is ratifiedt no other changes to the franchise will be included
as part of this franchise amendment. If the existing franchise agreement is due to
expire within 12 months of the date this Agreement is ratifiedt the parties' ability
to negotiate other provisions of the franchise at the time the franchise is amended
to accommodate this Agreement is not so limited.
6. Each person executing this Agreement represents that he or she is authorized to sign this
Agreement on behalf of the party represented.
7. The Signatories expressly acknowledge and agree that oral and written statements made
by any party or its representative during the course of the negotiations that led to this Agreement
cannot be used or portrayed as an admission or concession of any sort and shall not be
admissible as evidence in any proceeding in any forum.
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Executed on this the 2..?ofIoay of January, 2006, by the Signatories hereto, by and through
their undersigned duly authorized representatives.
TXU Electric Delivery Company
Steering Committee of Cities Served by TXU
Electric Delivery Company on behalf of all
cities listed on Exhibit A to this Agreement
By:
~/1~$U
VlCE ~~
By: ~'!{;; ____
Its: rlt.4lxY' ~
Its:
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Exhibit A
City of Addison
City of Allen
City of Alvarado
City of Andrews
City of Archer City
City of Arlington
City of Belton
City of Benbrook
City of Big Spring
City of Breckenridge
City of Bridgeport
City of Brown wood
City of Buffalo
City of Burkbumett
City of Burleson
City of Caddo Mills
City of Cameron
City of Canton
City of Carrollton
City of Celina
City of Centerville
City of Clebume
City of Colleyville
City of Collinsville
City of Comanche
City of Corinth
City of Crowley
City of Dallas
City of Dalworthington
Gardens
City of DeLeon
City of Denison
City of Early
City of Eastland
City of EdgecliffVillage
City of Euless
City of Farmers Branch
City of Flower Mound
City of Forest Hill
City of Fort Worth
City of Frisco
City of Frost
City of Glenn Heights
City of Grand Prairie
City of Granger
City of Grapevine
City of Gunter
City of Harker Heights
City of Heath
City of Henrietta
City of Hewitt
City of Highland Park
City of Honey Grove
City of Howe
City of Hurst
City of Hutto
City of Irving
City ofJolly
City ofJosephine
City of Justin
City of Kaufman
City of Keller
City ofKerens
City of Lakeside
City of Lamesa
City of Lindale
City of Little River Academy
City of Malakoff
City of Mansfield
City of McKinney
City of Midland
City of Murphy
City of Murchison
City of New Chapel Hill
City of North Richland Hills
City of O'Donnell
City of Oak Leaf
City of Oak Point
City of Odessa
City of Ovilla
City of Palestine
City of Pant ego
City of Paris
City of PIano
City of Ranger
City of Rhome
City of Richardson
City ofRichland Hills
City of Roanoke
City of Robinson
City of Rockwall
City of Rosser
City of Rowlett
City of Sherman
City of Snyder
City of Southlake
City of Sulphur Springs
City of Sunnyvale
City of Sweetwater
City of Temple
City of The Colony
City of Tyler
City of University Park
City of Venus
City of Waco
City ofWatauga
City of White Settlement
City of Wichita Falls
City of Wood way
T
Exhibit B
Steering Committee Cities
FranC,IIS\- FaGul InCled"es
# C't N F t 2006 2007 2008 2009
I Y ame ac or
Fac tor , 2(/" Factor + 3( 'u Factor +- 4(k Fallol' t 5%
1 iAddison i 0.002544 0.002595 0.002620 0.002646 0.002671
.....i..TAiien...........................................l.............'0':0'02794 .....................0:002"850 .....................0:002878 .....................0:00'2906 .....................0:002934
. ..........t........................ ..nn.................... ....................................... .......................................... ......................................... .......................................... .........................................
3 jAlvarado 1 0.003096 0.003158 0.003189 0.003220 0.003251
....4....jAndrews...................................l..............0.:O'03i"4.s .....................0:003.208. .....................iio03239 .....................0:003271 .....................(5:003302
...........CO.......................................................t................................... ........................................... ......................................... .n...................................... .........................................
5 jArcher City j 0.00327 0.003339 0.003372 0.003405 0.003438
....6....jAi-i"ington..................................l..............0:.0'02766 .....................0:002821' .....................0:002849 .....................0:002877' .....................0:00.2904
...........f'.................u................u................,.................................. .......................................... .......................................... ......................................... .........................................
7 iBelton i 0.003115 0.003177 0.003208 0.003240 0.003271
...........&O.......................................................l................................... .............................................. .......................................... ........................................._ ..........................................
8 1Benbrook j 0.003002 0.003062 0.003092 0.003122 0.003152
...........1-.............................................. .......,................................... ........................................... .......................................... ......................................... .............._.........................
9 1Big Spring i 0.002670 0.002723 0.002750 0.002777 0.002804
:::!:~:I~~~~~~p.~::::::::::::::::::::::::r::::::::::::Q:~~Q~?;~:! :::::::::::::::::::::Q;QQ~~~' :::::::::::::::::::::Q;QQ~~I~' :::::::::::::::::::::Q;QQ?'~~! ~:::::::::::::::::::~)JQ~~~
...!.!...l.~~.~~~p..~~m............................L.............Q:.QQ~~.~.? .....................Q:.QQ~.~~~. .....................Q:QQ~~~}, .....................Q:QQ?~~. .....................Q:QQ?~!..~
12 1Brownwood j 0.003069 0.003130 0.003161 0.003192 0.003222
...........~.....................................n.................................................. .......................................... .......................................... ........................................... ............................................
