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Home My WebLink AboutResolution 3316-02-2006RESOLUTION NO 3316-02-2006 CONTINUING ABATEMENT OF RATEMAKING PROCEEDING AND APPROVING EXTENSION AND MODIFICATION OF SETTLEMENT AGREEMENT AND AGREEMENT TO RESOLVE OUTSTANDING FRANCHISE ISSUES BETWEEN TXU ELECTRIC DELIVERY COMPANY AND STEERING COMMITTEE OF CITIES SERVED BY TXU ELECTRIC DELIVERY COMPANY WHEREAS, on September 7 2004 the City of Fort Worth ("City"), acting under rts original jurisdiction to regulate electric transmission and distribution utilities and as a member of the Steering Committee of Cities served by TXU Electric Delivery Company ("Steering Committee '), adopted Resolution No 3119 requiring TXU Electric Delivery Company ("Electric Delivery") to show cause why its rates should not be reduced, and WHEREAS, nineteen (19) other member cities of the Steering Committee adopted similar show-cause resolutions, and WHEREAS, Electric Delivery and the Steering Committee engaged m settlement discussions that led Electric Delivery and the Steering Committee to enter into a Settlement Agreement (the `Settlement Agreement") that compensated Steering Committee member cities for their alleged excess costs associated with street hghtmg and water pumping electricity charges m exchange for an abatement of the ratemaking proceedings initiated by the Steering Committee member cities, and WHEREAS, the City approved the Settlement Agreement on April 19 2005 pursuant to Resolution No 3194-04-2005 and WHEREAS, Electric Delivery now desires to extend the abatement of the ratemakmg proceedings initiated by the Steering Committee member cities m exchange for extended monetary payments to the Steering Committee member cities, as originally set forth m the Settlement Agreement, and for certain additional benefits to the Steering Committee member cities, and WHEREAS, worlcmg through rts consultants and legal counsel, the Steering Committee has negotiated with Electric Delivery the attached Extension and Modification of Settlement Agreement (the Amended Settlement Agreement") pursuant to which Electric Delivery m addition to continuing payments as originally set forth m the Settlement Agreement, will also pay the Steering Committee member cities certain annual payments for beneficial public use, as determined by those Steering Committee member cities, as well as additional reimbursements for participation by the Steering Committee m proceedings before the Electric Rehabilrty Council of Texas (ERGOT) and other market development activities, and 44!'""x!` ~~'" ~'~~'~' ~~~ Resolution No. 331(-02-2006 WHEREAS, working through its consultants and legal counsel, the Steering Committee has negotiated with Electric Delivery the attached Agreement to Resolve Outstanding Franchise Issues (the `Franchise Related Agreement) pursuant to which Electric Delivery will increase franchise fee factors over a four (4)-year period, which will result to increased franchise fee revenues for each Steering Committee member crty• and WHEREAS, the Steering Committee s consultants and legal counsel have advised the Steering Committee that current electric market constraints make it impractical to pass potential benefits of rate reductions that could accrue as a result of the Steering Committee member cities' ratemalang proceedings due to current `price to beat" rate regulations, which apply to most residential customers, and that rate reductions by competitive retail electric providers may not apply to the minority of consumers who have switched to electricity service from such providers unless their specific contract for serv~ce,requires a pass-through of such rate reductions, and WHEREAS, accordingly the Steering Committee has recommended that its member cities approve and ratify the Amended Settlement Agreement and the Franchise Related Agreement, as both will provide for immediate and long-term benefits to the Steering Committee member cities, which, m turn, will have indirect, but positive, benefits to all city residents, and WHEREAS, as part of the Settlement Agreement and Amended Settlement Agreement, Electric Delivery has also committed to share information on certain company operations and procedures that should enhance the member cities ability to appropriately exercise regulatory responsibilities mthe rate proceeding that rt is anticipated Electric Delivery will file on or before July 1 2008 (extended from July 1 2006 in accordance with the Amended Settlement Agreement) NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, 1 That the rate case proceeding imtiated against TXU Electric Delivery Company pursuant to Resolution No 3119 is hereby further abated, and no rate case filing will be expected from TXU Electric Delivery Company before July 1 2008 2. That the Extension and Modification of Settlement Agreement and the Agreement to Resolve Outstanding Franchise Issues between the Steering Committee and TXU Electric Delivery Company attached.~ereto, are hereby approved and ratified. APPROVED CITY COUl~CIL Adopted tlis 28th day of February 2006 FEB 2 R 2006 ~~~ City Secretary of the City of Fort Worth, Texas ~e~ ~ ~7~!' ~ i 7Y ~il~~~ AGREEMENT TO RESOLVE OUTSTANDING FRANCHISE ISSUES This Agreement To Resolve Outstanding Franchise Issues ("Agreement") is made and entered into between TXU Electric Delivery Company ("Electnc Delivery") and the Steering Committee of Cities Served by TXU Electnc Delivery Company on behalf of all cities listed on Exhibit A to this Agreement ("Cities"), hereinafter referred to jointly herein as `Signatories. The cities listed on Exhibit A to this Agreement are hereinafter referred to as `Member Cities. WHEREAS several Member Cities have expressed concern about the increasing cost and complexity of managing utilities m public rights-of way and the desire to receive increased compensation from utilities for their use of such rights-of way WHEREAS several Member Cities who receive their franchise fee payments from Electnc Delivery on a prospective yearly basis have expressed interest in transrtiomng to prospective quarterly payments, WHEREAS the Signatories desire to resolve outstanding issues related to franchises, and WHEREAS, after extensive negotiations, the Signatories have reached a resolution of those issues. NOW THEREFORE, the .Signatories, through their undersigned representatives, hereby agree to the following: 1 The Signatories agree that this Agreement shall become effective only upon the execution of this Agreement and of the Extension and Modification of Settlement Agreement between the Signatories dated January ~, 2006 The effectiveness of this Agreement shall be accomplished pursuant to the terms of paragraphs 4 and 19 of the Extension and Modification Settlement Agreement. 