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Before we get into our agenda, I guess I want to welcome

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Deb Armatar. This is her

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first meeting as a PUB board member, so Deb, welcome. Thank

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you. If you want to

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tell us a little bit about yourself, that's kind of the

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tradition here.

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Where you from and how you got here, I guess.

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Well, first of all, I'm happy to be here. Thank you so much

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and thanks to

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everyone who works for our utilities. I was born in Denmark

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, grew up in Rhode

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Island. I've been a Texan since 1995. I got a job at

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teaching English here at UNT

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in 2002 and I've been living here ever since. Don't want to

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live anywhere else.

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Married to East Texan, got two Texan kids and I just love

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Denton. I'm thrilled

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to be here. So thank you. Thanks for the introduction. Okay

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, our first item, we have a couple of

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work session items. So we'll go into work session. This

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time item A, which is to

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receive a report, hold a discussion, and give staff

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direction regarding resource

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planning and power supply strategy for DME. Brian? Good

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morning. This is the first

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of two presentations we have today for some consultants

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doing some work for us

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at UNT, with DME, not UNT. I was thinking UNT as I was

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looking over at you. I got confused.

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But we've been looking at some different elements of our

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resource planning and

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our power supply and we've hired enterprise resource risk

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consulting to

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do this work for us. Larry Lawrence is here. He's gonna

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make the presentation and

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Neil McAndreys is also here. So I'll turn it over to them.

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I did want to mention

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this is part of a two-phase process that we've been looking

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at with enterprise

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risk. This is the first phase. They're not yet complete

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with this phase. We hope

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to have that completed by mid-October and in the second

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phase we'll be

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bringing back a contract for your consideration and for the

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City Council's

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consideration probably next month. So with that, I'll turn

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it over to Larry.

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Thank you, Brian. Thank you. Good morning everyone. I'm

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Larry Lawrence and this is

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Neil McAndreys. We appreciate the opportunity to be here.

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The intent of

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this presentation is we've been, we were engaged in August

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and so we've started

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work. We're gonna wrap up the deliverable for this in

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October but we

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wanted to give you an early look because we have a pretty

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good sense of where

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we're going. We need to do some additional analysis and

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modeling to

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really refine the conclusions but we have a good sense of

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where we're gonna

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go in terms of what the recommendations will be for a

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resource plan. So Brian

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thought it was a very good idea to get this to you now so

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we can get some

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feedback and be able to refine the work as we go forward

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here. Just a brief

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introduction of the organization. We do risk management

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consulting in a variety

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of areas. We haven't had a lot of clients in ERCOT so we do

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a variety of things

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for them. We help them establish power supply programs. We

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do resource planning.

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We train traders. We do a lot of outsource work for them as

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well so we

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have a lot of experience. The people that work for the

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organization have been in

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the industry for multiple decades. Experience from Wall

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Street, utilities in

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Texas. We do a lot of work in the renewable space, have

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been through coal,

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gas, and renewables so there's a lot of experience in terms

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of what we've

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covered here. And as I go through the presentation we will

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invite questions at

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any time. You don't need to to wait or hold those till

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later because the the

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answers that we could give to those questions may be just

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as valuable as the

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material that's in the presentation. So we invite this to

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be as much of an open

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discussion as possible. So we want to start with sort of a

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benchmark reference

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here. We know that Denton has some goals in terms of

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advancing and increasing the

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amount of renewables, renewable resources in your supply

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portfolio and so a good

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benchmark for this is the city of Georgetown. Neil McAndrew

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s here

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successfully helped them build their renewable resource

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portfolio for

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supplies and one of the things we want to get across here

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is that as much as

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Georgetown has made a lot of hay with the branding for

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being 100% renewable

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and that's really been a tremendous boon to the city itself

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and the utility, their

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main goal was to come up with the least cost supply. They

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didn't start out trying

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to go 100% renewable. They had a customer, they had rate

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payer advocates

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that wanted that so they were clearly open to that message

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but the main thing

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they initially looked at was least cost and fortunately it

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was a, I don't

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know what the antithesis is of a perfect storm, but it all

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came together for them.

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It met the renewable goals and met their cost goals. So

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they originally did not

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intend to go 100% renewable but when they saw how cost-

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effective it was and

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how clean the power was and especially something that doesn

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't often get

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mentioned was the fact that it dramatically reduced the

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water usage, the

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water consumption for the power supply production as well,

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they opted to then

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kind of jump in full force and go 100%. Neil, I don't know

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if you want to speak to

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anything else about that. Neil was on the ground with them

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all the time and was

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heavily involved in that project. Right, they started off

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with a renewable

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portfolio standard or their, you know, their planning

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standard of 30%

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renewable. They also thought they were going to buy into a

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nuke. This was in

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2008. The nuke became way too expensive but the idea was

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they wanted to not have

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emissions, not as much emissions in their new portfolio.

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Also Georgetown's growing

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at about 7% per year and has been and so they needed, they

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had no supply so they

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needed to get a supply quickly out there. Those are things

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that helped

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spur them into the decisions that they made. So we just

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want to establish that

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as a benchmark because it's well known as a city that's

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gone 100% renewable and

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so we have a lot of experience in terms of the thought

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process and the planning

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process and the implementation process for that. Further,

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one thing that's

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important is managing, because of the intermittent nature

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of renewable

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resources, it's really important to have a daily active

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management operation in

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your power supply portfolio to manage around that

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intermittent nature. This is

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something that we provide even to Georgetown on an outsour

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ced basis. So not

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saying it has to be outsourced but we do this successfully

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on a daily basis for

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Georgetown so this is something that we can help build the

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capabilities within

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the utility. So the expected essential findings here in the

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program, this is

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just what we, in terms of our first look, the first few

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weeks on the ground here

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and you're getting a sense of what's going on, is that A,

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it's fortunate that

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you're in a position where you have needs for additional

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power supply because

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costs are very low right now. Renewables are low, costs are

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low. So we think

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additional renewable resources will be found to be the

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least cost alternative

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for Denton. This will also reduce the long-term cost

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volatility or the cost

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uncertainty for Denton so there'll be a tremendous

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advantage in reducing the

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price or cost uncertainty for your power supply. The DEC,

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the Denton Energy

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Center, will assist in lowering that supply cost volatility

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. We're still

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continuing to analyze how that would best fit in with the

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resource plan. We will

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also recommend alternative ways to dispose of the

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prospective excess

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production potential. And as I mentioned before, Denton

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will need to develop

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forecasting and congestion management processes to best

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optimize and manage a

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portfolio that is substantially renewable resource, is made

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up of

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substantial amounts of renewable resources. So that's

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another finding and

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that will a lot of the detail on how that needs to be

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managed will also be

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included in our plan that we'll be delivering in October.

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So go ahead Neil,

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why don't you speak to this one in terms of the first

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principles here. Okay, one of

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the things that you have to start off with is you have to

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understand the rules

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of ERCOT. It's an energy only market. So you just buy

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energy, that's all you need.

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Other jurisdictions have capacity markets, but we don't

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here. We just have an

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energy only market. And so the first thing is you've got

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you have to figure

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out how much energy am I buying. So all the load has to do,

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and this is very, very

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consumer friendly, that's and all you have to do is buy

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your energy schedules,

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schedule against your load, and you're done basically,

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right. And so the other

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thing is you have to measure your actual risk as your load

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and then you have to

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match the energy so it's sort of equal but opposite. That's

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an opposition hedge,

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that's what hedging is all about. But the idea it's a

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little tricky because

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loads vary and so do renewables or any other generation. So

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you always have to

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forecast these so they're always matching up and you don't

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want too much of either

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one, right. They have to be balanced. The other thing is it

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's very important, the

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other principle in the ERCOT market is it has what is known

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as a basis market or a

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congestion market and these are congestion CRRs as they're

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called. And

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what those are, they're instruments to bring whatever

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resource you have and

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translate it geographically and economically to your load.

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So that's one

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of the key things in renewables and all generation has to

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do this but renewables

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in particular because what it does is matches the whatever

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production that you

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have and serves the load directly and that's a key thing. A

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lot of people miss

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this step, large utilities and what they and we've been

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hired by several of them

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this year because they they have poor economic performance

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when they don't do

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that. The things explode on them, congestion incurs, all

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this other stuff

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and what the CRRs it turns out are really inexpensive

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insurance so you can

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ensure that the renewables actually match up with your load

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. So you'll see that

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point made several times throughout the presentation but

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one of the things that

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we also want to bring to the table for you is we've seen a

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lot of mistakes made

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especially with the municipalities and some cooperatives in

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Texas and how they

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built and then managed a renewable resource portfolio so we

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can help you

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avoid some of those mistakes that we've seen other people

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make. So as Neil

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alluded to the goal here is a balanced opposition hedge.

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Essentially when you

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have demand with insufficient resources you need to acquire

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sufficient

268
00:11:21,759 --> 00:11:25,029
resources in opposition to that demand to balance that

269
00:11:25,029 --> 00:11:26,159
portfolio and as Neil

270
00:11:26,159 --> 00:11:30,759
alluded to part of that supply piece is bringing the

271
00:11:30,759 --> 00:11:33,200
pricing to where your load

272
00:11:33,200 --> 00:11:38,519
is actually priced. ERCOT has overlapping but I hate to use

273
00:11:38,519 --> 00:11:39,519
the word mismatched but

274
00:11:39,519 --> 00:11:42,320
they're mismatched pricing points. Load is priced according

275
00:11:42,320 --> 00:11:43,159
to load zones across

276
00:11:43,159 --> 00:11:46,909
the state. Resources or production or generation production

277
00:11:46,909 --> 00:11:47,360
is priced at

278
00:11:47,360 --> 00:11:51,340
resource nodes and those don't always match. We don't have

279
00:11:51,340 --> 00:11:52,240
the time here but

280
00:11:52,240 --> 00:11:54,330
Neil could tell you an amusing story about the city of

281
00:11:54,330 --> 00:11:55,559
Austin who thought one

282
00:11:55,559 --> 00:11:57,529
of their power plants that happened to be in the city

283
00:11:57,529 --> 00:11:58,720
limits would be a natural

284
00:11:58,720 --> 00:12:00,820
offset to their load knowing to find out that that power

285
00:12:00,820 --> 00:12:01,720
plant which was in the

286
00:12:01,720 --> 00:12:04,240
city limits was priced at a different resource node and

287
00:12:04,240 --> 00:12:05,039
they had a tremendous

288
00:12:05,039 --> 00:12:10,580
pricing mismatch between those. So our goal here in terms

289
00:12:10,580 --> 00:12:12,080
of devising an

290
00:12:12,080 --> 00:12:15,929
optimal portfolio for you is to close that gap to make sure

291
00:12:15,929 --> 00:12:17,120
that the pricing

292
00:12:17,120 --> 00:12:22,049
matches that your supply and your demand are offset as

293
00:12:22,049 --> 00:12:24,399
efficiently as possible to

294
00:12:24,399 --> 00:12:28,210
reduce your cost and your cost variability. I'm gonna let

295
00:12:28,210 --> 00:12:28,860
Neil speak to

296
00:12:28,860 --> 00:12:33,129
this we're gonna in just a moment we're gonna show you sort

297
00:12:33,129 --> 00:12:34,279
of a slice of two

298
00:12:34,279 --> 00:12:38,250
different days a high load day and then a day in the spring

299
00:12:38,250 --> 00:12:39,399
which would have

300
00:12:39,399 --> 00:12:44,159
different outputs for things like wind resources, solar,

301
00:12:44,159 --> 00:12:45,240
how the deck might

302
00:12:45,240 --> 00:12:47,990
perform and so forth just to give you a picture of the

303
00:12:47,990 --> 00:12:49,279
things we're gonna look

304
00:12:49,279 --> 00:12:52,259
at and how these different resources can be applied to your

305
00:12:52,259 --> 00:12:53,799
load. Go ahead Neil you can

306
00:12:53,799 --> 00:13:00,909
describe the graph. Sure so this is wind resources produce

307
00:13:00,909 --> 00:13:03,120
their lowest capacity

308
00:13:03,120 --> 00:13:08,289
factor and their lowest output in the summer but they still

309
00:13:08,289 --> 00:13:09,320
produce some off

310
00:13:09,320 --> 00:13:14,350
peak but not so much and that's shown in red here and you

311
00:13:14,350 --> 00:13:15,679
can see that daily

312
00:13:15,679 --> 00:13:27,419
production it's U-shaped right. That's the green screen.

313
00:13:27,419 --> 00:13:29,320
Now solar is just the

314
00:13:29,320 --> 00:13:33,129
opposite and that's why you want to marry the two they're

315
00:13:33,129 --> 00:13:33,519
compliment perfectly

316
00:13:33,519 --> 00:13:38,220
complimentary it produces and this is all comes as amaz

317
00:13:38,220 --> 00:13:39,360
ement to some people

318
00:13:39,360 --> 00:13:43,629
it only produces during daylight hours right and so in its

319
00:13:43,629 --> 00:13:45,399
production the Sun

320
00:13:45,399 --> 00:13:49,840
is some of the its highest like June 22nd summer solstice

321
00:13:49,840 --> 00:13:51,679
and that's the

322
00:13:51,679 --> 00:13:57,000
highest production and so those two that's what happens

323
00:13:57,000 --> 00:13:58,240
sort of on a typical

324
00:13:58,240 --> 00:14:02,220
summer day when the wind is low. Now the wind can also blow

325
00:14:02,220 --> 00:14:03,200
on even on summer

326
00:14:03,200 --> 00:14:08,480
days or for instance the Georgetown wind last three days it

327
00:14:08,480 --> 00:14:09,480
's been blowing at

328
00:14:09,480 --> 00:14:13,570
maximum and it's when September that's really counted to

329
00:14:13,570 --> 00:14:15,639
summer and so the

330
00:14:15,639 --> 00:14:18,740
other thing that you have is market purchases and a lot of

331
00:14:18,740 --> 00:14:19,360
people don't

332
00:14:19,360 --> 00:14:23,169
understand the market purchases are designed to dynamically

333
00:14:23,169 --> 00:14:23,879
fill in any gaps

334
00:14:23,879 --> 00:14:27,929
on your resources day to day for instance on this day you

335
00:14:27,929 --> 00:14:29,039
had these

336
00:14:29,039 --> 00:14:32,850
purple purchases at night when it's really inexpensive to

337
00:14:32,850 --> 00:14:34,799
fill in the gap

338
00:14:34,799 --> 00:14:41,700
and that's that's part of the forecasting process that you

339
00:14:41,700 --> 00:14:42,759
have to do

340
00:14:42,759 --> 00:14:46,360
now if the wind was blowing full out you wouldn't have to

341
00:14:46,360 --> 00:14:47,240
buy any market

342
00:14:47,240 --> 00:14:50,120
purchases and so that's the that's what you have to manage

343
00:14:50,120 --> 00:14:51,360
every day the deck

344
00:14:51,360 --> 00:14:55,200
which is the you know the Denton Energy Center is a peaking

345
00:14:55,200 --> 00:14:56,600
plant essentially

346
00:14:56,600 --> 00:15:01,220
and you can see that it's dispatched wherever the blue

347
00:15:01,220 --> 00:15:02,720
levels are now these

348
00:15:02,720 --> 00:15:06,529
things it's probably dispatched mostly full out during

349
00:15:06,529 --> 00:15:09,639
those periods so on this

350
00:15:09,639 --> 00:15:14,200
day though when you run the deck you also see below zero

351
00:15:14,200 --> 00:15:15,720
these purple numbers

352
00:15:15,720 --> 00:15:20,009
those were also markets but actions but they're sales you

353
00:15:20,009 --> 00:15:20,519
have too much

354
00:15:20,519 --> 00:15:24,340
generation so you're selling into the market so that's that

355
00:15:24,340 --> 00:15:26,039
what you try to do

356
00:15:26,039 --> 00:15:33,120
for 8600 hours 8760 hours a year the entire year hourly you

357
00:15:33,120 --> 00:15:34,000
try to match all

358
00:15:34,000 --> 00:15:38,049
those different resources to minimize cost and so if you

359
00:15:38,049 --> 00:15:39,480
think about it it's

360
00:15:39,480 --> 00:15:41,629
it's kind of a hard thing to do because a lot of these

361
00:15:41,629 --> 00:15:42,759
things vary you have to

362
00:15:42,759 --> 00:15:47,049
model them prices you have to model the outputs you have to

363
00:15:47,049 --> 00:15:48,080
brought model low and

364
00:15:48,080 --> 00:15:51,889
they're all under uncertainty so you can see in this little

365
00:15:51,889 --> 00:15:52,960
square in the bottom

366
00:15:52,960 --> 00:15:58,129
and right what the the relative outputs of each are solar

367
00:15:58,129 --> 00:15:59,799
is 21% the markets

368
00:15:59,799 --> 00:16:05,720
27% the deck produces 28% and when produces 24% of their

369
00:16:05,720 --> 00:16:07,360
capacity and you

370
00:16:07,360 --> 00:16:09,590
can see that's kind of balanced and that's that's a pretty

371
00:16:09,590 --> 00:16:10,799
good portfolio so

372
00:16:10,799 --> 00:16:15,169
that means when you have a portfolio like that the variance

373
00:16:15,169 --> 00:16:16,879
goes down so you

374
00:16:16,879 --> 00:16:22,049
have a very secure supply so this is where the energy

375
00:16:22,049 --> 00:16:23,120
management operation yes

376
00:16:23,120 --> 00:16:28,139
yes sir so this this is a I'm assuming the blue line is our

377
00:16:28,139 --> 00:16:31,799
demand yes yeah so

378
00:16:31,799 --> 00:16:37,519
in a typical August day this is what it would look like

379
00:16:37,519 --> 00:16:39,000
that the market

380
00:16:39,000 --> 00:16:45,210
purchases when we when we contract market purchases do we I

381
00:16:45,210 --> 00:16:45,919
mean typically

382
00:16:45,919 --> 00:16:49,850
are we gonna say we're gonna take this this amount of

383
00:16:49,850 --> 00:16:52,000
energy during this August

384
00:16:52,000 --> 00:16:57,559
day so there may be some over purchase on that mark