13 iBuffalo i 0.003133 0.003196 0.003227 0.003258 0.003290
...........:.,.......................................................;.................................. .......................................... ............... ........................... ..................................u..... .........................................
14 iBurkbumett j 0.003003 0.003063 0.003093 0.003123 0.003153
...........1:............................................................................................ .......................................... .......................................... .......................................... .................. .......................
15 iBurleson ! 0.002976 0.003036 0.003065 0.003095 0.003125
...........:,......................................................: .................................. .......................................... .......................................... .......................................... .... .....................................
16 iCaddo Mills i 0.003418 0.003486 0.003521 0.003555 0.003589
...........+......................................................,.................................. .......................................... ......................................... ......................................... ........n.................................
17 iCameron i 0.002873 0.002930 0.002959 0.002988 0.003017
.............1:........................................................;.................................. ~....................n................... ...........n......n..................... ..........................._............. ..............................._........
18 1Canton i 0.003216 0.003280 0.003312 0.003345 0.003377
...........(......................................................................................... .......................................... ........................................... .......................................... ..........................................
19 iCarrollton i 0.002695 0.002749 0.002776 0.002803 0.002830
......._...L.....................................................;.............n................... ................00....................... ......................................... ......................................... .................._.....................
20 iCelina i 0.003200 0.003264 0.003296 0.003328 0.003360
...........to.....................................................,.................................. .......................................... .....................................-... ......................................... ...............................-........
21 1Centerville i 0.003150 0.003213 0.003245 0.003276 0.003308
...22..TCie"ijuiTie..................................j..............O.:0023S4 .....................C):002401' .....................iio02425. .....................0:002448. .....................0:002472
...........t-.....................................................,.................................. .......................................... ......................................... ........u............................... ..........................................
23 jColleyville j 0.002984 0.003044 0.003074 0.003103 0.003133
...24.Tcoii"fnsViiie...............................l..............0.:003212 .....................0:003276 .....................0:003308. .....................0:003340 .....................0:003373
...........(-.....................................................,.................................. ........ .................................. .......................................... ......................................... .........................................
25 iComanche i 0.003203 0.003267 0.003299 0.003331 0.003363
.............:,...................................... ... .............J.................................. .... ...................................... ......................................... ..... .................................... ........ ..................................
26 1Corlnth 1 0.002901 0.002959 0.002988 0.003017 0.003046
...........,..................... .................................,.................................. ........................................... .......................................... ......................................... .........................................
27 jCrowley 1 0.003095 0.003157 0.003188 0.003219 0.003250
...2.8..Tii~.iia.s......................................T............0-:iiO2622 .....................0:.002674 .....................0:002701 .....................0:002727. .....................0:00275"3
...........,......................................................................................... .......................................... ......................................... ......................................... .........................................
...~.~...J.!?~.~~~~~!.~~~~..~.~~D~.L............Q:.g.Q~Q.~~ ...................J?:9.Q~.Q~~. .....................Q:9.Q~.~.~.1. .....................Q:Qg.~.~~ .....................Q:QQ.~E~
30 iDe Leon i 0.003280 0.003346 0.003378 0.003411 0.003444
...........(-.......................................................,................................... .......................................... ......................................... ......................................... .........................................
31 1Denison 1 0.002766 0.002821 0.002849 0.002877 0.002904
:::~~:::r~~r.!y.::::::::::::::::::::::::::::::::::::::::::r::::::::::::QJ~Q~?;~:! ::::::::::::::::::::I9.Q~:~~~ ::::::::::::::::::::IQQ~:~I~. :::::::::::::::::::::Q;QQ~~~Q :::::::::::::::::::IQQ~~~?'
33 iEastland i 0.003148 0.003211 0.003242 0.003274 0.003305
:::~:::r~~~~H~::Y.m~~~:::::::::::::::::I::::::::::::Q~:QQ~?~~ :::::::::::::::::::::Q;QQ~~~? :::::::::::::::::::::Q;QQ~~~Q' :::::::::::::::::::::Q;QQ?'~~ :::::::::::::::::::::Q;QQ?2~~
35 1Euless j 0.002971 0.003030 0.003060 0.003090 0.003120
...36...fj=armers..Branch...................l..............0.:002452 .....................0:002"501' .....................0:002.526. .....................0:002550 .....................0:002575
...........f'.....................................................,.................................. ........................................... .......................................... ............................-............ .........................................
37 lFlower Mound i 0.003031 0.003092 0.003122 0.003152 0.003183
...38...rFOresi"Hiir.............................I..............o~oo291"5 .....................0:002973 .....................0:003002 .....................0:003032 .....................0:003061
....................................u............................................................... .......................................... ........................................... .......................................... .........................................
39 iFort Worth i 0.002651 0.002704 0.002731 0.002757 0.002784
..................................................................ol.................................. .......................................... ..........................nn............ .......................................... .........................................
