HomeMy WebLinkAboutOrdinance 19541-02-2011ORDINANCE NO. 19541-02-2011
AN ORDINANCE SUSPENDING IMPLEMENTATION OF THE RATE
SCHEDULE PROPOSED BY ONCOR ELECTRIC DELIVERY
COMPANY LLC, AS REFLECTED IN THE "PETITION AND
STATEMENT OF INTENT OF ONCOR ELECTRIC DELIVERY
COMPANY LLC FOR AUTHORITY TO CHANGE RATES" FILED BY
ONCOR ELECTRIC DELIVERY COMPANY LLC ON JANUARY 7, 2011
UNTIL (i) MAY 15, 2011 OR OTHERWISE FOR THE MAXIMUM
PERIOD PERMITTED BY LAW, OR (ii) THE EFFECTIVENESS OF A
RATE ORDER ADOPTED BY THE CITY COUNCIL, WHICHEVER
DATE IS EARLIER; ESTABLISHING RATES TO BE CHARGED BY
ONCOR ELECTRIC DELIVERY COMPANY LLC DURING THE
PERIOD OF SUSPENSION; AUTHORIZING THE PARTICIPATION IN A
STEERING COMMITTEE OF OTHER CITIES ANALYZING SIMILAR
RATE CHANGE FILINGS BY ONCOR ELECTRIC DELIVERY LLC
AND THE HIRING OF CONSULTANTS AND ATTORNEYS
THEREWITH; DIRECTING THAT ONCOR ELECTRIC DELIVERY
COMPANY LLC REIMBURSE THE CITY FOR ALL SUCH
REASONABLE EXPENSES; ADOPTING DECLARATIONS AND
FINDINGS IN PREAMBLE; PROVIDING A SEVERABILITY CLAUSE;
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on January 7, 2011, Oncor Electric Delivery Company LLC ("Oncor")
filed with the City Secretary that certain "Petition And Statement of Intent of Oncor Electric
Delivery Company LLC For Authority to Change Rates" (the "Rate Filing") under which
revised rates charged by Oncor would go into effect in the City on February 14, 2011; and
WHEREAS, the rates proposed in the Rate Filing would result in approximately $353
million in additional revenue for Oncor on a system-wide basis, which additional revenue
includes an approximate 14.1 % increase in electricity rates imposed by Oncor in the City of Fort
Worth (which factors in approximately a 14.6% increase in electricity rates imposed by Oncor
on residential customers in the City of Fort Worth) and approximately $30 million in additional
revenue for Oncor from customers in the City of Fort Worth; and
WHEREAS, pursuant to Chapter 36 of the Texas Utilities Code, the City Council is
required to (i) analyze Oncor's Rate Filing; (ii) conduct a public hearing in order to determine
the propriety of the proposed rate changes; and (iii) determine whether the rates proposed in the
Rate Filing are reasonable and lawful, and if not, enter an order establishing the maximum rates
that Oncor shall be permitted to charge; and
WHEREAS, as permitted by Chapter 36 of the Texas Utilities Code, in order to have
time to analyze the Rate Filing thoroughly prior to the public hearing on this matter, it is
necessary that the City suspend implementation of Oncor's proposed rates from February 14,
2011 until (i) May 15, 2011 or otherwise for the maximum period allowed by law, or (ii) the
effective date of a rate order adopted by the City Council in response to the Rate Filing,
whichever date under subsections (i) or (ii) is earlier; and
WHEREAS, the City has previously delivered to Oncor a written statement of the City's
reasons for its suspending implementation of Oncor's proposed rate schedule;
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS THAT:
SECTION 1.
Pending a public hearing on the merits, a determination by the City Council as to the
propriety of the Rate Filing, and the adoption of a rate order by the City Council that establishes
the rates that Oncor may charge in the City, implementation of the rate schedule outlined in
Oncor's Rate Filing is hereby suspended until (i) May 15, 2011 or otherwise for the maximum
period permitted by law, or (ii) the effective date of a rate order adopted by the City Council in
response to the Rate Filing, whichever date under subsections (i) or (ii) is earlier. Until the
effective date of a rate order adopted by the City Council in response to the Rate Filing or the
date on which the rates proposed by Oncor in its Rate Filing with the City become effective by
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operation of applicable law, Oncor shall charge the same rates in the City as those that were in
effect on January 7, 2011.
SECTION 2.
The City Manager or his authorized designee is hereby authorized to cooperate with
other municipalities to participate in a steering committee to hire and direct legal counsel and
consultants to make recommendations to participating municipalities, including the City,
regarding the Rate Filing and similar Rate Filings in such other participating municipalities and
to direct any administrative proceedings or litigation associated with the Rate Filing, subject to
the City's right to terminate such participation at any time by written notice to the steering
committee and to act independently in the exercise of its regulatory authority.
SECTION 3.
