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2006-013-RES-TXU RESOLUTION NO. 2006-013 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 1,2008; 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. .----' /' I ..~ Mayor -I ATTEST: APPROVED AS TO FORM: - ;1J. fi'7f5~.~ D. Lestock, Assistant Attorney 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 of this 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 Page 1 Act, Tex. UtiI. 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. F or 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. Page 2 (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 manner, 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 tenn 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 tenn 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 tenn 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 tenn 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 ratified, 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 ratified, 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. Page 3 Executed on this the 2.?1foay 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<4JJ Vl(i ~~ BY:~~~ Its: (' .J~Jj'(\ , Its: Page 4 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 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 Kaufman City of Keller City ofKerens City of Lakeside City of Lamesa City of Lindale City of Little River Academy City of Malak off 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 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 W oodway Exhibit B 1 iAddison j 0.002544 0.002595 0.002620 0.002646 0.002671 .....f..fAiien...........................................j..............O'.'()o2794 .....................0:002.850 .....................0:002878 .....................0:002906 .....................0:002934 ...........l......................................................,..................................................................................................................... ................................................................................... 3 jAlvarado 1 0.003096 0.003158 0.003189 0.003220 0.003251 ....4...TAiidrews...................................j..............O.:003i'~i"s .....................0:003.208. .....................0:003239. .....................0:00327i .....................0:003302' ..........,(t.....................................................t....................."........... 1................11....................., .......................................11 ...................11111................. ..IIIU"................................ 5 1Archer City j 0.00327 0.003339 0.003372 0.003405 0.003438 ....6....j'ArWngton..................................i..............O.:OO2766 .....................0:00282i' .....................0:002849. .....................0:002877' .....................0:002904 ...........f'.....................................................,..................II.............. ...............11111...................... ...............1....11.................... .......................................... .........".............................. 7 lBelton i 0.003115 0.003177 0.003208 0.003240 0.003271 ....s...TSenbrook...............................T.............O.:003002 .....................0:003.062. .....................0:003092. .....................0:oo3'ii2 .....................0:003'15i ...........('...........""....................... ...............,...................,.............. .......................................... ..,..............................1........ .......................1................. ......................'"1........1....... 9 iBig Spring 1 0.002670 0.002723 0.002750 0.002777 0.002804 ................................................................01.................................. .......................................... .......................................... ......................................... ......................................... 10 ~Breckenridge l 0.002251 0.002296 0.002319 0.002341' 0.002364 ...........t........,....................,.......................................................... .......................................... .......................1................, .......,....,.,......................... ......,...............1.................. 11 ~Bridgeport i 0.002547 0.002598 0.002623 0.002649 0.002674 .....11................................................1..........1.............................................1...................................11.1..1.....11..."".1............... 111.1...11.............,.................1...............11"....."...........,... 12 jBrownwood 1 0.003069 0.003130 0.003161 0.003192 0.003222 ...........1......................................................,......................................................................................................................................................................................................... 13 jBuffalo j 0.003133 0.003196 0.003227 0.003258 0.003290 ...i'4.Tsu.rkbumett..........................T.............O.:003003 .....................0:003.063 .....................0:003093. .....................0:003'123 .....................0:003'153 .1..I.I'"~........................II......................'.'..I..........u...................... ..........'11............................. '..,11111.........................,......, ............................,....,........ ......................................... 15 iBurleson i 0.002976 0.003036 0.003065 0.003095 0.003125 ...i'6..TEaddo..M.iiis.............................!..............O.:OO34ia .....................0:003486 .....................0:003S2i. .....................0:003555. .....................0:003589 ...........t............................,........................,.....................,............ ,.........,....,.......................... ...................,....,..,............. ..'........1............................. ..............,................."....... 17 iCameron i 0.002873 0.002930 0.002959 0.002988 0.003017 ..'is...!'canton.....................................T.............O.:0032ifi .....................0:.003'2S0 .....................0:00331'2' .....................0:00334S. .....................0:003377 ...........("..,..,..............................................,........................,......... .......................................... ...............1..........,........".... .......................................... ......................................... 19 iCarrollton j 0,002695 0.002749 0.002776 0.002803 0.002830 ...20..Tcei'fna......................................T.............O.:0.03200 .....................0:003.26"4 .....................0:003296 .....................0:003328 .................._.0:003360 ...........i"...................,............I....................................tI............... .......................................... ......... ............................H... .......................................... ..........,......."..................... 21 ~CentelVille i 0.003150 0.003213 0.003245 0.003276 0.003308 ...22..TOeburne..................................j..............O.:0.0235'" .....................0:002401' .....................0:002425. .....................0:002448. .....................0:002472 ...........r.....................................................,................... ............... .......,......,........................... .............. .................11....11... .......... ............................... 1........11.............................. 23 1Colleyville l 0.00298 0.003044 0.003074 0.003103 0.003133 ...24..[coii'i"nsviii'e...............................l..............O.:003212 .....................0:003276 .....................0:003308. .....................0:003'346 .....................0:00337.3 ...........~....................................... ... ... .... ....:.................................. ..... ... .........,........................ .. ........................................ ............... .......................... ......................................... 25 lComanche ! 0.003203 0.003267 0.003299 0.003331 0.003363 ...........:.......,..............................................1.................................. .........................................,......................................... ......................................... ..............................,.......... 26 lCorlnth ~ 0.002901 0.002959 0.002988 0.003017 0.003046 ...........t..................... ..................... ........................................,....., '......... ...................1....11111... .......................................... ........1................................ ......................................... 27 ~Crowley 1 0.003095 0.003157 0.003188 0.003219 0.003250 ...2S..TDaiias......................................T............O...OO2622 .....................0:002.674 .....................0:002'701' .....................0:002727. .....................0:002753 ......,....(............................. .........................,.................................. ...........1.............................. ......................................... ...,...,.........,....................... ......................................... 29 iDalworthington Gardensj 0.003023 0.003083 0.003114 0.003144 0.003174 ...30..TDe..Leon..................................r............O...OO3280 .....................0:003.346 .....................0:003.378. .....................ii0034'i'i' .....................0:003444 ..................................................1........................81...................,.... ............1..'.......................... .....................,................... ......................................... ......................................... 31 jDenison i 0.002766 0.002821 0.002849 0.002877 0.002904 ..'32"TEariy.........................................T.............O.:00322I .....................0:.003.285 .....................0:003'3'i'8 .....................0:003350 .....................0:003382 ...........\".....................................................,............................................................................................................................................................... ......................................... 33 jEastland l 0.003148 0.003211 0.003242 0.003274 0.003305 :::~~:::r~~9.~!~:y[!!~~~::::::::::::::::::I:::::::::::::Q:.:Q.Q?'?'~~ :::::::::::::::::::::Q;:QQ~~~? :::::::::::::::::::::Q;QQ~~~Q. :::::::::::::::::::::Q;QQ?'!~ :::::::::::::::::::::Q;QQ:?~~~ 35 ;Euless i 0.002971 0.003030 0.003060 0.003090 0.003120 ...36...rFarmers..Branch...................!..............O.:002452 .....................0:002501' .....................0:002'526. .....................iio025so. .....................0:002575 ...........c.......................................................,................................. ...................,...................... .......... ..1'......".................... .............11.......................... .,....................................,.. 37 lFlower Mound ! 0.003031 0.003092 0.003122 0.003152 0.003183 ...........&o................"................II........'II......~.. ................................ ....,................. ............,....... ..........,..........1".......,......... ......................................... .......,................................. 38 iForest Hill 1 0.002915 0,002973 0.003002 0.003032 0.003061 ...........,.....................................................1....................,............. .......................................... ,......................................... ...............................'"........ ......................................... 39 lFort Worth 1 0.002651 0.002704 0.002731 0.002757 0.002784 ...........:1.........'...........................,...............:........... ...................11.. ...,..................,................... "........................."............. .......................,.................. ......................................... 40 lFrisco i 0.00296 0.003023 0.003053 0.003083 0.003112 ...........(1.....................................................,.................................. 1111.................11.........,......... .................."...................... ...........,............11............... ......................................... 41 lFrost i 0.003336 0.003403 0.003436 0.003469 0.003503 ...........:......................................................1........1......................... .......................................... .....................................................................,..........,... ......................................... 42 !Glenn Heights ~ 0.003110 0.003172 0.003203 0.003234 0.003266 ..........I~.....................................................'I.......U.III...................11 .......................................... ,...... .."....................""....... .......................................... ......................................... 