To: Mark R. Hafner, City Manager
From: Lupe Orozco, Administrative Services Manager
Subject:
Title
Consider a resolution of the City of Keller, 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 the resolution to the company and legal counsel.
Action Requested:
Consider a resolution denying the application from Oncor Electric Delivery Company LLC to change rates within the City of Keller; finding that the city’s reasonable rate case expenses shall be reimbursed by Oncor; finding that the meeting at which this resolution is passed is open to the public as required by law; requiring notice of the resolution to the company and legal counsel.
Background:
The City of Keller, along with over 150 other cities served by Oncor Electric Delivery Company LLC (“Oncor” or “Company”) is a member of 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 previously served by TXU Energy 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.
On May 13, 2022, Oncor filed an application with the city to increase system-wide transmission and distribution rates by $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 kWk/month would be about $6.02.
The Steering Committee is coordinating its review of Oncor’s application and working with the designated attorneys and consultants to resolve issues in the Company’s filing. Through review of the application, the Steering Committee’s consultants determined that Oncor’s proposed rates are excessive. The Steering Committee’s members and attorneys recommend that members deny the application.
Financial Impact:
The rates proposed by Oncor to be recovered through its electric rates charged to customers located within city limits, are hereby found to be unreasonable and shall be denied.
The Company shall continue to charge its existing rates to customers within the city.
The city’s reasonable rate case expenses shall be reimbursed in full by Oncor within 30 days of the adoption of this resolution.
Citizen Input/Board Review:
Not applicable
Legal Review:
The proposed resolution has been reviewed and submitted by the Oncor Cities Steering Committee (OCSC) general counsel at Lloyd Gosselink Rochell & Townsend.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
Staff recommends approval of resolution as presented.