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August 3, 2020

Texas PUC approves Oncor DCRF settlement, discusses attorneys’ fees

by Kelso King, Grid Monitor
Source – Grid Monitor
Posted 07/31/2020

The Texas PUC approved a settlement agreement for a new Distribution Cost Recovery Factor for Oncor but most of the discussion focused on attorneys’ fees. Commissioner D’Andrea noted the recent trend of excluding attorneys’ fees but suggested they provide value to ratepayers and should be considered. Chairman Walker agreed but expressed concerns about ratepayers paying legal fees to litigate long-settled issues.

At the July 31, 2020 Open Meeting, Commissioner D’Andrea noted there has been a trend in settlements to do away with attorneys’ fees for both utilities and cities, adding that one of the common settlement provisions is that a party will not request attorneys’ fees. However, he noted that the PUCT’s rule suggests that attorneys’ fees provide value for ratepayers and, therefore, should be considered. The commissioner asserted that the proceedings not be bifurcated, that there should not be separate proceedings.

Commissioner D’Andrea suggested there could be transparency issues, noting that the Commission used to review the fees but now it is the General Counsels of the utilities. He wants to make sure that the PUCT’s “bar” is high enough, fees are reasonable but not too high. Commissioner D’Andrea wants to consider this issue some more over the coming year.

Chairman Walker expressed her desire that rate case expenses not go back for 15 years, adding that most ratepayers that benefitted would be gone by that time, adding that the PUCT’s Legal Division has done a good job of directing parties not to go back to that “quagmire.”

Chairman Walker noted that she had been interested in raising this issue in the Energy Efficiency Cost Recovery Factor (EECRF) dockets because the same issues are addressed year after year so there shouldn’t be a lot of issues. However, she was skeptical of ratepayers continuing to pay legal fees on issues that are “pretty settled” and was opposed to doing that but acknowledged that the issue requires balancing that with transparency.

Commissioner D’Andrea noted that his always very concerned about the cost of litigation for ratepayers. He believes there is a role for the Commission to play in rate cases and does not want that “black boxed away” without thinking about what that is doing to “the bar.”

The Commission adopted the proposed Order with minor revisions.

Background

On April 3, 2020, Oncor filed an application with the Commission and each of its municipal regulatory authorities for approval to amend its Distribution Cost Recovery Factor (DCRF). This is Oncor’s third DCRF proceeding since its last base rate proceeding, Docket No. 46957 (Oct. 2017). Oncor requested approval to amend its DCRF based on an annual revenue requirement of $116,327,475, after adjusting for load growth, an increase of approximately $75,889,531. Oncor claimed it invested $1,524,053,795 in its distribution system between January 1, 2017 and December 31, 2019.

On June 24, 2020, Oncor, Commission Staff, the Steering Committees of Cities Served by Oncor, the Alliance of Oncor Cities, and the Alliance for Retail Markets entered into a Settlement Agreement. Texas Industrial Energy Consumers did not oppose the settlement.

Under the settlement agreement, Oncor seeks an incremental increase to its DCRF revenue requirement of $69,889,531, effective September 1, 2020. This amount results from a black box reduction of $6 million to the DCRF revenue requirement increase originally requested in Oncor’s application. Under the settlement agreement, the following DCRF rates apply:

Rate ClassDCRF Charge Effective 9/1/20Billing Units
Residential$0.001287per kWh
Secondary < 10 kW$0.001374per kWh
Secondary > 10kW$0.266647per kW
Primary < 10 kW$0.000620per kWh
Primary > 10 kW$0.111613per kW
Primary Substation$0.029207per kW
Transmission$0.002994per kW
Lighting$0.004595per kWh
Wholesale Substation$0.045540per kW
Wholesale Distribution$0.194644per kW

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