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Oncor’s request won’t go far in Ennis

There’s just not a lot of sympathy for Oncor’s rate filing for approval to impose rate hikes with the intenion of increasing their take during an economic struggle.
Oncor came forward with a plan for a $353-million statewide rate hike early this month, and Ennis moved to join a group of other municipalities on the company’s 146-member steering committee in suspending that request.

That move buys a bit more wiggle room and negotiating time for municipalities like Ennis. Here, the most recent municipal rate increase to support local government activity and services was painstakingly considered and carefully planned to be as palatable as possible and produce the maximum benefit.

In Oncor’s case, their request comes with the purpose of raising a 9-percent rate of return on investment to an 11.25 percent rate of return on investment. A local company representative told Ennis city commissioners that the Public Utilities Commission allows for rates that are designed to provide a 10.25-percent return.

That in and of itself is problematic: A private business with a virtually guaranteed return in this economy isn’t going to get any sympathy when asking for more.

Because of the right-of-way franchise fee agreement in place with Oncor, Ennis taxpayers actually be taxed twice in the event of an Oncor rate increase.

Electricity is a basic necessity, so paying increased rates is not a question of if, it’s a question of how much. Add to that the lost revenue from city franchise fees as users curtail kilowatt-hour use, and the loss of revenue would eventually strain Ennis’ budget in a way that could mean higher costs elsewhere where taxpayers provide support.

It’s just a bad time altogether to look for reasons to boost utility rates for more company gain. The arguments that the investments made in the company’s infrastructure and rising health care and retirement costs require the boost don’t wash when the company is still earning 9 percent.

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Posted by on Jan 20 2011. Filed under News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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