2 To recognize the increasing cost and complexity of managing utilities m public rights-of way Electric Delivery agrees to increase the franchise fee factor for each Member City on January 1 2006, by 2%. The franchise fee factor is the amount per kilowatt hour which is multiplied times the number of kilowatt hours of electricity delivered by Electnc Delivery to each retail customer whose consuming facility's point of delivery is located within the Member City's municipal boundaries. Electnc Delivery will also increase the franchise fee factor to be paid to the Member Cities an additional 1 % on January 1 2007 on January 1 2008 and on January 1 2009 for a total potential increase of 5% above the franchise fee factor in effect on December 31 2005 Exhibit B to thus Agreement reflects the franchuse fee factors m effect for all Member Cities m 2005 and the increased franchise fee factors for Member Cities provided by this paragraph for 2006, 2007 2008, and 2009 3 Electnc Delivery's obligation to increase its franchise fee payments to reflect the increased franchise fee factors described in paragraph 2 ceases on the date upon which. (1) Electnc Delivery is called in for a rate case by any municipality (2) a proceeding concerning Electric Delivery's rates is initiated under Subchapters C or D of the Public Utility Regulatory Page 1 Act, Tex. Util Code Title 2 ("PURR') Chapter 36 (3) a proceeding affecting Electric Delivery's rates is initiated as a result of a settlement; or (4) legislation becomes effective that modifies the franchise fee authorized by PURR. 4 The Signatories agree that if the Public Utility Commission of Texas denies recovery in Electric Delivery's rates of the fees associated with the increased franchise fee factors described m paragraph 2, then the franchise fee factors immediately revert to the franchise fee factors in effect on December 31 2005 Electric Delivery will not seek to impose a refund or credit obligation on Member Cities for franchise fees already paid under the increased franchse fee factors. 5 Electric Delivery agrees to amend its existing franchise agreements with those Member Cities who receive their annual franchise fee payments from Electric Delivery on a prospective basis, and who wish to receive franchise fee payments on a quarterly basis, to reflect the following points. Implementation of this amendment will be at each eligible Member City's option. Exhibit C is a list of Member Cities who are eligible to take advantage of this provision. For the purposes of this Agreement, `privilege period" is the period during which Electric Delivery will have the right to use the public rights-of way to deliver electricity to a retail customer `Basis period" is the period during which kWh delivered to each retail customer whose consuming facility's point of delivery is located within the Member City s municipal boundaries is used for the payment calculation. (a.) In calendar year 2006, the annual payment to be made by Electric Delivery to the eligible Member Cities will be paid m full on the date required by the applicable franchise agreement. (b) Electric Delivery agrees to amend the franchise of eligible Member Cities to make quarterly payments on a prospective basis in lieu of the annual prospective payments as follows (i.) A quarterly payment schedule will be established with the first quarterly payment due three months after the 2006 annual payment date in the existing franchise. (ii.) If the franchise amendment reflecting this Agreement is not effective prior to the first quarterly payment date, Electric Delivery will pay any quarterly payments due within 30 days of the effective date of the amendment. Subsequent payments will be made m accordance with the schedule established in the franchise amendment. (iii) The basis period used m determining the first quarterly payment will be the three-month period immediately following the end of the basis period designated in the existing franchise agreement that corresponds to the last annual payment made in 2006 The basis period used in determining each subsequent quarterly payment will be the subsequent three-month period. Page 2 ~:... (iv) The privilege period covered by the first quarterly payment will be the three-month period immediately following the end of the privilege period designated m the existing franchise agreement that corresponds to the last annual payment made in 2006 The privilege period for each subsequent quarterly payment will be the subsequent three-month period. (c.) For an eligible Member City that chooses to amend its franchise agreement with Electric Delivery in this manner Electric Delivery will cease to make annual franchise fee payments after December 31 2006 (d.) In no instance will Electric Delivery agree to payment provisions that would require payment for the same privilege period twice. (e.) The franchise amendment must extend the term of the amended franchise agreement for at least five years beyond its current expiration date. (f.) Since the quarterly franchuse payments will correspond to a privilege period that is more than 12 months beyond the date of the payment, no franchise payments will be made during the final year of the franchise term unless the franchise is extended as set out herein. The amended franchise agreement will include a provision allowing Electric Delivery to elect to make one or more quarterly payments during the final year of the franchise term that will prepay in full the corresponding number of quarterly franchise periods that extend beyond what would otherwise be the term of the franchise agreement. The amended franchise agreement will include a provision requiring that any subsequent franchise agreement must recogmze that any quarterly payments made during the final year of the amended franchise agreement term constitute full payment for the relevant quarterly franchise periods. (g.) Unless the existing franchise agreement is due to expire within 12 months of the date this Agreement is ratified, no other changes to the franchise will be included as part of this franchise amendment. If the existing franchise agreement is due to expire within 12 months of the date this Agreement is ratified, the parries ability to negotiate other provisions of the franchise at the time the franchise is amended to accommodate this Agreement is not so limited. 6 Each person executing this Agreement represents that he or she is authorized to sign this Agreement on behalf of the party represented. 7 The Signatories expressly acknowledge and agree that oral and written statements made by any party or its representative during the course of the negotiations that led to this Agreement cannot be used or portrayed as an admission or concession of any sort and shall not be admissible as evidence in any proceeding in any forum. Page 3 Executed on this the 277hday of January, 2006, by the Signatories hereto, by and through their undersigned duly authorized representatives. TXU Electric Delivery Company Steering Committee of Cities Served by TXU Electric Delivery Company on behalf of all cities listed on Exhibit A to this Agreement Its. ~lC.