40 lFrisco ! 0.002 0.003023 0.003053 0.003083 0.003112
...........to......u.............................................,................................... ......................................... ......................................... n....................................... .........................................
41 ~Frost i 0.00333 0.003403 0.003436 0.003469 0.003503
............;.......................................................1.................................. ......................................... .......................................'" ......................................... .........................................
42 jGlenn Heights ! 0.00311 0.003172 0.003203 0.003234 0.003266
...........(......................................................"1.................................. ......................................... n........................................ ..nnn.................................. .........................................
43 iGrand Prairie i 0.002651 0.002704 0.002731 0.002757 0.002784
............;......................................................1. ... .............................. .......................................... ................... ....................... .......... ............................... .........................................
44 ~Granger 1 0.003392 0.003460 0.003494 0.003528 0.003562
...........f".....................................................I.................................. .......................................... ............ ............................... .......................................... .............................-..........
45 iGrapevine i 0.002545 0.002596 0.002621 0.002647 0.002672
...4(i.."fGunter.....................................l............0.:OO31'03 .....................0:003.165. .....................0:00ii96 .....................0:003227 .....................0:00.3258
...................................................................,.................................. .......................................... .......................................... ......................................... ..........................................
47 iHarker Heights i 0.003099 0.003161 0.003192 0.003223 0.003254
...48...~.Heath........................................t...........O.:OO3072 .....................0:003'133 .....................0:003"i64 .....................0:003"i95 .....................0:003226
...:.jg..THen.rietta................................T.............0.:OO3226 .....................0:003291' .....................0:003.32"3. .....................0:00'335S. .....................0:003387
...S.O..fHewiii.....................................r............O.:OO3060 .....................0:003.12i .....................0:003'152 .....................0:003"i82 .....................0:003213
...........1*........................................................................................ ........................................... .......................................... .......................................... .........................................
...~!...i~!2~.~~.~9...~~.~.~.......................l.............g:.Q.Q~~~.~ .....................Q:.QQ?~~. .....................Q:.QQ?~?.~. .....................Q:QQ~QQg .....................Q:QQ.~Q~.~
52 1Honey Grove i 0.003388 0.003456 0.003490 0.003524 0.003557
...........t'......................................................................................... ........................................... ......................................... .......................................... ......n.................................
53 iHowe i 0.003245 0.003310 0.003342 0.003375 0.003407
...........,.............. ......... ...............................4.................................. .......................................... .......................................... ................ ....n................... .........................................
54 iHurst ! 0.002979 0.003039 0.003068 0.003098 0.003128
...................................................................................................... ............n............................ .......................................... ......................................... .........................................
-- T-
Exhibit B
# Ct N F t 2006 2007 2008 2009
I Y ame ac or Facto' , 2 J c' Fdctor + 3[/, Factor -r +10 Fdctor , 5'~o
...~.~...i~~~.......................................J.............Q:.Qg.~~.~.~. .....................Q:.QQ~.~~. .....................Q:.QQ~~~!.. .....................Q:QQ~.~~.! .....................Q:QQ.~?~.~
...?~...i~.~~!!~.........................................L............Q:.Q.Q?~~Q .....................Q:.qQ??.Q~. .....................9.:9.9.?.?.~Q. .....................Q:9.9.??.~ ....................,9.:QQ.?.?.~.~
57 !Jolly ! 0.002967 0.003026 0.003056 0.003086 0.003115
...........c.........................................04...........I.................................. .......................................... ......................................... ......................................... .........................................
58 lJosephine l 0.003221 0.003285 0.003318 0.003350 0.003382
...........':".....................................................-:.................................. ......................................... .......................................... ......................................... .........................................
59 iJustln E 0.003243 0.003308 0.003340 0.003373 0.003405
...........c......................................................,.................................. .......................................... .......................................... ......................................... .........................................
...~.Q...L~.~!:!f.~.~~..................................L...........Q:.9.Q~Q?~ .....................Q:QQ~.Q~9. .....................Q:QQ~gQ. .....................Q:Q9.~.!~ .....................9.:Q9.~.~.~
61 iKeller i 0.003061 0.003122 0.003153 0.003183 0.003214
...........(0.....................................................,.................................. .......................................... .......................................... ......................................... .......n................................
...~~...!.~~r.~.~~...............m.....................L.............Q.:QQ~~.!.? .....................Q:.QQ~.~?~ .....................Q:.QQ~.~.!.! .....................Q:Q9.~~ .......m...........Q:Q9.~::!?~
63 H.akeside 1 0.003168 0.003231 0.003263 0.003295 0.003326
...........10......................................................,.................................. .......................................... .......................................... .......................................... .........................................
64 ~Lamesa ~ 0.003045 0.003106 0.003136 0.003167 0.003197
...6s..Tundaie......................................r-............O.:OO.299g .....................0:003059 .....................0:003089 .....................0:003'1i'9. .....................0:003'149
...................................................................................................... ........................................... .......................................... ......................................... .........................................
...~...j.~!~.~..~~.~r.~.~~~~!!.!y.........j..............Q:.QQ.~!.?.~ ..................mQ:.QQ~.?.!.~. .....................Q:QQ~.??!. .....................Q:Q9.~~~.? .....................Q:QQ~~!.1
67 lMalakoff E 0.002847 0.002904 0.002932 0.002961 0.002989
...................................................................,................................... .......................................... ......................................... ......................................... .........................................
