05-D TXU Settlement Agreement
AGENDA INFORMATION SHEET
PROJECT: A Resolution approving and ratifying a Settlement Agreement between the Steering Committee
of Cities served by TXU (including Paris) and TXU Electric Delivery.
BACKGROUND: The City of Paris is and has been for some time a member ofa 110 member city coalition
known as the Steering Committee of Cities Served by TXU. The Committee has been in existence since the
late 1980s. It took on a formal structure in the early 1990s when TXU Cities 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 for approximately 17 years
the primary public interest advocate before the Public Utility Commission, the Courts, and the Legislature on
electric utility regulation matters dealing with TXU.
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. To facilitate
the efforts of the Steering Committee, twenty (20) 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 had thrown municipal accounts in with broader
commercial services in the 2001 rate proceedings that led to the deregulated environment. In the case of Paris
and most other cities, THIS LED TO APPLICATION OF UNFAIR DEMAND RATCHETS AND
HIGHER CHARGES FOR WATER PUMPING. IT ALSO LED TO OUTRAGEOUS 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the hypothetical cost structures the PUC had used to justify current rates in 2001 were no longer valid.
Information was to have been filed by TXU with the 20 cities initiating the rate review in late November 2004.
Assuming that the cities that reviewed that material would have passed ordinances reducing rates in the
January-February time frame, appeals to the PUC would have been triggered that would have led to a
statewide rate case in the summer of2005. A final order would have been expected in mid to late 2006.
DESCRIPTION: The Steering Committee and TXU began settlement discussions last fall and before
Thanksgiving sufficient progress had been made to justify delaying the required rate filing. A Settlement
Agreement was signed on February 22, 2005. The Agreement postpones or abates the statewide rate
proceeding for approximately 14 months. In exchange for abating its rate inquiry, the cities have been
promised rate design changes to be proposed to the PUC that should significantly reduce future electric
charges. The Agreement also includes certain lump sum payments by TXU to the Steering Committee.
As soon as all original jurisdiction city members of the Steering Committee ratify the Settlement Agreement,
TXU will pay $8.5 million to the Steering Committee. The Committee has decided to distribute funds back
to members by: (1) providing an amount equivalent to 25% of the total street lighting revenues collected by
TXU in 2004; (2) holding back $100,000; and (3) distributing the residual based upon per capita participation
in the Committee. Since all prior assessments have been on a per capita basis, it was believed that this manner
of distribution would be the fairest to all cities. Additional payments of $8 million are expected in 2006 and
2007.
There is no one factor that tilted the Steering Committee toward accepting a Settlement with TXU. Instead,
all of the following factors were influential:
1.
Most residential customers remain on price to beat (PTB) rates. Cost of service rate reductions cannot
be shared with PTB customers until after January 1, 2007. Neither a litigated outcome nor a settlement
will benefit PTB customers before that date.
2.
The settlement delays rather than terminates a rate review. TXU must file a statewide case on or
before July 1, 2006. The settlement provides that the Company must cooperate with cities in the
interim period before the rate filing by funding a cities' consultant to evaluate affiliate transactions of
TXU. Additionally, the Company must provide up to $2 million of reimbursement of cities' future rate
case expenses. Without the settlement, the Steering Committee would have to make assessments to
raise a comparable amount of money.
3.
Cities have been consistently treated unfairly in the cost allocation/rate design process associated with
the transition from regulated to competitive industry. This is especially true with regard to street
lighting and water pumping. The settlement guarantees that TXU will propose fixes to those tariff
problems when it files its rate case. That is particularly significant since rate design issues typically do
not receive adequate consideration in a rate case. The settlement provides specific relief to cities that
would be difficult to obtain in a rate case.
4.
TXU has agreed to provide the Steering Committee $8.5 million after approval of the Settlement
Agreement is obtained from cities. A payment of $8 million will be paid in 2006 and a third payment
in 2007 will be based on $8 million pro rata to the point of a final rate order from the Public Utility
Commission.
5.
CAPP has an extremely important legislative agenda and the potential benefit to residential citizens and
the cities where they reside from the four bills drafted by CAPP exceed benefits expected from a rate
case. It is better to postpone the rate case and concentrate current efforts on the Legislature.
RECOMMENDED ACTION: Adoption of the Resolution ratifying the Settlement Agreement. IF THE
SETTLEMENT IS APPROVED, THE CITY OF PARIS' ESTIMATED SHARE OF THE INITIAL
SETTLEMENT PROCEEDS IS $64,197.72.
