Extension and Modification of Settlement Agreement



 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 is feasible, (b) such undergrounding is consistent with the PUC’s Substantive Rules and ERCOT’s
requirements, and (c) Electric Delivery can recover the costs of such undergrounding through a surcharge in the requesting city. Electric Delivery will not be obligated to file the tariff for city approval until after the expiration of the
Price to Beat or the modification of the Price to Beat in a manner that allows pass through of tariff charges to the ultimate consumer. 
 10. Electric
Delivery agrees to provide quarterly updates to representatives designated by Cities and their consultants concerning Electric Delivery’s capital expenditure projects and affiliate transactions, the creation and regulatory treatment of a
Pension and Health Benefits Reserve for Electric Delivery, possible workable parameters for performance based rates for Electric Delivery, and other topics as agreed upon by the Signatories. Electric Delivery will work with Cities to provide
information requested by Cities concerning those topics. 
 11. Electric Delivery shall pay up to $10,000 per month in regulatory expenses directly to
Cities’ consultants, after receipt of appropriate documentation and invoices, provided said expenses may be deferred for recovery. Cities agree to support recovery of such costs in Electric Delivery’s next rate case. Should recovery be
denied by the PUC, then the payments will immediately cease. 
 12. Electric Delivery shall pay up to $40,000 per month through December 2009 to reimburse
Cities for their involvement before ERCOT and the PUC concerning market design issues, after receipt of appropriate documentation and invoices. 
 13.
Electric Delivery agrees to reimburse Cities for the expenses incurred related to the negotiation of this Agreement in an amount not to exceed $25,000 after receipt of appropriate documentation and invoices, and Cities agree that those costs can be
deferred for recovery in its next rate case and agree to support deferral and recovery in that case. Notwithstanding paragraph 14, any rights Cities may have under PURA, and any provisions in existing applicable franchise agreements to the contrary,
Electric Delivery agrees to reimburse Cities for reasonable and necessary expenses incurred in Electric Delivery’s next system-wide rate case in an amount not to exceed $2,000,000. The rate case expense reimbursements will be made monthly,
beginning with the first month after the consultants are hired. Cities further agree not to contest the recovery of Cities’ rate case expenses and Electric Delivery’s reasonable and necessary rate case expenses in Electric Delivery’s
next system-wide rate case. 
  

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 14. Electric Delivery agrees that, in franchise negotiations, it will not seek to extend the prohibition on reimbursement
of municipal rate case expenses beyond June 2008. 
 15. Electric Delivery agrees to pay Cities $18 million for beneficial public use. The Signatories agree
that that amount will be paid in two installments: (1) $9 million will be payable two weeks after Electric Delivery receives the notice from Cities required in paragraph 4 of this Agreement; and (2) $9 million will be payable by
January 31, 2007. The Signatories agree that member cities are to apply these funds for beneficial public use and that the determination of what activities are beneficial to the public is within the discretion of each member city. Those
activities include, but are not limited to, energy education for citizens, reductions in rates for city services, investments in community facilities, and investments in energy efficiency measures. 
 16. The Signatories acknowledge that Electric Delivery intends to offer certain terms of this Agreement to cities served by Electric Delivery that are not listed on
Exhibit A (“Negotiations”). Electric Delivery agrees that all cities listed on Exhibit A are entitled to Most Favored Nations protection during those Negotiations and that any benefits that Electric Delivery agrees to provide to any city
during those Negotiations that are not already included in this Agreement will be offered to all cities listed on Exhibit A. Cities acknowledge and agree that to receive any additional benefits from Electric Delivery, additional consideration from
Cities to Electric Delivery may be required. 
 17. The Signatories agree that the amounts paid by Electric Delivery to Cities pursuant to paragraphs 4, 11,
12, 13, and 15 of this Agreement are paid solely in consideration for Cities’ continued abatement or dismissal of, and forbearance from filing or pursuing, Show Cause Actions against Electric Delivery and Cities’ agreement to abide by the
terms of this Agreement, and to reimburse Cities’ expenses associated with the Show Cause Actions and other regulatory proceedings. To the extent that the amounts paid may be in excess of Cities’ expenses, the excess is paid solely in
order to settle the matters that are the subject of this Agreement. Signatories recognize and agree that the payments specified in this Agreement are not a rate reduction, refund, rebate, discount, preference or privilege of any kind for services
provided by Electric Delivery or any of its affiliates or predecessors in interest under any tariff, whether in the past, now, or in the future. As such, the provision of electric delivery service to Cities by Electric Delivery or any affiliate or
predecessor has been and will continue to be governed solely by the rates, terms, and conditions of the applicable tariffs. 
 18. The Signatories agree that
the rights, duties, benefits, and obligations set forth in this Agreement are binding upon their successors in interest. 
 19. This Agreement shall become
effective only upon the execution of this Agreement and the entry of resolutions or orders continuing the abatements or dismissing the Show Cause Actions. 
 20. Each person executing this Agreement represents that he or she is authorized to sign this Agreement on behalf of the party represented. 
  

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 21. The Signatories expressly acknowledge and agree that oral and written statements made by any party or its
representative during the course of the settlement negotiations that led to this Agreement cannot be used or portrayed as an admission or concession of any sort and shall not be admissible as evidence in any proceeding in any forum. 
 22. The Signatories agree that this Agreement extends and modifies the terms of their February 22, 2005 Settlement Agreement. To the extent that any terms of that
February 22, 2005 Settlement Agreement are not restated here, the Signatories agree that those terms have expired. To the extent that there are any inconsistencies between the terms of this Agreement and the terms of the February 22, 2005
Settlement Agreement, the Signatories agree that the terms of this Agreement control. 
 Executed on this the 27th day of January, 2006, by the
Signatories hereto, by and through their undersigned duly authorized representatives. 
  

