TITLE
Consider a memorandum/resolution denying an application by Oncor to amend its distribution cost recovery factor.
SUMMARY
DATE: May 7, 2019
TO: Ronald L. Olson, City Manager
FROM: Kathy Davis, City Attorney
SUBJECT: Denying an application by Oncor to amend its distribution cost recovery factor
BACKGROUND AND FINDINGS:
Pursuant to state law, the city has regulatory authority over the rates and charges of electric utilities. The city is a member of the Steering Committee of Cities Served by Oncor (OCSC), which is a group of cities served by Oncor that have joined together to efficiently and in a cost-effective manner review and respond to electric issues affecting rates charged in Oncor's service area.
On April 8, 2019, Oncor filed with the City an Application for Approval to Amend its Distribution Cost Recovery Factor (DCRF). The application seeks to increase electric distribution rates by approximately $29,433,804 system wide. All electric utility customers in the city served by Oncor would be impacted in the form of increased rates and charges.
After preliminary review, the attorneys for OCSC recommend that its member cities deny the application. OCSC has engaged a consultant to review the filing and identify adjustments that would make any increase more reasonable. Public Utility Commission (PUC) rules allow the cities 60 days to take action. Once denied, the application will go to the PUC for a determination of the appropriate DCRF adjustment.
THE ALTERNATIVES CONSIDERED:
The city’s options are:
1) to deny Oncor’s application, as recommended by OCSC, and pursue a reasonable settlement of increases to electric distribution rates directly with Oncor or through administrative proceedings at the PUC;
2) support Oncor’s application, which would result in increased rates for citizens served through Oncor’s distribution system; or
3) do nothing, and the rates as to the city would be appealed directly to the PUC.
Which alternative is recomme...
Click here for full text