43 lGrand Prairie i 0.002651 0.002704 0.002731 0.002757 0.002784 ...........:............111..........,...........................01...........1..111..........'....11.......................................... ..........11.............................. .....................11.................. .................,....................... 44 iGranger i 0.003392 0.003460 0.003494 0.003528 0.003562 . ..........~.... .....".".................. ... ...................,.. ............IIU................ .......................................... .......................................... .......................................... ......................................... 45 !Grapevine 1 0.002545 0.002596 0.002621 0.002647 0.002672 ...4f1'Guilter.....................................l............O.:003i'03 .....................0:003.165. .....................0:00ii96 .....................0:003227. .....................0:003258 ...........(t........UI......................... .... ..................... ........................... ............,................11.1111..... .....................n.n................ .............11........................., ......................................... 47 !Harker Heights i 0.003099 0.003161 0.003192 0.003223 0.003254 ...:t8..tHeath........................................l.............O.:003072 .....................0:003'1:33. .....................0:003"i64 .....................0:003'i9S .....................0:003226 . . ...........(.........,..............................,..'''........,........."....................... ....1'................................... ...................n............,........ ................."...................... .......................................... 49 ~Henrietta i 0.003226 0.003291 0.003323 0.003355 0.003387 ...So...rHewitt......................................r............O.:OO3060 .....................0:oi)3'12i. .....................0:003'i5i .....................0:003'isi .....................0:003213 ...........(............................. .............................................1.............. .......................""............... ......................................... ......................................... ......................"................. 51 1Highland Park i 0.002885 0.002943 0.002972 0.003000 0.003029 ...si"'1Honey.G.rove.........................l..............O...0.033S.s .....................0:003456 .....................0:.003490 .....................0:003524 .....................0:003557 ...........t.....................................................I.................................. ....,..............11..................... ,......................................... .................................1....... 1..11......................1111........., 53 1Howe 1 0.003245 0.003310 0.003342 0.003375 0.003407 ...54...j.Hur~..........................................!..............O.:OO2979 .....................0:003039 .....................0:.003.068. .....................0:003098 .....................0:003'128 ...........;...............IIII.'...........................II....i.................................1....................,....................,.......................................... ..............................................,.................................... Exhibit B # C't N F t 2006 2007 2008 2009 I V ame ac or , Factor -, 21Jltc Fdctor + 3[/) Factor -, 4% Fdctor -, 5lJf~ 55 !Hutto i 0.003395 0.003463 0.003497 0.003531 0.003565 ...........1-........................................................................................ .......................................... .......................................... ......................................... ......................................... 56 1Irving l 0.002650 0.002703 0.002730 0.002756 0.002783 ...57...fio"iiy...........................................r.............O.:O.02967 .....................0:003026 .....................0:003056. .....................iioO'30s6 .....................O':ooiii's ...........(11....................................................1........................u.uu..' .......................................... ................................................................................... ......................................... 58 iJosephine l 0.003221 0.003285 0.003318 0.003350 0.003382 ...s9...!Jij.Sii.n.......................................T............t)','o'03243 .....................0:003'308 .....................0:003340. .....................0:003373 .....................0:003405 ...........1......................................................1........................................................................... ................................................................................... ......................................... 60 !Kaufman 1 0.003029 0.003090 0.003120 0.003150 0.003180 ...6i...!Keii'er.......................................T.............O..'(l0306'1 .....................0:003'i22' .....................0:003.i53. .....................0:003'i83 .....................0:00321'4 ...........1......................................................1........................................................................... ......................................... ......................................... ......................................... 62 jKerens i 0.003312 0.003378 0.003411 0.003444 0.003478 ...6i"i'i:d'keside.................................T.............o.:O'o3i'68 .....................0:003231' .....................0:003263' .....................0:00'3295 .....................0:00'332'6 ..I..II....~..........'"I......IIIII.......I...................III.......I.........II,.............. 11111..................................... ,.........................."............ II'''....................."......''''''.. ............"......".......""........ 64 iLamesa i 0.003045 0.003106 0.003136 0.003167 0.003197 ...65"'fi]ndaie.....................................r............0.:002999 ...........,.........0:003059 .....................0:003Os9 .....................0:003'11'9. .....................0:003'149 "...,..n.~...,...II..'"..........n...............III......n..I..................11.............. 01.. ...................................... . ............................""......... ........................................" .,....................................... ...~~...i.~!~I.~..~~~:.~.~~~~~y.........l....,.........Q:.QQ.~.~.?.~ .....................9.:.QQ~.?.~.~. .....................9.:9.9.~.?~~. .....................9.:Q9.~~~.?. .....................Q:9.Q.