HomeMy Public PortalAboutResolution No. 253-06 02-14-2006
• RESOLUTION N0.253-06
A RESOLUTION OF THE CITY OF RICHLAND HILLS,
TEXAS CITY COUNCIL CONTINUING ABATEMENT OF
SHOW-CAUSE AND ACCEPTING SETTLEMENT WITH
TXU ELECTRIC DELIVERY
WHEREAS, on or about August 24, 2004, the City of Richland Hill, Texas, acting
under its original jurisdiction to regulate electric transmission and distribution utilities and as a
member of the Steering Committee of Cities served by TXU (Steering Committee) did pass a
resolution requiring TXU Electric Deliver (Electric Delivery) to show-cause why its rates should
not be reduced; and
WHEREAS, Electric Delivery and the Steering Committee engaged in settlement
discussions regarding abatement of any full-scale rate investigation and interim relief that may
be available to Cities leading to a settlement in February 2005 that made Steering Committee
members whole for their alleged excess costs associated with street lighting and water pumping
in exchange for delay in Show-Cause filing requirements; and
• WHEREAS, Electric Delivery has desired to further extend for two years the currently
scheduled June 2006 rate case filing in exchange for extension of payments to Cities under the
February 2005 Agreement and other benefits to Cities; and
WHEREAS, the Steering Committee and Electric Delivery have reached a Settlement
Agreement that extends the previously negotiated settlement terms by two years and adds
benefits to Cities, including reimbursement for participation in ERGOT and market development
activities and $18 million in funds for beneficial public use as may be determined in the
discretion of Steering Committee member cities and which may include, but which is not limited
to, energy education for citizens, reductions in rates for city services, investments in community
facilities, and investment in energy efficiency measures; and
WHEREAS, current electric market constraints make it impractical to pass the potential
benefits of rate reductions on to residential ratepayers, because most consumers remain on price
to beat rates which are fixed by statute and rule, and the minority of consumers who have
switched to service from a competitive retail electric supplier may only realize rate reduction
benefits if their REP contract requires apass-through of such rate reduction; and
WHEREAS, the Steering Committee and Electric Delivery have reached a separate
agreement wherein the Company will increase franchise fee factors over afour-year period
• producing increased revenues for each member city; and
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• WHEREAS, Electric Delivery has committed to the Steering Committee during the
period of rate case abatement to share information on certain company operations and procedures
that should enhance the Cities' ability to appropriately exercise regulatory responsibilities in the
rate proceeding that Electric Delivery has agreed to file on or before July 1, 2008.
WHEREAS, the Settlement Agreement calls for immediate and long-term benefits to
flow to all city members of the Steering Committee which in turn have indirect but positive
benefit to all city residents and public safety in general; and
WHEREAS, the Steering Committee values the benefits of settlement to Cities at
approximately $85 million between 2005 and 2009 and comparable value is unlikely to be
achieved through litigation.
THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
THE CITY OF RICHLAND HILLS, TEXAS that:
1. The Show-Cause proceeding initiated against TXU Electric Delivery in Electric
Delivery in Resolution No. 212-04 is further abated and no rate case filing will be expected from
• Electric Delivery before July 1, 2008.
2, The Extension And Modification of Settlement Agreement and Agreement to Resolve
Outstanding Franchise Issues, both dated January 19, 2006, between the Cities Steering
Committee and TXU Electric Delivery are hereby ratified.
APPROVED THIS 14TH DAY OF FEBRUARY 2006.
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Nelda S. Stroder, Mayor
ATTEST:
M SLITTER, TRMC
• CITY SECRETARY
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