385
00:17:10,720 --> 00:17:14,529
you're waiting as long as possible to get that forecast

386
00:17:14,529 --> 00:17:15,920
error down so those

387
00:17:15,920 --> 00:17:19,069
are likely be day ahead purchases where you can be much

388
00:17:19,069 --> 00:17:20,440
more precise in how much

389
00:17:20,440 --> 00:17:24,250
you're paying for those so it's just you buy it day to day

390
00:17:24,250 --> 00:17:25,880
to day hour by hour by

391
00:17:25,880 --> 00:17:28,509
hour so you don't you're only buying the minimum amount you

392
00:17:28,509 --> 00:17:29,079
need that you need

393
00:17:29,079 --> 00:17:33,960
and notice this is all at night most of these are at night

394
00:17:33,960 --> 00:17:35,160
because you have

395
00:17:35,160 --> 00:17:37,920
enough supplies during the daylight at night are the

396
00:17:37,920 --> 00:17:39,160
cheapest prices so you're

397
00:17:39,160 --> 00:17:42,549
only buying cheap stuff at night to fill them yeah so that

398
00:17:42,549 --> 00:17:43,480
's where the deck in

399
00:17:43,480 --> 00:17:45,569
this case would protect you because that's likely when the

400
00:17:45,569 --> 00:17:46,200
highest market

401
00:17:46,200 --> 00:17:49,000
prices would be and you have that unit to generate power

402
00:17:49,000 --> 00:17:50,480
right as a substitute

403
00:17:50,480 --> 00:17:53,430
to buying higher price from the market yet when the deck is

404
00:17:53,430 --> 00:17:54,440
not economical to

405
00:17:54,440 --> 00:17:57,789
run you're purchasing things at night to fill in the gaps

406
00:17:57,789 --> 00:17:58,880
when the price is

407
00:17:58,880 --> 00:18:02,690
generally cheap it's also the peak time to sell the excess

408
00:18:02,690 --> 00:18:02,960
production that's

409
00:18:02,960 --> 00:18:07,319
correct well that's correct yes so this is where the energy

410
00:18:07,319 --> 00:18:07,720
management

411
00:18:07,720 --> 00:18:10,329
organization that I believe you set up and I believe the

412
00:18:10,329 --> 00:18:11,440
gentleman from Deloitte

413
00:18:11,440 --> 00:18:14,460
are going to discuss that further that's something that we

414
00:18:14,460 --> 00:18:15,839
're learning more about

415
00:18:15,839 --> 00:18:17,980
as we get engaged here but that's something that will be a

416
00:18:17,980 --> 00:18:18,640
very valuable

417
00:18:18,640 --> 00:18:22,450
component to how you manage this because this will require

418
00:18:22,450 --> 00:18:23,480
active management this

419
00:18:23,480 --> 00:18:27,289
isn't what we would call a set and forget kind of portfolio

420
00:18:27,289 --> 00:18:28,119
because of the

421
00:18:28,119 --> 00:18:31,019
variability of the output in the need to forecast the need

422
00:18:31,019 --> 00:18:32,119
to purchase from the

423
00:18:32,119 --> 00:18:35,470
market to fill in the balance to sell excess and maximize

424
00:18:35,470 --> 00:18:36,400
the revenue of

425
00:18:36,400 --> 00:18:40,289
excess production capacity all of these things are an

426
00:18:40,289 --> 00:18:42,680
ongoing operation that a

427
00:18:42,680 --> 00:18:44,650
lot of other utilities do all the time and successfully

428
00:18:44,650 --> 00:18:45,640
this wouldn't be unique

429
00:18:45,640 --> 00:18:48,799
to you but that you do need an internal organization to do

430
00:18:48,799 --> 00:18:50,000
that I think it'd be

431
00:18:50,000 --> 00:18:52,789
more efficient than outsourcing that for example there are

432
00:18:52,789 --> 00:18:53,880
certain functions you

433
00:18:53,880 --> 00:18:56,259
might outsource but the people that are making the ultimate

434
00:18:56,259 --> 00:18:57,079
decision and pulling

435
00:18:57,079 --> 00:19:03,559
the trigger it's very useful to have that internally yes so

436
00:19:03,559 --> 00:19:04,079
when you talk

437
00:19:04,079 --> 00:19:07,890
about the market what are you talking about purchasing

438
00:19:07,890 --> 00:19:08,759
purchasing energy

439
00:19:08,759 --> 00:19:14,319
purchasing energy from I know but what kind just the market

440
00:19:14,319 --> 00:19:15,079
energy and market

441
00:19:15,079 --> 00:19:17,900
energy is composed of all the whatever is dispatching at

442
00:19:17,900 --> 00:19:20,319
that the ratio of you

443
00:19:20,319 --> 00:19:26,589
know renewables some coal some wind are not when some

444
00:19:26,589 --> 00:19:29,319
natural gas maybe some

445
00:19:29,319 --> 00:19:33,640
hydros thrown in there other other solar things whatever

446
00:19:33,640 --> 00:19:34,720
makes up that whole

447
00:19:34,720 --> 00:19:37,289
thing you're just buying a slice of it and you can't you

448
00:19:37,289 --> 00:19:38,640
can't avoid that yeah

449
00:19:38,640 --> 00:19:42,450
this is you know I just wanted to be clear yeah what we're

450
00:19:42,450 --> 00:19:42,680
talking about

451
00:19:42,680 --> 00:19:47,359
market was not more solar or more wind from somewhere else

452
00:19:47,359 --> 00:19:48,680
it could be but it

453
00:19:48,680 --> 00:19:51,720
could also be gas it could also be coal it could be correct

454
00:19:51,720 --> 00:19:52,799
and part of this is

455
00:19:52,799 --> 00:19:54,900
a function of yes that's a very good question it's a

456
00:19:54,900 --> 00:19:55,880
function of being in

457
00:19:55,880 --> 00:20:00,819
Urquhart because you essentially it's we we could spend

458
00:20:00,819 --> 00:20:02,359
hours talking about the

459
00:20:02,359 --> 00:20:04,119
way Urquhart works but you're essentially buying everything

460
00:20:04,119 --> 00:20:04,759
from Urquhart and

461
00:20:04,759 --> 00:20:06,730
selling thing everything to Urquhart and they match all

462
00:20:06,730 --> 00:20:07,799
that up so you're you're

463
00:20:07,799 --> 00:20:10,950
buying that's a good point in terms of the mix of what that

464
00:20:10,950 --> 00:20:12,200
can be but one way

465
00:20:12,200 --> 00:20:14,930
to think about it too is this is like the city of

466
00:20:14,930 --> 00:20:16,480
Georgetown the way they

467
00:20:16,480 --> 00:20:20,289
think about it is this is that as long as they purchased a

468
00:20:20,289 --> 00:20:21,039
hundred percent

469
00:20:21,039 --> 00:20:24,849
renewable relative to their energy so that let's say the

470
00:20:24,849 --> 00:20:25,839
planning basis so they

471
00:20:25,839 --> 00:20:29,549
have they have a load of 700,000 megawatt hours they bought

472
00:20:29,549 --> 00:20:30,279
700,000

473
00:20:30,279 --> 00:20:34,349
megawatt hours of production from then that means they're a

474
00:20:34,349 --> 00:20:35,079
hundred percent

475
00:20:35,079 --> 00:20:39,349
renewable and what happens a lot of that gets served you

476
00:20:39,349 --> 00:20:40,079
know it gets thrown in

477
00:20:40,079 --> 00:20:44,589
to Urquhart so Urquhart becomes more renewable and at times

478
00:20:44,589 --> 00:20:45,279
they have to buy

479
00:20:45,279 --> 00:20:49,609
sort of back from back from it and it's we use sort of an

480
00:20:49,609 --> 00:20:51,480
ATM analogy that is if

481
00:20:51,480 --> 00:20:55,069
you put money in your account you can pull it out but it's

482
00:20:55,069 --> 00:20:56,240
not necessarily the

483
00:20:56,240 --> 00:20:59,380
same money if you go to Mexico you're pulling out pesos and

484
00:20:59,380 --> 00:20:59,920
you didn't put

485
00:20:59,920 --> 00:21:02,700
the pesos into your account right but it's it's it's an

486
00:21:02,700 --> 00:21:04,880
accounting identity so

487
00:21:04,880 --> 00:21:10,160
you're you are and that's how most of the 100% renewables

488
00:21:10,160 --> 00:21:12,880
now described in

489
00:21:12,880 --> 00:21:18,559
around the country. So in terms of the Denton Energy Center

490
00:21:18,559 --> 00:21:19,640
more specifically

491
00:21:19,640 --> 00:21:22,289
the initial models of price suggests that the deck is

492
00:21:22,289 --> 00:21:23,440
likely to have excess

493
00:21:23,440 --> 00:21:26,119
capacity for most of the year it is a peaking plan so there

494
00:21:26,119 --> 00:21:27,359
'd be many times of

495
00:21:27,359 --> 00:21:31,170
day in many seasons where you don't need a peaking plan.

496
00:21:31,170 --> 00:21:32,920
Under some prospective

497
00:21:32,920 --> 00:21:36,730
coal retirement schedules in other words if coal units are

498
00:21:36,730 --> 00:21:37,660
retired ahead of what

499
00:21:37,660 --> 00:21:41,000
some projections may be the deck capacity factor may end up

500
00:21:41,000 --> 00:21:41,519
being higher

501
00:21:41,519 --> 00:21:45,920
but this is an uncertainty. In either case it may be an

502
00:21:45,920 --> 00:21:47,799
opportunity to sell

503
00:21:47,799 --> 00:21:51,609
excess deck potential production on a seasonal basis to

504
00:21:51,609 --> 00:21:52,440
capture additional

505
00:21:52,440 --> 00:21:55,519
revenue to pay debt service so this is part of the mission

506
00:21:55,519 --> 00:21:56,599
that we have is how

507
00:21:56,599 --> 00:22:02,119
best to optimize that generation asset to help reduce your

508
00:22:02,119 --> 00:22:04,319
debt service. Because

509
00:22:04,319 --> 00:22:07,559
most 70% to 100% renewable portfolios produce too much

510
00:22:07,559 --> 00:22:08,440
renewable production

511
00:22:08,440 --> 00:22:11,529
during the spring and fall season may also be beneficial to

512
00:22:11,529 --> 00:22:12,240
sell excess

513
00:22:12,240 --> 00:22:16,529
renewable power during those periods. So the issue is as

514
00:22:16,529 --> 00:22:17,880
you saw here earlier

515
00:22:17,880 --> 00:22:22,200
you've got variable load but you're typically buying block

516
00:22:22,200 --> 00:22:23,359
power so this is

517
00:22:23,359 --> 00:22:26,960
part of what your organization would need to manage is

518
00:22:26,960 --> 00:22:28,119
selling the excess and

519
00:22:28,119 --> 00:22:30,819
filling in the periods of time where you have a deficit in

520
00:22:30,819 --> 00:22:32,000
the most efficient way

521
00:22:32,000 --> 00:22:35,369
possible that's part of what that needs to be done. Yeah we

522
00:22:35,369 --> 00:22:35,799
have a slide that

523
00:22:35,799 --> 00:22:39,609
shows that it's coming up. So I'll let Neil speak to this

524
00:22:39,609 --> 00:22:40,880
again here's April so

525
00:22:40,880 --> 00:22:44,690
you saw a summer day here is an April day which is

526
00:22:44,690 --> 00:22:46,440
typically some of your peak

527
00:22:46,440 --> 00:22:51,039
wind generation season. Great thanks for pointing out I

528
00:22:51,039 --> 00:22:51,920
didn't mention that the

529
00:22:51,920 --> 00:22:56,670
blue line is your load so that was kind of key. So this is

530
00:22:56,670 --> 00:22:58,519
an April day and in

531
00:22:58,519 --> 00:23:01,890
April the winds are high typically and you can see that the

532
00:23:01,890 --> 00:23:03,000
the wind portfolio

533
00:23:03,000 --> 00:23:06,809
that you have it sometimes blows all over Texas all the

534
00:23:06,809 --> 00:23:07,680
time and that's why

535
00:23:07,680 --> 00:23:10,500
it's just a straight line there and that's like I said the

536
00:23:10,500 --> 00:23:11,640
Georgetown wind

537
00:23:11,640 --> 00:23:17,579
did that like three days last three days and so what

538
00:23:17,579 --> 00:23:19,839
happens is you have these

539
00:23:19,839 --> 00:23:25,990
sales an hour those are the purple below zero during that

540
00:23:25,990 --> 00:23:27,039
time so you have too

541
00:23:27,039 --> 00:23:35,450
much wind being produced at that time. The other thing is

542
00:23:35,450 --> 00:23:38,359
that you

543
00:23:38,359 --> 00:23:44,180
have I think the scale got off a little bit our market

544
00:23:44,180 --> 00:23:46,400
purchases here is

545
00:23:46,400 --> 00:23:53,640
somehow I got off is that these are the avoided these are

546
00:23:53,640 --> 00:23:54,519
market purchases that

547
00:23:54,519 --> 00:23:57,440
aren't quite right actually this somehow this I'm sorry

548
00:23:57,440 --> 00:23:58,519
this I'm sorry about this

549
00:23:58,519 --> 00:24:02,400
slide by screwed up this slide there's whenever there is

550
00:24:02,400 --> 00:24:03,720
production over your

551
00:24:03,720 --> 00:24:06,769
blue line here we must have adjusted the line somehow and

552
00:24:06,769 --> 00:24:08,799
all of this will be

553
00:24:08,799 --> 00:24:12,849
sold off of the solar so solar you'll have slightly too

554
00:24:12,849 --> 00:24:14,440
much of and that will

555
00:24:14,440 --> 00:24:18,250
produce sales you won't buy any of these things these

556
00:24:18,250 --> 00:24:20,400
market purchases and so

557
00:24:20,400 --> 00:24:24,210
you'll have sales all through this period whenever any of

558
00:24:24,210 --> 00:24:25,279
the two supplies

559
00:24:25,279 --> 00:24:30,200
which is wind and solar is over the blue line and so what

560
00:24:30,200 --> 00:24:32,000
that does is your

561
00:24:32,000 --> 00:24:36,269
supply in the down here in this region it shows that wind

562
00:24:36,269 --> 00:24:38,160
provides 85 percent of

563
00:24:38,160 --> 00:24:43,160
your energy the deck doesn't execute at all because it's

564
00:24:43,160 --> 00:24:44,839
the prices are low and

565
00:24:44,839 --> 00:24:50,009
so it will have no production at all and the market

566
00:24:50,009 --> 00:24:52,200
purchases actually I don't

567
00:24:52,200 --> 00:24:55,079
think there will be any market purchase here and the solar

568
00:24:55,079 --> 00:24:56,079
produces about six

569
00:24:56,079 --> 00:24:58,940
percent of your supplies and there's much more sales I'm

570
00:24:58,940 --> 00:24:59,480
sorry about this

571
00:24:59,480 --> 00:25:05,680
slides we got I did this it's my we can correct that in a

572
00:25:05,680 --> 00:25:07,000
submit a new version

573
00:25:07,000 --> 00:25:17,150
yeah so this slide shows the part of the presentation if

574
00:25:17,150 --> 00:25:18,519
you yeah um so number

575
00:25:18,519 --> 00:25:24,829
one I understand how selling renewable generation works if

576
00:25:24,829 --> 00:25:26,039
we actually have

577
00:25:26,039 --> 00:25:30,539
physical solar and wind power but how exactly does that

578
00:25:30,539 --> 00:25:32,000
work when we're

579
00:25:32,000 --> 00:25:36,599
contracting out so we're buying other people's solar and

580
00:25:36,599 --> 00:25:37,920
wind and then where's

581
00:25:37,920 --> 00:25:42,630
in where's then we're selling it well you really when you

582
00:25:42,630 --> 00:25:43,720
buy yeah you're the

583
00:25:43,720 --> 00:25:47,759
owner okay yeah nobody yeah so are the only only you yeah

584
00:25:47,759 --> 00:25:48,920
you bought the energy

585
00:25:48,920 --> 00:25:53,190
at the price and you want all the environmental attributes

586
00:25:53,190 --> 00:25:54,160
of connected

587
00:25:54,160 --> 00:25:59,200
with that yes okay so it's yours and if it's in excess and

588
00:25:59,200 --> 00:26:01,319
only in excess you

589
00:26:01,319 --> 00:26:05,130
may and it happens in the spring when you have a lot of

590
00:26:05,130 --> 00:26:06,400
production you may know

591
00:26:06,400 --> 00:26:10,359
do you mind I'm sorry it's not picking you up oh sorry you

592
00:26:10,359 --> 00:26:13,079
you will make sales

593
00:26:13,079 --> 00:26:17,450
either into the market or you can you can you know if you

594
00:26:17,450 --> 00:26:18,920
have forecasted

595
00:26:18,920 --> 00:26:22,630
let's say for an entire month too much wind you could you

596
00:26:22,630 --> 00:26:24,680
could sell it off and

597
00:26:24,680 --> 00:26:27,849
say to other munis or other people who want to increase

598
00:26:27,849 --> 00:26:29,200
their environmental

599
00:26:29,200 --> 00:26:33,200
thing because let's say you have a hundred percent

600
00:26:33,200 --> 00:26:36,319
renewable portfolio goal

601
00:26:36,319 --> 00:26:40,130
you probably wind up buying something like a hundred and

602
00:26:40,130 --> 00:26:40,759
twenty percent

603
00:26:40,759 --> 00:26:45,930
energy something like that in order to fit it in that that

604
00:26:45,930 --> 00:26:46,599
may be the way that

605
00:26:46,599 --> 00:26:50,500
it maximizes and so you're like twenty percent a little

606
00:26:50,500 --> 00:26:52,039
long so what you do is

607
00:26:52,039 --> 00:26:54,579
you you can sell that you'll either sell it into the market

608
00:26:54,579 --> 00:26:55,559
or you can sell it to

609
00:26:55,559 --> 00:26:59,369
other people in a forward basis and it just whatever is

