R233RESOLUTION NO. 233
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
KENNEDALE, TEXAS, AUTHORIZING INTERVENTION IN THE
PUBLIC UTILITY COMMISSION PROCEEDING,
TRANSFERRING THE OWNERSHIP OF TXU/ONCOR, DOCKET
NO. 34077; AUTHORIZING PARTICIPATION IN A COALITION
OF MUNICIPALITIES, PUBLIC ENTITIES AND COMMERCIAL
CUSTOMERS KNOWN AS THE ALLIANCE OF TXU/ONCOR
CUSTOMERS ("ATOC"); PROVIDING FOR THE RETENTION
OF LEGAL EXPERTS; PROVIDING FOR NOMINAL FUNDING;
FINDING THAT THE MEETING COMPLIES WITH THE OPEN
MEETINGS ACT; SUCH OTHER FINDINGS AND PROVISIONS
RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, On February 26, 2007, a proposed buyout of TXU Corp. was
announced. The potential purchasers are several equity firms, including Kohlberg Kravis
Roberts & Co. ("KKR") and Texas Pacific Group ("TPG"). The purchase price has been
announced as $45 billion.
WHEREAS, on April 25, 2007, a filing was made with the Public Utility
Commission by Oncor Electric Delivery Company, formerly known as TXU Electric
Delivery Company (hereinafter referred to as "TXU/Oncor") and Texas Energy Future
Holdings L.P. ("TEF") for a declaration that the acquisition of TXU/Oncor is in the
public interest.
WHEREAS, the applicants have claimed that the transaction is in the public
interest, in part, due to a commitment not to seek TCEQ permits for 8 coal-fired
generating stations and a 10% reduction in price for TXU Energy, an Affiliate Retail
Electric Provider ("A-REP"), for customers who have not chosen an alternative electric
service plan since the advent of retail competition.
WHEREAS, the validity and value of the foregoing commitments are not beyond
question;
WHEREAS, the Staff of the PUC reported in March 2007 that TXU/Oncor was
over-earning by approximately $80 million.
WHEREAS, TXU/Oncor has not committed to any reduction in distribution rates;
and
WHEREAS, there is genuine concern about the impact of the leveraged buyout by
KKR and TPG on the rates of electric customers who reside within the service territory of
TXU/Oncor;
WHEREAS, the purchase of TXU Corp. by KKR/TPG is the largest leveraged
buyout by private equity funds;
WHEREAS, a public interest determination of TXU/Oncor buyout requires
specialized expertise of lawyers and financial analysts; and
WHEREAS, by forming a coalition with other public entities and commercial
customers, it will be possible to review the TXU/Oncor buyout in a more efficient and
complete manner.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KENENDALE,TEXAS:
Section 1. That the findings set out in the preamble to this resolution are
hereby in all things approved and adopted.
Section 2. That the City is authorized to join with other municipalities, public
entities and commercial customers in order to form and participate in the Alliance of
TXU/Oncor Customers ("ATOC"), to form a steering committee to provide direction and
guidance to legal experts.
Section 3. That the City authorizes the law firm of Herrera & Boyle, PLLC
and Michael Pichinson of the Public Power Pool/Association Power to act on behalf of
the City and ATOC in PUC Docket No. 34077.
Section 4. That the City authorizes the payment of to the law
firm of Herrera & Boyle, PLLC to act on behalf of the City as a participant in ATOC.
Section 5. That the meeting at which this resolution was approved was in all
things conducted in strict compliance with the Texas Open Meetings Act, Texas
Government Code, Chapter 551.
Section 6. That this resolution shall become effective from and after its
passage.
PASSED AND APPROVED this 12th day of July, 2007.
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City Secretary
APPROVED AS TO FORM:
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Wayne Olson, City Attorney