DRAFT
F:ALICEIRESWORK\CURRENT\ TXU Settlement Res 2005
March 9, 2005
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS,
TEXAS, ACCEPTING A SETTLEMENT AGREEMENT WITH TXU ELECTRIC
DELIVERY AS RECOMMENDED BY THE STEERING COMMITTEE OF
CITIES SERVED BY TXU; MAKING OTHER FINDINGS AND PROVISIONS
RELA TED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of 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; and,
WHEREAS, TXU 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;
and,
WHEREAS, it remains impractical, if not impossible, to deliver rate relief to the vast majority of
residential customers until the expiration of price to beat (PTB) on January 1, 2007; and,
WHEREAS, the unfair and adverse impacts of street lighting and water pumping tariffs that Cities
have experienced since the implementation of retail deregulation on January 1, 2002, can be addressed on
an interim basis pending a final order in a future rate case through a financial distribution from the Steering
Committee of funds received from TXU Electric Delivery as part of a Settlement; and
WHEREAS, such interim relief is coupled with the Steering Committee's recognition that
resources should be devoted to the 2005 Legislative Session to promote overall enhancements in electric
retail competition for the benefit of all end-users; and,
WHEREAS, the Steering Committee and TXU Electric Delivery have entered into a Settlement
Agreement pending approval by the 20 Cities that passed show-cause resolutions and ratification by other
member cities with original jurisdiction; and,
WHEREAS, TXU Electric Delivery has agreed to improve communication, coordination and
timing of construction in rights-of-way, permit development of a tariff that will allow city mandated
underground placement of distribution facilities, modify certain franchise renewal negotiation positions,
and improve meter reading on certain city accounts that are estimated; and,
WHEREAS, TXU 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
TXU Electric Delivery has agreed to file on or before July 1, 2006; and,
WHEREAS, the aforementioned 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; 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 Settlement Agreement between the Cities' Steering Committee and TXU
Electric Delivery, attached hereto and for all purposes incorporated herein as Exhibit A, shall be and is
hereby in all things ratified.
Section 3. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 14th day of March, 2005.
Curtis Fendley, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Larry W. Schenk, City Attorney
r,.
This 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 "SigJ18tories."
WHEREAS, the city councils of 23 cities who are members of Cities passed resolutions
in 2004 requiring Electric Delivery to tile with those cities infonnation 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, other cities who are members Qf Cities are contemplating initiating similar
Show Cause Actions against Electric Delivery;
WHEREAS, Cities and Electric Delivery desire to resolve all outstanding issues related
to the existing and potential Show Cause Actions 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 ÏDfonnation
needed to design the rates described in this paragraph.
2. Electric Delivery agrees to tile a system-wide rate case at the Public Utility Commission
of Texas ("PUC") no later than July 1, 2006, based on a test year ending December 31, 2005
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, 2006, Electric Delivery will extend its
effective date to accomplish suspension by August 31, 2006. However, if Electric Delivery files
a sYStem-wide rate case at the PUC on or before June 1, 2006, then Electric Delivery will not
extend its effective date.
3. Cities agree that Electric Delivery is not required to respond to any pending Show Cause
Action initiated by any city listed on Exhibit A to this Agrcallent prior to July 1, 2006. Cities
further agree to abate or dismiss all pending Show Cause Actions, not to pursue any abated Show
Cause Actions, and not to initiate similar actions before July 1, 2006, provided the provisions of
this Settlement 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-etrorts associated with paragraph 1 or to protect the city or
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its residents ftom being prejudiced in any show cause action pending on appeal at the POCo If
Cities intervene in a show cause action Pending on appeal at the PUC, then Cities agree not to
ta1ce any position in that proceeding that is inconsistent with its obligations under this Settlement
Agreement.
4. In consideration for Cities' obligations under this Agreeiuent, Electric Delivery agrees to
make a cash payment of 58.5 million to Cities by the later of March 31,2005 or two weeks after
receiving notice ftom Cities that (1) all cities listed on Exhibit B to this Settlement Agreement
have abated or dismissed show cause actions pending against Electric Delivery, and (2) each city
on Exhibit e to this Settlement AIr_nent has passed a resolution ratifiying this Settlement
Agreement or provided to Cities a letter in substantially the same form as Exhibit D to this
Settlement Agreement that has been signed by an authorized representative of the city. Starting
March 31, 2006, and each March 31- thereafter, Electric Delivery will make an annual cash
payment of 58 million to Cities. Electric Delivery's obligation to make this payment 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 poe or
in a city rate inquiry become effective on a temporary or permanent basis ("Termination Datej;
provided, however, in the year the new tariffs become effective, the annual payment shall be
prorated until the Termination Date.
5. Electric Delivery agrees to wømc with Cities to improve the timeliness of streetlight
maintenance and to develop a procesJ 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, by June 30, 2005, 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 Settlement
Agreement by either Cities or Electric Delivery.
6. Electric Delivery agrees to work with Cities to establish improved communication,
coordination, and timing of construction concerning relocations of Electric Delivery's fàcilities
in public right of way. SigJ1atories agree to establish a task force of senior employees that will
develop, by June 30, 2005, the process and planned rollout of an improved relocation process.