~ 11~--~'~ _ By' ~~ ~ ~ Its. ('~,,~ ~r Page 4 Exhibit A City of Addison City of Highland Park City of Allen City of Honey Grove City of Alvarado City of Howe City of Andrews City of Hurst City of Archer Ctty City of Hutto City of Arlington City of Irving City of Belton City of Jolly City of Benbrook City of Josephine City of Big Spring City of Justin City of Breckenridge City of Kaufman City of Bridgeport City of Keller City of Brownwood City of Kerens City of Buffalo Ctty of Lakeside City of Burkburnett City of Lamesa City of Burleson City of Lmdale City of Caddo Mills City of Little River Academy City of Cameron Ctty of Malakoff City of Canton City of Mansfield City of Carrollton City of McKinney City of Celina City of Midland City of Centerville City of Murphy City of Cleburne City of Murchison City of Colleyville City of New Chapel Hill City of Collinsville City of North Richland Hills City of Comanche City of O'Donnell City of Corinth City of Oak Leaf City of Crowley City of Oak Point City of Dallas City of Odessa City of Dalworthington Ctty of Ovilla Gardens City of Palestine City of DeLeon City of Pantego City of Denison City of Paris City of Early City of Plano City of Eastland City of Ranger City of Edgecliff Village City of Rhome City of Euless City of Richardson City of Farmers Branch City of Richland Hills City of Flower Mound City of Roanoke City of Forest Hill City of Robinson City of Fort Worth City of Rockwall City of Frisco City of Rosser City of Frost Ctty of Rowlett City of Glenn Heights City of Sherman City of Grand Prairie City of Snyder City of Granger City of Southlake City of Grapevine City of Sulphur Springs City of Gunter City of Sunnyvale City of Harker Heights City of Sweetwater City of Heath City of Temple City of Henrietta City of The Colony City of Hewitt Ctty of Tyler City of University Park City of Venus City of Waco City of Watauga City of White Settlement City of Wichita Falls City of Woodway Exhibit B 1 Addison 0.0025441 0.0025951 0.0026201 0.0026461 0.002671 2 :Allen 0.002794 .... ..................................................................... ................ . . . 0.002850 .. ......... ... .. 0.002878 0.002906 0.002934 3 . . .. . .Alvarado 0.003096 .... .................... . . 0.003158 ......................................... 0.003189 ................... .. 0.003220 ............... ...... 0.003251 4 'Andrews 0.003145 0.003208 0.003239 _ 0.003271 0.003302 5 ;Archer City 0.003274 ......... ................ ...... 0.003339 . . . 0 003372 0.003405 0.003438 . . 6 :Arlington 0.002766 ..... . ................................. 0.002821 .......................................... 0.002849 .......................................... 0.002877 ......................................... 0.002904 7 :Belton 0.003115 .... .... .... ................................ ... .. .....:.. . . . 0.003177 0.003208 0.003240 0.003271 8 e : . .. .. . ........... ........... ...... ;B nbrook 0.003002 .................................... 0.003062 .............. 0.003092 .............. 0.003122 0.003152 . Bi rin 0.002670 9 9 p 9 ~ 0.002723 0.002750 0.002777 002804 0 .... ........ .... ..... ............................... .................................. 10 :Breckenridge 0.002251 .......................................... 0.002296 .........................................: 0.002319 .......................................... 0.002341 . : .. 0.002364 .,.11 ':Brid~eport .............. : 0.002547 0:002598 0.002623 0.002649 0.002674 _.,.......,. 12 Brownwood 0.003069 ,,.,..... _ 0.003130 ......,,..,,,,,.,.., .. 0.003161 ............... ... ....................... 0.003192 ,.....,..,.. ....... ........ 0 003222 13 ;Buffalo 0.003133 ........... ....................... .. . s 0.003196 0.003227 0 003258 0.003290 ........................ . ... .................................. : 14 :Burkburnett 0 003003 ................................... ....... 0.003063 .. ........................................ 0.003093 .......................................... 0.003123 .......................................... 0.003153 15 :Burleson 0.002976 ....... .. .. .. ~~~ 0 003036 0.003065 0.003095 0.003125 .. . . ...........`~~~~~~~~~~~~~~0.003418 16 :Caddo Mills .....................0.003486 ~~~~~~~~~~~~~~~~~~~~~0.003521 ~~~~~~~~~~~~~~~~~~~~~0.003555 ~~~~~~~~~~~~~~~~~~~~~0.003589 17 :Cameron 0.002873 0.002930 0.002959 0.002988 0.003017 18 Canton 0.003216 .. L.. ... ..................................j.. ........ 0.003280 .............. . 0.003312 0.003345 0.003377 19 :Carrollton 0.002695 . 0.002749 ................ 0.002776 ................ 0.002803 ............... 0.002830 20 Celina 0.003200 0.003264 0.003296 0.003328 0.003360 21 :Centerville 0.003150 0.003213 0;003245 0.003276 0.003308 22 :Cleburne 0.002354 . 0.002401 . 0.002425 0.002448 ....... 0.002472 23 Colle ille 0.002984 0.003044 .......................... 0 003074 .......................................... 0.003103 .......................................... 0.003133 24 ;Collinsville 0.003212 0.003276 0:003308 0.003340 0.003373 25 Comanche 0.003203 0.003267 0.003299 ...................................... 0 003331 .......................................... 0.003363 26 .Corinth 0.002901 ..t .. .. ............................................... 0.002959 ............... 0.002988 0 003017 0.003046 27 :Crowley 0.003095 0 003157 ................ 0.003188 ................ 0.003219 ............... 0.003250 28 ~ Dallas 0.002622 0.002674 ................................... 0.002701 .. ~ 0.002727 0.002753 29 ,Dalworthin~ton Gardens: 0.003023 0;003083 ............ 0.003114 .......................................... 0.003144 .......................................... 0.003174 30 € De Leon 0.003280 ........... . . ....................... . 0 :003346 ... .................................... 0:003378 .......................................... 0.003411 .. 0.003444 ..31 iDenison € 0.002766 . ......... . .... .. 0.002821 . ................. 0:002849 ... .... ........... 0:002877 .. ...... ....... 0.002904 . . .................... 32 ~ Early 0.003221 ..................... . .................. 0 :003285 ...........,.......,. ............. 0.003318 ..........._........ . 0.003350 0.003382 33 ;Eastland 0.003148 0.003211 . 0.003242 0.003274 0.003305 34 1Ed ecliff Village 0.002796 .......... g ............................................:. ...... .. ................. 0.002852 ..... . . .. . . .. ................... ....................... 0.002880 ....... 0 002908 0.002936 35 ':Euless 0.002971 .. ..... . . .. . ................ 0.003030 ......................... 0.003060 0 003090 0 003120 36 :Farmers Branch 0.002452 0.002501 ........................................ 0.002526 .......................................... 