SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event reported) - December 17,
1997
TEXAS UTILITIES ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
TEXAS 0-11442 75-1837355
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2001 Bryan Tower, Dallas, Texas 75201
(Address of principal executive offices)
Registrant's telephone number, including area code -
(214) 812-4600
ITEM 5. OTHER EVENTS
On December 17, 1997, the Registrant announced a
proposed settlement with respect to the retail rates that it
would charge and the mitigation of potentially stranded costs
that it would achieve during 1998 and 1999. The proposal is not
unanimous, but is a joint agreement among the Registrant, the
staff of the Public Utility Commission of Texas (PUC), the Office
of Public Utility Counsel, and certain consumer groups and
industrial customers served by the registrant. The proposal is
subject to PUC approval, which is anticipated on an interim basis
before the end of the year. Pursuant to the agreement, the
Registrant will implement base rate reductions effective January
1, 1998, equal to 4% for residential customers, 2% for general
service customers taking electric service at secondary voltages
(typically small and medium size businesses), and 1% for all
other retail customers. Effective January 1, 1999, an additional
reduction of 1.4% would apply to the base rate charges to
residential customers. These rate credits are expected to
produce revenue reductions of $118 million in 1998 and $145
million in 1999. In addition, the settlement caps the return on
invested capital that the registrant will earn in 1998 and 1999.
Any return in excess of the cap will be applied as additional
production depreciation to mitigate potentially stranded costs.
The settlement also provides for mitigation of potentially
stranded costs through the redirection of transmission and
distribution depreciation during the two-year period, amounting
to approximately $335 million, as additional production
depreciation.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
TEXAS UTILITIES ELECTRIC COMPANY
By: /s/ Robert S. Shapard
---------------------------
Robert S. Shapard
Treasurer and Assistant Secretary
Date: December 17, 1997
