21-967ORDINANCE NO. 21-967
AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME-RULE MUNIC'IPAL
CORPORATION, DENYnqG THE DISTRIBUTION COST RECOVERY FACTOR RATE
REQUEST OF ONCOR ELECTRIC DELIVERY COMPANY LLC MADE ON OR ABOUT
APRIL 8, 2021; AUTHORIZHqG PARTICEPATION IN A COALITION OF Sn4iLARLY
SITUATED CITIES; AUTHORIZING PARTicmATioN IN RELATED RATE
PROCEEDINGS; REQUIRING THE REHv£BURSEMENT OF MUNICIPAL RATE CASE
EXPENSES; AUTHORIZING THE RETENTION OF SPECIAL COUNSEL; FNDING THAT
THE MEETING COMPLIES WITH THE TEXAS OPEN MEETINGS ACT; MAKING OTHER
FRVDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, on about April 8, 2021, Oncor Electric Delivery Company LLC (“Oncor”)
filed an application for approval to amend its Distribution Cost Recovery Factor (“DCRF“) with
the City of Denton (the “City”) that will increase Oncor’s rates effective September 1, 202 1; and
WHEREAS, the City is a regulatory authority under the Public Utility Regulatory Act
(“PURA”) and under Chapter 33, §33.001 et seq. of PURA has exclusive original jurisdiction over
Oncor’s rates, operations, and services within the municipality, and specifically over its requested
amendment to its DCRF under Chapter 36, §36.210; and
WHEREAS, Oncor seeks to include in rates a profit related to its incremental investment
in distribution assets it has made from January 1, 2020 through December 3 1, 2020; and
WHEREAS, the inclusion ofOncor’s profit on its investment in distribution assets in rates
has the effect of increasing Oncor’s revenue requirement by approximately $97.83 million; and
WHEREAS, the jurisdictional deadline for the City to act in this rate matter is 60 days from
the application date, or June 7, 2021; and
WHEREAS, the City will require the assistance of specialized legal counsel and rate
experts to review the merits ofOncor’s application to increase rates; and
WHEREAS, in order to maximize the efficient use of resources and expertise in reviewing,
analyzing and investigating Oncor’s rate request, it is prudent to coordinate the City’s efforts with
a coalition of similarly situated municipalities; and
WHEREAS, the City, in matters regarding applications by Oncor to change rates, has in
the past joined with other local regulatory authorities to form the Alliance ofOncor Cities (“AOC”)
and hereby continues its participation in AOC; and
WHEREAS, Oncor simultaneously filed an application for approval of an amendment to
its DCRF with the Public Utility Commission of Texas, and therefore the decision of the Public
Utility Commission of Texas will have an impact on the rates paid by the City and its citizens who
are customers in Oncor’s service territory, and in order for the City’s participation to be
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meaningful, it is important that the City promptly intervene in such proceeding at the Public Utility
Commission of Texas; and
WHEREAS, Oncor failed to show that its proposed rate change is reasonable and therefore
the City has concluded that Oncor’s proposed rate change is unreasonable; NOW THEREFORE,
THE COUNCL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this Ordinance are
in all things approved and incorporated herein by reference.
SECTION 2. The rate change Oncor requested on or about April 8, 2021 is hereby
DENIED.
SECTION 3. Intervention in proceedings related to Onoor’s application for approval of
its DCRF before the Public Utility Commission of Texas and related proceedings in courts of law
as part of the coalition of cities known as the Alliance of Oncor Cities (“ AOC”), including any
appeal of the City’s decision on rates, is hereby authorized.
SECTION 4. Oncor is hereby ordered to reimburse the City’s rate case expenses as
provided in the Public Utility Regulatory Act and Oncor shall do so on a monthly basis and within
30 days after submission of the City’s invoices for the City’s reasonable costs associated with the
City’s activities related to this rate review or to related proceedings involving Oncor before the
City, the Public Utility Commission of Texas, or any court of law, including any appeal of the
City’s decision on rates; and receipt of such reimbursement directly or indirectly by the City, by a
representative of the AOC on behalf of the City or by legal counsel and experts in payment of
services rendered in connection with such rate review or related proceedings is hereby authorized.
SECTION 5. Subject to the right to terminate employment at any time, the retention of
the law firm of Herrera Law & Associates, PLLC to act as Special Counsel with regard to rate
proceedings involving Oncor before the City, the Public Utility Commission of Texas, or any court
of law, including any appeal of the City’s decision on rates, and to retain such experts as may be
reasonably necessary for review of Oncor’s rate application is hereby authorized.
SECTION 6. The City Manager, or their designee, through the City’s participation in
AOC, shall review the invoices of the lawyers and rate experts for reasonableness before
submitting the invoices to Oncor for reimbursement.
SECTION 7. The City Manager, or their designee, is hereby directed to send a copy of
this Ordinance to Oncor Electric Delivery Company, LLC, care of Mr. J. Michael Sherburne,
Oncor Electric Delivery Company LLC, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202;
and to Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC, 4524 Burnet Road, Austin, Texas
78756
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SEC llC)IN 3. It rs hereby louna ana cleterrnrnea that the rneetrng at WhICh thIS Or<]lnance
is passed and approved is in all things conducted in strict compliance with the Texas Open
Meetings Act, Texas Government Code, Chapter 551.
SECTION 9. This Ordinance supersedes any prior inconsistent or conflicting resolution
r ordinance.
SECTION 10. This Ordinance shall become effective immediately upon its passage and
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approval.
s e c o n d IEy 1r%t:I? ?(;f: P P&v :: F) r d i n a n c e vr a s Ir= aRe?) r:? :ileein::f=fapprove / I
the following vote U - O ]:
Aye Nay Abstain Absent
Gerard Hudspeth, Mayor: /
Vicki Byrd, District 1 : /
Brian Beck, District 2: J_
Jesse Davis, District 3 : a
Alison Maguire, District 4: a
Deb Armintor, At Large Place 5: /
Paul Meltzer, At Large Place 6: /
PASSED AND APPROVED this the _day of N\o-\
.- Z;(
l
GERARD HUDSPETH, MAYOR
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ATTEST:
ROSA RIOS, CITY SECRETARY
BY: . /G/% bJ#?x2wP
APPROVED AS TO LEGAL FORM
AARON LEAL, CITY ATTORNEY
BY:4MhMt
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