610
00:26:59,369 --> 00:27:00,519
best okay so you're so

611
00:27:00,519 --> 00:27:03,680
you're saying it so it works of selling energy that way on

612
00:27:03,680 --> 00:27:05,079
the market works this

613
00:27:05,079 --> 00:27:08,890
kind of the same way as as selling energy that we would

614
00:27:08,890 --> 00:27:10,079
generate it's the

615
00:27:10,079 --> 00:27:14,150
same on the market it's right apples and apples and you can

616
00:27:14,150 --> 00:27:15,759
I and you can add you

617
00:27:15,759 --> 00:27:19,809
can actually add instead of having it variable you can add

618
00:27:19,809 --> 00:27:20,920
in a what we call

619
00:27:20,920 --> 00:27:26,150
affirming so and you use the deck can be used to do that

620
00:27:26,150 --> 00:27:28,079
and and that may create

621
00:27:28,079 --> 00:27:31,890
extra revenue for the deck so that you can pay down debt

622
00:27:31,890 --> 00:27:32,680
service that's one of

623
00:27:32,680 --> 00:27:37,119
the things to use it so you're really using the deck to

624
00:27:37,119 --> 00:27:39,799
essentially buy or to

625
00:27:39,799 --> 00:27:46,319
to affect renewables but we don't this is a question but we

626
00:27:46,319 --> 00:27:48,920
don't need the deck

627
00:27:48,920 --> 00:27:54,089
to do that right well there to firm it you would use the

628
00:27:54,089 --> 00:27:56,160
deck but you could sell

629
00:27:56,160 --> 00:28:06,309
it on unfurmed yes question and you know you talked about

630
00:28:06,309 --> 00:28:07,119
the hundred twenty

631
00:28:07,119 --> 00:28:11,720
percent so is the additional twenty percent that's kind of

632
00:28:11,720 --> 00:28:12,960
your farming part

633
00:28:12,960 --> 00:28:17,960
of the of the energy that you're right it says you're gonna

634
00:28:17,960 --> 00:28:19,640
buy excess yeah and

635
00:28:19,640 --> 00:28:21,789
we have a slide that shows how fitting this is kind of

636
00:28:21,789 --> 00:28:24,480
somewhat difficult and

637
00:28:24,480 --> 00:28:30,309
that is that that is one of the things one thing this this

638
00:28:30,309 --> 00:28:32,640
is a little something

639
00:28:32,640 --> 00:28:36,450
a lot I saw in some reports they were saying well you have

640
00:28:36,450 --> 00:28:38,240
to buy 200% or

641
00:28:38,240 --> 00:28:41,160
something like this this is all nonsense right you don't

642
00:28:41,160 --> 00:28:42,720
buy 200% the

643
00:28:42,720 --> 00:28:47,890
solar has a capacity factor of around 20% the wind has a

644
00:28:47,890 --> 00:28:50,920
capacity factor of 35% so

645
00:28:50,920 --> 00:28:54,009
when people say you have to buy twice the capacity in fact

646
00:28:54,009 --> 00:28:55,079
you're only buying

647
00:28:55,079 --> 00:28:59,599
55% of the energy and the other thing is they it implies

648
00:28:59,599 --> 00:29:01,400
that those are additive

649
00:29:01,400 --> 00:29:05,799
well they're not because you can't add wind at night

650
00:29:05,799 --> 00:29:07,559
because it doesn't exist

651
00:29:07,559 --> 00:29:11,509
so that's a very misleading I've seen this in reports and I

652
00:29:11,509 --> 00:29:12,400
just go what are

653
00:29:12,400 --> 00:29:15,299
they talking about these are people who are sort of deeply

654
00:29:15,299 --> 00:29:16,319
ignorant or they have

655
00:29:16,319 --> 00:29:20,799
some kind of an agenda so the challenge here is that you've

656
00:29:20,799 --> 00:29:21,960
got 8,000 in a

657
00:29:21,960 --> 00:29:25,769
typical year you have 8,760 hours so how do you get to be a

658
00:29:25,769 --> 00:29:27,079
perfectly 100% match

659
00:29:27,079 --> 00:29:29,319
in every one of those hours you can't you're gonna have

660
00:29:29,319 --> 00:29:30,200
some excess in some

661
00:29:30,200 --> 00:29:33,089
hours and deficiency in other hours where do you draw that

662
00:29:33,089 --> 00:29:34,559
line as Neil said

663
00:29:34,559 --> 00:29:37,329
the to us the most practical way is just add up all the meg

664
00:29:37,329 --> 00:29:38,400
awatt hours of load

665
00:29:38,400 --> 00:29:41,440
you have in the year and then you take this capacity

666
00:29:41,440 --> 00:29:42,119
factors of these

667
00:29:42,119 --> 00:29:44,369
generation units and you'll you'll understand that a little

668
00:29:44,369 --> 00:29:44,960
better when you

669
00:29:44,960 --> 00:29:47,960
see a graph later and so you multiply the capacity factors

670
00:29:47,960 --> 00:29:48,480
by the total

671
00:29:48,480 --> 00:29:50,829
capacity of the units and you sum all those up and then you

672
00:29:50,829 --> 00:29:51,559
get your perfect

673
00:29:51,559 --> 00:29:54,599
opposition edge so you'll be a little long have excess in

674
00:29:54,599 --> 00:29:55,839
some hours some

675
00:29:55,839 --> 00:30:00,519
deficiencies in other hours but when we have those acts

676
00:30:00,519 --> 00:30:03,480
yeah when we have those

677
00:30:03,480 --> 00:30:06,319
excesses we can always sell those in the market absolutely

678
00:30:06,319 --> 00:30:07,519
and that will bull or

679
00:30:07,519 --> 00:30:10,339
deck or whatever exactly exactly and that's one of the that

680
00:30:10,339 --> 00:30:11,039
's one of our

681
00:30:11,039 --> 00:30:14,160
missions is to help figure out the optimal way to dispose

682
00:30:14,160 --> 00:30:15,200
of that excess

683
00:30:15,200 --> 00:30:17,769
because that reduces your overall cost that's just part of

684
00:30:17,769 --> 00:30:18,960
the whole pie that

685
00:30:18,960 --> 00:30:22,769
you're dealing with and if you do nothing it all happens

686
00:30:22,769 --> 00:30:24,039
automatically both if

687
00:30:24,039 --> 00:30:27,849
you're don't have enough energy or cotton will make you buy

688
00:30:27,849 --> 00:30:28,519
to make that

689
00:30:28,519 --> 00:30:31,539
up if you have too much or couple buy it for you or they

690
00:30:31,539 --> 00:30:32,359
buy it in the market

691
00:30:32,359 --> 00:30:38,279
automatically yes so you're hedging you're trying to hedge

692
00:30:38,279 --> 00:30:39,440
against cost

693
00:30:39,440 --> 00:30:46,000
price yes and against demand to make sure you have enough

694
00:30:46,000 --> 00:30:47,240
right and not be

695
00:30:47,240 --> 00:30:51,049
forced to where you control your own market right is that

696
00:30:51,049 --> 00:30:52,799
right yes so is

697
00:30:52,799 --> 00:30:57,069
there a percentage a target kind of I think the Randy's

698
00:30:57,069 --> 00:30:58,720
question that hundred

699
00:30:58,720 --> 00:31:01,420
and twenty percent is it twenty one hundred and twenty

700
00:31:01,420 --> 00:31:02,519
percent that's kind

701
00:31:02,519 --> 00:31:05,859
of on a day-to-day hour-to-hour that you want to be ahead

702
00:31:05,859 --> 00:31:07,079
of the curve or is it

703
00:31:07,079 --> 00:31:10,160
110 or does it work that's probably more if you look at it

704
00:31:10,160 --> 00:31:11,039
in aggregate over a

705
00:31:11,039 --> 00:31:13,880
year in advance you might be roughly 120 percent in terms

706
00:31:13,880 --> 00:31:14,759
of the way you need

707
00:31:14,759 --> 00:31:18,150
just to stack up your resources to meet that but going into

708
00:31:18,150 --> 00:31:19,319
any hour you want to

709
00:31:19,319 --> 00:31:22,920
be 100% 100% that's right and that's another question that

710
00:31:22,920 --> 00:31:23,240
we're going to

711
00:31:23,240 --> 00:31:25,740
answer later on you may not have specifically asked this

712
00:31:25,740 --> 00:31:26,359
but I'll answer

713
00:31:26,359 --> 00:31:30,789
it now which is you need to be a hundred percent five years

714
00:31:30,789 --> 00:31:32,359
out not necessarily

715
00:31:32,359 --> 00:31:34,059
you need to be a hundred percent ten years out not

716
00:31:34,059 --> 00:31:34,839
necessarily that's

717
00:31:34,839 --> 00:31:38,200
something that will work with you all to do to fit that but

718
00:31:38,200 --> 00:31:39,440
you've you've come

719
00:31:39,440 --> 00:31:44,039
into this in a very advantageous position because you're

720
00:31:44,039 --> 00:31:44,960
not full of

721
00:31:44,960 --> 00:31:48,769
supply yet and costs are coming down this market has really

722
00:31:48,769 --> 00:31:49,680
benefited energy

723
00:31:49,680 --> 00:31:52,059
consumers so you have a tremendous advantage in the fact

724
00:31:52,059 --> 00:31:52,759
that you didn't

725
00:31:52,759 --> 00:31:55,920
lock everything up five or ten years ago we have clients

726
00:31:55,920 --> 00:31:57,519
that are really dealing

727
00:31:57,519 --> 00:32:00,720
with that but they've got very high price power just up

728
00:32:00,720 --> 00:32:02,160
down the road in

729
00:32:02,160 --> 00:32:05,130
Austin you know they they took pride in being an early

730
00:32:05,130 --> 00:32:06,599
mover in renewables but

731
00:32:06,599 --> 00:32:09,890
they've paid five to ten times the cost of what you would

732
00:32:09,890 --> 00:32:11,039
be paying now it

733
00:32:11,039 --> 00:32:13,859
always pays my dad always told me never buy the first mile

734
00:32:13,859 --> 00:32:14,640
of anything I always

735
00:32:14,640 --> 00:32:17,759
go for the second one so you're in that position now where

736
00:32:17,759 --> 00:32:19,019
prices have come way

737
00:32:19,019 --> 00:32:21,589
down and you can take advantage of that just from the fact

738
00:32:21,589 --> 00:32:22,519
that you've had an

739
00:32:22,519 --> 00:32:26,869
open portion of your demand that has not been filled so

740
00:32:26,869 --> 00:32:29,259
there's a there's an

741
00:32:29,259 --> 00:32:31,750
efficient balance between buying too much and not buying

742
00:32:31,750 --> 00:32:32,440
enough that's

743
00:32:32,440 --> 00:32:35,289
something else will be working with your staff to try to

744
00:32:35,289 --> 00:32:36,480
figure out how best to

745
00:32:36,480 --> 00:32:39,299
fit that going forward here and that'll be part of what we

746
00:32:39,299 --> 00:32:41,680
recommend here so in

747
00:32:41,680 --> 00:32:45,549
terms of the path of what we're going to do in terms of

748
00:32:45,549 --> 00:32:46,480
developing

749
00:32:46,480 --> 00:32:49,210
recommendations for your renewable resource portfolio a we

750
00:32:49,210 --> 00:32:50,119
've got the goal

751
00:32:50,119 --> 00:32:54,599
of least cost B we want to be diversified you already have

752
00:32:54,599 --> 00:32:55,279
some purchases

753
00:32:55,279 --> 00:32:57,849
we need to work around those Neil will speak a little more

754
00:32:57,849 --> 00:32:58,240
to that

755
00:32:58,240 --> 00:33:00,750
diversification but diversification is very important in

756
00:33:00,750 --> 00:33:01,720
reducing the overall

757
00:33:01,720 --> 00:33:04,710
risk and the variability of the portfolio its divers

758
00:33:04,710 --> 00:33:05,880
ification in terms

759
00:33:05,880 --> 00:33:09,690
of asset types solar and wind are perfectly uncorrelated so

760
00:33:09,690 --> 00:33:10,279
that's a great

761
00:33:10,279 --> 00:33:14,089
diversification but it's also diversification in terms of

762
00:33:14,089 --> 00:33:14,319
locations of

763
00:33:14,319 --> 00:33:18,029
where these production for these generation units are

764
00:33:18,029 --> 00:33:19,119
located and its

765
00:33:19,119 --> 00:33:22,900
diversification in terms of wind wind is not wind coastal

766
00:33:22,900 --> 00:33:23,839
wind is different from

767
00:33:23,839 --> 00:33:26,190
panhandle when panhandle wind is different from West Texas

768
00:33:26,190 --> 00:33:26,759
when in terms

769
00:33:26,759 --> 00:33:29,650
of how often it blows what time of day and so forth so you

770
00:33:29,650 --> 00:33:29,960
need

771
00:33:29,960 --> 00:33:32,970
diversification and all of those factors to really have a

772
00:33:32,970 --> 00:33:33,839
very efficient

773
00:33:33,839 --> 00:33:37,430
portfolio and then the renewable goal that's something that

774
00:33:37,430 --> 00:33:38,839
70% 100% we need

775
00:33:38,839 --> 00:33:41,250
to figure that out we'll offer alternatives to that but we

776
00:33:41,250 --> 00:33:41,839
need to you

777
00:33:41,839 --> 00:33:44,920
know know where that is so then Neil will oversee this

778
00:33:44,920 --> 00:33:45,799
portion of the work

779
00:33:45,799 --> 00:33:48,190
we've done this for a lot of other people we run Monte

780
00:33:48,190 --> 00:33:49,119
Carlo simulation

781
00:33:49,119 --> 00:33:52,930
models to model the cost and the variability in the makeup

782
00:33:52,930 --> 00:33:53,440
of these

783
00:33:53,440 --> 00:33:57,400
different portfolio mixes that we'll be discussing so in

784
00:33:57,400 --> 00:33:58,759
terms of least cost

785
00:33:58,759 --> 00:34:01,630
we'll go down these things quickly in terms of the pieces

786
00:34:01,630 --> 00:34:02,599
of that last slide

787
00:34:02,599 --> 00:34:05,920
that you saw current wind resources are offered from 17 to

788
00:34:05,920 --> 00:34:06,720
22 dollars per

789
00:34:06,720 --> 00:34:09,840
megawatt hour these are really great low prices solar is

790
00:34:09,840 --> 00:34:10,960
offered in the mid 20s

791
00:34:10,960 --> 00:34:14,269
they just these are tremendously low prices the benefit of

792
00:34:14,269 --> 00:34:15,079
not having locked

793
00:34:15,079 --> 00:34:18,889
things up a few years ago these power prices are the lowest

794
00:34:18,889 --> 00:34:19,079
offered in the

795
00:34:19,079 --> 00:34:22,079
last 50 years this is in contrast as I was mentioning

796
00:34:22,079 --> 00:34:23,119
earlier four years earlier

797
00:34:23,119 --> 00:34:25,760
who win prices were offered between 40 and 65 dollars per

798
00:34:25,760 --> 00:34:26,679
megawatt hour and

799
00:34:26,679 --> 00:34:30,090
solar was as much as five to seven times the current offers

800
00:34:30,090 --> 00:34:31,159
the city of Austin's

801
00:34:31,159 --> 00:34:34,969
Weber's ill Weberville site for example at $165 per megaw

802
00:34:34,969 --> 00:34:36,480
att hour subsidies for

803
00:34:36,480 --> 00:34:39,760
solar and winter being phased out so it's good to move now

804
00:34:39,760 --> 00:34:40,960
natural gas is the

805
00:34:40,960 --> 00:34:43,670
marginal fuel nationwide and supplies declining at current

806
00:34:43,670 --> 00:34:44,519
price levels while

807
00:34:44,519 --> 00:34:48,219
demand is increasing dramatically so you can make a

808
00:34:48,219 --> 00:34:49,199
fundamental case the gas

809
00:34:49,199 --> 00:34:52,800
prices are fairly low right now as well if gas prices go up

810
00:34:52,800 --> 00:34:54,079
it'll make renewables

811
00:34:54,079 --> 00:34:56,980
more competitive and likely be higher prices so this is

812
00:34:56,980 --> 00:34:58,920
really an ideal time to

813
00:34:58,920 --> 00:35:01,019
be in the position you're in right now to lock up

814
00:35:01,019 --> 00:35:03,320
additional renewables and add

815
00:35:03,320 --> 00:35:06,400
to the portfolio now in terms of diversification I'll let

816
00:35:06,400 --> 00:35:10,119
Neil speak yeah

817
00:35:10,119 --> 00:35:13,269
this is a chart from the independent market monitor for ERC

818
00:35:13,269 --> 00:35:14,119
OT and what

819
00:35:14,119 --> 00:35:17,929
they've done is just taken the average load for ERCOT and

820
00:35:17,929 --> 00:35:18,639
that's in the blue

821
00:35:18,639 --> 00:35:23,880
and they've showed different renewable resources the in the

822
00:35:23,880 --> 00:35:25,400
red is the wind

823
00:35:25,400 --> 00:35:30,360
coastal that's that's right on the coast of Texas and then

824
00:35:30,360 --> 00:35:32,400
they've on the other

825
00:35:32,400 --> 00:35:35,469
side of Texas on way up north is the wind up in the panhand

826
00:35:35,469 --> 00:35:37,440
le and that's in

827
00:35:37,440 --> 00:35:45,389
green and solar is in purple here and and so that's those

828
00:35:45,389 --> 00:35:46,519
are the different

829
00:35:46,519 --> 00:35:51,119
regions and you can see they're all different and they core

830
00:35:51,119 --> 00:35:52,719
they the big

831
00:35:52,719 --> 00:35:55,539
thing is the one thing that really correlates with you know

832
00:35:55,539 --> 00:35:56,360
peak demand is

833
00:35:56,360 --> 00:36:01,000
solar it has it has production during the day and so that

834
00:36:01,000 --> 00:36:02,800
load where load kind

835
00:36:02,800 --> 00:36:08,909
of goes up it also goes up if you marry that solar with the