~~!.~ 67 ~Malakoff ! 0.002847 0.002904 0.002932 0.002961 0.002989 ...........1......................................................1............................................................................................................................................................... ......................................... 68 1Mansfield 1 0.002834 0.002891 0.002919 0.002947 0.002976 ...69...rMc~nney................................T............ojl0272E. .....................0:002.783. .....................0:00281'0 .....................0:002837. .....................0:002864 ..... ...,..~.............I"lfll'. ,". .............................1...............1............11.,.. .11........ .... .........................,. ........ ... ...w........................... I......................................... ......................................... 70 1Midland 1 0.002944 0.003003 0.003032 0.003062 0.003091 ...ii...!M.j.iford'.....................................r.............o.:003383 .....................0:.003'451' .....................0:003484 .....................i):00351'8. .....................0:003552 ...........(......................................................10................................. ...............n...n.w.................. 1.11'.................................... .......................................... ......................................... 72 jMurchison l 0.003351 0.003418 0.003452 0.003485 0.003519 ...73".TM.urPhy....................................T.............O.:O.03078 .....................0:ooii40 .....................0:003'i70. .....................0:003201' .....................0:003232 ...........(......................................................1.........................".."... .......,,,................................ ..............".......................... ......................................... ......................................... 74 lNew Chapel Hill i 0.003156 0.003219 0.003251 0.003282 0.003314 ...7s..TNortii..Rfch.ianej'ii.iiis..........r.............0.:0.02S37. .....................0:002894 .....................0:002922. .....................0:002950 ................."..0:002979 ...........(0.....................................................1..................................................................................................................... ......................................... ......................................... ...?~...i9...9.~~D~!!................................L............Q.:Qg~~.~? .....................9.:Q9.~.~~~. .....................9.:.9.Q~~~ .....................9.:9.Q.~~~~ .....................9.:9.Q.~~~ 77 iOak Leaf ! 0.002965 0.003024 0.003054 0.003084 0.003113 11.........(......................................1........."....1...................1.......................................1.......................................1..11.............. .........1............................... ...................1..................... ...?~...i9.~.~..~~!.~~................................L............Q:.9.Q~Q.?'~ .....................9.:Q9.~.!1Q. .....................Q:9.Q.~.!?Q .....................9.:9.Q~.?Q! .....................Q:9.Q.~?~.? 79 iOdessa ! 0.003046 0.003107 0.003137 0.003168 0.003198 ...........1......................................................,............................................................................................................................................................... ......................................... 80 iOvilla i 0.003038 0.003099 0.003129 0.003160 0.003190 ...........~.II........................I..........................,...........................w...... ......................,.................. .....................11.1................. ..............,................."....... ......................................... 81 iPalestine i 0.003017 0.003077 0.003108 0.003138 0.003168 ...........10.....................................................1............................................................................................................................................................... ......................................... ...~~...J.~.~~.~.~9....................................L............Q:.Q.Q~~.~9. .....................9.:.9.9.~.??1. .....................Q:Q9}~9.~. .....................Q:QQ~.~~.~ .....................Q:9.Q.~2?! 83 lparis ! 0.002407 0.002455 0.002479 0.002503 0.002527 ...........(....................................... .... ......,.........................,11.......11.. ....11.................11................. .............11......11................., ......................................... ......................................... ...~~...J.~.~~9..........................................L............Q:.QQ~?~Q .....................Q:.9.9.?.?.~~. .....................Q:.QQ?~.~.? .....................Q:9.9.?~~.~ .....................Q:Q9.?~~.? 85 lRanger i 0.003232 0.003297 0.003329 0.003361 0.003394 ...........(........................................... .... .......,.........................11....11 ............ .............................. .......,1........ ......................... ..................1.........'..,......... ......................................... 86 !Rhome ! 0.003180 0.003244 0.003275 0.003307 0.003339 ...s7"'fRlcha.rdson.............................r.............o.:O'o2608 .....................0:002'660. .....................0:002686 .....................0:00'271'2 .....................0:00273.8 ...........1......................................................1............................................................................................................................................................... ......................................... ...~~...J.~!~~!~D~..~!!!.~.........................L............Q.:Q.Q~Q.~~ .....................9.:.9.Q~.!?~ .....................Q:.9.Q~.!~?. .....................Q:9.Q.~.?.~.~ .....................Q:9.Q.~?1~ 89 1Roanoke 1 0.003167 0.003230 0.003262 0.003294 0.003325 ...........10.....................................................1............................................................................................................................................................... ......................................... 