Signatories agree to düigently pursue resolution of the issues discussed in this paragraph;
however, failure to reach an a&1ee.uent with respect to these issues will not constitute a breach of
this Settlement AgIeement by either Cities or Electric Delivery.
7. Electric Delivery agrees to discuss with Cities the payment of franchise fees on a
quarterly basis regardless of whether the basis for a quarterly payment is historic or proSPective
and the standardization of a ûanchise renewal process that permits transition Û"Om a prospective
basis to a historic basis where the franchise is up for renewal. Signatories agree to diligendy
pursue discussion of the issues discussed in this paragraph; however, failure to reach a resolution
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of these issues will not constitute a bæach of this Settlement Agreement by either Cities or
Electric Delivery.
8. Electric Delivery agrees to negotiate with Cities. and Cities agree to approve, a tariff that
permits Cities to request under¡roundins 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 under grounding 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 undergroundina 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 tile 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 consmner.
9. Electric Delivery agrees to provide quarterly updates to representatives designated by
Cities and their consultants conœmiDg Electric Delivery's capital expenditure projects and
affiliate transactions, the creation and regulatory treatment of a Pension and Health Benefits
Reserve fur 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.
10. Electric Delivery shall pay up to S 1 0,000 per month in regulatory expenses directly to
Cities' consultants, after receipt of appropriate documentation and invoices, provided said
expenses may be defeJTed 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
immediate! y cease.
11. Electric Delivery agrees to wolk with Cities to establish better communications between
the Cities and Electric Delivery with respect to access to city meters for monthly readin¡. Each
city shall provide in writin& by Mard131, 2005, a contact person for inaccessible meters for city
accounts, and sbaIl promptly notify Electric Delivery of any change in the contact person. In
months where a meter reader is unable to pin access to the premises to read the meter on regular
meter reading trips, or in months when meters are not read, Electric Delivery agrees to provide
the customer with a postcard and request the customer to read the meter' and relum the card to
Electric Delivery. If the postcard is not received by EleCtric Delivery in time for billing, Electric
Delivery may estim.te the meter reading and issue a bill. Electric Delivery agrees that all
municipal meters will be read at least once every three months by it or by the respective city.
The failure of a city to designate a contact person for inaccessible meters affects only that city
and does not adversely impact anyotha- city or mitipte responsibilities and benefits otherwise
inherent to this Agreement.
12. Electric Delivery agrees to reimburse Cities for the expenses incurred related to the Shuw
Cause Actions in an amount not to exceed S 1 00,000 after receipt of appropriate documentatiun
and invoices, and Cities agree that those costs can be deferred for recovery in its next rate ~
and agree to support deferral and recovery in that case. Notwithstanding any provisi\..ns in
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existing applicable Û'aDchise agreements to the contrary, Electric Delivery agrees to reimburse
Cities for reasonable and necessary expenses incutred in Electric Ddivery's next 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 Ddivcry's next rate case. Electric Delivery further agrees to pay, and
Cities agrees to accept, $150,000 in settlement of all previously disputed regulatory expenses.
Electric Delivery will not seek reimbursement of that $150,000 amount in Electric Delivery's
rates.
13. Electric Delivery agrees that, in ftanchise negotiations, it will not seek to extend the
prohibition on reimbursement of mUlÚcipal rate case expenses beyond June 2008.
14. Electric Delivery agrees that if the 2005 Texas Legislature considers the implementation
of a nodal pricing system in ERCaf, then Electric Delivery will provide infonDation to the
Legislature concerning the importance of a vibrant electric transmission system and the benefits
of the expansion of transmission facilities in helping 'to reduce congestion costs.
15. Signatories acknowledge that Electric Delivery intends to offer certain terms of this
Settlement Agr~lcnt to cities served by Electric Delivery that arc 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 Elecbir. Delivery
agrees to provide to any city during those Negotiations that arc not aJready included in this
Settlement 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
fiom Cities to Electric Delivery may be required.
16. The Signatories agree that the amounts paid by Electric Delivery to Cities pursuant to
paragraphs 4, lOt and 12 of this Agrctment are paid solely in oonsideration for Cities' abatement
or dismissal of, and forbearance ûom filing or pursuing, Show Cause Actions against Electric
Delivery and Cities' agreement to abide by the terms of this ~cement, and to reimburse Cities'
expenses associated with the Show Cause Actions and other regulatory proceetfings. 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 Aatccment. Signatories recognize and agree
that the payments specified in this A&iocment 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 cœtinue to be governed solely by the rates, terms, and
conditions of the applicable tariði.
17. Cities agree that for a ten-day period following the date this Settlement Agrecn1ent is
executed, neither Cities nor the cities listed on Exhibit A will make any public statements or take
any public action conceming the existence of a settlement or the terms of the Settlement
Agreement
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18. This Agreement shall become effective only upon the execution of this Agreement and
the entry of resolutions or orders abating or dismissing the Show Cause Actions.