68 ;Mansfield i 0.002834 0.002891 0.002919 0.002947 0.002976
................................................... ..............................................;c .......................................... ......... ................................ .......................................... .........................................
69 lMckinney 1 0.002720 0.002783 0.002810 0.002837 0.002864
...........4.......................................................................................... .......................................... ......................................... ......................................... .........................................
...?9...L~J.~~~!}~.,...................................L..........g.:9.Q?'~ .....................Q:9.Q~.QQ~. .....................Q:QQ~.Q~~. .....................Q:Q9.~Q~?. .........m.........Q:QQ~Q~~
71 lMilford i 0.003383 0.003451 0.003484 0.003518 0.003552
:::!.~:::r~:~~F.!~~~:::::::::::::::::::::::::::::I:::::::::::::Q:.:Qp.~~:~} :::::::::::::::::::::Q;P.Q~:~I~. :::::::::::::::::::::Q;QQ~1~i :::::::::::::::::::::Q;QQ~1~~: :::::::::::::::::::::Q;P.Q~~I~
...?~...l.~.~r.J?!).Y......................................L.............Q.:QQ~Q?~ .....................Q:.QQ~.!~ .....................Q:.QQ~.!!.Q. .....................Q:9.9I?Q! ................_...Q:QQ~~~f
74 ~New Chapel Hill 1 0.003156 0.003219 0.003251 0.003282 0.003314
.................................................................................................;::; ......................................... .......................................... ......................................... .................-........-............
...??...i~~~..~.I.9).I.~~~..~.!!!~...........L............Q:.9g~~~!. .....................Q:.QQ~.~~1. .....................Q:QQ~.~?~ .....................Q:QQ?~?Q .....................Q:QQ.~~!..~
76 10 Donnell i 0.003332 0.003399 0.003432 0.003465 0.003499
...........'1".....................................................:.................................. .......................................... ......................................... ......................................... .........................................
77 lOak Leaf 1 0.002965 0.003024 0.003054 0.003084 0.003113
...........(......................................................................................... ......................................... ......................................... ......................................... .........................................
...?~...!.Q~.~..~?!.~~................................L.............Q:.Q.Q~Q!'~ .....................Q:QQ~.!~Q. .....................Q:QQ~.!?Q .....................9.:QQ~.?Q! .....................Q:QQ.~~~.?
79 10dessa ; 0.003046 0.003107 0.003137 0.003168 0.003198
...........(ea....................................................I.................................. ......................................... ............................................ ......................................... .........................................
80 !OVilla ~ 0.003038 0.003099 0.003129 0.003160 0.003190
...........r.............................. .......................,................................... ......................................... ......................................... ......................................... .........................................
81 iPalestine i 0.003017 0.003077 0.003108 0.003138 0.003168
...........(e.....................................................I.................................. .......................................... .......................................... ......................................... .........................................
...~~...i~.~~.~~g....................................L............Q:.9.Q~~.!Q .....................Q:.QQ~.??~. .....................Q:9.9.~!.Q~. .....................Q:QQ~~~.~ .....................Q:Q9.~!.?.!
83 iParis i 0.002407 0.002455 0.002479 0.002503 0.002527
...........(e.......................................................................................... .......................................... ......................................... ......................................... .........................................
...~~...J.~.~!:!~............n............................L.............Q:.QQ~!..~Q .....................Q:.QQ~.?~~. .....................Q:.QQ~.~.!.~. .....................Q:9.9.~~~.~ .....................Q:QQ~~~.!.
85 iRanger j 0.003232 0.003297 0.003329 0.003361 0.003394
...........(......................................................,................................. .......................................... .................................................................................... ..........................................
86 lRhome i 0.003189 0.003244 0.003275 0.003307 0.003339
...........t-......................................................:................................... .......................................... ......................................... .......................................... .........................................
87 iRicharclson l 0.002608 0.002660 0.002686 0.002712 0.002738
........................................................................................................... ......................................... .......................................... ......................................... ..........................................
88 iRlchland Hills ! 0.003094 0.003156 0.003187 0.003218 0.003249
.............i.............................................................;....................................... ......................................... .......................................... ............................................... .............................................-..
89 iRoanoke i 0.003167 0.003230 0.003262 0.003294 0.003325
:::~:::I~~:~j~~~~:::::::::::::::::::::::::::::::::1::::::::::::::Q:~9.Q~I~~ :::::::::::::::::::::Q;QQ~J~!. :::::::::::::::::::::Q;P.Q~~n :::::::::::::::::::::Q;QQ~~~~ :::::::::::::::::::IQ9.~?'!'~
91 lRockwall ~ 0.002813 0.002869 0.002897 0.002926 0.002954
.....................................................................1..................................... .............................................. .............................................. ....................................................................................
92 ! Rosser 1 0.003258 0.003323 0.003356 0.003388 0.003421
............r.......................................................:................................... ........................................... ............................................ ........................................... .............................................
93 ERowlett i 0.003068 0.003129 0.003160 0.003191 0.003221
..................................................................................................................................................... ..................................................................................... ............................................