0.002550 ......................................... 0.002575 37 :Flower Mound 0 003031 003092, 0 003122 0 ........................................ 0.003152 ......................................... 0.003183 ; ...... . 38 :Forest Hill 0.002915 . : 0.002973 : 0.003002 ......... 0.003032 .. ...... ..... 0.003061 39 :Fort Worth 0.002651 ..........:......................................................i......................... 0.002704 . ...... 0.002731 0.002757 . ..... 0.002784 ......... 40 ;Frisco 0.00296 . .................................. 0.003023 .......................................... 0.003053 .......................................... 0.003083 ......................................... 0.003112 41 :Frost 0.003336 ..........:................................................. : . 0.003403 0.003436 0.003469 0.003503 .... .................................. 42 :Glenn Hei hts 0.003110 ..........:......................:3 .............................;.................................. .......................................... 0.003172 .......................................... 0.003203 .......................................... 0.003234 ......................................... 0.003266 43 :Grand Prairie 0.002651 .............. .. .. ................... 0.002704 . .......................................... 0.002731 .... ...................................... 0.002757 ......................................... 0.002784 . . 44 :Granger 0 003392 ..................................... . 0.003460 . ......................................... 0:003494 .......................................... 0.003528 .. 0.003562 45 ;Grapevine 0.002545 ......................................... .. : 0.002596 0.002621 0.002647 0.002672 .......... ............ .................................. 46 ;Gunter 0.003103 ......................................... . 0.003165 .. ................ ........................ 0.003196 .. 0.003227 .003258 47 :Harker Heights ': 0.003099 ..........:.................................. : 0.003161 .... 0.003192 .. . ..... 0.003223 .. . . 0.003254 .................... .................................. 48 :Heath 0.003072 ........ ................. . . ....................... .......................................... 0:003133 ... ...... .................................... 0 003164 .. ....................... 0.003195 .003226 9 :Henrietta 0.003226 ............ 0 003291 ... ....................... 003323 0 ... ..... ........... 0.003355 . ....................... 0.003387 50 'Hewitt 0.003060 ; 0.003121 . : 0.003152 0.003182 0.003213 ..51 :Highland.Park ......................:...........0:002885 ..... .... .............. 0:002943 ..................... ..................................... 0 002972 .. ~~~~~~~~~~~~~~~0.003000 ~ ~ ~~~0.003029 52 ;Honey Grove 0 003388 . 0.003455 ............_......., ................... 0:003490 ......................................... 0 003524 ......................................... 0.003557 53 ':Howe 0.003245 0.003310 0.003342 0 003375 0.003407 54 :Hurst 0;002979 0.003039 0.003068 0.003098 0.003128 ................................................................ ...................................................................................................................................................................................... Exhibit B 55 :Hutto 0.003395 0.003463 0.003497 0.003531 0.003565 56 :Irving 0.002650 : 0.002703 0.002730 0.002756 0.002783 ...........:..................................................... .................................. 57 Jolly ~ 0.002967 .......................................... 0.003026 .......................................... 0.003056 ................. . . ............. 0.003086 ................ ......... .. ... . 0.003115 . 58 ;Josephine 0.003221 0.003285 0.003318 0.003350 0.003382 .59 ;Justin 0.003243 0:003308 0:003340 0.003373 .. ...... 0.003405 60 Kaufman 0.003029 ... .. .... ....... ...... . . : 0.003090 ,,,,.,,., 0.003120 0.003150 0.003180 fi . .... ................... .. ......... .................................. . :Keller 0.003061 .......................................... 0.003122 .......................................... 0.003153 ................. ..... 0.003183 ............... .. 0.003214 62 Kerens 0.003312 0.003378 0.003411 0.003444 0.003478 63 Lakeside 0.003168 0 003231 . ... 0.003263 ............ 0.003295 .. .... . 0.003326 64 €Lamesa 0.003045 0.003106 0.003136 0.003167 0.003197 65 €Lindale € 0.002999 4 0:003059 0:003089 ..... ............ 0.003119 ... 0.003149 .. .. .... ..............f.......... 66 :Little River-Academy 0.003156 ... .. .................................... ......... . : . ................ 0.003219 ........ 0.003251 ................ 0.003282 ............... 0.003314 fi7 .. .... .......... . ....................... . :Malakoff 0.002847 .n. .. ......................... ...i.. . .......................................... 0.002904 .......................................... 0.002932 .......................................... 0.002961 ................. . ............ 0.002989 ... . .... 68 ;Mansfield 0.002834 ................ 0.002891 ................ 0.002919 ................ 0.002947 ................ 0.002976 ...........:..................y ................................;.................................. 69 Mckinne € 0.002728 .......................................... 0.002783 .................. ....... 0:002810 .................... 0.002837 .................. .. 0.002864 70 :Midland 0.002944 ........... .....................................................:............ . .... . 0.003003 . „ ..... 0.003032 0.003062 0.003091 . . ............... : 71 Milford 0.003383 .................................................................i.............................. .......................................... 0.003451 .......................................... 0.003484 .......................................... 0.003518 .............................. 0.003552 .... 72 :Murchison 0.003351 .... ....:......... .. ................................................... ............. .. .......................................... 0.003418 .......................................... 0.003452 ......................................... 0.003485 ......................................... 0.003519 P Y .... . ... ...73...,.M ur.. h ........................................~............. 0:003078 .......................................... 0 :003140 . . . .........,.................... 0:003170 ............ ....... 0:003201 ......... ..... . 0:003232 74 :New Chapel Hill 0.003156 ... .... ........... . 0 003219 ..................... . 0.003251 ..................... 0.003282 , ................ 0.003314 75 North Richland Hills ~ 0.002837 0.002894 0:002922 0.002950 0.002979 76 O Donnell 0.003332 0.003399 0.003432 0.003465 0.003499 77 Oak Leaf € 0.002965 0 ;003024 0 :003054 0.003084 . ......... .. 