Title
Consider/Discuss/Act on a Resolution Directing Oncor Electric Delivery Company, LLC to File Certain Information Over the Rates of Oncor Electric Delivery Company, LLC
Summary
COUNCIL GOAL: Financially Sound Government
MEETING DATE: June 7, 2016
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Acting Chief Financial Officer
RECOMMENDED CITY COUNCIL ACTION:
• Approve the resolution.
ITEM SUMMARY:
- This resolution will accomplish the following objectives:
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- It requires Oncor to file actual financial and operational information for the 12-month period ending December 31, 2015, consistent with the format dictated by the PUC, to justify the reasonableness of its existing transmission and distribution rates.
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- It establishes a procedural schedule for Oncor’s filing of rate information, the City’s response and recommendation regarding Oncor’s filing, Oncor’s rebuttal to the City’s recommendation, a public hearing regarding the reasonableness of Oncor’s existing rates, and if necessary, the setting of new transmission and distribution rates to be charged by Oncor.
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- It ratifies the Steering Committee’s selection of legal counsel and affirms the oversight and direction provided by the Steering Committee for the attorneys and consultants who will analyze the reasonableness of Oncor’s existing rates, and represent the City upon related appeals.
BACKGROUND INFORMATION:
• Recent Public Utility Commission of Texas (“Commission”) proceedings related to approval of conversion of Oncor into a Real Estate Investment Trust (“REIT”) resulted in the Commissioners’ desire to share $200 million to $250 million in annual federal income tax (“FIT”) savings with Oncor ratepayers. Since the proceeding involving a change of ownership and control of Oncor was not a rate case, the Commission had no jurisdiction to order a reduction in rates. The new owners of Oncor indicated an intent to file a rate case in mid-2017 to become effective in 2018. Believing that a two year wait to factor FIT savings into rates was too long to wait, the Steering Committee of Cities Served by Oncor decided to initiate a rate case against Oncor.
FINANCIAL SUMMARY:
• To the extent permitted by law, the Steering Committee and Oncor Cities reserve the right to seek reimbursement from Oncor for rate case expenses incurred in this matter.