...~~...i~.~~~~..................................L............Q:.9.Q~~.~.! ........n...........Q:.QQ~.~?!.. ..................noQ:Q9.?.~~~ .....................Q:QQ.?!.?? .....................Q:QQf!.~.~
95 !Snyder j 0.003173 0.003236 0.003268 0.003300 0.003332
.............1............................................................................................ ............................................ .......................................... ......................................... ...........................................
96 lSouthlake ! 0.003031 0.003092 0.003122 0.003152 0.003183
.............:.......................................................-i.................................. .............................................. ........................................... .......................................... ..........................................
...~?...i~.~!P.~~E..~P..~.~~~..................L.....n....Q.:99.~?.~.?. .....................Q:.QQ~.~~~. .....................Q:9.Q~.~?Q. .....................Q:Q9.?~?~ ............._......Q:QQ?~.?
98 lSunnyvale ! 0.002433 0.002482 0.002506 0.002530 0.002555
............1'"............................................................................................... ............................................. .......................................... ......................................... .........................................
99 !Sweetwater ! 0.003100 0.003162 0.003193 0.003224 0.003255
...........(0........................................................,.................................. .............................................. ........................................... .......................................... ............................-...........
100 jTemple i 0.002526 0.002577 0.002602 0.002627 0.002652
.................r...........................................................:...................................... ............................................... .............................................. ............................................ .............................................
101 iThe Colony 1 0.002978 0.003038 0.003067 0.003097 0.003127
................10............................................................1................................................................................................................................ ..........................................................................................
102 rry,ler ~ 0.002648 0.002701 0.002727 0.002754 0.002780
jQI[Q~!~~~!Y.::~~r.~::::::::::::::::::::r::::::::::::Q~9.Q~?:~~ :::::::::::::::::::::Q;QQ~~1~. :::::::::::::::::::::Q;QQ~~?~: ::::::::::::::::::::IQQ~~!H :::::::::::::::::::I~~~~~
1041Venus i 0.003313 0.003379 0.003412 0.003446 0.003479
..i05TWaco.........................................~..............O.:002630 .....................O:00i"683 .....................iio02709 .....................0:00i"735 .....................0:002762
..........................................................................1........................................ .............................................. .............................................. ............................................. ............................................
106 ~Watauna j 0.002968 0.003027 0.003057 0.003087 0.003116
..io7"fwiiite..Seiiiement................j..............O-:!)"029.ii"2 .....................0:003011" .....................0:00304i. .....................0:003070 .....................0:003100
............................................................................................................... .......................................... ............................................. ........................................... ..........................................
1081Wlchlta Falls ~ 0.002841 0.002898 0.002926 0.002955 0.002983
..i09.fwOOdway..............................T.............O~O.02692 .....................0:00i"746. ................,....0:002.773 .....................0:002800 .....................0:002827
r
Exhibit C
City of Addison
City of Allen
City of Alvarado
City of Andrews
City of Archer City
City of Belton
City of Benbrook
City of Big Spring
City of Breckenridge
City of Bridgeport
City of Brownwood
City of Burkbwnett
City of Colleyville
City of Corinth
City of Crowley
City of Dalworthington Gardens
City of DeLeon
City of Denison
City of Early
City of Eastland
City of Edgecliff Village
City of Euless
City of Farmers Branch
City of Flower Mound
City of Forest Hill
City of Glenn Heights
City of Grand Prairie
City of Granger
City of Grapevine
City of Heath
City of Henrietta
City of Hewitt
City of Honey Grove
City of Irving
City of Jolly
City of Josephine
City of Justin
City of Lakeside
City of Lames a
City of Little River Academy
City of Malak off
City of Mansfield
City of McKinney
City of Midland
City of Murchison
City of Murphy
City of New Chapel Hill
City of North Richland Hills
City of O'Donnell
City of Oak Leaf
City of Oak Point
City of Odessa
City of Ovilla
City of Pantego
City of Paris
City of Piano
City of Rhome
City of Richland Hills
City of Roanoke
City of Robinson
City of Rosser
City of Rowlett
City of Snyder
City of Southlake
City of Sunnyvale
City of Sweetwater
City of Temple
City of The Colony
City ofWatauga
City of White Settlement
City of Wichita Falls
City of Wood way
-",
EXTENSION AND MODIFICATION OF SETTLEMENT AGREEMENT
This Extension and Modification of Settlement Agreement ("Agreement") is made and
entered into between TXU Electric Delivery Company ("Electric Delivery") and the Steering
Committee of Cities Served by TXU Electric Delivery Company on behalf of all cities listed on
Exhibit A to this Agreement ("Cities"), hereinafter referred to jointly herein as "Signatories."
WHEREAS, on February 22, 2005, the Signatories entered into a Settlement Agreement
that resolved numerous issues, including issues arising out of the resolutions passed in 2004 by
23 cities that are members of Cities requiring Electric Delivery to file with those cities
information that demonstrates good cause for showing that Electric Delivery's transmission and
distribution rates should not be reduced (hereinafter referred to as "Show Cause Actions");
WHEREAS, as part of that February 22, 2005 Settlement Agreement, Electric Delivery
agreed to file a system-wide rate case by July 1, 2006;
WHEREAS, Cities and Electric Delivery desire to extend certain terms of the February
22, 2005 Settlement Agreement and to resolve all outstanding issues related to the pending and
potential Show Cause Actions, the upcoming system-wide rate filing, and other regulatory
issues; and
WHEREAS, after extensive negotiations, Cities and Electric Delivery have reached a
compromise and settlement to resolve those issues.