0.003113 78 :Oak Point 0.003078 . 0.003140 0.003170 0.003201 0.003232 79 :Odessa 0.003046 0;003107 .. . ........... 0;003137 0.003168 0.003198 80 Ovilla 0.003038 0.003099 0.003129 0.003160 0.003190 81 Palestine ~ 0.003017 0 ;003077 0 ;003108 ....................................... 0 :003138 ......................................... 0.003168 82 ?Pantego 0.003210 0.003274 0.003306 ,.,,.., . , 0.003338 0.003371 83 :Paris 0.002407 0:002455 0:002479 ..... .................... 0.002503 ........... ........ ... . 0.002527 84 `Plano 0.002730 , 0.002785 . 0.002812 0.002839 0.002867 85 :Ranger 's 0.003232 0.003297 0:003329 0.003361 0.003394 86 Rhome 0.003180 0.003244 . 0.003275 0.003307 0.003339 .87 Richardson i 0.002608 0.002660 0:002686 .. ....... 0.002712 ..... .... 0.002738 88 ;Richland Hills 0.003094 . 0.003156 0.003187 0.003218 0.003249 89 Roanoke i 0.003167 0:003230 0;003262 0.003294 0.003325 90 :Robinson 0.003119 0.003181 . 0.003213 0.003244 0.003275 91 €Rockwall € 0.002813 0:002869 0:002897 ........ ........ 0.002926 ... 0.002954 92 Rosser 0.003258 . 0.003323 ..................... 0.003356 0.003388 0.003421 93 ~ Rowlett i 0.003068 0 :003129 0 003160 0:003191 ....................................... 0.003221 94 ;Sherman 0.002281 ....... . : 0.002327 . ,.. 0.002349 ... ,.. 0.002372 0.002395 ............................................ .................................. ....:......y 95 ~Sn der 0.003173 .......................................... 0.003236 .. .. ..................................... 0:003268 ..... .......................... ........... 0:003300 ......................................... 0.003332 96 Southlake 0.003031 0.003092 , 0.003122 . 0.003152 0.003183 97 :Sulphur Springs ~ 0:002767 .. .... ....... ........ 0.002822 ... .... . 0.002850 .. .. ............... 0.002878 ... ................. 0:002905 98 ;Sunnyvale 0.002433 ................... 0.002482 ... ........................ 0.002506 ... ...................... 0.002530 . 0.002555 99 ~ Sweetwater 0.003100 . ............ . . . ... ..... . 0.003162 0:003193 ....................................... 0.003224 ......................................... 0.003255 . .. .. 100 :Temple 0.002526 . ................... 0.002577 . . ............. ... 0.002602 ... ...................... 0.002627 ... ....................... 0.002652 101 :The Colony 0.002978 . 0.003038 ........................................ 0.003067 ......................................... 0.003097 ......................................... 0.003127 102 ;Tyler 0.002648 0.002701 0.002727 0.002754 0.002780 103 ~Universit~ Park ~ 0.002792 ..... ..... . .. ......... .... ... .. 0.002848 ...................................... 0 :002876 .......................................... 0.002904 ......................................... 0.002932 . . . .. 104 ;Venus 0 003313 ................... 0.003379 ...., . ......... . 0.003412 .. ....................... 0.003446 . .. ... .............. 0.003479 . 105 Waco 0.002630 0 :002683 0.002709 . ... .... 0.002735 . . ........... ...... . 0.002762 106 ;Watauga 0.002968 0.003027 .. 0 :003057 0.003087 0.003116 107 White Settlement 0.002952 0.003011 0.003041 ., 0.003070 0.003100 108 ;Wichita Falls 0.002841 . 0.002898 ........ 0.002926 ... ............. 0.002955 ... ............. 0.002983 109 Woodway 0.002692 0.002746 0.002773 0.002800 0.002827 Exhibit C City of Addison City of Allen City of Alvarado City of Andrews City of Archer City City of Belton City of Benbrook City of Btg Spnng Ctty of Breckenridge City of Bndgeport City of Brownwood City of Burkburnett City of Colleyville City of Corinth City of Crowley City of Dalworthington Gardens City of DeLeon City of Denison City of Early City of Eastland City of Edgechff Village City of Euless City of Farmers Branch City of Flower Mound City of Forest Hill City of Glenn Heights City of Grand Prairie City of Granger City of Grapevine City of Heath City of Henrietta City of Hewitt City of Honey Grove City of Irving City of Jolly City of Josephine City of Justin City of Lakeside City of Lamesa City of Little River Academy City of Malakoff City of Mansfield City of McKinney City of Midland City of Murchison City of Murphy City of New Chapel Hill City of North Richland Hills City of O'Donnell City of Oak Leaf City of Oak Point City of Odessa City of Ovilla City of Pantego City of Pans City of Plano City of Rhome City of Richland Hills City of Roanoke City of Robinson City of Rosser City of Rowlett City of Snyder City of Southlake City of Sunnyvale City of Sweetwater City of Temple City of The Colony City of Watauga City of White Settlement City of Wichita Falls City of Woodway EXTENSION AND MODIFICATION OF SETTLEMENT AGREEMENT This Extension and Modification of Settlement Agreement ("Agreement") is made and entered into between TXU Electric Delivery Company ("Electric Delivery"} and the Steering Committee of Cities Served by TXU Electnc Delivery Company on behalf of all cities listed on Exhibit A to this Agreement ("Cities") hereinafter referred to jointly herein as `Signatories. WHEREAS on February 22, 2005 the Signatones entered into a Settlement Agreement that resolved numerous issues, including issues ansmg out of the resolutions passed m 2004 by 23 cities that are members of Cities requinng Electnc Delivery to file with those cities information that demonstrates good cause for showing that Electric Delivery's transmission and distribution rates should not be reduced (hereinafter referred to as `Show Cause Actions") WHEREAS as part of that February 22, 2005 Settlement Agreement, Electnc Delivery agreed to file a system wide rate case by July 1 2006 WHEREAS, Cities and Electnc Delivery desire to extend certain terms of the February 22, 2005 Settlement Agreement and to resolve all outstanding issues related to the pending and potential Show Cause Actions, the upcoming system-wide rate filing, and other regulatory issues and WHEREAS, after extensive negotiations, Cities and Electnc Delivery have reached a compromise and settlement to resolve those issues. NOW THEREFORE, the Signatones, through their undersigned representatives, hereby agree to the following; 1 Electnc Delivery agrees to propose and support m its next system-wide rate case or city rate inquiry one or more mumcipal rates, each without a demand ratchet, that together will cover all municipal accounts, including a street lighting rate and mumcipal pumping rate that will be lower than they otherwise would be Cities agree to provide to Electnc Delivery any information needed to design the rates described m this paragraph. 