R-2488-2-06RESOLUTION NO. 2488-2-06(R)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ACCEPTING SETTLEMENT WITH TXU ELECTRIC
DELIVERY; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Allen, Texas, is a member of the Steering Committee of Cities served by TXU
(Steering Committee); and,
WHEREAS, the Steering Committee did encourage certain member cities to initiate Show -Cause rate
proceedings against TXU Electric Delivery (Electric Delivery); and,
WHEREAS, Electric Delivery and the Steering Committee engaged in settlement discussions regarding
abatement of any full-scale into 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 terns by two years and adds benefits to Cities, including
' reimbursement for participation in ERCOT 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 a pass-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 a four-year period producing increased revenues for each
member city; and,
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; and,
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.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, THAT:
' SECTION 1. 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 is hereby ratified.
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SECTION 2. This resolution shall become effective immediately upon its passage.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, ON THIS THE 28fn DAY OF FEBRUARY, 2006.
APPROVED:
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Stephentferrell, MAYOR
ATTEST:
Shelley B. George, C, CITY SE TARY
Resolution No. 2488-2-06(R), Paget