Title
Consider/Discuss/Act on a Resolution of the City Council of the City of McKinney, Texas Finding That Oncor Electric Delivery Company LLC’s (“Oncor” or “Company”) Application to Change Rates Within the City Should be Denied; 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
Summary
COUNCIL GOAL: Financially Sound Government
MEETING DATE: October 18, 2022
DEPARTMENT: City Manager’s Office
CONTACT: Trevor Minyard, Director of Strategic Services
RECOMMENDED CITY COUNCIL ACTION:
• Approval of Resolution
ITEM SUMMARY:
• On May 13, 2022, Oncor Electric Delivery Company LLC (“Oncor” or “Company”) filed an application with cities retaining original jurisdiction seeking to increase system-wide transmission and distribution rates by about $251 million or approximately 4.5% over present revenues.
• The Company asks the City to approve an 11.2% increase in residential rates and a 1.6% increase in street lighting rates. The impact of this requested increase on an average residential customer using 1,300 kWh/month would be about $6.02 per month.
• In a prior City action, Oncor’s rate request was suspended from taking effect for 90 days, the fullest extent permissible under the law. This time period has permitted the City, through its participation with the Steering Committee of Cities Served by Oncor (“Steering Committee”), to determine that the proposed rate increase is unreasonable. Consistent with the recommendations of the experts engaged by the Steering Committee, Oncor’s request for a rate increase should be denied.
• Accordingly, the purpose of the Resolution is to deny the rate change application proposed by Oncor. Once the Resolution is adopted, Oncor will have 30 days to appeal the decision to the Public Utility Commission of Texas where the appeal will be consolidated with Oncor’s filing (i.e. PUC Docket No. 53601) currently pending at the Commission.
• All cities with original jurisdiction will need to adopt the Resolution prior to October 30, 2022.
BACKGROUND INFORMATION:
• The City, is a member of a 169-city coalition known as the Steering Committee of Cities Served by Oncor ("Steering Committee"). The Steering Committee has been in existence since the late 1980s. It took on a formal structure in the early 1990s when cities served by the former TXU 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 the primary public interest advocate before the Public Utility Commission, the Courts, and the Legislature on electric utility regulation matters for the last 30 years.
FINANCIAL SUMMARY:
• Current filing from Oncor anticipates an increase to transportation and distribution rates of $251 million across the system, equating to a roughly 11% increase to customers.
BOARD OR COMMISSION RECOMMENDATION:
• N/A