Exhibit 10.(ss)
EXTENSION AND MODIFICATION OF
SETTLEMENT AGREEMENT
This Extension and Modification of
Settlement Agreement (“Agreement”) is made and entered
into between TXU Electric Delivery Company (“Electric
Delivery”) and the Steering Committee of Cities Served by TXU
Electric Delivery Company on behalf of all cities listed on Exhibit
A to this Agreement (“Cities”), hereinafter referred to
jointly herein as “Signatories.”
WHEREAS, on February 22, 2005,
the Signatories entered into a Settlement Agreement that resolved
numerous issues, including issues arising out of the resolutions
passed in 2004 by 23 cities that are members of Cities requiring
Electric Delivery to file with those cities information that
demonstrates good cause for showing that Electric Delivery’s
transmission and distribution rates should not be reduced
(hereinafter referred to as “Show Cause
Actions”);
WHEREAS, as part of that
February 22, 2005 Settlement Agreement, Electric Delivery
agreed to file a system-wide rate case by July 1,
2006;
WHEREAS, Cities and Electric
Delivery desire to extend certain terms of the February 22,
2005 Settlement Agreement and to resolve all outstanding issues
related to the pending and potential Show Cause Actions, the
upcoming system-wide rate filing, and other regulatory issues;
and
WHEREAS, after extensive
negotiations, Cities and Electric Delivery have reached a
compromise and settlement to resolve those issues.
NOW, THEREFORE, the Signatories,
through their undersigned representatives, hereby agree to the
following:
1. Electric Delivery agrees to
propose and support in its next system-wide rate case or city rate
inquiry one or more municipal rates, each without a demand ratchet,
that together will cover all municipal accounts, including a street
lighting rate and municipal pumping rate that will be lower than
they otherwise would be. Cities agree to provide to Electric
Delivery any information needed to design the rates described in
this paragraph.
2. Electric Delivery agrees to file
a system-wide rate case at the Public Utility Commission of Texas
(“PUC”) no later than July 1, 2008, based on a
test year ending December 31, 2007 unless Cities and Electric
Delivery mutually agree that such a filing is unnecessary. For
those cities that do not have a City Council meeting in July, 2008,
Electric Delivery will extend its effective date to accomplish
suspension by August 31, 2008. However, if Electric Delivery
files a system-wide rate case at the PUC on or before June 1,
2008, then Electric Delivery will not extend its effective
date.
3. Cities agree not to pursue any
abated Show Cause Actions and not to initiate similar actions
before July 1, 2008, provided the provisions of this Agreement
are honored. Cities agree not to intervene in, or participate in
any manner in, any show cause action initiated at the PUC or in any
other jurisdiction prior to the proceeding described in paragraph
2, or in any appeals of such show cause actions, except as
necessary to protect the tariff or tariff-efforts associated
with
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paragraph 1 or to protect the city or its
residents from being prejudiced in any show cause action pending on
appeal at the PUC. If Cities intervene in a show cause action
pending on appeal at the PUC, then Cities agree not to take any
position in that proceeding that is inconsistent with its
obligations under this Agreement.
4. Cities agree to provide notice to
Electric Delivery that (1) all cities listed on Exhibit B to
this Agreement have continued their abatements of, or have
dismissed, show cause actions pending against Electric Delivery,
and (2) each city listed on Exhibit C to this Agreement has
passed a resolution ratifying this Agreement or provided to Cities
a letter in substantially the same form as Exhibit D to this
Agreement that has been signed by an authorized representative of
the city. On March 31, 2007, March 31, 2008, and
March 31, 2009, Electric Delivery will make a cash payment of
$8 million to Cities. Electric Delivery’s obligation to make
those payments ceases on the date upon which Cities fail to comply
with their obligations under this Agreement or the date upon which
the tariffs approved in Electric Delivery’s next system-wide
rate case at the PUC or in a city rate inquiry become effective on
a temporary or permanent basis (“Termination Date”);
provided, however, in the year the new tariffs become effective,
the annual payment shall be prorated until the Termination Date.
“System-wide rate case” includes any system-wide change
to base rate tariffs as a result of proceedings initiated under
Subchapters C or D of PURA Chapter 36 and any proceeding changing
Electric Delivery’s base rates initiated as a result of a
settlement.
5. The Signatories acknowledge and
agree that under paragraph 4 of the February 22, 2005
Settlement Agreement, Electric Delivery will pay Cities $8 million
on March 31, 2006.
6. Electric Delivery agrees to work
with Cities to improve the timeliness of streetlight maintenance
and to develop a process so that every city-owned and Electric
Delivery-owned street light is assigned an identifiable geographic
location. Signatories agree to establish a task force of senior
employees that will develop the process and planned rollout for the
street light assignment project. Electric Delivery also agrees to
provide to Cities a specific contact person (or persons) within
Electric Delivery who will be responsible for handling all
unresolved Cities’ requests with respect to streetlights,
including, but not limited to, billing, maintenance, installation,
removal, and account initiation and closure. Signatories agree to
diligently pursue resolution of the issues discussed in this
paragraph; however, failure to reach an agreement with respect to
these issues will not constitute a breach of this Agreement by
either Cities or Electric Delivery.
7. Electric Delivery agrees to work
with Cities to establish improved communication, coordination, and
timing of construction concerning relocations of Electric
Delivery’s facilities in public right of way. Signatories
agree to establish a task force of senior employees that will
develop the process and planned rollout of an improved relocation
process. Signatories agree to diligently pursue resolution of the
issues discussed in this paragraph; however, failure to reach an
agreement with respect to these issues will not constitute a breach
of this Agreement by either Cities or Electric Delivery.
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8. The Signatories acknowledge that they have
reached a separate agreement concerning outstanding issues related
to franchises. By its terms, that separate agreement becomes
effective only upon this Agreement’s becoming effective
pursuant to the terms of paragraphs 4 and 19.
9. Electric Delivery agrees to
negotiate with Cities, and Cities agree to approve, a tariff that
permits Cities to request undergrounding of new or existing
distribution facilities. The tariff shall ensure full cost recovery
by Electric Delivery through a surcharge in the requesting city in
the event that no third party is required by Electric
Delivery’s tariff, or applicable city ordinance, to pay for
undergrounding costs. That tariff will also allow Cities to request
undergrounding of transmission lines to the extent Electric
Delivery determines that (a) such undergrounding i
