2011-091s:\legal\our documents\ordinances\1l\oncor-ordinance adopting settlement-final.doc
ORDINANCE NO.
2011-091
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A
SETTLEMENT AGREEMENT BETWEEN THE ALLIANCE OF ONCOR CITIES
("AOC") AND ONCOR ELECTRIC DELIVERY COMPANY LLC ("ONCOR" OR
"COMPANY") REGARDING THE COMPANY'S STATEMENT OF INTENT TO
CHANGE ELECTRIC RATES IN ALL CITIES EXERCISING ORIGINAL
JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE;
ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT
WITH THE SETTLEMENT AGREEMENT AND FINDING THE RATES TO BE SET
BY THE ATTACHED TARIFFS TO BE JUST AND REASONABLE; FINDING THE
CITY'S RATE CASE EXPENSES REASONABLE; DIRECTING ONCOR TO
REIMBURSE THE CITY ITS REASONABLE RATE CASE EXPENSES;
DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE
WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETING ACT; REPEALING
ANY PRIOR ORDINANCES INCONSISTENT WITH THIS ORDINANCE AND
REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND LEGAL
COUNSEL AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas ("City") has exclusive original jurisdiction
as a regulatory authority over Oncor Electric Delivery Company LLC's ("Oncor" or
"Company") rates, operations, and services within the City; and
WHEREAS, the City is also an electric utility customer of Oncor, and has an
interest in Oncor's rates and charges;
WHEREAS, Oncor filed a Statement of Intent with the City on or about January
7, 2011 to increase its annual revenue requirement by approximately $353 million on a
system-wide basis, which included an increase in residential base rates of approximately
15%, and in Lighting rates of approximately 26%; and
WHEREAS, the City took action to suspend the effective date and to coordinate a
response to Oncor's filing with other similarly situated municipalities (such participating
cities are referred to herein as Alliance of Oncor Cities ("AOC")); and
WHEREAS, the City took action on or before February 14, 2011 to suspend the
effective date; and
WHEREAS, AOC's desire to minimize rate-case expenses that would result from
a lengthy contested rate case proceeding before the Public Utility Commission of Texas
("PUCT") and through the appellate process; and
WHEREAS, AOC authorized its attorneys and experts to formulate and review
reasonable settlement positions to resolve the pending rate increase request; and
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WHEREAS, AOC's attorneys met numerous times with the Company to
negotiate a Settlement Agreement resolving the issues raised in the Company's Statement
of Intent filing; and
WHEREAS, after extensive review and analysis, AOC's attorneys and experts
found that Oncor's proposed increase in revenue and its proposed rates are unreasonable;
and
WHEREAS, AOC's attorneys and experts have evaluated what a likely outcome
from a fully-litigated proceeding would be and are of the opinion that the increase of
approximately $136.7 million noted in the negotiated Settlement Agreement compares
favorably with a likely outcome from a fully-litigated proceeding; and
WHEREAS, after extensive review and analysis, AOC's attorneys and experts
found that the significantly lower increase of approximately $136.7 million set forth in
the Settlement Agreement instead of the $353 million increase is reasonable; and
WHEREAS, AOC's attorneys and experts recommend that AOC's members
approve the negotiated Settlement Agreement and attached tariffs; and
WHEREAS, the City as a member of AOC has incurred rate-expenses in the
collective amount of $315,919.26 which includes $225,919.26 in actual expenses through
March 31, 2011 and $90,000.00 in estimated expenses through July 1, 2011 for rate
proceedings involving Oncor, including the proceeding to address Oncor's rate case
expenses and the appeal of the Public Utility Commission's final order in Docket No.
35717, are hereby found to be reasonable; and
WHEREAS, under the Public Utility Regulatory Act, the City has a right to
reimbursement of its reasonable rate-case expenses and Oncor has an obligation to
reimburse the City's reasonable rate-case expenses; and
WHEREAS, because the final amount of rate case expenses to be reimbursed
cannot be know until conclusion of Oncor's rate case proceeding and related proceedings
before the PUCT, the final amount of rate case expenses will be subject to adjustment to
reflect the actual amount of rate expenses incurred; and
WHEREAS, the attached tariffs implementing new rates are consistent with the
Settlement Agreement and are just, reasonable, and in the public interest; and
WHEREAS, the Settlement Agreement as a whole is in the public interest. NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set out in the preamble are in all things approved and
incorporated herein as if fully set forth.
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SECTION 2. The City Council finds that the Settlement Agreement, which is
attached hereto and incorporated herein as Attachment A, is in the public interest and is
hereby endorsed in all respects.
SECTION 3. The revenue and resulting rates set forth in the Settlement
Agreement and schedule of rates and tariffs for electric service provided by Oncor, which
are attached hereto and incorporated herein as Attachment A, are just and reasonable, and
are hereby adopted.
SECTION 4. The AOC's rate-expenses in the amount of $315,919.26, are
hereby found to be reasonable and that Oncor is hereby directed to reimburse ADC's rate
case expenses within thirty days from adoption of this Ordinance and that Oncor is
hereby authorized to recover through the rates approved by this Ordinance, the amount of
rate case expenses found reasonable, subject to adjustment to reflect the actual expenses
ultimately incurred, including any related proceedings that addresses rate-case expenses.
SECTION 5. To the extent any resolution or ordinance previously adopted by
the Council is inconsistent with this Ordinance, it is hereby repealed.
SECTION 6. The meeting at which this Ordinance was approved was in all
things conducted in strict compliance with the Texas Open Meetings Act, Texas
Government Code, Chapter 551.
SECTION 7. If any one or more sections or clauses of this Ordinance is
adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or
invalidate the remaining provision of this Ordinance and the remaining provisions of the
Ordinance shall be interpreted as if the offending section or clause never existed.
SECTION 8. This Ordinance shall become effective from and after its passage
with rates authorized by the attached tariffs to be effective for service delivered on or
after the earlier of thirty (30) days after a final written order of the Public Utility
Commission of Texas approving rates consistent with the Stipulation or July 1, 2011.
SECTION 9. A copy of this Ordinance shall be sent to the Company, care of
Don J. Clevenger, Oncor Electric Delivery Company LLC, 1601 Bryan Street, Suite 22-
070, Dallas, Texas 75201-3411 and to Mr. Alfred R. Herrera, Herrera & Boyle, PLLC,
816 Congress Ave., Suite 1250, Austin, Texas 78701.
PASSED AND APPROVED this nth day of , 2011.
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
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ANITA BURGESS, CITY ATTORNEY