836
00:36:08,909 --> 00:36:10,239
red the coastal wind

837
00:36:10,239 --> 00:36:15,039
you can see that that curve matches almost perfectly that

838
00:36:15,039 --> 00:36:16,559
this this slope on

839
00:36:16,559 --> 00:36:22,119
this whoops I just whoops you go back hands off the wheel

840
00:36:22,119 --> 00:36:22,840
for a second okay

841
00:36:22,840 --> 00:36:29,440
thank you you know I says that so so this curve goes down

842
00:36:29,440 --> 00:36:30,119
like that these two

843
00:36:30,119 --> 00:36:34,050
curves you know almost match that so all you have to do is

844
00:36:34,050 --> 00:36:35,760
you know raise this up

845
00:36:35,760 --> 00:36:38,840
and they'll match it perfectly basically the other thing

846
00:36:38,840 --> 00:36:40,280
about coastal wind which

847
00:36:40,280 --> 00:36:43,570
is this coastal wind notice that it produces the least off-

848
00:36:43,570 --> 00:36:44,960
peak and so

849
00:36:44,960 --> 00:36:51,159
that's when if you're if you're having to at night right so

850
00:36:51,159 --> 00:36:52,800
what happens there

851
00:36:52,800 --> 00:36:56,639
is it in competing with say some of these in the spring

852
00:36:56,639 --> 00:36:57,860
this has an

853
00:36:57,860 --> 00:37:00,460
advantage in that it doesn't produce when everybody else is

854
00:37:00,460 --> 00:37:01,760
over producing so

855
00:37:01,760 --> 00:37:06,030
what we'll go is try to measure all of these and see what

856
00:37:06,030 --> 00:37:07,639
the relative advantage

857
00:37:07,639 --> 00:37:10,440
when they fit into your portfolio and that's that's kind of

858
00:37:10,440 --> 00:37:11,440
a hard thing to do

859
00:37:11,440 --> 00:37:16,039
but it's but that's that's what we'll do and see how we can

860
00:37:16,039 --> 00:37:18,079
do it now on top of

861
00:37:18,079 --> 00:37:20,980
this you know on a daily basis we will have these dynamic

862
00:37:20,980 --> 00:37:22,079
purchases and that

863
00:37:22,079 --> 00:37:25,090
sort of thing and we've been doing that for years we do

864
00:37:25,090 --> 00:37:26,280
this every hour for

865
00:37:26,280 --> 00:37:30,610
Georgetown every day so and we've been doing it for two two

866
00:37:30,610 --> 00:37:32,039
point three years

867
00:37:32,039 --> 00:37:37,210
or something like that and so it turns out when you do that

868
00:37:37,210 --> 00:37:38,400
the price of your

869
00:37:38,400 --> 00:37:41,840
portfolio your renewables are also turn out to be the price

870
00:37:41,840 --> 00:37:43,440
at your loads that's

871
00:37:43,440 --> 00:37:48,760
the that's the goal low zone so they both match so you're

872
00:37:48,760 --> 00:37:50,440
perfectly hedged if

873
00:37:50,440 --> 00:37:56,559
gas prices go up to ten dollars you don't see any change so

874
00:37:56,559 --> 00:37:58,800
just to sort of

875
00:37:58,800 --> 00:38:01,210
reinforce some of the points that Neil was talking about we

876
00:38:01,210 --> 00:38:02,119
've talked about

877
00:38:02,119 --> 00:38:04,289
these earlier renewables are intermittent producers and

878
00:38:04,289 --> 00:38:04,719
carry two

879
00:38:04,719 --> 00:38:06,869
risk elements but spotty hedge performance meaning that

880
00:38:06,869 --> 00:38:07,360
they're all

881
00:38:07,360 --> 00:38:09,300
they're not always there when you want them and sometimes

882
00:38:09,300 --> 00:38:10,039
they're there more

883
00:38:10,039 --> 00:38:13,070
than when you want them and the increased forecast area so

884
00:38:13,070 --> 00:38:13,719
that's why

885
00:38:13,719 --> 00:38:16,420
portfolio renewables needs to be composed of resources that

886
00:38:16,420 --> 00:38:16,960
are poorly

887
00:38:16,960 --> 00:38:20,150
correlated with each other meaning that when the Sun is

888
00:38:20,150 --> 00:38:22,000
shining the wind usually

889
00:38:22,000 --> 00:38:25,809
on average is not blowing so you've got a great offset so

890
00:38:25,809 --> 00:38:27,239
the main risk reduction

891
00:38:27,239 --> 00:38:29,980
is a combination of solar and wind but as I said earlier

892
00:38:29,980 --> 00:38:30,800
wind resource

893
00:38:30,800 --> 00:38:32,739
combinations have varying correlations due to the

894
00:38:32,739 --> 00:38:33,840
differences in quality and

895
00:38:33,840 --> 00:38:36,900
location so as you saw on that other graph that's part of

896
00:38:36,900 --> 00:38:37,639
the best fit

897
00:38:37,639 --> 00:38:40,139
analysis that we'll be conducting is how best to fit those

898
00:38:40,139 --> 00:38:41,159
different locations

899
00:38:41,159 --> 00:38:44,969
and types and qualities of wind and solar and I thought

900
00:38:44,969 --> 00:38:45,800
this is a really

901
00:38:45,800 --> 00:38:48,090
important point that Neil added here very few commodity

902
00:38:48,090 --> 00:38:49,039
portfolios have the

903
00:38:49,039 --> 00:38:52,360
opportunity of such advantageous pairing of assets you will

904
00:38:52,360 --> 00:38:54,239
not find I've come

905
00:38:54,239 --> 00:38:57,059
through oil we've done a lot of work in other areas Neil

906
00:38:57,059 --> 00:38:58,079
grew up in the in the

907
00:38:58,079 --> 00:39:02,690
cattle business you will not find such a perfectly opposing

908
00:39:02,690 --> 00:39:04,039
correlation to solar

909
00:39:04,039 --> 00:39:06,190
and wind it just doesn't exist in any other commodity

910
00:39:06,190 --> 00:39:07,320
complex so you have a

911
00:39:07,320 --> 00:39:11,260
very natural advantage here to take it to take advantage of

912
00:39:11,260 --> 00:39:12,199
yes so I have a

913
00:39:12,199 --> 00:39:19,760
question when you have storage does that decrease the

914
00:39:19,760 --> 00:39:22,679
problem of forecast error

915
00:39:22,679 --> 00:39:27,639
because you've got it you know you're not you to an extent

916
00:39:27,639 --> 00:39:29,880
storage we're on

917
00:39:29,880 --> 00:39:33,690
the cusp of storage being commercially viable it's being

918
00:39:33,690 --> 00:39:34,679
deployed in some areas

919
00:39:34,679 --> 00:39:37,920
it's not quite there I'll let Neil speak to this in a

920
00:39:37,920 --> 00:39:38,880
moment but typically

921
00:39:38,880 --> 00:39:43,760
storage would best be used to behind congestion points

922
00:39:43,760 --> 00:39:45,280
storage may be valuable

923
00:39:45,280 --> 00:39:48,309
for a few hours but this isn't like other commodities where

924
00:39:48,309 --> 00:39:48,960
you can just put

925
00:39:48,960 --> 00:39:52,559
it away for weeks and then deploy it later we're talking on

926
00:39:52,559 --> 00:39:53,719
an hourly basis

927
00:39:53,719 --> 00:40:02,039
but we do have utility scale storage that's being used well

928
00:40:02,039 --> 00:40:02,800
no well there are

929
00:40:02,800 --> 00:40:07,599
some smaller that will that will happen that's something

930
00:40:07,599 --> 00:40:08,320
that will happen I've

931
00:40:08,320 --> 00:40:13,489
done storage I wrote a thesis in graduate school on natural

932
00:40:13,489 --> 00:40:14,000
gas storage

933
00:40:14,000 --> 00:40:18,699
which LCRA was building and so I did after we built it I

934
00:40:18,699 --> 00:40:19,320
did all the

935
00:40:19,320 --> 00:40:22,170
operational things that they started and that's been going

936
00:40:22,170 --> 00:40:25,440
on since 20 years or

937
00:40:25,440 --> 00:40:30,099
so and and I've also done large case that's compressed air

938
00:40:30,099 --> 00:40:31,840
energy storage in

939
00:40:31,840 --> 00:40:35,730
other and those were utility scale like 400 megawatts and

940
00:40:35,730 --> 00:40:37,760
so you asked first

941
00:40:37,760 --> 00:40:41,570
about forecasting forecasting is key because we're

942
00:40:41,570 --> 00:40:42,519
basically storage takes

943
00:40:42,519 --> 00:40:46,559
power from one period and then it deploys in another period

944
00:40:46,559 --> 00:40:47,159
we have to

945
00:40:47,159 --> 00:40:49,840
know what the price differentials are how much you fill it

946
00:40:49,840 --> 00:40:50,519
up and this is

947
00:40:50,519 --> 00:40:55,320
difficult stuff and and then how to depose it but

948
00:40:55,320 --> 00:40:57,119
absolutely storage will

949
00:40:57,119 --> 00:41:02,349
help do that in your case here you have you know if you buy

950
00:41:02,349 --> 00:41:03,920
a solar thing with

951
00:41:03,920 --> 00:41:08,190
the deck you have too much of that you have too much

952
00:41:08,190 --> 00:41:10,280
certainty on peak you will

953
00:41:10,280 --> 00:41:15,920
you that's what you'll wind up with and so that's that's

954
00:41:15,920 --> 00:41:17,440
something that you'll

955
00:41:17,440 --> 00:41:21,280
have to consider about I wanted to point this out this is

956
00:41:21,280 --> 00:41:23,360
again from the 2016

957
00:41:23,360 --> 00:41:28,349
state of the market report and what it does is show in 2016

958
00:41:28,349 --> 00:41:29,239
by months and that

959
00:41:29,239 --> 00:41:34,239
the the very last chart these were there were four of them

960
00:41:34,239 --> 00:41:35,159
together and they're

961
00:41:35,159 --> 00:41:38,179
split apart but those are the months of the year and then

962
00:41:38,179 --> 00:41:39,119
the different zones

963
00:41:39,119 --> 00:41:41,650
and you'll notice you're in the north zone which is in the

964
00:41:41,650 --> 00:41:42,639
lower left corner

965
00:41:42,639 --> 00:41:48,389
and you can see that congestion for y'all is is some of the

966
00:41:48,389 --> 00:41:49,960
lowest and the

967
00:41:49,960 --> 00:41:54,710
least volatile and that's great so that means the insurance

968
00:41:54,710 --> 00:41:55,639
to buy for that is

969
00:41:55,639 --> 00:42:00,920
incredibly cheap but in renewables they come from the west

970
00:42:00,920 --> 00:42:03,280
and the south and so

971
00:42:03,280 --> 00:42:07,889
you'll quickly have to merge those two and so say half your

972
00:42:07,889 --> 00:42:10,079
congestion risk is

973
00:42:10,079 --> 00:42:14,380
easy to manage with congestion but the renewables would be

974
00:42:14,380 --> 00:42:15,800
more difficult to

975
00:42:15,800 --> 00:42:19,610
manage that but it's completely you're buying insurance

976
00:42:19,610 --> 00:42:20,960
essentially and so you

977
00:42:20,960 --> 00:42:23,230
just have to look at all the comparative costs and that

978
00:42:23,230 --> 00:42:24,480
sort of thing but that's

979
00:42:24,480 --> 00:42:29,719
there's 20 markets a year to go out in the forward markets

980
00:42:29,719 --> 00:42:30,719
and so you have to

981
00:42:30,719 --> 00:42:34,739
have a real rigid point or real well thought-out plan and

982
00:42:34,739 --> 00:42:35,880
execute it in a

983
00:42:35,880 --> 00:42:41,199
very very disciplined way to get this but when you do that

984
00:42:41,199 --> 00:42:43,440
again you wind up

985
00:42:43,440 --> 00:42:47,250
with their renewables at the loud sound at the price you

986
00:42:47,250 --> 00:42:50,280
want so this is yes but

987
00:42:50,280 --> 00:42:54,800
if we had renewable physical renewables here renewable

988
00:42:54,800 --> 00:42:56,679
generation well we do

989
00:42:56,679 --> 00:43:01,429
already but so with with our renewable generation that we

990
00:43:01,429 --> 00:43:01,960
have here our

991
00:43:01,960 --> 00:43:07,130
physical generation there's not a congestion problem that's

992
00:43:07,130 --> 00:43:07,559
right correct

993
00:43:07,559 --> 00:43:10,280
because it's being produced here so correct so that's one

994
00:43:10,280 --> 00:43:11,079
advantage that

995
00:43:11,079 --> 00:43:15,139
actually having the distributed generation has over the

996
00:43:15,139 --> 00:43:16,239
contracting out

997
00:43:16,239 --> 00:43:22,130
that's right the as long as it's not too big or cut as soon

998
00:43:22,130 --> 00:43:23,239
as you get over a

999
00:43:23,239 --> 00:43:27,719
megawatt they it's they take away that advantage from you

1000
00:43:27,719 --> 00:43:29,239
because then they say

1001
00:43:29,239 --> 00:43:32,210
that's a transmission thing and it might as well be an am

1002
00:43:32,210 --> 00:43:33,519
aryllis or something okay

1003
00:43:33,519 --> 00:43:36,469
so so but that means any rooftop as long as you don't

1004
00:43:36,469 --> 00:43:38,199
exceed one megawatt all the

1005
00:43:38,199 --> 00:43:42,469
rooftop solars absolutely that congestion or the basis and

1006
00:43:42,469 --> 00:43:43,639
what we like

1007
00:43:43,639 --> 00:43:46,760
to say is geographic basis it's the same place right yeah

1008
00:43:46,760 --> 00:43:47,559
so you don't need a

1009
00:43:47,559 --> 00:43:51,369
basis on that case that's right thanks so just just one

1010
00:43:51,369 --> 00:43:52,760
very last quick thing on

1011
00:43:52,760 --> 00:43:56,570
here as Neil alluded to the congestion risk is small here

1012
00:43:56,570 --> 00:43:57,360
this is an advantage

1013
00:43:57,360 --> 00:44:01,170
you have being in the north as he said the renewables are

1014
00:44:01,170 --> 00:44:02,239
likely to come from

1015
00:44:02,239 --> 00:44:04,349
other zones of congestion is going to be a bigger problem

1016
00:44:04,349 --> 00:44:05,840
we've had some

1017
00:44:05,840 --> 00:44:08,380
customers that have said we don't want to spend this money

1018
00:44:08,380 --> 00:44:09,119
this is just an

1019
00:44:09,119 --> 00:44:12,929
additional cost why should we buy insurance when nothing is

1020
00:44:12,929 --> 00:44:13,480
happening here

1021
00:44:13,480 --> 00:44:16,090
but to us this is like somebody in Houston a month ago

1022
00:44:16,090 --> 00:44:17,119
saying you know what

1023
00:44:17,119 --> 00:44:19,780
hadn't flooded here in ten years I don't need to pay that $

1024
00:44:19,780 --> 00:44:20,800
500 a year to

1025
00:44:20,800 --> 00:44:23,760
ensure my house when the insurance is cheap you take

1026
00:44:23,760 --> 00:44:24,840
advantage of it insure

1027
00:44:24,840 --> 00:44:26,599
it that's our philosophy and that's going to be something

1028
00:44:26,599 --> 00:44:27,480
that will integrate

1029
00:44:27,480 --> 00:44:32,650
into our plan so just to wrap this up our anticipated

1030
00:44:32,650 --> 00:44:33,800
recommendations for the

1031
00:44:33,800 --> 00:44:36,590
plan that we're going to be delivering in October to

1032
00:44:36,590 --> 00:44:38,039
purchase additional wind

1033
00:44:38,039 --> 00:44:40,659
with a lower correlation to your current wind supplies to

1034
00:44:40,659 --> 00:44:41,639
better complete the

1035
00:44:41,639 --> 00:44:44,809
supply hedge and achieve greater diversification purchase

1036
00:44:44,809 --> 00:44:45,480
solar at two

1037
00:44:45,480 --> 00:44:47,510
or more additional locations to improve aggregate

1038
00:44:47,510 --> 00:44:48,599
reliability and that also

1039
00:44:48,599 --> 00:44:52,409
increases your diversification 30% of the load would be

1040
00:44:52,409 --> 00:44:53,119
purchased with short

1041
00:44:53,119 --> 00:44:55,550
to intermediate term solar and wind contracts two to five

1042
00:44:55,550 --> 00:44:56,280
years so you're

1043
00:44:56,280 --> 00:45:00,199
not loading up a hundred percent too far out we'll talk

1044
00:45:00,199 --> 00:45:01,719
about this more when we

1045
00:45:01,719 --> 00:45:04,820
get into the deliverable portion of the report but you need

1046
00:45:04,820 --> 00:45:05,920
to balance staying

1047
00:45:05,920 --> 00:45:08,469
somewhat competitive versus making sure you don't have too

1048
00:45:08,469 --> 00:45:09,320
much uncertainty

1049
00:45:09,320 --> 00:45:11,710
there's a balance there and that can be achieved through

1050
00:45:11,710 --> 00:45:12,800
staggering these things

1051
00:45:12,800 --> 00:45:15,730
are laddering them through time we want to avoid known

1052
00:45:15,730 --> 00:45:16,880
congestion areas if

1053
00:45:16,880 --> 00:45:20,469
possible we're going to emphasize 345 KB interconnects

1054
00:45:20,469 --> 00:45:21,679
these are higher capacity

1055
00:45:21,679 --> 00:45:24,769
transmission lines you don't be connecting to something we

1056
00:45:24,769 --> 00:45:25,559
've had clients

1057
00:45:25,559 --> 00:45:28,389
that did this and then brought us in later after they've

1058
00:45:28,389 --> 00:45:29,199
made the decisions

1059
00:45:29,199 --> 00:45:32,230
have connected to low capacity interconnection points and

1060
00:45:32,230 --> 00:45:32,880
they've got

1061
00:45:32,880 --> 00:45:35,829
tremendous congestion problems expected prices for the