									
	TXU Electric Delivery Company	 		 	Steering Committee of Cities Served by TXU Electric Delivery Company on behalf of all cities listed on Exhibit A to this Agreement
					
	By:	 	 /s/ David T. Gill
	 		 	By:	 	 /s/ Jay Doegey

	Its:	 	 Vice President
	 		 	Its:	 	 Chair


  

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 Exhibit A 
 City of Addison 
 City of Allen 
 City of Alvarado

 City of Andrews 
 City of Archer City 
 City of Arlington 
 City of Belton 
 City of Benbrook 
 City of Big Spring 
 City of Breckenridge 
 City of Bridgeport 
 City of Brownwood 
 City of Buffalo 
 City of Burkburnett 
 City of Burleson 
 City of Caddo Mills 
 City of Cameron 
 City of Canton 
 City of Carrollton 
 City of Celina 
 City of Centerville 
 City of Cleburne 
 City of Colleyville 
 City of Collinsville 
 City of Comanche 
 City of Corinth 
 City of Crowley 
 City of Dallas 
 City of Dalworthington Gardens 
 City of DeLeon 
 City of Denison 
 City of Early 
 City of Eastland 
 City of Edgecliff Village 
 City of Euless 
 City of Farmers Branch 
 City of Flower Mound 
 City of Forest Hill 
 City of Fort Worth 
 City of Frisco 
 City of Frost 
 City of Glenn Heights 
 City of Grand Prairie 
 City of Granger 
 City of Grapevine 
 City of Gunter 
 City of Harker Heights 
 City of Heath 
 City of Henrietta 
 City of Hewitt 
 City of Highland Park 
 City of Honey Grove 
 City of Howe 
 City of Hurst 
 City of Hutto 
 City of Irving 
 City of Jolly 
 City of Josephine 
 City of Justin 
 City of Kaufman 
 City of Keller 
 City of Kerens 
 City of Lakeside 
 City of Lamesa 
 City of Lindale 
 City of Little River Academy 
 City of Malakoff 
 City of Mansfield 
 City of McKinney 
 City of Midland 
 City of Murphy 
 City of Murchison 
 City of New Chapel Hill 
 City of North Richland Hills 
 City of O’Donnell 
 City of Oak Leaf 
 City of Oak Point 
 City of Odessa 
 City of Ovilla 
 City of Palestine 
 City of Pantego 
 City of Paris 
 City of Plano 
 City of Ranger 
 City of Rhome 
 City of Richardson 
 City of Richland Hills 
 City of Roanoke 
 City of Robinson 
 City of Rockwall 
 City of Rosser 
 City of Rowlett 
 City of Sherman 
 City of Snyder 
 City of Southlake 
 City of Sulphur Springs 
 City of Sunnyvale 
 City of Sweetwater 
 City of Temple 
 City of The Colony 
 City of Tyler 
 City of University Park 
 City of Venus 
 City of Waco 
 City of Watauga 
 City of White Settlement 
 City of Wichita Falls 
 City of Woodway 









 Exhibit B 
 City of Arlington 
 City of Benbrook 
 City of Brownwood

 City of Burleson 
 City of Carrollton 
 City of Dallas 
 City of Dalworthington Gardens 
 City of Denison 
 City of Ft. Worth 
 City of Harker Heights 
 City of Heath 
 City of Pantego 
 City of Plano 
 City of Richland Hills 
 City of Robinson 
 City of Rockwall 
 City of Snyder 
 City of Sulphur Springs 
 City of The Colony 
 City of Woodway 









 Exhibit C 
 City of Addison 
 City of Allen 
 City of Andrews

 City of Archer City 
 City of Belton 
 City of Big Spring 
 City of Breckenridge 
 City of Bridgeport 
 City of Burkburnett 
 City of Celina 
 City of Cleburne 
 City of Colleyville 
 City of DeLeon 
 City of Early 
 City of Eastland 
 City of Euless 
 City of Farmers Branch 
 City of Flower Mound 
 City of Forest Hill 
 City of Frisco 
 City of Glenn Heights 
 City of Grand Prairie 
 City of Grapevine 
 City of Henrietta 
 City of Highland Park 
 City of Howe 
 City of Hurst 
 City of Irving 
 City of Keller 
 City of Lakeside 
 City of Lamesa 
 City of Lindale 
 City of Little River Academy 
 City of Mansfield 
 City of McKinney 
 City of Midland 
 City of Murphy 
 City of North Richland Hills 
 City of Oak Point 
 City of O’Donnell 
 City of Odessa 
 City of Palestine 
 City of Paris 
 City of Richardson 
 City of Roanoke 
 City of Rowlett 
 City of Sherman 
 City of Southlake 
 City of Sunnyvale 
 City of Sweetwater 
 City of Temple 
 City of Tyler 
 City of University Park 
 City of Waco 
 City of Watauga 
 City of White Settlement 
 City of Wichita Falls 









 Exhibit D 
 January ___, 2006 
 Mr. Geoffrey M. Gay, Esq. 
 Lloyd Gosselink 
 816 Congress Avenue, Suite 1900 
 Austin, Texas 78701 
  

	 	RE:	Settlement Agreement between Steering Committee of Cities Served by TXU Electric Delivery and TXU Electric Delivery Company 

 Dear Mr. Gay: 
 I hereby acknowledge that the Steering
Committee of Cities Served by TXU Electric Delivery has the authority to act on behalf of the City of __________________ in the negotiation and execution of a settlement agreement with TXU Electric Delivery Company. 
 I also represent that I am duly authorized by the City of ________________ to sign this letter. 
  

	
	 Sincerely,

	
	   
	 [Name]

	 [Position]