2 Electnc Delivery agrees to file a system wide rate case at the Public Utility Commission of Texas ("PUC") no later than July 1 2008, based on a test year ending December 31 2007 unless Cities and Electnc Delivery mutually agree that such a filing is unnecessary For those cities that do not have a City Council meeting in July 2008, Electrc Delivery will extend its effective date to accomplish suspension by August 31 2008 However if Electric Delivery files a system-wide rate case at the PUC on or before June 1 2008 then Electric Delivery will not extend its effective date. 3 Cities agree not to pursue any abated Show Cause Actions and not to initiate similar actions before July 1 2008, provided the provisions of this Agreement are honored. Cities agree not to intervene in, or participate in any manner in, any show cause action initiated at the PUC or m any other ~unsdiction prior to the proceeding described m paragraph 2, or in any appeals of such show cause actions, except as necessary to protect the tanff or tariff-efforts associated with paragraph 1 or to protect the city or its residents from being prejudiced m any show cause action pending on appeal at the PUC. If Cities intervene m a show cause action pending on appeal at the PUC, then Cities agree not to take any position m that proceeding that is inconsistent with its obligations under this Agreement. 4 Cities agree to provide notice to Electnc Delivery that (1) all cities fisted on Exhibit B to this Agreement have continued their abatements of, or have dismissed, show cause actions pending against Electnc Delivery and (2) each city listed on Exhibit C to this Agreement has passed a resolution ratifying this Agreement or provided to Cities a letter m substantially the same form as Exhibit D to this Agreement that has been signed by an authonzed representative of the city On March 31 2007 Mazch 31 2008, and March 31 2009 Electnc Delivery will make a cash payment of $8 million to Cities. Electnc Delivery's obligation to make those payments ceases on the date upon which Cities fail to comply with their obligations under thus Agreement or the date upon which the tariffs approved in Electric Delivery's next system-wide rate case at the PUC or in a city rate inquiry become effective on a temporary or permanent basis ("Termination Date"), provided, however, in the year the new tariffs become effective, the annual payment shall be prorated until the Termination Date. `System-wide rate case" includes any system-wide change to base rate tanffs as a result of proceedings initiated under Subchapters C or D of PURR Chapter 36 and any proceeding changing Electnc Delivery's base rates initiated as a result of a settlement. 5 The Signatones acknowledge and agree that under paragraph 4 of the February 22, 2005 Settlement Agreement, Electnc Delivery will pay Cities $8 million on March 31 2006 6 Electnc Delivery agrees to work with Cities to improve the timeliness of streetlight maintenance and to develop a process so that every city-owned and Electric Delivery-owned street fight is assigned an identifiable geographic location. Sngnatones agree to establish a task force of senior employees that will develop the process and planned rollout for the street light assignment project. Electnc Delivery also agrees to provide to Cities a specific contact person (or persons) within Electric Delivery who will be responsible for handling all unresolved Cities' requests with respect to streetlights, including, but not limited to billing, maintenance, installation, removal, and account initiarion and closure. Sngnatones agree to diligently pursue resolution of the issues discussed in this paragraph, however, failure to reach an agreement with respect to these issues will not constitute a breach of this Agreement by either Cities or Electnc Delivery 7 Electric Delnvery agrees to work with Cities to establish improved communication, coordination, and timing of construction concerning relocations of Electric Delivery's facilities m public nght of way Signatones agree to establish a task force of senior employees that will develop'the process and planned rollout of an improved relocation process. Signatones agree to diligently pursue resolution of the issues discussed in this paragraph, however failure to reach an agreement with respect to these issues will not constitute a breach of this Agreement by either Cities or Electric Delivery 8 The Signatories acknowledge that they have reached a separate agreement concerning outstanding issues related to franchises. By its terms, that separate agreement becomes effective only upon this Agreement's becoming effective pursuant to the terms of paragraphs 4 and 19 9 Electric Delivery agrees to negotiate with Cities, and Cities agree to approve, a tariff that permits Cities to request undergrounding of new or existing distribution facilities. The tariff shall ensure full cost recovery by Electric Delivery through a surcharge in the requesting city in the event that no third party is required by Electric Delivery's tariff, or applicable city ordinance, to pay for undergrounding costs. That tariff will also allow Cities to request undergrounding of transmission lines to the extent Electric Delivery determines that (a) such undergroundmg is feasible, (b) such undergrounding is consistent with the PUC's Substantive Rules and ERCOT's requirements, and (c) Electric Delivery can recover the costs of such undergrounding through a surcharge in the requesting city Electric Delivery will not be obligated to file the tariff for city approval until after the expiration of the Price to Beat or the modification of the Price to Beat in a manner that allows pass through of tariff charges to the ultimate consumer 10 Electric Delivery agrees to provide quarterly updates to representatives designated by Cities and their consultants concerning Electric Delivery's capital expenditure projects and affiliate transactions, the creation and regulatory treatment of a Pension and Health Benefits Reserve for Electric Delivery possible workable parameters for performance based rates for Electric Delivery and other topics as agreed upon by the Signatories. Electric Delivery will work with Cities to provide information requested by Cities concerning those topics. 11 Electric Delivery shall pay up to $10 000 per month in regulatory expenses directly to Cities consultants, after receipt of appropriate documentation and invoices, provided said expenses may be deferred for recovery Cities agree to support recovery of such costs in Electric Delivery's next rate case. Should recovery be denied by the PUC, then the payments will immediately cease. 12. Electric Delivery shall pay up to $40 000 per month through December 2009 to reimburse Cities for their involvement before ERCOT and the PUC concerning market design issues, after receipt of appropriate documentation and invoices. 13 Electric Delivery agrees to reimburse Cities for the expenses incurred related to the negotiation of this Agreement in an amount not to exceed $25 000 after receipt of appropriate documentation and invoices, and Cities agree that those costs can be deferred for recovery in its next rate case and agree to support deferral and recovery in that case. Notwithstanding paragraph 14 any rights Cities may have under PURR, and any provisions in existing applicable franchise agreements to the contrary Electric Delivery agrees to reimburse Cities for reasonable and necessary expenses incurred in Electric Delivery's next system-wide rate case in an amount not to exceed $2,000 000 The rate case expense reimbursements will be made monthly beginning with the first month after the consultants are hired. Cities further agree not to contest the recovery of Cities rate case expenses and Electric Delivery's reasonable and necessary rate case expenses in Electric Delivery's next system-wide rate case. 3 14 Electric Delivery agrees that, in franchise negotiations, it will not seek to extend the prohibition on reimbursement of municipal rate case expenses beyond June 2008. 15 Electnc Delivery agrees to pay Cities $18 million for beneficial public use. The Signatones agree that that amount will be paid in two installments. (1) $9 million will be payable two weeks after Electnc Delivery receives the notice from Cities required in paragraph 4 of this Agreement; and (2) $9 million will be payable by January 31 2007 The Signatories agree that member cities are to apply these funds for beneficial public use and that the determination of what activities are beneficial to the public is within the discretion of each member city Those activities include, but are not limited to, energy education for citizens, reductions in rates for city services, investments in community facilities, and investments in energy efficiency measures. 16 The Signatones acknowledge that Electnc Delivery intends to offer certain terms of this Agreement to cities served by Electric Delivery that are not listed on Exhibit A ("Negotiations") Electric Delivery agrees that all cities lasted on Exhibit A are entitled to Most Favored Nations protection dunng those Negotiations and that any benefits that Electric Delivery agrees to provide to any city dunng those Negotiations that are not already included in this Agreement will be offered to all cities listed on Exhibit A. Cities acknowledge and agree that to receive any additional benefits from Electric Delivery additional consideration from Cities to Electnc Delivery may be required. 17 The Signatories agree that the amounts paid by Electric Delivery to Cities pursuant to paragraphs 4 11 12, 13 and 15 of this Agreement are paid solely in consideration for Cities' continued abatement or dismissal of, and forbearance from filing or pursuing, Show Cause Actions against Electric Delivery and Cities' agreement to abide by the terms of this Agreement, and to reimburse Cities expenses associated with the Show Cause Actions and other regulatory proceedings. To the extent that the amounts paid may be in excess of Cities expenses, the excess is paid solely in order to settle the matters that are the subject of this Agreement. Signatories recognize and agree that the payments specified in this Agreement are not a rate reduction, refund, rebate, discount, preference or pnvilege of any land for services provided by Electric Delivery or any of its affiliates or predecessors in interest under any tanff, whether in the past, now or in the fixture. As such, the provision of electric delivery service to Cities by Electnc Delivery or any affiliate or predecessor has been and will continue to be governed solely by the rates, teens, and conditions of the applicable tariffs. 18 The Signatones agree that the rights, duties, benefits, and obligations set forth in this Agreement are binding upon their successors in interest. 19 This Agreement shall become effective only upon the execution of this Agreement and the entry of resolutions or orders continuing the abatements or dismissing the Show Cause Actions. 20 Each person executing thus Agreement represents that he or she is authonzed to sign this Agreement on behalf of the party represented. 21 The Signatones expressly acknowledge and agree that oral and wntten statements made by any party or its representative dunng the course of the settlement negotiations that led to this Agreement cannot be used or portrayed as an admission or concession of any sort and shall not be admissible as evidence in any proceeding in any forum. 22 The Signatones agree that this Agreement extends and modifies the terms of their February 22, 2005 Settlement Agreement. To the extent that any terms of that February 22, 2005 Settlement Agreement are not restated here, the Signatones agree that those terms have expired. To the extent that there are any inconsistencies between the terms of this Agreement and the terms of the February 22, 2005 Settlement Agreement, the Signatones agree that the terms of this Agreement control. Executed on this the ~~day of January, 2006, by the Signatories hereto, by and through their undersigned duly authorized representatives. TXU Electric Delivery Company Steering Committee of Cities Served by TXU Electric Delivery Company on behalf of all cities listed on Exhibit A to this Agreement Its V~C~ f ~~I ~C-~ i gy. '~~ Its ~.vr Exhibit A City of Addison City of Highland Park City of Allen Ctty of Honey Grove City of Alvarado City of Howe City of Andrews Ctty of Hurst City of Archer City City of Hutto City of Arlington City of Irving City of Belton Ctty of Jolly City of Benbrook Ctty of Josephine City of Btg Spnng City of Justin City of Breckenridge City of Kaufman City of Bridgeport City of Keller City of Brownwood City of Kerens City of Buffalo City of Lakeside City of Burkburnett City of Lamesa City of Burleson City of Lindale City of Caddo Mills City of Little River Academy City of Cameron Ctty of Malakoff City of Canton City of Mansfield City of Carrollton City of McKinney City of Celina City of Midland City of Centerville City of Murphy City of Cleburne City of Murchison City of Colleyville City of New Chapel Hill City of Collinsville City of North Richland Hills City of Comanche City of O'Donnell City of Connth City of Oak Leaf City of Crowley Ctty of Oak Point City of Dallas City of Odessa City of Dalworthtngton City of Ovilla Gardens City of Palestine City of DeLeon City of Pantego City of Denison City of Parts City of Early City of Plano City of Eastland City of Ranger City of Edgecliff Village City of Rhome City of Euless Ctty of Richardson City of Farmers Branch Ctty of Richland Hills City of Flower Mound Ctty of Roanoke City of Forest Hill City of Robinson City of Fort Worth City of Rockwall City of Frisco City of Rosser City of Frost City of Rowlett City of Glenn Heights City of Sherman City of Grand Pratne Ctty of Snyder City of Granger Ctty of Southlake City of Grapevine City of Sulphur Spnngs City of Gunter City of Sunnyvale City of Harker Heights City of Sweetwater City of Heath City of Temple City of Henrietta Ctty