1062
00:45:35,829 --> 00:45:36,880
renewables in the mid

1063
00:45:36,880 --> 00:45:39,269
twenty dollars per megawatt hour and we will propose a

1064
00:45:39,269 --> 00:45:40,480
variety of alternatives

1065
00:45:40,480 --> 00:45:43,739
for maximizing the value the deck including how to dispose

1066
00:45:43,739 --> 00:45:44,199
of that

1067
00:45:44,199 --> 00:45:49,809
perspective excess production potential just very lastly in

1068
00:45:49,809 --> 00:45:51,199
a second part of our

1069
00:45:51,199 --> 00:45:55,590
work we're going to assist we propose assist the city in

1070
00:45:55,590 --> 00:45:57,280
revising RFPs for

1071
00:45:57,280 --> 00:46:01,079
both renewable resources and for natural gas supplies

1072
00:46:01,079 --> 00:46:02,199
making sure that you have

1073
00:46:02,199 --> 00:46:05,489
the right type of supply contract for the deck is crucial

1074
00:46:05,489 --> 00:46:06,360
to make sure it

1075
00:46:06,360 --> 00:46:09,820
operates optimally so this is just something that we have

1076
00:46:09,820 --> 00:46:10,760
in your on your

1077
00:46:10,760 --> 00:46:15,030
desk in terms of a proposal to help you evaluate the offers

1078
00:46:15,030 --> 00:46:16,039
for both renewable

1079
00:46:16,039 --> 00:46:19,000
resources and for gas supplies that's the end of the

1080
00:46:19,000 --> 00:46:20,119
presentation any final

1081
00:46:20,119 --> 00:46:23,909
questions that you have if not we thank you very much for

1082
00:46:23,909 --> 00:46:25,639
your time yes yeah

1083
00:46:25,639 --> 00:46:29,909
earlier in the presentation you said something about you

1084
00:46:29,909 --> 00:46:31,280
already have some

1085
00:46:31,280 --> 00:46:37,989
some purchases and we need to work around those are you imp

1086
00:46:37,989 --> 00:46:38,800
lying what would

1087
00:46:38,800 --> 00:46:42,610
you say that those purchases that were made are not

1088
00:46:42,610 --> 00:46:44,239
necessarily the ones that

1089
00:46:44,239 --> 00:46:49,960
you would have gone with head you reasonable assumption mm-

1090
00:46:49,960 --> 00:46:52,159
hmm yeah so I'll

1091
00:46:52,159 --> 00:46:59,090
I'll just say that I really like the idea of of contracting

1092
00:46:59,090 --> 00:47:00,000
out renewable

1093
00:47:00,000 --> 00:47:05,530
portfolio management either with this group or some some

1094
00:47:05,530 --> 00:47:07,599
other group but it

1095
00:47:07,599 --> 00:47:11,429
it just seems to me that there's too much risk of trying to

1096
00:47:11,429 --> 00:47:12,559
manage this in

1097
00:47:12,559 --> 00:47:17,539
house and you know trying to reinvent the wheel the wheel

1098
00:47:17,539 --> 00:47:18,280
and teach ourselves

1099
00:47:18,280 --> 00:47:24,800
skills that take many many years to acquire so I'm I'm all

1100
00:47:24,800 --> 00:47:27,079
for contracting

1101
00:47:27,079 --> 00:47:30,880
out for these kinds of services and for the insurance I

1102
00:47:30,880 --> 00:47:32,039
just wanted to say that

1103
00:47:32,039 --> 00:47:36,309
just to speak about two things to that one is you've you've

1104
00:47:36,309 --> 00:47:37,400
already the city's

1105
00:47:37,400 --> 00:47:41,210
already contracted out to us to help design the right yes I

1106
00:47:41,210 --> 00:47:41,440
understand I mean

1107
00:47:41,440 --> 00:47:45,309
we're confident that you can you can acquire the skill set

1108
00:47:45,309 --> 00:47:46,320
and the experience

1109
00:47:46,320 --> 00:47:49,219
to do the day-to-day management we see that successfully

1110
00:47:49,219 --> 00:47:50,320
across clients now a

1111
00:47:50,320 --> 00:47:53,210
lot of them we advise on an ongoing basis but we think you

1112
00:47:53,210 --> 00:47:54,079
can build that

1113
00:47:54,079 --> 00:47:57,030
capability internally so there's two certain things yes

1114
00:47:57,030 --> 00:47:58,119
yeah yeah yes sure

1115
00:47:58,119 --> 00:48:02,610
yeah I mean having having somebody I'm not sure what the

1116
00:48:02,610 --> 00:48:03,400
you know what the

1117
00:48:03,400 --> 00:48:06,239
official terms are thank you for clarifying yeah I mean

1118
00:48:06,239 --> 00:48:07,519
having somebody

1119
00:48:07,519 --> 00:48:14,420
on our team around the clock yes not just yes not being

1120
00:48:14,420 --> 00:48:15,360
entirely on our own

1121
00:48:15,360 --> 00:48:20,800
mm-hmm thank you thank you very much thanks no any other

1122
00:48:20,800 --> 00:48:21,559
questions from any

1123
00:48:21,559 --> 00:48:35,719
any other board no thank you okay do we have on this item

1124
00:48:35,719 --> 00:48:38,960
do we have anything to

1125
00:48:38,960 --> 00:48:46,599
discuss or any direction we want to to give staff

1126
00:48:47,239 --> 00:48:53,440
right yeah don't we already do I mean we we monitor on a

1127
00:48:53,440 --> 00:48:55,159
minute by minute basis

1128
00:48:55,159 --> 00:48:58,869
the energy and all don't we already pretty much have the

1129
00:48:58,869 --> 00:49:00,159
platform and skill

1130
00:49:00,159 --> 00:49:04,530
set we do have the platform what we're missing is a formal

1131
00:49:04,530 --> 00:49:06,239
plan moving forward

1132
00:49:06,239 --> 00:49:09,320
to implement so I think our team is very talented and I

1133
00:49:09,320 --> 00:49:10,679
think that's gonna be

1134
00:49:10,679 --> 00:49:14,489
born out in this next presentation one of the things though

1135
00:49:14,489 --> 00:49:15,159
moving forward is

1136
00:49:15,159 --> 00:49:18,239
just a longer-term renewable plan how we're going to

1137
00:49:18,239 --> 00:49:19,480
operate it how we're

1138
00:49:19,480 --> 00:49:23,070
going to manage it we very well could recommend bringing in

1139
00:49:23,070 --> 00:49:23,679
assets such as

1140
00:49:23,679 --> 00:49:28,079
enterprise risk to help us you know update the plan and and

1141
00:49:28,079 --> 00:49:28,880
just have that

1142
00:49:28,880 --> 00:49:32,219
that outside voice to bounce ideas off of but yes now we do

1143
00:49:32,219 --> 00:49:33,199
have a very talented

1144
00:49:33,199 --> 00:49:35,940
team in house to work with them I took a tour and it looked

1145
00:49:35,940 --> 00:49:37,159
like yeah the stock

1146
00:49:37,159 --> 00:49:42,519
market I mean yeah monitoring and the people I was very

1147
00:49:42,519 --> 00:49:43,519
impressed with with

1148
00:49:43,519 --> 00:49:46,010
what the city already has yeah I think I think the reason

1149
00:49:46,010 --> 00:49:47,320
we brought them we

1150
00:49:47,320 --> 00:49:50,019
brought enterprise risk in is to help us put together a

1151
00:49:50,019 --> 00:49:51,519
formal plan moving forward

1152
00:49:51,519 --> 00:49:54,820
and help us with that that resource allocation mix and also

1153
00:49:54,820 --> 00:49:56,019
to make sure that

1154
00:49:56,019 --> 00:49:59,829
our public understands what we're doing you know but moving

1155
00:49:59,829 --> 00:50:00,960
forward what we will

1156
00:50:00,960 --> 00:50:04,050
likely ask them to you know to help us refine the plan and

1157
00:50:04,050 --> 00:50:05,079
make sure that we're

1158
00:50:05,079 --> 00:50:07,840
operates officially as possible but we have no concerns

1159
00:50:07,840 --> 00:50:09,119
about our current staff

1160
00:50:09,119 --> 00:50:12,150
and their ability to pull this plan off their talented

1161
00:50:12,150 --> 00:50:13,440
people and have saved

1162
00:50:13,440 --> 00:50:16,320
quite a bit of money over the last millions of dollars

1163
00:50:16,320 --> 00:50:17,639
right well as he

1164
00:50:17,639 --> 00:50:21,050
said you have to have somebody here somebody's gonna be on

1165
00:50:21,050 --> 00:50:22,239
it 24/7 to watch

1166
00:50:22,239 --> 00:50:28,920
it third party look forward I don't know if there's no

1167
00:50:28,920 --> 00:50:29,960
action to be taken but I

1168
00:50:29,960 --> 00:50:36,940
look forward to the October 16th reports when it comes in

1169
00:50:36,940 --> 00:50:40,360
16 is when is our we

1170
00:50:40,360 --> 00:50:46,489
don't have what's that we have a PB meeting on the 6 second

1171
00:50:46,489 --> 00:50:48,119
meeting okay

1172
00:50:48,119 --> 00:51:03,960
okay that's the 23rd okay to the public but also my

1173
00:51:03,960 --> 00:51:07,800
colleagues on on pub that the

1174
00:51:07,800 --> 00:51:13,000
impression that I got from reading this presentation in

1175
00:51:13,000 --> 00:51:14,639
advance and hearing this

1176
00:51:14,639 --> 00:51:20,769
today is that the the plan that we had in place called the

1177
00:51:20,769 --> 00:51:21,840
renewable dentin plan

1178
00:51:21,840 --> 00:51:26,510
was very very bare bones and minimalistic so I'm kind of

1179
00:51:26,510 --> 00:51:27,599
getting the

1180
00:51:27,599 --> 00:51:32,539
impression here that where that what we're doing now is

1181
00:51:32,539 --> 00:51:34,239
really building a

1182
00:51:34,239 --> 00:51:38,510
plan from the ground up is that would you say that's

1183
00:51:38,510 --> 00:51:40,280
correct Todd I think

1184
00:51:40,280 --> 00:51:44,920
that's fair the there was there's obviously a concept and

1185
00:51:44,920 --> 00:51:46,159
an idea behind

1186
00:51:46,159 --> 00:51:49,510
the energy center at this point what we're trying to do is

1187
00:51:49,510 --> 00:51:50,800
make sure that we

1188
00:51:50,800 --> 00:51:56,119
include pub and council in terms of adopting our renewable

1189
00:51:56,119 --> 00:51:56,800
plan moving

1190
00:51:56,800 --> 00:51:59,219
forward what that's going to mean in terms of a divers

1191
00:51:59,219 --> 00:52:00,260
ification what it's

1192
00:52:00,260 --> 00:52:03,340
going to mean in terms of future contracts contracts the

1193
00:52:03,340 --> 00:52:04,360
renewable market

1194
00:52:04,360 --> 00:52:07,250
as well as the important policy decision it's really not

1195
00:52:07,250 --> 00:52:08,440
been discussed yet and

1196
00:52:08,440 --> 00:52:11,639
that is how the deck is gonna work yes you know and how in

1197
00:52:11,639 --> 00:52:12,760
I think there's a

1198
00:52:12,760 --> 00:52:15,340
lot of confusion around that and we just want to make sure

1199
00:52:15,340 --> 00:52:16,360
that that both of our

1200
00:52:16,360 --> 00:52:19,949
governing bodies and our public fully understand how this

1201
00:52:19,949 --> 00:52:21,000
all works and that

1202
00:52:21,000 --> 00:52:25,039
you know that we're operating from one set of facts mm-hmm

1203
00:52:25,039 --> 00:52:26,280
yes thank you yeah

1204
00:52:26,280 --> 00:52:30,550
this is essentially just going to give us a formal strategy

1205
00:52:30,550 --> 00:52:31,440
of how we're going

1206
00:52:31,440 --> 00:52:34,530
to be moving forward with renewables and everything and

1207
00:52:34,530 --> 00:52:36,239
exactly in a very public

1208
00:52:36,239 --> 00:52:41,550
way yes and and as implementation of the deck and how do we

1209
00:52:41,550 --> 00:52:42,079
how do we utilize

1210
00:52:42,079 --> 00:52:47,559
that as well in that plan so for what it's worth and

1211
00:52:47,559 --> 00:52:49,000
regardless of how we've

1212
00:52:49,000 --> 00:52:52,809
come up here to this point with or without a plan the

1213
00:52:52,809 --> 00:52:53,800
gentleman did say

1214
00:52:53,800 --> 00:52:57,610
that we were poised in a great position to begin putting

1215
00:52:57,610 --> 00:52:59,000
this plan on paper so

1216
00:52:59,000 --> 00:53:01,960
however we got into this good position I guess it's

1217
00:53:01,960 --> 00:53:03,920
fortunate that we are in the

1218
00:53:03,920 --> 00:53:07,329
position and I think I heard him say Georgetown fell into

1219
00:53:07,329 --> 00:53:09,000
it so maybe

1220
00:53:09,000 --> 00:53:17,269
into it too I do remember having discussion five six years

1221
00:53:17,269 --> 00:53:18,840
ago about solar

1222
00:53:18,840 --> 00:53:23,130
contracts and about the time that Austin got into it and

1223
00:53:23,130 --> 00:53:24,880
and we were looking at

1224
00:53:24,880 --> 00:53:29,150
hundred and twenty dollars minimum at that time so now we

1225
00:53:29,150 --> 00:53:29,840
're talking about

1226
00:53:29,840 --> 00:53:36,840
twenty dollars which is yeah yeah I'll go here that's good

1227
00:53:36,840 --> 00:53:38,840
yes I'll just add to

1228
00:53:38,840 --> 00:53:42,719
that yet we're absolutely in it clearly in it advantageous

1229
00:53:42,719 --> 00:53:44,039
position financially

1230
00:53:44,039 --> 00:53:48,940
in terms of purchasing renewables but of course we also are

1231
00:53:48,940 --> 00:53:50,559
balancing that out

1232
00:53:50,559 --> 00:53:59,469
with the the 265 million dollars bond debt for for the gas

1233
00:53:59,469 --> 00:54:01,400
plant so that may

1234
00:54:01,400 --> 00:54:05,210
have been of course we can't go back in time and and I'll

1235
00:54:05,210 --> 00:54:06,440
alter the recent past

1236
00:54:06,440 --> 00:54:08,760
but just to make sure in terms of being honest with the

1237
00:54:08,760 --> 00:54:09,880
public that the public

1238
00:54:09,880 --> 00:54:14,699
understands that we also have this big debt service and

1239
00:54:14,699 --> 00:54:16,539
part of what we'll be

1240
00:54:16,539 --> 00:54:20,809
doing it seems from from reading this report with these

1241
00:54:20,809 --> 00:54:23,159
cheap renewables is

1242
00:54:23,159 --> 00:54:28,460
helping to pay off the debt I know that's obvious to us

1243
00:54:28,460 --> 00:54:29,679
just kind of stating

1244
00:54:29,679 --> 00:54:33,489
that off for the public and I've made it you know just to

1245
00:54:33,489 --> 00:54:35,239
put my cards on the

1246
00:54:35,239 --> 00:54:40,760
table you know I've I've been been very vocal from the

1247
00:54:40,760 --> 00:54:41,719
beginning in my

1248
00:54:41,719 --> 00:54:49,619
opposition to the gas plant but I've always been thrilled

1249
00:54:49,619 --> 00:54:51,079
with the idea of

1250
00:54:51,079 --> 00:54:55,469
these renewables and I makes me really happy to know that

1251
00:54:55,469 --> 00:54:56,800
we're doing this at

1252
00:54:56,800 --> 00:55:01,820
at precisely the right time it is bittersweet for me though

1253
00:55:01,820 --> 00:55:02,539
you know to

1254
00:55:02,539 --> 00:55:06,969
see that all these all these gains will be you know paying

1255
00:55:06,969 --> 00:55:08,159
off this this this

1256
00:55:08,159 --> 00:55:15,320
burden well I think to your point we thought that you know

1257
00:55:15,320 --> 00:55:16,199
based upon the

1258
00:55:16,199 --> 00:55:21,159
council's goal of you know 70% renewable strategy moving

1259
00:55:21,159 --> 00:55:21,519
forward and

1260
00:55:21,519 --> 00:55:24,469
hopefully exceeding that you know we feel like we've got

1261
00:55:24,469 --> 00:55:25,440
the right team in

1262
00:55:25,440 --> 00:55:29,250
place to help us put that strategy in place they've

1263
00:55:29,250 --> 00:55:30,199
obviously proven they can

1264
00:55:30,199 --> 00:55:33,199
do that note with other communities but the the financial

1265
00:55:33,199 --> 00:55:34,440
plan that's currently

1266
00:55:34,440 --> 00:55:38,250
in place and which would be in the form of the five-year

1267
00:55:38,250 --> 00:55:39,179
operating budget

1268
00:55:39,179 --> 00:55:42,989
operating CIP budget that really is the those are the

1269
00:55:42,989 --> 00:55:44,159
numbers we're trying to

1270
00:55:44,159 --> 00:55:48,199
improve upon and so any strategy that's put in place yeah

1271
00:55:48,199 --> 00:55:48,800
there's the debt

1272
00:55:48,800 --> 00:55:52,130
there's mitigation for the debt service no question about

1273
00:55:52,130 --> 00:55:53,119
it but one of the

1274
00:55:53,119 --> 00:55:55,519
charges that we're hoping to see through this strategic

1275
00:55:55,519 --> 00:55:56,599
planning is can we meet

1276
00:55:56,599 --> 00:56:02,300
and exceed our financial goals and input the the DME and

1277
00:56:02,300 --> 00:56:04,079
even more advantageous

1278
00:56:04,079 --> 00:56:08,679
financial positions so we you know we're moving forward we

1279
00:56:08,679 --> 00:56:09,800
've got the variable

1280
00:56:09,800 --> 00:56:11,949
set and I think we've got the right team in place that can

1281
00:56:11,949 --> 00:56:13,280
can help us provide

1282
00:56:13,280 --> 00:56:17,090
that objective third-party look and improve our financial

1283
00:56:17,090 --> 00:56:17,360
situation that's

1284
00:56:17,360 --> 00:56:23,440
that's the goal thank you and I would just want to see to

1285
00:56:23,440 --> 00:56:26,719
make sure that our

1286
00:56:26,719 --> 00:56:31,639
rate payers our residential rate payers average Joe rate

1287
00:56:31,639 --> 00:56:33,440
payer is reaping the

1288
00:56:33,440 --> 00:56:38,150
benefits of this savings so that your average residential

1289
00:56:38,150 --> 00:56:39,760
rate payer doesn't

1290
00:56:39,760 --> 00:56:42,730
feel like they're strapped with this debt I know we're all

1291
00:56:42,730 --> 00:56:43,840
strapped with it with

1292
00:56:43,840 --> 00:56:49,079
the debt and that's a reality but I just wanted to put that

1293
00:56:49,079 --> 00:56:50,599
in there so that the

1294
00:56:50,599 --> 00:56:55,300
public knows that that that that will be something that

1295
00:56:55,300 --> 00:56:57,159
that that will be talking

1296
00:56:57,159 --> 00:57:01,429
about trying to ease the burden on the residential rate pay

1297
00:57:01,429 --> 00:57:02,380
ers I think once we

1298
00:57:02,380 --> 00:57:05,389
can get to a point where PUB and council feel comfortable

1299
00:57:05,389 --> 00:57:06,800
adopting our operational

1300
00:57:06,800 --> 00:57:09,880
plans moving forward the strategic plan moving forward you

1301
00:57:09,880 --> 00:57:11,599
know and we start

1302
00:57:11,599 --> 00:57:15,300
locking down some additional renewable contracts we should

1303
00:57:15,300 --> 00:57:16,159
be able to be in a

1304
00:57:16,159 --> 00:57:21,550
pretty solid position late next spring to assess how our

1305
00:57:21,550 --> 00:57:23,519
new strategy or how our

1306
00:57:23,519 --> 00:57:26,739
strategy is going to correlate to our assumptions and I

1307
00:57:26,739 --> 00:57:27,840
think it's I think

1308
00:57:27,840 --> 00:57:29,349
that will be the time where we can answer that question a

1309
00:57:29,349 --> 00:57:29,920
little bit better

1310
00:57:29,920 --> 00:57:37,880
for you excellent well I'm not quite ready to scrap the

1311
00:57:37,880 --> 00:57:39,199
deck at this point I

1312
00:57:39,199 --> 00:57:43,010
think I'm looking forward to this through the report in

1313
00:57:43,010 --> 00:57:43,920
October because I

1314
00:57:43,920 --> 00:57:47,869
think it's going to illustrate that not just paying off

1315
00:57:47,869 --> 00:57:49,559
debt but also the value

1316
00:57:49,559 --> 00:57:54,179
of having a start-up during peak hours because that is the

1317
00:57:54,179 --> 00:57:55,920
most expensive time

1318
00:57:55,920 --> 00:58:00,190
to try to buy energy when you need it is during the summer

1319
00:58:00,190 --> 00:58:01,519
peak hours and so if

1320
00:58:01,519 --> 00:58:05,809
that might makes that gap I think I think the jury is still

1321
00:58:05,809 --> 00:58:07,880
out and and that

1322
00:58:07,880 --> 00:58:11,880
that's also the time when of course the Sun the solar is

1323
00:58:11,880 --> 00:58:12,840
most yeah we've got the

1324
00:58:12,840 --> 00:58:18,480
most solar we'll look forward to the report yes yes me too

1325
00:58:18,480 --> 00:58:21,880
okay next item we

1326
00:58:21,880 --> 00:58:28,239
have is item B Brian to receive report whole discussion

1327
00:58:28,239 --> 00:58:29,199
give staff direction

1328
00:58:29,199 --> 00:58:36,690
regarding the energy management organization this is the

1329
00:58:36,690 --> 00:58:40,039
second of two

1330
00:58:40,039 --> 00:58:42,900
presentations this morning for you from some consultants

1331
00:58:42,900 --> 00:58:44,039
that we've hired so as

1332
00:58:44,039 --> 00:58:46,179
we were talking about earlier with you we did create an

1333
00:58:46,179 --> 00:58:47,039
energy management

1334
00:58:47,039 --> 00:58:49,699
organization about three years ago we had some internal

1335
00:58:49,699 --> 00:58:50,679
benchmarks we were

1336
00:58:50,679 --> 00:58:53,539
using to calculate what we thought the savings of having

1337
00:58:53,539 --> 00:58:54,639
that group in-house

1338
00:58:54,639 --> 00:58:57,510
was but we wanted to get an independent view of that and so

1339
00:58:57,510 --> 00:58:58,519
we hired Deloitte

1340
00:58:58,519 --> 00:59:01,179
consulting to come in and do a review of that and so the

1341
00:59:01,179 --> 00:59:02,519
purpose of this item is

1342
00:59:02,519 --> 00:59:05,199
to have them present that report to you tomorrow they'll

1343
00:59:05,199 --> 00:59:05,960
also be repeating

1344
00:59:05,960 --> 00:59:08,119
reporting on this to the City Council so with that I'm

1345
00:59:08,119 --> 00:59:09,199
going to introduce Steve

1346
00:59:09,199 --> 00:59:13,010
Engler and Tim Metz from Deloitte and turn the presentation

1347
00:59:13,010 --> 00:59:14,920
over to them thank

1348
00:59:14,920 --> 00:59:17,690
you Brian good morning ladies and gentlemen of the board as

1349
00:59:17,690 --> 00:59:18,480
Brian mentioned

1350
00:59:18,480 --> 00:59:21,300
my name is Steve Engler I'm a managing director with Delo

1351
00:59:21,300 --> 00:59:22,280
itte's energy risk

1352
00:59:22,280 --> 00:59:24,800
advisory practice and my colleague Tim Metz is a senior

1353
00:59:24,800 --> 00:59:25,840
manager in that same

1354
00:59:25,840 --> 00:59:28,190
practice pleased to speak with you this morning and like

1355
00:59:28,190 --> 00:59:29,079
the gentleman that

1356
00:59:29,079 --> 00:59:32,079
spoke earlier please don't hesitate to interrupt with

1357
00:59:32,079 --> 00:59:33,639
questions I apologize in

1358
00:59:33,639 --> 00:59:35,420
advance there's a lot of numbers on a lot of these slides

1359
00:59:35,420 --> 00:59:36,199
but we're gonna try

1360
00:59:36,199 --> 00:59:40,010
to tell a story at the same time I love numbers before you

1361
00:59:40,010 --> 00:59:40,679
start I have to leave

1362
00:59:40,679 --> 00:59:45,079
at 1015 so if I get up and leave it's not your present

1363
00:59:48,760 --> 00:59:51,030
so our attorneys require that we put a lot of verbiage

1364
00:59:51,030 --> 00:59:53,559
upfront in the slides

1365
00:59:53,559 --> 00:59:56,219
just to talk quickly about where we're gonna go we'll give

1366
00:59:56,219 --> 00:59:57,039
a little bit of a

1367
00:59:57,039 --> 00:59:59,519
background in terms of why we're here Brian gave an

1368
00:59:59,519 --> 01:00:00,639
introduction to that

1369
01:00:00,639 --> 01:00:04,449
effect talk about the three things that we set out to

1370
01:00:04,449 --> 01:00:05,440
complete during this

1371
01:00:05,440 --> 01:00:08,139
analysis and then we're going to talk about some of the

1372
01:00:08,139 --> 01:00:08,940
details of that

1373
01:00:08,940 --> 01:00:13,019
analysis specifically validating the model that the city's

1374
01:00:13,019 --> 01:00:13,920
been using to

1375
01:00:13,920 --> 01:00:18,530
calculate the savings then peel that back a little bit and

1376
01:00:18,530 --> 01:00:19,760
look at some of

1377
01:00:19,760 --> 01:00:22,849
the key assumptions that are in that model including the

1378
01:00:22,849 --> 01:00:23,679
heat rate and the

1379
01:00:23,679 --> 01:00:27,489
ancillary services and the QSE costs which we'll talk about

1380
01:00:27,489 --> 01:00:28,719
and then the

1381
01:00:28,719 --> 01:00:31,400
third piece was to look at on the cost side of the equation

1382
01:00:31,400 --> 01:00:32,119
so what we're

1383
01:00:32,119 --> 01:00:35,929
comparing to and we've got a summary at the end and some

1384
01:00:35,929 --> 01:00:37,119
recommended next steps

1385
01:00:37,119 --> 01:00:41,159
as well so I'm not going to read all this to you and I

1386
01:00:41,159 --> 01:00:41,880
think this is probably

1387
01:00:41,880 --> 01:00:45,019
familiar to all of you on the board and in the audience but

1388
01:00:45,019 --> 01:00:46,760
dating back to 2002

1389
01:00:46,760 --> 01:00:50,570
when the state of Texas deregulated the energy the electric

1390
01:00:50,570 --> 01:00:52,139
markets Denton

1391
01:00:52,139 --> 01:00:55,949
Municipal Electric began utilizing services from several

1392
01:00:55,949 --> 01:00:57,159
counterparties to

1393
01:00:57,159 --> 01:01:01,480
procure energy when required to meet the demand as well as

1394
01:01:01,480 --> 01:01:02,599
fulfill this the

1395
01:01:02,599 --> 01:01:07,519
scheduling requirements in ERCOT beginning in 2011 DME

1396
01:01:07,519 --> 01:01:08,559
selected a single

1397
01:01:08,559 --> 01:01:12,369
counterparty to perform that function on their behalf and

1398
01:01:12,369 --> 01:01:13,440
through the course of

1399
01:01:13,440 --> 01:01:16,610
that contract it was discussed that there was potential

1400
01:01:16,610 --> 01:01:17,559
savings by bringing

1401
01:01:17,559 --> 01:01:22,460
that capability in-house and that's when the the Emo was

1402
01:01:22,460 --> 01:01:24,239
was created and launched

1403
01:01:24,239 --> 01:01:28,050
as Brian said there were some expected savings in bringing

1404
01:01:28,050 --> 01:01:29,159
the capabilities in

1405
01:01:29,159 --> 01:01:34,400
house and in order to monitor to calculate those savings in

1406
01:01:34,400 --> 01:01:36,280
2014 before

1407
01:01:36,280 --> 01:01:40,090
the the Emo was established Denton went to that same

1408
01:01:40,090 --> 01:01:41,719
counterparty for a quote to

1409
01:01:41,719 --> 01:01:44,599
continue to provide those those services and that's been

1410
01:01:44,599 --> 01:01:45,480
really the the

1411
01:01:45,480 --> 01:01:50,320
benchmark cost that has been used in doing the savings

1412
01:01:50,320 --> 01:01:52,280
calculation there were

1413
01:01:52,280 --> 01:01:57,530
some budgeted savings that were put in place for fiscal 15

1414
01:01:57,530 --> 01:02:00,199
and fiscal 16 and in

1415
01:02:00,199 --> 01:02:02,849
the calculation of the performance against those

1416
01:02:02,849 --> 01:02:05,280
expectations the DME has

1417
01:02:05,280 --> 01:02:09,940
reported savings in excess of those budgeted savings and I

1418
01:02:09,940 --> 01:02:10,679
'm here to

1419
01:02:10,679 --> 01:02:13,099
foreshadow and the good news is we agree that there have

1420
01:02:13,099 --> 01:02:14,239
been savings in excess

1421
01:02:14,239 --> 01:02:17,489
of the budgeted amounts there are some details that could

1422
01:02:17,489 --> 01:02:18,880
push those savings in

1423
01:02:18,880 --> 01:02:24,269
one direction or the other okay so just to recap what we

1424
01:02:24,269 --> 01:02:25,800
were asked to do the

1425
01:02:25,800 --> 01:02:29,079
first piece of this is really a re performance of the

1426
01:02:29,079 --> 01:02:30,360
calculation and the

1427
01:02:30,360 --> 01:02:33,260
purpose of this was to check the inputs and see if that

1428
01:02:33,260 --> 01:02:34,760
there are any really data

1429
01:02:34,760 --> 01:02:39,079
gaps or inconsistencies or errors in the calculation of the

1430
01:02:39,079 --> 01:02:39,920
saving using the

1431
01:02:39,920 --> 01:02:43,920
savings using the model that's been in place here the

1432
01:02:43,920 --> 01:02:44,960
second piece as I

1433
01:02:44,960 --> 01:02:47,000
mentioned was to dig into the assumptions some of the

1434
01:02:47,000 --> 01:02:47,519
underlying

1435
01:02:47,519 --> 01:02:51,570
assumptions and understand what's driving the majority of

1436
01:02:51,570 --> 01:02:52,679
the savings that have

1437
01:02:52,679 --> 01:02:57,039
been reported and then finally looking at the Emo itself

1438
01:02:57,039 --> 01:02:58,840
and it's important to

1439
01:02:58,840 --> 01:03:02,349
keep in mind when the the function was outsourced there are

1440
01:03:02,349 --> 01:03:03,199
a number of

1441
01:03:03,199 --> 01:03:07,010
capabilities that we see at similar organizations that

1442
01:03:07,010 --> 01:03:08,360
provide energy risk

1443
01:03:08,360 --> 01:03:11,559
management and scheduling capabilities and so we were asked

1444
01:03:11,559 --> 01:03:12,519
to do a high level

1445
01:03:12,519 --> 01:03:17,119
assessment of those capabilities because that's really what

1446
01:03:17,119 --> 01:03:18,159
you're in effect

1447
01:03:18,159 --> 01:03:21,150
replacing by bringing it in-house it's important that we

1448
01:03:21,150 --> 01:03:22,280
did not do a detailed

1449
01:03:22,280 --> 01:03:25,440
process review kind of a front-to-back office assessment it

1450
01:03:25,440 --> 01:03:26,719
was really what we

1451
01:03:26,719 --> 01:03:30,420
want to do here is point out some capabilities some

1452
01:03:30,420 --> 01:03:30,880
functions some

1453
01:03:30,880 --> 01:03:35,170
underlying costs that we would recommend to you are in fact

1454
01:03:35,170 --> 01:03:35,880
included in the

1455
01:03:35,880 --> 01:03:39,690
cost side of the equation so that you truly are replacing

1456
01:03:39,690 --> 01:03:40,719
apples with apples

1457
01:03:40,719 --> 01:03:45,170
okay I'm going too fast slowing down I'm from New Jersey so

1458
01:03:45,170 --> 01:03:47,840
I talked quickly okay

1459
01:03:47,840 --> 01:03:51,650
so here's one of those numbers slides so this is the first

1460
01:03:51,650 --> 01:03:52,280
part of the

1461
01:03:52,280 --> 01:03:55,059
assessment and we broke it down into two time periods

1462
01:03:55,059 --> 01:03:56,400
October 14 through

1463
01:03:56,400 --> 01:04:01,219
September 15 and then October 15 through September 16 and

1464
01:04:01,219 --> 01:04:03,239
the takeaway from this

1465
01:04:03,239 --> 01:04:07,050
calculation this is where we re-performed the model and the

1466
01:04:07,050 --> 01:04:07,360
savings

1467
01:04:07,360 --> 01:04:12,530
calculation as performed by the city prior is that with

1468
01:04:12,530 --> 01:04:13,519
very minor

1469
01:04:13,519 --> 01:04:17,329
differences we were able to match the calculation of the

1470
01:04:17,329 --> 01:04:18,400
savings in fact the

1471
01:04:18,400 --> 01:04:21,750
difference in cost savings is you know in a small way to

1472
01:04:21,750 --> 01:04:22,639
the good in other

1473
01:04:22,639 --> 01:04:25,420
words you under reported the savings based on the

1474
01:04:25,420 --> 01:04:26,920
calculation of the model

1475
01:04:26,920 --> 01:04:30,519
that you've been using some drivers for that includes some

1476
01:04:30,519 --> 01:04:31,360
data elements that we

1477
01:04:31,360 --> 01:04:33,570
when we dug into the model the details of the model and

1478
01:04:33,570 --> 01:04:34,559
found that there were

1479
01:04:34,559 --> 01:04:39,400
some some minor anomalies but for the most part it was a

1480
01:04:39,400 --> 01:04:40,559
given the numbers

1481
01:04:40,559 --> 01:04:43,030
that we're talking about the differences were very minor so

1482
01:04:43,030 --> 01:04:44,719
for the first part of

1483
01:04:44,719 --> 01:04:48,530
this we would conclude that the calculation was done

1484
01:04:48,530 --> 01:04:49,860
correctly and the

1485
01:04:49,860 --> 01:04:54,280
inputs were used appropriately and that there were no data

1486
01:04:54,280 --> 01:04:56,599
gaps to speak of so

1487
01:04:56,599 --> 01:04:58,570
now we're going to get into the next part of the analysis

1488
01:04:58,570 --> 01:04:59,679
and really this was to

1489
01:04:59,679 --> 01:05:03,489
understand the key drivers of the savings and also to

1490
01:05:03,489 --> 01:05:04,840
understand you know

1491
01:05:04,840 --> 01:05:09,309
the sensitivity of those savings to certain inputs and I'm

1492
01:05:09,309 --> 01:05:10,559
going to spend a

1493
01:05:10,559 --> 01:05:12,610
minute on this slide just to make sure we're on all on the

1494
01:05:12,610 --> 01:05:13,360
same page in terms

1495
01:05:13,360 --> 01:05:18,150
of heat rate and heat rate is effectively a measure of the

1496
01:05:18,150 --> 01:05:19,239
efficiency

1497
01:05:19,239 --> 01:05:23,510
of a generation unit to convert fuel to electricity so the

1498
01:05:23,510 --> 01:05:25,000
lower the heat rate

1499
01:05:25,000 --> 01:05:30,400
number the better the it's there's a simplistic example

1500
01:05:30,400 --> 01:05:32,280
here if it takes 10

1501
01:05:32,280 --> 01:05:36,090
units of natural gas of MMBT use to create one unit of