90 1Roblnson l 0.003119 0.003181 0.003213 0.003244 0.003275 ...91..TRockWaiT................................T'............0.:002813 .....................0:002"869 .....................0:002897 .....................0:00.2926 .....................0:002954 ...........10.....................................................,........................................................................... ................................................................................... ......................................... 92 jRosser 1 0.003258 0.003323 0.003356 0.003388 0.003421 ...gfTRowiett.....................................!..............0.:003068 .....................0:003.129 .....................0:003'i60. .....................0:oo3'i9i' .....................0:00.3221 ...........(0.......11............................................'".."..1111........".............. ........11..........11.................... ....................................,..... ........................111............... ......................................... 94 !Sherman i 0.002281 0.002327 0.002349 0.002372 0.002395 ...9s..Ts.nyder.....................................r.............0:.OO3i'73 .....................0:003.i36 .....................0:003268 .....................0:003300 .....................0:003332 ...........1.........................111..........................1.................................. ............11............................ ..............11.............'...11....... ................1....'.................... ............,............................ 96 1Southlake ! 0.003031 0.003092 0.003122 0.003152 0.003183 .......................'".......................................'1.......1111....................... ......1111..............11...........1.... .......................................... .......................................... ......................................... 97 iSulphur Springs ~ 0.002767 0.002822 0.002850 0.002878 0.002905 ...........&0.....11.............................11...............1.................................. .... ...................1...........,...... .........11.............................. ....................'n...............I.. 1111.'....................11.............. 98 15unnyvale ! 0.002433 0.002482 0.002506 0.002530 0.002555 ...........r.................III1...........w.......................................................11'"...................................... .......................................... ......................................... ......................................... 99 iSweetwater i 0.003100 0.003162 0.003193 0.003224 0.003255 .................................,.."............................,..................11....'.....1..,...........11............................. ............................'11........... ......................................... .......................................... 100 lTemple i 0.002526 0.002577 0.002602 0.002627 0.002652 ..ioi"iThe..Coiony............................T.............O.:002978 .....................0:003038. .....................0:003067 .....................0:003097 .....................0:003ii'7 ...........10.....................................................,......................................................................................................................................................................................................... 102 iTyler i 0.002648 0.002701 0.002727 0.002754 0.002780 jQ~:rQ~!~~~!~::P.~f.~::::::::::::::::::::r::::::::::IQQ~?~r::::::::::::::::::::Q;9.Q?~~f::::::::::::::::::::Q;QQ~#.?~::::::::::::::::::::::Q;QQ.?~Q1.:::::::::::::::::::::Q;QQ~~~:~ 104 jVenus i 0.003313 0.003379 0.003412 0.003446 0.003479 ..io5Twa.co.........................................~..............0.:O'02630 .....................0:002.683. .....................0:002.709 .....................0:00273S. .....................0:002762 ...........c............II'..........................II...........t..........II...........,.......... .......................................... .......................................... ......................................... ......................................... 106 iWatauaa i 0.002968 0.003027 0.003057 0.003087 0.003116 ..ioi'fwhite..Sett'iement................1..............0':002952 .....................0:0030i'i. .....................0:003041' .....................0:003070. .....................0:003'iOO ....1I.....(........................,1t..........................4....................,............. ...........u............................, ......................,................... ...........'.....11...................... ......................................... 108 jWlchita Falls ! 0.002841 0.002898 0.002926 0.002955 0.002983 ..i09.rWoodway..............................T.............0:.002692 .....................0:002746. .....................0:002773. .....................0:002800 .....................iio02827 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 Burkburnett 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 Lamesa City of Little River Academy City of Malakoff 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; . I. 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 1,2008, 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 I, 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 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 Cor D ofPURA 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 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 ~rice 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 amountynot 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 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 detennination 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 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 27d/day 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.M BY:~ Its: Ckir ItS:~\Lt: ~IDfNr 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 Brownwood 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 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 of Kerens 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 V enus City of Waco City ofWatauga City of White Settlement City of Wichita Falls City of W oodway 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 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 Cleburne City of Colleyville City of DeLeon City of Early City of Eastland City of Euless City of Fanners 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 Sunnyvale 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 ~ CITY OF FARIS ;p .. 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, <:., ) , . . ......\ l, ( ~ ,J' " "---"'-_.'~_'_'___ /.".," tOny N. Williams City Manager lap P.O. BOX 9037 . PARIS, TEXAS 75461.9037 · (903) 785.7511 · FAX (903) 785.8519