RES 2007-16RESOLUTION NO. 2007-1 6
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF
TROPHY CLUB, TEXAS, AUTHORIZING INTERVENTION IN THE
PUBLIC UTILITY COMMISSION PROCEEDING,
TRANSFERRING THE OWNERSHIP OF TXUIONCOR, DOCKET
NO. 34077; AUTHORIZING PARTICIPATION IN A COALITION
OF MUNICIPALITIES, PUBLIC ENTITIES AND COMMERCIAL
CUSTOMERS KNOWN AS THE ALLIANCE OF TXUIONCOR
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 "TXUIOncor") and Texas
Energy Future Holdings L.P. ("TEF") for a declaration that the acquisition of
TXUIOncor 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 TXUIOncor
was over-earning by approximately $80 million.
WHEREAS, TXUIOncor has not committed to any reduction in distribution
rates;
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 TXUIOncor;
WHEREAS, the purchase of TXU Corp. by KKRPTPG is the largest
leveraged buyout by private equity funds;
WHEREAS, a public interest determination of TXUIOncor 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 TXUIOncor buyout in a
more efficient and complete manner.
NOW BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF
TROPHY CLUB, 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 Town is authorized to join with other municipalities,
public entities and commercial customers in order to form and participate in the
Alliance of TXUIOncor Customers ("ATOC"), to form a steering committee to
provide direction and guidance to legal experts.
Section 3. That the Town authorizes the law firm of Herrera & Boyle,
PLLC and Michael Pichinson of the Public Power PoolIAssociation Power to act
on behalf of the Town and ATOC in PUC Docket No. 34077.
Section 4. That the Town authorizes the payment of an amount not to
exceed $200.00 to the law firm of Herrera & Boyle, PLLC to act on behalf of the
Town 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 gth day of July, 2007
Mayor, Nick Sanders
ATTEST:
APPROVED AS TO FORM: