Feb 01, 2016 City Council on 2016-02-01 11:30 AM

joint meeting of the Public Utility Board of the City of Denton and the Denton City Council. It is Monday, February the 1st, 2016 at about 11 31 p.m. I will open up the City Council portion of the meeting and pass it over to the chair of the PUB and they can open up that meeting as well. So we have a quorum here, so I'm opening up the City Council portion of this meeting. Fantastic. Do we want to do introductions in the open or closed session portion? We can do that. I think we do it in the open session. Okay, let's just go around and introduce ourselves. Start with me and then we'll move to my left. Chris Watts, mayor. Kathleen Wasney, City Council District 3. Barbara Russell, Public Utility Board. Joey Hawkins, District 4. Keely Briggs, District 2. Brendan Carroll, Public Utilities Board. Greg Johnson, At-Large, District 6. Kevin Roe, District 1. Charlie Jackson, Public Utilities Board. Dalton Gregory, Place 5. Phil Galev, PUB. Brady Robinson, Public Utilities Board. Fantastic. Alright, without further ado, we'll go ahead and go into our first item on the agenda, which is a closed meeting. Agenda item 1A is deliberations regarding certain public power utilities, competitive matters under Texas Government Code section 551.086, and that is receive a presentation from Denton Municipal Electric staff regarding public power competitive and financial matters. Good afternoon. This is a meeting, joint meeting of the Denton City Council and the Public Utility Board on Monday, February 1st, 2016. The City Council does have a quorum and I will open the City Council portion of this meeting and pass it to the chair of the PUB. And being a quorum of the Public Utility Board here, we'll open the Public Utility Board meeting as well. And we're opening this meeting at 1.01 PM again on Monday, February the 1st. Our one and only item for consideration is the work session report 1A. Receive report and hold discussion, give staff direction on the Denton Renewable Plan. Thank you, Mayor, Council and PUB. As we were sitting out here looking towards the dais, we started realizing now what it looks like to have a 14- member council. It's rather intimidating. So we'll move forward past that. So I want to talk today about TMPA and Renewable Denton Plan and how they kind of interact with each other. This is of course a picture of the Gibbons Creek plant. As discussed previous sessions, we have some upcoming TMPA decisions. A request for proposal was issued on January 29 th. We'll be coming back with results from what we see from that those requests for proposals in the future. We also will be coming back with to adopt concurrent resolutions that we adopt the recent state legislation that was passed related to TMPA. We also have a joint operating agreement that will amend our power sales agreements that will clarify many of the things that weren't abundantly clear within our operation of TMPA. And by September 30, 2016 each member city must provide those their intent if they desire to exit TMPA on 2018, September 30, 2018. As we've discussed, we're working with joint operating agreement to clarify what our options are going forward. Proposal submission deadline for the RFP is April 15th. We will be analyzing those during the latter part of April and try to make a finalist selection and those finalists will present to the TMPA board. TMPA has a board meeting scheduled for May 12th. TMPA decisions are related to our power supply going forward, but they're not sequential. In other words, it's not that we have to decide one before we decide the other. They are related. They do have an impact on each other. But the TMPA decisions will be based on the responses we get to these RFPs, what kind of offers we get for the plant going forward, and in our discussions with the other member cities and what their actions are and what they take forward. That is the direction we're getting, of course, and gotten from the PUB and from the council has been to proceed forward to look and see what our options are with TMPA and we'll continue to do that. With that, I'd be open for any questions or comments. Well, Mayor Pro Tem has a couple questions. Well, actually Mayor, my questions, you know, we have this opportunity on rare occasions to sit down with PUB. And so if people have questions on the staff presentation, let them ask them first. I have a couple of questions I want to ask the members of the Public Utility Board. Sure. Any questions for staff? Yes, Councilmember Hawkins. Thank you, Mayor. On September 2016, when we have to get our notice of intent, what exactly does that, what is the criteria of that intent ? What does that have to include? So in the existing Power Sales Agreement, it provides that notice. I think when it was originally written, it was thinking that it would be a what I call once-and-done decision, that you declare you're out, you would be out in September 2018. Many of the cities desire since there's so many issues, regulatory and environmental laws being contempl ated for a coal burning plant, there are others in the member cities that are desiring to extend that or to have an option period after September 2016 to be able to declare and still have two years out, but that not to be a one-and-done decision. Okay. Any other questions for staff? Councilmember Johnson. Phil and Ashley, I just want to make sure I have it right. So the the renewable debt and plan that we've been talking about does contemplate all of the remaining debt obligation that Denton