From
Mark Dempsey, Deputy City Attorney
Title
Resolution to deny Oncor's Application to Amend its Distribution Cost Recovery Factor (DCRF) to Increase Distribution Rates
Presenter
Mark Dempsey, Deputy City Manager
Recommended Action
Adopt the resolution denying the Oncor DCRF
Analysis
The City is an electric utility customer of Oncor Electric Delivery Company LLC ("Oncor" or "Company"). The Oncor Cities Steering Committee ("OCSC") is a coalition of similarly situated cities served by Oncor that have joined together to efficiently and cost effectively review and respond to electric issues affecting rates charged in Oncor's service area in matters before the Public Utility Commission ("PUC" or "Commission") and the courts.
On April 3, 2020, Oncor filed an application to Amend its Distribution Cost Recovery Factor ("DCRF") with each of the cities retaining original jurisdiction and with the Commission in Docket No. 50734. In the filing, the Company sought to increase distribution rates by $75.9 million annually (an approximately $0.88 increase to the average residential customer's bill).
The resolution authorizes the City to join with OCSC to evaluate the filing, determine whether the filing complies with law, and if lawful, to determine what further strategy, including settlement, to pursue.
Purpose of Resolution:
The purpose of the Resolution is to deny the DCRF amendment proposed by Oncor.
Explanation of "Be it Ordained" Section:
1. This section authorizes the city to participate with OCSC as a party in the Company's DCRF filing in PUC Docket No. 50734.
2. This section authorizes the hiring of Lloyd Gosselink and consultants to review the filing, negotiate with the Company, and make recommendations to the City regarding reasonable rates. It also authorizes OCSC to direct any necessary administrative proceedings or court litigation associated with an appeal of this application filed with the Commission.
3. This paragraph finds that the Company's application is unreasonable and should be denied.
4. This section states that the Company's current rates shall not be changed.
5. The Company will reimburse OCSC for its reasonable rate case expenses. Legal counsel and consultants approved by the OCSC will submit monthly invoices that will be forwarded to Oncor for reimbursement.
6. This section merely recites that the resolution was passed at a meeting that was open to the public and that the consideration of the Resolution was properly noticed.
7. This section provides that Oncor and counsel for OCSC will be notified of the City's action by sending a copy of the approved and signed resolution to counsel.
This item will be reviewed by the Finance and Government Committee on May 5, 2020.
Financial Consideration
NA
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, FINDING THAT ONCOR ELECTRIC DELIVERY COMPANY LLC'S APPLICATION FOR APPROVAL TO AMEND ITS DISTRIBUTION COST RECOVERY FACTOR TO INCREASE DISTRIBUTION RATES WITHIN THE CITY SHOULD BE DENIED; AUTHORIZING PARTICIPATION WITH ONCOR CITIES STEERING COMMITTEE; AUTHORIZING THE HIRING OF LEGAL COUNSEL AND CONSULTING SERVICES; FINDING THAT THE CITY'S REASONABLE RATE CASE EXPENSES SHALL BE REIMBURSED BY THE COMPANY; FINDING THAT THE MEETING AT WHICH THIS RESOLUTION IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; REQUIRING NOTICE OF THIS RESOLUTION TO THE COMPANY AND LEGAL COUNSEL
Whereas, the City of Grand Prairie, Texas ("City") is an electric utility customer of Oncor Electric Delivery LLC ("Oncor" or "Company"), and a regulatory authority with an interest in the rates and charges of Oncor; and
Whereas, the Oncor Cities Steering Committee ("OCSC") is a coalition of similarly situated cities served by Oncor that have joined together to efficiently and cost effectively review and respond to electric issues affecting rates charged in Oncor's service area in matters before the Public Utility Commission ("Commission") and the courts; and
Whereas, on or about April 3, 2020, Oncor filed with the Commission an Application to Amend its Distribution Cost Recovery Factor ("DCRF"), Commission Docket No. 50734, seeking to increase distribution rates by $75.9 million annually (an approximately $0.88 increase to the average residential customer's bill); and
Whereas, the City of Grand Prairie will cooperate with OCSC in coordinating their review of Oncor's DCRF filing with designated attorneys and consultants, prepare a common response, negotiate with the Company, and direct any necessary litigation, to resolve issues in the Company's filings; and
WHEREAS, all electric utility customers residing in the City will be impacted by this ratemaking proceeding if it is granted; and
WHEREAS, working with the OCSC to review the rates charged by Oncor allows members to accomplish more collectively than each city could do action along; and
WHEREAS, OCSC's members and attorneys recommend that members deny Oncor's DCRF.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of GRAND PRAIRIE, Texas that:
Section 1. That the City is authorized to participate with OCSC in Commission Docket No. 50734.
Section 2. That, subject to the right to terminate employment at any time, the City of Grand Prairie hereby authorizes the hiring of the law firm of Lloyd Gosselink Rochelle & Townsend, P.C. and consultants to negotiate with the Company, make recommendations to the City regarding reasonable rates, and to direct any necessary administrative proceedings or court litigation associated with an appeal to Oncor's DCRF application.
SECTION 3. That the rates proposed by Oncor to be recovered through its DCRF charged to customers located within the City limits, are hereby found unreasonable and shall be denied.
SECTION 4. That the Company shall continue to charge its existing rates to customers within the City.
SECTION 5. That the City's reasonable rate case expenses shall be reimbursed in full by Oncor within 30 days of the adoption of this Resolution.
SECTION 6. That it is hereby officially found and determined that the meeting at which this Resolution is passed is open to the public as required by law and the public notice of the time, place, and purpose of said meeting was given as required.
SECTION 7. That a copy of this Resolution shall be sent to Tab Urbantke, Attorney for Oncor, at Hunton Andrews Kurth LLP, 1445 Ross Avenue, Suite 3700, Dallas, Texas 75202, and to Thomas Brocato, General Counsel to OCSC, at Lloyd Gosselink Rochells # Townsend, P.C., P.O. Box 1725, Austin, TX 78767-1725, or tbrocato@lglawfirm.com.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, MAY 5, 2020.