NOW, THEREFORE, the Signatories, through their undersigned representatives, hereby
agree to the following;
1. Electric Delivery agrees to propose and support in its next system-wide rate case or city
rate inquiry one or more municipal rates, each without a demand ratchet, that together will cover
all municipal accounts, including a street lighting rate and municipal pumping rate that will be
lower than they otherwise would be. Cities agree to provide to Electric Delivery any information
needed to design the rates described in this paragraph.
2. Electric Delivery agrees to file a system-wide rate case at the Public Utility Commission
of Texas ("PUC") no later than July I, 2008, based on a test year ending December 31, 2007
unless Cities and Electric Delivery mutually agree that such a filing is unnecessary. For those
cities that do not have a City Council meeting in July, 2008, Electric Delivery will extend its
effective date to accomplish suspension by August 31, 2008. However, if Electric Delivery files
a system-wide rate case at the PUC on or before June 1, 2008, then Electric Delivery will not
extend its effective date.
3. Cities agree not to pursue any abated Show Cause Actions and not to initiate similar
actions before July 1,2008, provided the provisions of this Agreement are honored. Cities agree
not to intervene in, or participate in any manner in, any show cause action initiated at the PUC or
in any other jurisdiction prior to the proceeding described in paragraph 2, or in any appeals of
such show cause actions, except as necessary to protect the tariff or tariff-efforts associated with
-T
paragraph 1 or to protect the city or its residents from being prejudiced in any show cause action
pending on appeal at the PUc. If Cities intervene in a show cause action pending on appeal at
the PUC, then Cities agree not to take any position in that proceeding that is inconsistent with its
obligations under this Agreement.
4. Cities agree to provide notice to Electric Delivery that (1) all cities listed on Exhibit B to
this Agreement have continued their abatements of, or have dismissed, show cause actions
pending against Electric Delivery, and (2) each city listed on Exhibit C to this Agreement has
passed a resolution ratifying this Agreement or provided to Cities a letter in substantially the
same form as Exhibit D to this Agreement that has been signed by an authorized representative
of the city. On March 31, 2007, March 31, 2008, and March 31, 2009, Electric Delivery will
make a cash payment of $8 million to Cities. Electric Delivery's obligation to make those
payments ceases on the date upon which Cities fail to comply with their obligations under this
Agreement or the date upon which the tariffs approved in Electric Delivery's next system-wide
rate case at the PUC or in a city rate inquiry become effective on a temporary or permanent basis
("Termination Date"); provided, however, in the year the new tariffs become effective, the
annual payment shall be prorated until the Termination Date. "System-wide rate case" includes
any system-wide change to base rate tariffs as a result of proceedings initiated under Subchapters
C or D of PURA Chapter 36 and any proceeding changing Electric Delivery's base rates initiated
as a result of a settlement.
5. The Signatories acknowledge and agree that under paragraph 4 of the February 22, 2005
Settlement Agreement, Electric Delivery will pay Cities $8 million on March 31, 2006.
6. Electric Delivery agrees to work with Cities to improve the timeliness of streetlight
maintenance and to develop a process so that every city-owned and Electric Delivery-owned
street light is assigned an identifiable geographic location. Signatories agree to establish a task
force of senior employees that will develop the process and planned rollout for the street light
assignment project. Electric Delivery also agrees to provide to Cities a specific contact person
(or persons) within Electric Delivery who will be responsible for handling all unresolved Cities'
requests with respect to streetlights, including, but not limited to, billing, maintenance,
installation, removal, and account initiation and closure. Signatories agree to diligently pursue
resolution of the issues discussed in this paragraph; however, failure to reach an agreement with
respect to these issues will not constitute a breach of this Agreement by either Cities or Electric
Delivery.
7. Electric Delivery agrees to work with Cities to establish improved communication,
coordination, and timing of construction concerning relocations of Electric Delivery's facilities
in public right of way. Signatories agree to establish a task force of senior employees that will
develop the process and planned rollout of an improved relocation process. Signatories agree to
diligently pursue resolution of the issues discussed in this paragraph; however, failure to reach an
agreement with respect to these issues will not constitute a breach of this Agreement by either
Cities or Electric Delivery.
2
-T
8. The Signatories acknowledge that they have reached a separate agreement concerning
outstanding issues related to franchises. By its terms, that separate agreement becomes effective
only upon this Agreement's becoming effective pursuant to the terms of paragraphs 4 and 19.
9. Electric Delivery agrees to negotiate with Cities, and Cities agree to approve, a tariff that
permits Cities to request undergrounding of new or existing distribution facilities. The tariff
shall ensure full cost recovery by Electric Delivery through a surcharge in the requesting city in
the event that no third party is required by Electric Delivery's tariff, or applicable city ordinance,
to pay for undergrounding costs. That tariff will also allow Cities to request undergrounding of
transmission lines to the extent Electric Delivery determines that (a) such undergrounding is
feasible, (b) such undergrounding is consistent with the PUC's Substantive Rules and ERCOT's
requirements, and (c) Electric Delivery can recover the costs of such undergrounding through a
surcharge in the requesting city. Electric Delivery will not be obligated to file the tariff for city
approval until after the expiration of the Price to Beat or the modification of the Price to Beat in
a manner that allows pass through of tariff charges to the ultimate consumer.