1502
01:05:36,090 --> 01:05:37,199
electricity or one

1503
01:05:37,199 --> 01:05:43,309
unit of power that would be a heat rate of 10 so the drive

1504
01:05:43,309 --> 01:05:45,360
to build and dispatch

1505
01:05:45,360 --> 01:05:48,389
more efficient units is hopefully has the effect of

1506
01:05:48,389 --> 01:05:49,960
lowering the overall heat

1507
01:05:49,960 --> 01:05:54,559
rate in a particular area so in a calculation such as the

1508
01:05:54,559 --> 01:05:55,800
one that we were

1509
01:05:55,800 --> 01:06:01,440
asked to to review it's the heat rate itself is a key

1510
01:06:01,440 --> 01:06:03,199
contributor to the cost

1511
01:06:03,199 --> 01:06:07,519
of the you know the effective cost of the contract that you

1512
01:06:07,519 --> 01:06:08,719
were replacing

1513
01:06:08,719 --> 01:06:12,530
another key element that that we want to make sure we

1514
01:06:12,530 --> 01:06:14,400
emphasize is the notion of

1515
01:06:14,400 --> 01:06:18,449
on peak versus off peak versus around the clock the on peak

1516
01:06:18,449 --> 01:06:20,400
hours which would

1517
01:06:20,400 --> 01:06:26,210
be the hours between 6 a.m. and 10 p.m. reflect generally

1518
01:06:26,210 --> 01:06:27,280
the the period of

1519
01:06:27,280 --> 01:06:31,739
highest demand for electricity and then the off peak hours

1520
01:06:31,739 --> 01:06:32,840
obviously by by

1521
01:06:32,840 --> 01:06:35,869
extension of that are the evening hours the overnight hours

1522
01:06:35,869 --> 01:06:36,719
where demand is

1523
01:06:36,719 --> 01:06:40,530
lower and then there's a notion of around the clock which

1524
01:06:40,530 --> 01:06:41,840
would be the full 24

1525
01:06:41,840 --> 01:06:45,650
hour period which would be some combination of that the

1526
01:06:45,650 --> 01:06:47,000
heat rate that

1527
01:06:47,000 --> 01:06:51,280
was quoted in the contract extension offer by the

1528
01:06:51,280 --> 01:06:53,559
counterparty it's important

1529
01:06:53,559 --> 01:06:57,630
to note that that was quoted at an on peak rate whereas the

1530
01:06:57,630 --> 01:06:58,800
product that was

1531
01:06:58,800 --> 01:07:02,610
provided was an around-the-clock product so in our mind

1532
01:07:02,610 --> 01:07:04,039
there's some question as

1533
01:07:04,039 --> 01:07:07,849
to what the appropriate heat rate should be in order to

1534
01:07:07,849 --> 01:07:08,920
perform the calculation

1535
01:07:08,920 --> 01:07:12,889
to calculate the savings this isn't as there's not a

1536
01:07:12,889 --> 01:07:14,559
definitive answer here and

1537
01:07:14,559 --> 01:07:18,550
we're not asked to opine on whether the heat rate was the

1538
01:07:18,550 --> 01:07:19,719
correct one or the

1539
01:07:19,719 --> 01:07:22,320
incorrect one what we want to point out is that the

1540
01:07:22,320 --> 01:07:23,840
decision of which benchmark

1541
01:07:23,840 --> 01:07:26,559
heat rate to use is a significant driver of what the

1542
01:07:26,559 --> 01:07:28,480
savings would be reasonable

1543
01:07:28,480 --> 01:07:31,559
people can and do disagree on what the right heat rate

1544
01:07:31,559 --> 01:07:32,840
should be in any given

1545
01:07:32,840 --> 01:07:36,650
model part of our recommendations going forward is that for

1546
01:07:36,650 --> 01:07:37,360
future benchmark

1547
01:07:37,360 --> 01:07:41,170
comparisons that there's clear and explicit agreement on

1548
01:07:41,170 --> 01:07:41,880
that heat rate

1549
01:07:41,880 --> 01:07:45,230
component so that the savings as calculated you know there

1550
01:07:45,230 --> 01:07:45,719
's less

1551
01:07:45,719 --> 01:07:50,349
question or less pushback so that's a key concept and what

1552
01:07:50,349 --> 01:07:50,840
I'm going to

1553
01:07:50,840 --> 01:07:53,730
demonstrate next is the impact that the heat rate has on

1554
01:07:53,730 --> 01:07:54,880
the calculation and

1555
01:07:54,880 --> 01:07:58,860
changing the heat rate has on the calculation the the red

1556
01:07:58,860 --> 01:07:59,960
line here I'll

1557
01:07:59,960 --> 01:08:03,769
try to walk you through these charts it's a clarified all

1558
01:08:03,769 --> 01:08:06,679
the lines the the the

1559
01:08:06,679 --> 01:08:08,949
blue line the blue and gray lines kind of going across

1560
01:08:08,949 --> 01:08:09,800
through the year are

1561
01:08:09,800 --> 01:08:14,250
forward heat rates for any particular year that that were

1562
01:08:14,250 --> 01:08:16,279
recorded the red

1563
01:08:16,279 --> 01:08:19,989
dotted line is the benchmark heat rate that was quoted in

1564
01:08:19,989 --> 01:08:20,600
the counterparties

1565
01:08:20,600 --> 01:08:26,520
contract of 15.75 by doing historic analysis of those lines

1566
01:08:26,520 --> 01:08:27,399
with the peak

1567
01:08:27,399 --> 01:08:31,800
you see in July in August the average forward on peak heat

1568
01:08:31,800 --> 01:08:32,300
rate that we

1569
01:08:32,300 --> 01:08:36,680
calculated for that time period between 13 and 14 was 12.26

1570
01:08:36,680 --> 01:08:39,079
so 12.26 on peak

1571
01:08:39,079 --> 01:08:43,159
heat rate versus 15.75 it's reasonable to assume that the

1572
01:08:43,159 --> 01:08:45,619
counterparty would have some profit margin built into the

1573
01:08:45,619 --> 01:08:46,439
heat rate that they

1574
01:08:46,439 --> 01:08:50,250
quoted you and in fact DME and the email have calculated

1575
01:08:50,250 --> 01:08:51,279
kind of backed into a

1576
01:08:51,279 --> 01:08:55,550
calculation of what we think the the profit margin was for

1577
01:08:55,550 --> 01:08:56,319
the counterparty

1578
01:08:56,319 --> 01:08:58,890
and that would be expected in any in any contract where

1579
01:08:58,890 --> 01:09:00,279
they're providing all of

1580
01:09:00,279 --> 01:09:05,159
those services to you but we point this out that there is a

1581
01:09:05,159 --> 01:09:05,960
significant gap

1582
01:09:05,960 --> 01:09:10,039
between the actual on peak heat rate forward heat rate

1583
01:09:10,039 --> 01:09:11,720
versus the one that was

1584
01:09:11,720 --> 01:09:14,170
quoted and this may be a function of the fact that it was

1585
01:09:14,170 --> 01:09:15,039
quoted on a particular

1586
01:09:15,039 --> 01:09:18,000
day or a particular period in time whereas we look back

1587
01:09:18,000 --> 01:09:19,199
over that course of

1588
01:09:19,199 --> 01:09:23,609
time over that those those years and then to take that one

1589
01:09:23,609 --> 01:09:26,039
step further if you

1590
01:09:26,039 --> 01:09:29,960
agree that using an around-the-clock heat rate would be a

1591
01:09:29,960 --> 01:09:32,119
reasonable benchmark

1592
01:09:32,119 --> 01:09:35,409
for that same time period we calculated the average forward

1593
01:09:35,409 --> 01:09:36,359
heat rate for those

1594
01:09:36,359 --> 01:09:42,279
for those years to be at 10.1 so you can see using the

1595
01:09:42,279 --> 01:09:43,199
around-the-clock heat rate

1596
01:09:43,199 --> 01:09:48,380
pushes it down even further if we then add in some profit

1597
01:09:48,380 --> 01:09:50,079
margin and in this

1598
01:09:50,079 --> 01:09:54,350
case we use 2.5 we rounded the 10.1 up to 10.25 just to

1599
01:09:54,350 --> 01:09:55,119
keep the math kind of

1600
01:09:55,119 --> 01:10:00,619
clean and then we added a profit margin of 2.5 results in

1601
01:10:00,619 --> 01:10:01,960
the the opportunity

1602
01:10:01,960 --> 01:10:07,359
is 12.75 as a benchmark heat rate as opposed to 15.75 as

1603
01:10:07,359 --> 01:10:09,520
one example and then

1604
01:10:09,520 --> 01:10:14,359
the next chart we tried to summarize what changing the heat

1605
01:10:14,359 --> 01:10:15,359
rate does to the

1606
01:10:15,359 --> 01:10:19,170
calculated savings the yellow highlighted lines and this is

1607
01:10:19,170 --> 01:10:19,680
what the

1608
01:10:19,680 --> 01:10:24,970
top tables for 2015 the bottom tables for 2016 we only

1609
01:10:24,970 --> 01:10:26,319
highlight that one

1610
01:10:26,319 --> 01:10:28,960
line in yellow to point back to the prior slide it's an

1611
01:10:28,960 --> 01:10:29,960
example of what the

1612
01:10:29,960 --> 01:10:32,380
savings would be if you agree that that's the correct heat

1613
01:10:32,380 --> 01:10:33,920
rate to use and

1614
01:10:33,920 --> 01:10:38,880
you can see that the change in savings is you know you know

1615
01:10:38,880 --> 01:10:39,840
significant based

1616
01:10:39,840 --> 01:10:42,720
on the different heat rates that you use the closer you get

1617
01:10:42,720 --> 01:10:44,880
to the 15.75 the

1618
01:10:44,880 --> 01:10:49,539
changes become smaller so we offer that here is something

1619
01:10:49,539 --> 01:10:50,640
for the for the board

1620
01:10:50,640 --> 01:10:54,449
to consider and for the EMO to work with the board and DME

1621
01:10:54,449 --> 01:10:55,319
in terms of

1622
01:10:55,319 --> 01:10:58,510
determining what is the correct heat rate benchmark to use

1623
01:10:58,510 --> 01:10:59,439
and then that will

1624
01:10:59,439 --> 01:11:03,250
adjust the savings accordingly for both of these years I'll

1625
01:11:03,250 --> 01:11:03,920
point out that even

1626
01:11:03,920 --> 01:11:07,399
when using a very low heat rate you know in the nines there

1627
01:11:07,399 --> 01:11:09,039
are still savings in

1628
01:11:09,039 --> 01:11:12,439
excess of the budgeted savings it's a question really of

1629
01:11:12,439 --> 01:11:13,760
how much in excess of

1630
01:11:13,760 --> 01:11:18,359
those the savings is the appropriate the appropriate

1631
01:11:18,359 --> 01:11:20,560
analysis I'll pause there to

1632
01:11:20,560 --> 01:11:24,010
see if there are questions on that's being a key point I've

1633
01:11:24,010 --> 01:11:25,039
got a question

1634
01:11:25,039 --> 01:11:29,779
the in this you may not have looked into this but the

1635
01:11:29,779 --> 01:11:32,840
previous contract we had

1636
01:11:32,840 --> 01:11:40,800
for for this was the I guess was the fee we paid based upon

1637
01:11:40,800 --> 01:11:42,680
something other than

1638
01:11:42,680 --> 01:11:47,130
ATC or was it on peak it was based on on peak so we were

1639
01:11:47,130 --> 01:11:48,479
actually paying on peak

1640
01:11:48,479 --> 01:11:52,800
on the one prior to 2014 that was the quote that that was

1641
01:11:52,800 --> 01:11:54,520
offered at the point

1642
01:11:54,520 --> 01:11:59,420
then that was for the renewal yes the contract prior to do

1643
01:11:59,420 --> 01:12:00,279
we actually pay

1644
01:12:00,279 --> 01:12:04,090
that yeah it appears to have been based on an on peak price

1645
01:12:04,090 --> 01:12:05,239
as well so if you

1646
01:12:05,239 --> 01:12:08,390
go back and you look at what the forward price for power

1647
01:12:08,390 --> 01:12:09,760
was around the time you

1648
01:12:09,760 --> 01:12:13,119
were negotiating that contract it does line up with the on

1649
01:12:13,119 --> 01:12:14,319
peak power prices

1650
01:12:14,319 --> 01:12:18,590
now the markets changed I think significantly from when

1651
01:12:18,590 --> 01:12:19,079
those

1652
01:12:19,079 --> 01:12:23,109
negotiations were occurring in 2010 11 to what the price

1653
01:12:23,109 --> 01:12:24,680
dynamic was in 14 so

1654
01:12:24,680 --> 01:12:29,090
you did see a large change in prices in 2014 which did

1655
01:12:29,090 --> 01:12:30,840
which explains part of

1656
01:12:30,840 --> 01:12:33,500
the difference between what explains part of the reason why

1657
01:12:33,500 --> 01:12:34,119
it went up so

1658
01:12:34,119 --> 01:12:44,039
much in in 2014 okay okay so the next piece of this was to

1659
01:12:44,039 --> 01:12:45,319
break down even if

1660
01:12:45,319 --> 01:12:49,020
you look at that adjusted cost savings those are still

1661
01:12:49,020 --> 01:12:49,920
significant numbers and

1662
01:12:49,920 --> 01:12:53,090
we wanted to understand what's driving the lion's share of

1663
01:12:53,090 --> 01:12:55,159
those savings and in

1664
01:12:55,159 --> 01:12:59,829
our analysis the large part of that answer can come back to

1665
01:12:59,829 --> 01:13:01,079
what you were

1666
01:13:01,079 --> 01:13:03,779
paying for ancillary services and call what they call

1667
01:13:03,779 --> 01:13:04,960
qualified scheduling

1668
01:13:04,960 --> 01:13:08,770
entity costs queasy costs that you were paying the

1669
01:13:08,770 --> 01:13:10,800
counterparty versus what you

1670
01:13:10,800 --> 01:13:15,069
actually paid in managing it yourselves so I think the the

1671
01:13:15,069 --> 01:13:16,560
headline or the good

1672
01:13:16,560 --> 01:13:19,060
story here is that there were significant cost savings that

1673
01:13:19,060 --> 01:13:19,520
are driven

1674
01:13:19,520 --> 01:13:22,439
by the fact that you do this yourself as opposed to paying

1675
01:13:22,439 --> 01:13:23,319
somebody with a

1676
01:13:23,319 --> 01:13:28,840
premium we looked at the ancillary service cost is quoted

1677
01:13:28,840 --> 01:13:29,880
and then assumed

1678
01:13:29,880 --> 01:13:35,380
some increase for 15 into 16 look back at what the ancill

1679
01:13:35,380 --> 01:13:36,800
ary services actual

1680
01:13:36,800 --> 01:13:41,399
needs were for for those time periods and when you

1681
01:13:41,399 --> 01:13:42,680
calculate the benchmark

1682
01:13:42,680 --> 01:13:46,489
cost at 525 a megawatt and then at 551 a megawatt versus

1683
01:13:46,489 --> 01:13:47,640
what you actually paid

1684
01:13:47,640 --> 01:13:51,449
for those time periods the rough from both years over three

1685
01:13:51,449 --> 01:13:52,680
million dollars of

1686
01:13:52,680 --> 01:13:56,720
that savings that that remaining savings can be attributed

1687
01:13:56,720 --> 01:13:58,000
to basically beating

1688
01:13:58,000 --> 01:14:01,960
the beating the quote that you got by doing it yourselves

1689
01:14:01,960 --> 01:14:05,439
okay Jim did I say

1690
01:14:05,439 --> 01:14:12,159
that right perfect okay okay so this this table is just

1691
01:14:12,159 --> 01:14:13,000
intended to summarize

1692
01:14:13,000 --> 01:14:16,369
what I just what I just mentioned if you agree that the the

1693
01:14:16,369 --> 01:14:17,880
heat rate at that

1694
01:14:17,880 --> 01:14:22,699
number that lower number of sorry at ten point two five

1695
01:14:22,699 --> 01:14:24,399
plus a two point five

1696
01:14:24,399 --> 01:14:28,319
profit margin if you agree that that's the right benchmark

1697
01:14:28,319 --> 01:14:29,319
to use it would

1698
01:14:29,319 --> 01:14:33,130
adjust the savings by roughly seven million and fifteen and

1699
01:14:33,130 --> 01:14:33,520
roughly six

1700
01:14:33,520 --> 01:14:37,329
million and sixteen still resulting in cost savings of six

1701
01:14:37,329 --> 01:14:38,880
point one million and

1702
01:14:38,880 --> 01:14:43,729
fifteen and six point eight million in 2016 against the

1703
01:14:43,729 --> 01:14:44,960
benchmarks which are in

1704
01:14:44,960 --> 01:14:48,770
the first line there two point three million for fifteen

1705
01:14:48,770 --> 01:14:49,840
and two point or five

1706
01:14:49,840 --> 01:14:54,130
point two million for sixteen so again I think the debate

1707
01:14:54,130 --> 01:14:55,479
that should stem from

1708
01:14:55,479 --> 01:14:58,300
this is what's the right benchmark going forward and we'll

1709
01:14:58,300 --> 01:14:59,880
talk about that in our

1710
01:14:59,880 --> 01:15:02,539
recommended next steps and then the bottom part of the

1711
01:15:02,539 --> 01:15:03,640
table just summarizes

1712
01:15:03,640 --> 01:15:07,550
that a healthy chunk of those savings even the adjusted

1713
01:15:07,550 --> 01:15:08,520
savings come from the

1714
01:15:08,520 --> 01:15:12,350
fact that you are serving as your own queasy and paying

1715
01:15:12,350 --> 01:15:13,840
actuals for ancillary

1716
01:15:13,840 --> 01:15:18,319
services as opposed to actuals plus a plus a margin

1717
01:15:19,880 --> 01:15:20,380
okay

1718
01:15:24,720 --> 01:15:28,529
all right the final part of the assessment we looked at the