has as it relates to TNPA. Correct. But my understanding is it gives no future value to TNPA whatsoever. Correct. So it's all of the potential negative of the debt, but there's no potential positive of any future incomes or anything that would come back. Is that correct? That's correct. Thank you. Any other questions for staff? We move to Mayor Pro Tem's questions for the PUB. All right, Mayor Pro Tem. Thank you. Well, I don't know if the PUB members are aware of this or not, but there's been a little bit of discussion over the last few months about the debt and renewable plan. And so the question I have for you guys, it's three questions actually. We as a council gave a charge to the staff of DME to come up with a plan, new plan that increased our renewables, that kept our rates competitive, and that ensured reliability. So I guess the first question I have, and I'm gonna ask all three of them so that I'll get out of the way and then you can just make your comments as you wish. The question I have is, were we on target by setting those goals for the staff? Did we miss something by saying giving them those three goals? The second question is, do you think from your knowledge of the plan that was presented, the renewable dentin plan, how well did they do in achieving those three goals? You know, very well somewhat. No, they didn't at all. And then the third question I have is, do you still have questions that you need answers to regarding the renewable dentin plan? So those are my three questions and Mr. Chair of the PUB, if you want to call on your members or answer, all ears. Okay. Thank you very much. I'll just ask, I'll go down the line to PUB members if there's any answers to these questions or follow-ups. If you want me to, I'll be glad to start it off if you want . Yeah, I guess an answer to your first question, is that on target? Yeah, I think we talk about the three legs of the stool, if you will, that have to be present and so depending upon, you know, we think about our ratepayers or a customer base or citizens and what does it mean? Which of these is more important to each one of them? And I think there's not really a right answer. I think there's certain pieces of every one of these are as important or more important. So if I were to rank them or you were to rank them or somebody else were to rank them, they may not come out one, two, three exactly the same. And so it's a balance that we talk about and how do you balance reliability with rates because I guarantee you rates mean more to an industrial commercial user and reliability than it necessarily would renewability, but it may be just the opposite for somebody else. And so I think it's a very fair challenge, if you will, to say take these three things into consideration. As far as how the staff is done answering those with the Denton Renewable Plan, I think that they I think they've addressed all three. Yeah, honestly, personally when they when they brought a 70% renewable suggestion to us, I thought well that's that may be may not be cutting edge. It may be bleeding edge because you just want to you want to make sure is that out of line as as we've come to know the plan or look at the plan they've done a good job of putting reaching that which I think is a very lofty goal. For some people anything short of 100% is is not enough, but 70% is a pretty good pretty good target pretty good goal. And as far as the rates, we know all the challenges coming up ahead of Phil was talking about you know, we're in RFPs now with TMPA and so you know what is going to affect our rates in the future not just now but in the future and we have to think in these things in 20, 30, 40, sometimes 50 year strategies and so I think they've taken care of the rate part of it as far as how do we how do we take care of the challenges we have as far as debt? Having having an asset that we may or may not want that may or may not be perhaps today is not efficient to run but you know as circumstances change it may be coal may be a better way of doing things again, who knows? And certainly reliability the type of the type of generation plans I think that they've come forward with to be to be quick start they will have a very short uptime if you will if the wind quits blowing the skies get cloudy you got to have it either you got to buy it from somebody else or you got to have your own source of generation to make up for that or to back that up and so I think the staff has done very well and and that's again, that's my personal opinion you can ask other PGBM members I really have any other questions other than you know I'm concerned we try to play the futures market of gas prices and at what point in time or you know we do the guessing game of regulatory things you know is is gas going to be the coal of in 20 years where the EPA says you need to divest yourself of this with the regulations become so burdensome that you can't burn gas Who knows there's a lot of there's a lot of questions when you do that so I don't know if there's any questions. I have that really can be answered other than You know can how far out can we go to purchase gas futures? What's how do we how do we? How do we hedge our bet on gas prices for to feed this these these generation plants So that's a long answer I'm sorry, but you did ask three questions Then you can refresh my memory are we on target? Did you make the proper choice? charged to the To the staff about getting us to renewable didn't a trend setter. I recall when we went to 40% renewable I was in a meeting at