10. Electric Delivery agrees to provide quarterly updates to representatives designated by
Cities and their consultants concerning Electric Delivery's capital expenditure projects and
affiliate transactions, the creation and regulatory treatment of a Pension and Health Benefits
Reserve for Electric Delivery, possible workable parameters for performance based rates for
Electric Delivery, and other topics as agreed upon by the Signatories. Electric Delivery will
work with Cities to provide information requested by Cities concerning those topics.
11. Electric Delivery shall pay up to $10,000 per month in regulatory expenses directly to
Cities' consultants, after receipt of appropriate documentation and invoices, provided said
expenses may be deferred for recovery. Cities agree to support recovery of such costs in Electric
Delivery's next rate case. Should recovery be denied by the PUC, then the payments will
immediately cease.
12. Electric Delivery shall pay up to $40,000 per month through December 2009 to,
reimburse Cities for their involvement before ERCOT and the PUC concerning market design
issues, after receipt of appropriate documentation and invoices.
13. Electric Delivery agrees to reimburse Cities for the expenses incurred related to the
negotiation of this Agreement in an amount not ,to exceed $25,000 after receipt of appropriate
documentation and invoices, and Cities agree that those costs can be deferred for recovery in its
next rate case and agree to support deferral and recovery in that case. Notwithstanding
paragraph 14, any rights Cities may have under PURA, and any provisions in existing applicable
franchise agreements to the contrary, Electric Delivery agrees to reimburse Cities for reasonable
and necessary expenses incurred in Electric Delivery's next system-wide rate case in an amount
not to exceed $2,000,000. The rate case expense reimbursements will be made monthly,
beginning with the first month after the consultants are hired. Cities further agree not to contest
the recovery of Cities' rate case expenses and Electric Delivery's reasonable and necessary rate
case expenses in Electric Delivery's next system-wide rate case.
3
'r
14. Electric Delivery agrees that, in franchise negotiations, it will not seek to extend the
prohibition on reimbursement of municipal rate case expenses beyond June 2008.
15. Electric Delivery agrees to pay Cities $18 million for beneficial public use. The
Signatories agree that that amount will be paid in two installments: (1) $9 million will be payable
two weeks after Electric Delivery receives the notice from Cities required in paragraph 4 of this
Agreement; and (2) $9 million will be payable by January 31,2007. The Signatories agree that
member cities are to apply these funds for beneficial public use and that the determination of
what activities are beneficial to the public is within the discretion of each member city. Those
activities include, but are not limited to, energy education for citizens, reductions in rates for city
services, investments in community facilities, and investments in energy efficiency measures.
16. The Signatories acknowledge that Electric Delivery intends to offer certain terms of this
Agreement to cities served by Electric Delivery that are not listed on Exhibit A ("Negotiations").
Electric Delivery agrees that all cities listed on Exhibit A are entitled to Most Favored Nations
protection during those Negotiations and that any benefits that Electric Delivery agrees to
provide to any city during those Negotiations that are not already included in this Agreement will
be offered to all cities listed on Exhibit A. Cities acknowledge and agree that to receive any
additional benefits from Electric Delivery, additional consideration from Cities to Electric
Delivery may be required.
17. The Signatories agree that the amounts paid by Electric Delivery to Cities pursuant to
paragraphs 4, 11, 12, 13, and 15 of this Agreement are paid solely in consideration for Cities'
continued abatement or dismissal of, and forbearance from filing or pursuing, Show Cause
Actions against Electric Delivery and Cities' agreement to abide by the terms of this Agreement,
and to reimburse Cities' expenses associated with the Show Cause Actions and other regulatory
proceedings. To the extent that the amounts paid may be in excess of Cities' expenses, the
excess is paid solely in order to settle the matters that are the subject of this Agreement.
Signatories recognize and agree that the payments specified in this Agreement are not a rate
reduction, refund, rebate, discount, preference or privilege of any kind for services provided by
Electric Delivery or any of its affiliates or predecessors in interest under any tariff, whether in
the past, now, or in the future. As such, the provision of electric delivery service to Cities by
Electric Delivery or any affiliate or predecessor has been and will continue to be governed solely
by the rates, terms, and conditions of the applicable tariffs.
18. The Signatories agree that the rights, duties, benefits, and obligations set forth in this
Agreement are binding upon their successors in interest.
19. This Agreement shall become effective only upon the execution of this Agreement and
the entry of resolutions or orders continuing the abatements or dismissing the Show Cause
Actions.
20. Each person executing this Agreement represents that he or she is authorized to sign this
Agreement on behalf of the party represented.
4
. T
21. The Signatories expressly acknowledge and agree that oral and written statements made
by any party or its representative during the course of the settlement negotiations that led to this
Agreement cannot be used or portrayed as an admission or concession of any sort and shall not
be admissible as evidence in any proceeding in any forum.
