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Parties File Joint Proposal On Threshold Legal Issues in Sharyland Rate Case To Establish Territory-Wide Rates

August 31, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Parties have reached agreement on a joint proposal addressing certain threshold legal issues, mostly concerning corporate structure and associated treatment, in Sharyland Utilities' current rate case which is to implement uniform, territory-wide distribution rates for the ex-Cap Rock and McAllen service areas

The terms of the joint proposal include:

• The leases between InfraREIT's Sharyland Distribution & Transmission Services subsidiary (SDTS), the owner of the transmission and distribution assets, and Sharyland Utilities, the operator, will be treated as part of an SDTS tariff subject to PUCT approval and regulation;

• The replacement of the five current lease agreements between Sharyland and SDTS with two leases (one for transmission and one for distribution);

• The lease payments under the lease agreements will be set and updated by the PUCT from time to time, through rate cases and other interim updates filed by SDTS;

• Sharyland and SDTS will make an amended rate case filing, within 90 days of the PUCT approval of the joint proposal, that will include a request for PUCT approval of the proposed lease payments;

• Sharyland and SDTS will amend the rate case filing to include a request for an SDTS certificate of convenience and necessity allowing SDTS to own and lease assets to Sharyland;

• A reference to mechanisms by which lease payments could be updated between rate cases; and

• A note that, in light of the parties' agreement on other issues in the joint proposal, the PUCT will no longer need to consider or rule on several of the other remaining threshold issues, such as the validity of the restructuring order that the Sharyland companies received from the PUCT in 2008, and whether the PUC can approve the rates of a utility without a certificate of convenience and necessity Such terms result from the joint proposal's conclusions, which include, among others:

• The Signatories agree that both Sharyland and SDTS are electric utilities and TDUs as defined by PURA.

• The Signatories agree that the leases between SDTS and Sharyland will be treated as part of an SDTS tariff subject to Commission approval and regulation

Docket 45414

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