In accordance with Section 33.023 of the Texas Utilities Code, as well as that certain
Settlement Agreement by and between Oncor's predecessor, TXU Electric Delivery Company,
and the Steering Committee of Cities Served by TXU Electric Delivery Company (the "Steering
Committee") dated February 22, 2005, as amended by that certain Extension and Modification
of Settlement Agreement by and between TXU and the Steering Committee dated January 27,
2006, Oncor is hereby directed to reimburse the City for all reasonable costs and expenses of
any rate consultants, accountants, auditors, attorneys and engineers retained by the City or a
steering committee of which the City is a member and incurred in the course of the City's and/or
the steering committee's review of the Rate Filing. Such costs and expenses shall be reimbursed
on a monthly basis.
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SECTION 4.
All of the declarations and fmdings contained in the preamble of this Ordinance are made
a part hereof and shall be fully effective as part of the ordained subject matter of this Ordinance.
SECTION 5.
If any portion, section or part of a section of this Ordinance is subsequently declared
invalid, inoperative or void for any reason by a court of competent jurisdiction, the remaining
portions, sections or parts of sections of this Ordinance shall be and remain in full force and
effect and shall not in any way be impaired or affected by such decision, opinion or judgment.
SECTION 6.
This Ordinance shall take effect and be in full force and effect from and after the date of
its adoption. The City Secretary is hereby directed to deliver a certified copy of this Ordinance
to Oncor.
AND IT IS SO ORDAINED.
ADOPTED AND EFFECTIVE: FebruarY8, 2011
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
M&C: G-17193
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City of Fort Worth, Texas
Mayor and Council Communication
.COUNCIL ACTION: Approved on 2/8/2011 -Ordinance No. 19541-02-2011
_, ~ ~ >: , .~.~ ;. ~~r~ _ ~, ~..,~ ~~ _ :~ ~ ~ . ~.. ~~_ ... _:
DATE: Tuesday, February 08, 2011
LOG NAME: 120NCOR RATES
REFERENCE NO.: ''''G-17193
SUBJECT:
Adopt Ordinance Suspending the Effectiveness of New Rates Proposed by Oncor Electric Delivery
Company, LLC, and Authorize the Retention of Consultants to Evaluate the Proposed Rates
RECOMMENDATION:
It is recommended that the City Council adopt the attached ordinance which:
1. Suspends the implementation of proposed rates filed with the City by Oncor Electric Deliver Company,
LLC, from February 14, 2011 until the earlier of May 15, 2011 or the date on which the City Council adopts
a rate order in response to the filing; and
2. Authorizes the City Manager to cooperate with other cities in the Steering Committee of Cities Served
by Oncor Electric Delivery to hire and direct legal counsel and consultants, negotiate with the Company,
make recommendations to the City regarding reasonable rates, and direct any administrative proceedings
or litigation associated with the Rate Adjustments filed with the City or with the Public Utility Commission.
DISCUSSION:
The City of Fort Worth is a member of a standing coalition of cities known as the Steering Committee of
Cities Served by Oncor Electric Delivery (Steering Committee), originally authorized by the City Council by
M&C G-11549 on July 30, 1996.
On January 7, 2011, Oncor Electric Delivery Company filed an application with cities retaining original
jurisdiction seeking to increase system-wide transmission and distribution rates. The proposed effective
date for the new rates is February 14, 2011. Oncor's application requests new rates that would produce an
estimated $353 million in additional revenue per year on asystem-wide basis; a 14.6 percent increase in
residential rates and a 14.1 percent total rate increase.
Under state law, the City has exclusive original jurisdiction over the rates, operations and services of
Oncor in the City. If the City takes no action on this matter, the new rates will automatically take effect
February 14, 2011. However, state law also allows the City to suspend the effectiveness of the rates for a
period of up to an additional 90 days so that the City may analyze Oncor's request and, following a public
hearing, make a determination as to whether it is lawful and reasonable. It is recommended that the City
Council suspend the effectiveness of the rates and that the City utilize rate consultants hired by the
Steering Committee during that suspension period to assist the City in making such a determination. In
accordance with state law and pursuant to a the Settlement Agreement between Oncor and the Steering
Committee, ratified by City Council February 28, 2006 (Resolution No.3316-02-2006, M8~C G-15096),
Oncor is required to reimburse the Steering Committee for reasonable consultant and other regulatory
costs associated with this review.
Logname: 120NCOR RATES Page 1 of 2
The attached ordinance suspends the effectiveness of Oncor's requested rates from February 14, 2011
until the earlier of: 1) May 15, 2011 otherwise for the maximum period allowed by law, or 2) the effective
date of a rate order adopted by the City Council in response to the rate filing. The ordinance also freezes
current rates being charged in the City during the suspension period.
FISCAL INFORMATION /CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on City
Funds.
FUND CENTERS:
TO Fund/Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by:
Ori ig_nating Department Head:
Additional Information Contact:
FROM Fund/Account/Centers
Charles Daniels (6199)
David Yett (7623)
Bridgette Garrett (8518)
Logname: 12ONCOR RATES Page 2 of 2