of The Colony City of Hewitt City of Tyler City of University Park City of Venus City of Waco City of Watauga City of Whrte Settlement City of Wichita Falls City of Woodway Exhibit B City of Arlington City of Benbrook City of Brownwood City of Burleson City of Carrollton City of Dallas City of Dalworthington Gardens City of Denison City of Ft. Worth City of Harker Heights City of Heath City of Pantego City of Plano City of Richland Hills City of Robinson City of Rockwall City of Snyder City of Sulphur Springs City of The Colony City of Woodway Exhibit C City of Addison City of Allen City of Andrews City of Archer City City of Belton City of Big Spnng City of Breckenridge City of Bridgeport City of Burkburnett City of Celina City of Cleburne City of Colleyville City of DeLeon City of Early City of Eastland City of Euless City of Farmers Branch City of Flower Mound City of Forest Hill City of Fnsco City of Glenn Heights City of Grand Prairie City of Grapevine City of Henrietta City of Highland Park City of Howe City of Hurst City of Irving City of Keller City of Lakeside City of Lamesa City of Lindale City of Little River Academy City of Mansfield City of McKinney City of Midland City of Murphy City of North Richland Hills City of Oak Point City of O'Donnell City of Odessa City of Palestine City of Pans City of Richardson City of Roanoke City of Rowlett City of Sherman City of Southlake City of Sunnyvale City of Sweetwater City of Temple City of Tyler City of University Park City of Waco City of Watauga C1ty of White Settlement City of Wichita Falls _.~ Exhibit D January _ 2006 Mr Geoffrey M. Gay Esq Lloyd Gosselink 816 Congress Avenue, Suite 1900 Austin, Texas 78701 ItE Settlement Agreement between Steenng Committee of Cities Served by TXU Electric Delivery and TXU Electric Delivery Company Dear Mr Gay• I hereby acknowledge that the Steenng Committee of Cities Served by TXU Electnc Delivery has the authority to act on behalf of the City of in the negotiation and execution of a settlement agreement with TXU Electric Delivery Company I also represent that I am duly authorized by the City of to sign this letter Sincerely [Name] [Position] City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION Approved on 2/28/2006 Resolution No 3316-02-2006 DATE Tuesday February 28 2006 LOG NAME 0303TXU REFERENCE NO G-15096 SUBJECT Adopt Resolution Further Abating Ratemaking Proceeding and Ratifying Settlement Agreement between Steering Committee of Cities Served by TXU and TXU Electric Delivery Company RECOMMENDATION It is recommended that the City Council adopt the Resolution further abating the ratemaking proceeding against TXU Electric Delivery Company and ratifying the settlement agreement between the Steering Committee of Cities Served by TXU and TXU Electric Delivery Company DISCUSSION The City of Fort Worth is a member of a standing coalition of cities known as the Steering Committee of Cities Served by TXU (Steering Committee) authorized by the City Council by M&C G-11549 on July 30 1996 On July 15 2004 the Steering Committee recommended that its member cities adopt a Resolution requiring TXU Electric Delivery Company to show cause why its Transmission and Distribution (T&D) rates should not be reduced On September 7 2004 the City Council adopted Resolution No 3119 initiating a ratemaking proceeding against TXU Electric Delivery The Steering Committee and TXU Electric Delivery entered into settlement discussions in the Fall of 2004 Attorneys for the Steering Committee advised committee members that a potential rate reduction could not be passed on to residential customers until after TXU Energy's Price-to Beat (PTB) rates expire in 2007 Members of the Steering Committee explained to TXU Electric Delivery that certain tariffs for municipal accounts were especially unfair The Steering Committee and TXU Electric Delivery signed a Settlement Agreement on February 22 2005 subject to ratification by all member cities that passed ashow-cause resolution The agreement abated the rate proceeding until July 2006 The City Council adopted Resolution #3194-04-2005 on April 19 2005 (M&C C-20665) ratifying the Settlement Agreement. TXU and the Steering Committee have been discussing the possibility of modifying and extending the terms of the original settlement agreement and delaying TXU s July 2006 rate case filing After comparing the benefits to be derived from accepting the settlement and delaying the rate case against the likelihood of success in achieving positive outcomes for residential and city-specific issues in a rate case initiated in July 2006 the Steering Committee approved acceptance of a new settlement agreement. Key items are TXU will file a rate case in June 2008 with a December ending test year 2. TXU will continue to make annual payments to the Steering Committee until a final order is entered in the 2008 rate case These payments are dispersed to participating cities as reimbursement for excessive street lighting and water pumping rates This provision is a two year extension to the previously negotiated Logname 0303TXU Page 1 of 2 agreement. The City of Fort Worth will receive approximately $555 000 of this money 3 TXU will make two payments of $9 million to Steering Committee cities before January 31 2007 for beneficial public use These monies will be redistributed to member cities to use as they deem most appropriate Fort Worth will receive approximately $1 million from each payment. 4 All unexpired provisions of the last agreement will be preserved 5 The Company will reimburse up to $40 000 per month to the Steering Committee for participation at ERCOT and the PUC 6 Separate from the rate settlement, but linked in benefit under the Settlement Agreement, is the Company's commitment to increase the factor used to calculate municipal franchise fees to partially offset the effects of inflation Fort Worth's total franchise fees will be increased approximately $400 000 in FY 06 $750 000 in FY 07 and $1 million in FY 08 Copies of the new settlement agreement and an agreement to address franchise issues are attached The Steering Committee concluded that delaying a comprehensive rate case until June 2008 and immediately capturing beneficial financial terms was the optimal course of action All Steering Committee member cities must approve the settlement for the benefits to flow to any member FISCAL INFORMATION/CERTIFICATION The Finance Director certifies that the Budget and Management Services Department, Utility Administration Division will be responsible for collecting any funds that may be due the City as a result of this settlement. TO Fund/Account/Centers Submitted for City Manager's Office by_ Originating Department Head. Additional Information Contact. FROM Fund/Account/Centers Richard Zavala (Acting) (6222) Bridgette Garrett (8518) Danny Reed (6145) Logname• 0303TXLT Page 2 of 2