19. Each person executing this Agreement represents that he or she is authorized to sign this
Agreement on behalf of the party rept eaented.
20. 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
Aareement 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.
Executed on this the 21: day of February, 2005, by the Sip.tories hereto, by and through
their uderllped duly authorized repres-tadves.
TXU Eleetrle DeHvery Company
SteerIDl Committee of Cities Served by
TXU EIeetrIe DeUvery Company on behalf
of an ddes Bated on Exhibit A to this
Agreement
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Emlbit A
City of Addison
City of Allen
C ity 0 f Alvarado
City of Andrews
City of Archer City
City of Arlington
City of BeltOD
City of Benbrook
City of Big Spring
City of Breckenridge
City of Bridgeport
City of Brown wood
City of Buftàlo
City of Burkbumett
City of Burleson
City of Caddo Mills
City of Cameron
City of Canton
City of emollton
City ofCe1iDa
City of Centerville
City of Clebume
City of Colleyville
City of Co 1IiDsviJ Ie
City of Comanche
City of Corinth
City of Crowley
City of Dallas
City of Da1 worthiqtœ
Gardeas
City of DeLeon
City of Denison
City of Early
City of Eastland
City of Bdgccliff Village
City ofBuless
City of Farmeø Branch
City of Flower Mound
City of Forest Hill
City of Fort Worth
City of Frisco
City of Frost
City of Glean Heights
City of Grand Prairie
City of Granger
City of GrapeviDe
City ofGuDter
City of Harker Heiahts
City of Heath
City ofHemietta
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 KanfnulJ1
City oflC.cller
City of Kereos
City of Lakeside
City of L-~
City ofLiDdale
City of Little RiWl" Academy
City of Luella
City ofMaJ.~ff
City ofMaDsfield
City ofMc~iTm~
City of Midland
City ofMDford
City of Murphy
City ofMurchisOD
City of New Chapel Hill
City of North RichIand Hills
City of 0 'DoDDelI
City of Oak Leaf
City of Oak Point
City of Odessa
City of Ovilla
City ofPa1estine
City ofPanteøo
City of Paris
City ofPlano
City ofRaDger
City of Rhome
City of Richardson
City ofRichland Hi11s
City oflloanoke
City ofRobiDJon
City of RDckwa1l
City oflo...
City of Rowlett
City of~n
City of Snyder
City of Soot\1þ11ce
City of Sulphur Springs
City of SuDnyvale
City of Sweetwater
City of Temple
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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
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Exhibit B
City of Arlin¡ton
City of Benbrook
City of Brown wood
City of Burleson
City of Carrollton
City of Dallas
City of DaJworthiDgton Gazdeos
City of Denison
City of Pt. Worth
City of Harker Heights
City of Heath
City of Pantego
City of PIano
City of Richlaud Inns
City of Robinson
City of Rockwall
City of Snyder
City of Sulphur Springs
City of The Colony
City of Woodway
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Exhibit C
City of Addison
City of Allen
CityofADdrews
City of Archer City
City of Belton
City ofBiø SpriDg
City of Breckemidge
City of Brid¡eport
City of Bwtbumett
City of CeliDa
City of Clebume
City of Co11eyvi1le
City of DeLeœ
City of Early
City of Bastland
City of Euless
City of Farmers Branch
City of Flower Mound
City of Forest Hin
City of Frisco
City of Glenn Heights
City of Grand Prairie
City of Grapevine
City ofHemietta
City ofmgÞ1Md Parle:
City of Howe
City of HUIIt
City of IrviDg
City ofK.e1ler
City of Lakeside
City of Lamesa
City of LiDðI1e
City of Little River Academy
C it)' of MaDsfield
City of McKhmey
City of Midland
City of Murphy
City of North lUchlAd Hills
City of Oak Point
City of O'Dolme1l
City of Odessa
City of Palestine
City of Paris
C ity of Richardson
City of Roanoke
City of Rowlett
City of Sherman
City of Sol1thl.1œ
City of Swmyvale
City of Sweetwater
City of Temple
City of Tyler
City ofUDiversity Park
City of Waco
City ofWatauga
City of White Settlement
City of Wichita Falls
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EXHIBIT D
March
, 2005
Mr. Geoffrey Gay
Lloyd Gosselink Blevins Rochelle Baldwin & Townsend, P.C.
111 Congress Avenue, Suite 1800
Austin, Texas 78701
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 Served by TXU Electric
Delivery has the authority to act on behalf of the City of in the negotiation and
execution of a settlement agreement with TXU Electric Delivery Company, dated February 22,
2005.
I also represent that I am duly authorized by the City of
to sign this letter.
Sincerely,
[Name]
[Position]