state at my professional organization and I took the literature down to them and they were blown away because they said wow you're far ahead So when you're when you're far ahead that means you don't have as many people to ask but I recall when we were hiring the staff that we now have a number of them and their credentials and we hired them because they had their credentials to look forward and So I think your charge was correct I think we have the people in place to make those judgments and I think we have the right to ask them the questions I don't have any other questions. I am I Am learning every time I attend a meeting I attended the public meeting recently I there's a lot of misinformation out there and I am going to continue to try to learn because It's the wave of the future. I think we're recognized as being Trendsetters in this respect and I think that they get when people ask today have they Have you talked to other people doing this? Well other people are calling Denton wanting to know What is it that you're doing down there because you seem to be? Very progressive. I'm sorry. I don't remember the second question The second one was looking at those three goals rates reliability and renewables. How well do you think the Dent on renewable plan? Accomplishes all three of those goals. I think it accomplishes those goals very well I Think Come on Charlie. I'm sorry. Yeah, I have very little to add to what Randy spoke about I think I would focus a little bit on the reliability portion of it because having worked for one of the larger entities that consumers of DME power knowing that Having that power available when you needed was really essential and not only did it impact, you know my little universe, but I'm sure that the Folks who are more in the commercial business of things in the city of Denton want to know that they've got the power when they Need it. I think this plan the way it's structured now does provide for that reliability, so And do you have questions I have no more questions for him Okay, running up saw your hand up there well, I think they're exactly right the three the three goals that the Council charged the DME with were on target I think two of the charges however are constant charges that they have which are to keep rates competitive Keep the ratepayers happy and keep the electricity on as much as as possible I don't think that they deviate from that in any of their activities We we meet with them on a regular basis. We hear of other things that they do to keep rates low and reliability So as as the it relates to the renewable Ditten plan Which I'll done is y'all that at this third component to To increase renewables and what that did is that opened it up to? Opened up different options opened up different ideas. I think it challenged the staff and come up with different ideas I can't imagine that they all agreed all the time about the best way to move forward kind of like you see within our community Everybody doesn't agree with with what the first step we should take Is I think as far as whether or not the plan? Addresses all of those those goals. I think it does very well I think what the challenge will be is that this isn't a static thing these guys are working all the time to do these things so We're kind of viewing this as a static thing, but while we 're thinking about it and thinking about this decision Well, there's all kinds of things moving and there's all kinds of things playing so how DME takes this project And if and if we move forward with the project how they take this This current technology with the gas plants and the renewable contracts that we that were that we're gonna get into and move forward I think that will be their challenge and I will always have questions Never not have any questions Do you have any specifically that you need answered? In this particular form no, but I do have questions absolutely Okay, thank you Brendan Phil last word Yeah, thank you. I Since I've been on the utility board I'm been amazed at the expertise and the and the quality of people that are that represent the energy and the municipality elements of our utility The most frequently asked question is how does it affect our rates? and I also am a big fan of the reliability. I think I don't think anybody will quarrel with the fact that Outages are absolutely minimal. I mean we we almost don't have any outages except for maybe You know a small area from time to time so rate and reliability are is my saw and I feel we meet those goals without exception and My only other question is is when can we get on with the project? Thank you Yes, Councilman road I was just I wanted to kind of look up and I just did on our website You can see how long some of these PUB members have been serving and it's pretty astonishing And I just want to thank you guys for your service Phil since 2004 It's over 10 years. I'm a short camera. Holy cow Randy since 2006 Barbara since 2009 Charlie since 2014 Brendan recently appointed so you guys have been thinking about rates utilities our electric infrastructure our energy portfolio Well before any of us were even thinking about serving on something like City Council, so your Your opinion is very valuable to us So thank you so much for taking the time to look at this and for advising us in this way. I appreciate it Any other questions this session this work session Going once twice any others All right. Thank you. Then we will adjourn our joint meeting of the Dent City Council and didn 't public utility board at 121 thank you [ Silence ]