22. The Signatories agree that this Agreement extends and modifies the terms of their
February 22, 2005 Settlement Agreement. To the extent that any terms of that February 22, 2005
Settlement Agreement are not restated here, the Signatories agree that those terms have expired.
To the extent that there are any inconsistencies between the terms of this Agreement and the
terms ofthe February 22, 2005 Settlement Agreement, the Signatories agree that the terms of this
Agreement control.
Executed on this the 2:J1Ictay of January, 2006, by the Signatories hereto, by and through
their undersigned duly authorized representatives.
TXU Electric Delivery Company
Steering Committee of Cities Served by TXU
Electric Delivery Company on behalf of all
cities listed on Exhibit A to this Agreement
By:
~?7~.dJ{
BY:~~
Its: ~ir'
ItS:---1J\Lt- ~I DfN r
5
-',
Exhibit A
City of Addison
City of Allen
City of Alvarado
City of Andrews
City of Archer City
City of Arlington
City of Belton
City of Benbrook
City of Big Spring
City of Breckenridge
City of Bridgeport
City of Brown wood
City ofBufIalo
City of Burkbumett
City of Burleson
City of Caddo Mills
City of Cameron
City of Canton
City of Carrollton
City of Celina
City of Centerville
City of Clebume
City of Colleyville
City of Collinsville
City of Comanche
City of Corinth
City of Crowley
City of Dallas
City of Dalworthington
Gardens
City of DeLeon
City of Denison
City of Early
City of Eastland
City of Edgecliff Village
City of Euless
City of Farmers Branch
City of Flower Mound
City of Forest Hill
City of Fort Worth
City of Frisco
City of Frost
City of Glenn Heights
City of Grand Prairie
City of Granger
City of Grapevine
City of Gunter
City of Harker Heights
City of Heath
City of Henrietta
City of Hewitt
City of Highland Park
City of Honey Grove
City of Howe
City of Hurst
City of Hutto
City of Irving
City of Jolly
City of Josephine
City of Justin
City of Kaufinan
City of Keller
City ofKerens
City of Lakeside
City of Lamesa
City of Lindale
City of Little River Academy
City of Malakoff
City of Mansfield
City of McKinney
City of Midland
City of Murphy
CitY of Murchison
City of New Chapel Hill
City of North Richland Hills
City of O'Donnell
City of Oak Leaf
City of Oak Point
City of Odessa
City of Ovilla
City of Palestine
City of Pantego
City of Paris
City of Piano
City of Ranger
City of Rhome
City of Richardson
City of Richland Hills
City of Roanoke
City of Robinson
City of Rockwall
City of Rosser
City of Rowlett
City of Sherman
City of Snyder
City of Southlake
City of Sulphur Springs
City of Sunnyvale
City of Sweetwater
City of Temple
City of The Colony
City of Tyler
City of University Park
City of Venus
City of Waco
City ofWatauga
City of White Settlement
City of Wichita Falls
City of Wood way
~T
Exhibit B
City of Arlington
City of Benbrook
City of Brownwood
City of Burleson
City of Carrollton
City of Dallas
City ofDalworthington Gardens
City of Denison
City of Ft. Worth
City of Harker Heights
City of Heath
City of Pantego
City of PIano
City of Richland Hills
City of Robinson
City ofRockwall
City of Snyder
City of Sulphur Springs
City of The Colony
City of Wood way
" r-
Exhibit C
City of Addison
City of Allen
City of Andrews
City of Archer City
City of Belton
City of Big Spring
City of Breckenridge
City of Bridgeport
City ofBurkburnett
City of Celina
City of Clebume
City of Colleyville
City of DeLeon
City of Early
City of Eastland
City of Euless
City of Farmers Branch
City of Flower Mound
City of Forest Hill
City of Frisco
City of Glenn Heights
City of Grand Prairie
City of Grapevine
City of Henrietta
City of Highland Park
City of Howe
City of Hurst
City of Irving
City of Keller
City of Lakeside
City of Lamesa
City of Lindale
City of Little River Academy
City of Mansfield
City of McKinney
City of Midland
City of Murphy
City of North Richland Hills
City of Oak Point
City of O'Donnell
City of Odessa
City of Palestine
City of Paris
City of Richardson
City of Roanoke
City of Rowlett
City of Sherman
City of Southlake
City of Smmyvale
City of Sweetwater
City of Temple
City of Tyler
City of University Park
City of Waco
City ofWatauga
City of White Settlement
City of Wichita Falls
.-T"
Exhibit D
February 13, 2006
Mr. Geoffrey M. Gay, Esq.
Lloyd Gosselink
816 Congress Avenue, Suite 1900
Austin, Texas 78701
In re: Settlement Agreement between Steering Committee of Cities Served by TXU
Electric Delivery and TXU Electric Delivery Company
Dear Mr. Gay:
I hereby acknowledge that the Steering committee of Cities Serviced by TXU
Electric Delivery has the authority to act on behalf of the city of Paris, Paris, Texas
in the negotiation and execution of a settlement agreement with TXU Electric
Delivery Company.
I also represent that I am duly authorized by the City of Paris to sign this
letter.
Sincerely,
Tony N. Williams
City Manager
lap
-"I