1719
01:15:28,529 --> 01:15:29,640
elements

1720
01:15:29,640 --> 01:15:33,699
that we as a service provider would expect to have in place

1721
01:15:33,699 --> 01:15:34,079
at an

1722
01:15:34,079 --> 01:15:38,810
organization that's providing queasy functions as well as

1723
01:15:38,810 --> 01:15:39,800
the typical

1724
01:15:39,800 --> 01:15:42,460
transacting and risk oversight function that you would see

1725
01:15:42,460 --> 01:15:43,439
for an entity that's

1726
01:15:43,439 --> 01:15:46,520
transacting in the forward energy commodity markets so we

1727
01:15:46,520 --> 01:15:47,479
offer these here

1728
01:15:47,479 --> 01:15:51,750
as considerations likely these types of functions or

1729
01:15:51,750 --> 01:15:53,640
capabilities were included

1730
01:15:53,640 --> 01:15:57,680
in the counterparties quote for you so we would recommend

1731
01:15:57,680 --> 01:15:58,880
that the company and

1732
01:15:58,880 --> 01:16:01,890
that the board are comfortable or get comfortable with the

1733
01:16:01,890 --> 01:16:02,760
fact that we are

1734
01:16:02,760 --> 01:16:07,130
replicating all of these capabilities inside of the Emo and

1735
01:16:07,130 --> 01:16:08,279
and we because

1736
01:16:08,279 --> 01:16:10,579
we're consultants we break things down in governance people

1737
01:16:10,579 --> 01:16:11,119
process and

1738
01:16:11,119 --> 01:16:14,930
technology on the governance side and we advise clients on

1739
01:16:14,930 --> 01:16:16,000
these these elements

1740
01:16:16,000 --> 01:16:19,810
on a regular basis we go into organizations that trade

1741
01:16:19,810 --> 01:16:20,479
energy and we

1742
01:16:20,479 --> 01:16:22,489
will perform assessments as to whether or not there's there

1743
01:16:22,489 --> 01:16:23,199
's the appropriate

1744
01:16:23,199 --> 01:16:26,039
level of risk oversight and governance so the governance

1745
01:16:26,039 --> 01:16:27,159
includes things like

1746
01:16:27,159 --> 01:16:30,970
external compliance elements as well as the internal

1747
01:16:30,970 --> 01:16:32,319
committee structure and

1748
01:16:32,319 --> 01:16:35,409
oversight that you have periodic assessments of the hedge

1749
01:16:35,409 --> 01:16:35,960
strategy

1750
01:16:35,960 --> 01:16:39,770
similar to what the gentleman spoke about earlier from the

1751
01:16:39,770 --> 01:16:40,279
process

1752
01:16:40,279 --> 01:16:44,550
perspective we typically see fairly rigorous internal audit

1753
01:16:44,550 --> 01:16:45,359
oversight

1754
01:16:45,359 --> 01:16:48,439
analysis of the cost of capital so for transacting in

1755
01:16:48,439 --> 01:16:49,640
markets where we're

1756
01:16:49,640 --> 01:16:52,649
required to post collateral what kind of impact is that

1757
01:16:52,649 --> 01:16:53,960
having on the floor from

1758
01:16:53,960 --> 01:17:00,000
a cash flow basis and the people side there's a heated

1759
01:17:00,000 --> 01:17:00,960
debate or maybe

1760
01:17:00,960 --> 01:17:03,300
vigorous debate in the industry around what's the right

1761
01:17:03,300 --> 01:17:04,399
level of risk oversight

1762
01:17:04,399 --> 01:17:08,210
for a transacting function and that I will tell you there's

1763
01:17:08,210 --> 01:17:09,359
no clear ratio is

1764
01:17:09,359 --> 01:17:12,409
it 10 for a 10 front office people the two middle and back

1765
01:17:12,409 --> 01:17:13,800
office people there

1766
01:17:13,800 --> 01:17:17,159
are no clean numbers but what I can say is that it should

1767
01:17:17,159 --> 01:17:18,319
the the amount of

1768
01:17:18,319 --> 01:17:20,550
oversight from back office and the middle office

1769
01:17:20,550 --> 01:17:21,680
perspective should be

1770
01:17:21,680 --> 01:17:24,819
driven by the type and the volume of transacting that you

1771
01:17:24,819 --> 01:17:25,920
're doing and that

1772
01:17:25,920 --> 01:17:29,729
should inform how much how much oversight is required and

1773
01:17:29,729 --> 01:17:30,199
along with

1774
01:17:30,199 --> 01:17:32,979
that is typically some IT and development support to have

1775
01:17:32,979 --> 01:17:33,520
the right

1776
01:17:33,520 --> 01:17:38,119
tools and systems in place to serve that bottom right box

1777
01:17:38,119 --> 01:17:39,880
which is ongoing

1778
01:17:39,880 --> 01:17:42,890
position in mark-to-market reporting you want to know are

1779
01:17:42,890 --> 01:17:43,779
we long are we short

1780
01:17:43,779 --> 01:17:47,590
you know some of the items that the gentleman earlier spoke

1781
01:17:47,590 --> 01:17:48,479
about are you

1782
01:17:48,479 --> 01:17:51,829
looking at risk calculations whether that's a value at risk

1783
01:17:51,829 --> 01:17:52,640
or maybe a gross

1784
01:17:52,640 --> 01:17:55,439
margin at risk or some other key performance or key risk

1785
01:17:55,439 --> 01:17:56,680
indicators these

1786
01:17:56,680 --> 01:18:00,489
would all be elements of the I would say the the

1787
01:18:00,489 --> 01:18:02,159
infrastructure that would be

1788
01:18:02,159 --> 01:18:06,590
required to be in place to support the the operations of

1789
01:18:06,590 --> 01:18:08,239
the MO from a energy

1790
01:18:08,239 --> 01:18:12,050
management perspective but also from a risk oversight

1791
01:18:12,050 --> 01:18:13,760
perspective yes

1792
01:18:13,760 --> 01:18:17,569
are you saying we're not doing these things no we're saying

1793
01:18:17,569 --> 01:18:19,560
that there in

1794
01:18:19,560 --> 01:18:22,680
order to know that the cost side of the equation is correct

1795
01:18:22,680 --> 01:18:23,760
we would recommend

1796
01:18:23,760 --> 01:18:29,050
that you include the cost yes okay exactly ensure that they

1797
01:18:29,050 --> 01:18:29,720
're happening and

1798
01:18:29,720 --> 01:18:33,789
ensure that the cost of being good yeah I think that's

1799
01:18:33,789 --> 01:18:34,760
right I mean we're not

1800
01:18:34,760 --> 01:18:37,270
suggesting that these things aren't being done okay I think

1801
01:18:37,270 --> 01:18:38,319
in our initial

1802
01:18:38,319 --> 01:18:42,130
review of the cost side you can't really tell when just

1803
01:18:42,130 --> 01:18:43,239
looking at a bucket of

1804
01:18:43,239 --> 01:18:46,000
costs you know whether things like independent you know the

1805
01:18:46,000 --> 01:18:46,359
mark-to-market

1806
01:18:46,359 --> 01:18:49,199
is being calculated independently and there's position

1807
01:18:49,199 --> 01:18:50,319
reports so you know if

1808
01:18:50,319 --> 01:18:52,880
you want to if you wanted to do a deeper dive on that which

1809
01:18:52,880 --> 01:18:54,079
we recommend you know

1810
01:18:54,079 --> 01:18:59,020
these are the types of things that we would look into okay

1811
01:18:59,020 --> 01:19:02,680
in the spirit of

1812
01:19:02,680 --> 01:19:04,479
telling what you're gonna tell them and tell them and then

1813
01:19:04,479 --> 01:19:05,119
tell them one more

1814
01:19:05,119 --> 01:19:10,109
time the takeaways from our from our assessment are that

1815
01:19:10,109 --> 01:19:10,840
the in the

1816
01:19:10,840 --> 01:19:13,109
performance of the model we found no significant

1817
01:19:13,109 --> 01:19:14,439
differences or errors in

1818
01:19:14,439 --> 01:19:18,479
calculation in peeling back the assumptions and

1819
01:19:18,479 --> 01:19:19,239
understanding what's

1820
01:19:19,239 --> 01:19:23,739
driving the cost savings the two main drivers are I guess

1821
01:19:23,739 --> 01:19:24,399
two of the main

1822
01:19:24,399 --> 01:19:28,210
elements one is determining what's the in fact the

1823
01:19:28,210 --> 01:19:29,479
appropriate heat rate we

1824
01:19:29,479 --> 01:19:32,039
would suggest that an on-peak heat rate is probably too

1825
01:19:32,039 --> 01:19:32,800
high to use as a

1826
01:19:32,800 --> 01:19:36,739
benchmark and looking at something more around the clock or

1827
01:19:36,739 --> 01:19:37,640
maybe closer to the

1828
01:19:37,640 --> 01:19:41,449
load pattern that you're actually using and then

1829
01:19:41,449 --> 01:19:43,079
determining that through a

1830
01:19:43,079 --> 01:19:46,890
historical analysis rather than a point-in-time quote doing

1831
01:19:46,890 --> 01:19:47,720
those things we

1832
01:19:47,720 --> 01:19:50,670
think could set the bet the heat rate benchmark for future

1833
01:19:50,670 --> 01:19:51,880
savings calculations

1834
01:19:51,880 --> 01:19:54,590
and and and just basically provide more clarity as to how

1835
01:19:54,590 --> 01:19:55,439
those are being

1836
01:19:55,439 --> 01:19:58,229
derived and what's what's driving the savings and then the

1837
01:19:58,229 --> 01:19:59,119
second takeaway

1838
01:19:59,119 --> 01:20:02,140
from that part of the assessment was that ancillary

1839
01:20:02,140 --> 01:20:03,920
services and queasy costs

1840
01:20:03,920 --> 01:20:07,199
bringing those in-house management of that in-house

1841
01:20:07,199 --> 01:20:08,439
resulted in significant

1842
01:20:08,439 --> 01:20:13,470
savings and then going forward we would recommend an effort

1843
01:20:13,470 --> 01:20:14,760
to ensure that

1844
01:20:14,760 --> 01:20:17,420
appropriate governance and oversight and those costs are

1845
01:20:17,420 --> 01:20:18,560
being included in on the

1846
01:20:18,560 --> 01:20:21,569
cost side of the equation including determining whether or

1847
01:20:21,569 --> 01:20:22,079
not you've got

1848
01:20:22,079 --> 01:20:26,350
the right dispersion or allotment I would say of

1849
01:20:26,350 --> 01:20:28,000
professionals across the

1850
01:20:28,000 --> 01:20:31,319
front the middle and the back office

1851
01:20:33,960 --> 01:20:37,770
okay so in terms of next steps and we've been working with

1852
01:20:37,770 --> 01:20:38,640
Brian and his

1853
01:20:38,640 --> 01:20:42,449
staff on a couple of these items number one we would

1854
01:20:42,449 --> 01:20:44,520
suggest is establishing the

1855
01:20:44,520 --> 01:20:49,210
benchmark for fiscal 17 as we've discussed the elements of

1856
01:20:49,210 --> 01:20:50,359
that can drive

1857
01:20:50,359 --> 01:20:54,449
the resulting cost savings in one direction significantly

1858
01:20:54,449 --> 01:20:55,479
or the other so

1859
01:20:55,479 --> 01:20:58,170
establishing a clear model and agreement on the underlying

1860
01:20:58,170 --> 01:20:59,079
components of that

1861
01:20:59,079 --> 01:21:03,079
model we think would be a reasonable next step prior to

1862
01:21:03,079 --> 01:21:04,479
calculating that

1863
01:21:04,479 --> 01:21:09,479
benchmark savings Brian has also asked us and we've talked

1864
01:21:09,479 --> 01:21:11,439
to the organization

1865
01:21:11,439 --> 01:21:15,729
about understanding perhaps are there other risks that have

1866
01:21:15,729 --> 01:21:17,119
been introduced to

1867
01:21:17,119 --> 01:21:21,819
the organization by establishing the EMO like any hedge you

1868
01:21:21,819 --> 01:21:22,800
often trade one risk

1869
01:21:22,800 --> 01:21:27,069
for the other and then along with that an assessment of the

1870
01:21:27,069 --> 01:21:27,920
EMOs capabilities

1871
01:21:27,920 --> 01:21:30,029
and make sure that all of those front middle and back

1872
01:21:30,029 --> 01:21:31,119
office capabilities are

1873
01:21:31,119 --> 01:21:34,930
in place sufficiently to reflect the level and the type of

1874
01:21:34,930 --> 01:21:35,520
transacting that's

1875
01:21:35,520 --> 01:21:40,930
happening in that organization and that's the end of my

1876
01:21:40,930 --> 01:21:42,640
prepared remarks so

1877
01:21:42,640 --> 01:21:50,600
I'm happy to take questions so the heat rate is that

1878
01:21:50,600 --> 01:21:52,199
something that we guess at

1879
01:21:52,199 --> 01:21:56,100
like it's a we guess what it's going to be the next day or

1880
01:21:56,100 --> 01:21:57,560
is it something that

1881
01:21:57,560 --> 01:22:01,960
set that we know or you only know a historical reference in

1882
01:22:01,960 --> 01:22:04,600
hindsight you

1883
01:22:04,600 --> 01:22:07,130
only really know what the heat rate was from a historical

1884
01:22:07,130 --> 01:22:08,119
when you're talking

1885
01:22:08,119 --> 01:22:12,390
about you know in this case calculating the cost of energy

1886
01:22:12,390 --> 01:22:13,399
we know it by looking

1887
01:22:13,399 --> 01:22:17,670
at the historical prices so going into the contract you

1888
01:22:17,670 --> 01:22:18,680
know there was some

1889
01:22:18,680 --> 01:22:21,750
analysis that was done to say we can go out and we can look

1890
01:22:21,750 --> 01:22:23,199
at today what the

1891
01:22:23,199 --> 01:22:26,380
heat rate might be for some future period of time if we

1892
01:22:26,380 --> 01:22:27,640
bought power today

1893
01:22:27,640 --> 01:22:30,279
and so you know any counterparty would go out and they

1894
01:22:30,279 --> 01:22:31,479
would look at that they

1895
01:22:31,479 --> 01:22:34,210
would consider internal factors that they have they would

1896
01:22:34,210 --> 01:22:35,359
factor in risk and

1897
01:22:35,359 --> 01:22:39,170
profit margin and so that's how they probably got to the 15

1898
01:22:39,170 --> 01:22:40,159
75 they started

1899
01:22:40,159 --> 01:22:43,119
with the on peak heat rate and factored in all those other

1900
01:22:43,119 --> 01:22:44,520
considerations now

1901
01:22:44,520 --> 01:22:46,340
after the fact we can go back and we can look at a lot of

1902
01:22:46,340 --> 01:22:47,079
different things

1903
01:22:47,079 --> 01:22:49,979
because now we have a lot more data we've got the forward

1904
01:22:49,979 --> 01:22:50,880
prices you know we

1905
01:22:50,880 --> 01:22:53,630
talked earlier about day ahead prices now we also know what

1906
01:22:53,630 --> 01:22:54,560
the day ahead price

1907
01:22:54,560 --> 01:22:57,750
was for a particular day and so that's why in terms of

1908
01:22:57,750 --> 01:22:59,079
looking at it from an

1909
01:22:59,079 --> 01:23:03,000
FY 17 perspective there's probably and you know the Emo I

1910
01:23:03,000 --> 01:23:03,479
think has already

1911
01:23:03,479 --> 01:23:06,109
looked at some of these a number of different ways in which

1912
01:23:06,109 --> 01:23:06,880
an analysis you

1913
01:23:06,880 --> 01:23:10,789
could do to inform what that benchmark should be now that

1914
01:23:10,789 --> 01:23:11,960
you've got a lot more

1915
01:23:11,960 --> 01:23:14,560
historical data after the fact you know but at the time

1916
01:23:14,560 --> 01:23:16,199
they had you know a

1917
01:23:16,199 --> 01:23:20,500
limited amount of data to do that analysis looking forward

1918
01:23:20,500 --> 01:23:21,520
and does this

1919
01:23:21,520 --> 01:23:25,329
does this heat rate and these calculations do these only

1920
01:23:25,329 --> 01:23:25,399
affect

1921
01:23:25,399 --> 01:23:29,319
purchases that we're making off the market or do they also

1922
01:23:29,319 --> 01:23:30,279
impact our

1923
01:23:30,279 --> 01:23:34,090
contracts that we signed for wind and solar they did not

1924
01:23:34,090 --> 01:23:35,640
they only impacted

1925
01:23:35,640 --> 01:23:38,520
the incremental energy that you needed once you factored in

1926
01:23:38,520 --> 01:23:39,399
the contract you

1927
01:23:39,399 --> 01:23:42,489
already had in place that we go out and buy off the market

1928
01:23:42,489 --> 01:23:43,640
so was it an April

1929
01:23:43,640 --> 01:23:48,340
month that showed us 28% off the market it was in your

1930
01:23:48,340 --> 01:23:50,119
presentation sorry and

1931
01:23:50,119 --> 01:23:56,479
then an August month there was none so we're still paying

1932
01:23:56,479 --> 01:23:58,359
the Emo what are they

1933
01:23:58,359 --> 01:24:01,000
doing on those days when we're not making any market

1934
01:24:01,000 --> 01:24:01,920
purchases just out of

1935
01:24:01,920 --> 01:24:03,829
curiosity yeah well I think that's a different situation I

1936
01:24:03,829 --> 01:24:04,560
mean there I think

1937
01:24:04,560 --> 01:24:08,369
that was a looking forward if you have more wind and you

1938
01:24:08,369 --> 01:24:09,439
have more solar well

1939
01:24:09,439 --> 01:24:11,260
that's where we're head yeah so I was just trying to get

1940
01:24:11,260 --> 01:24:12,359
right my idea around

1941
01:24:12,359 --> 01:24:16,630
what the emo is doing if we're not purchasing anything off

1942
01:24:16,630 --> 01:24:17,720
the market well

1943
01:24:17,720 --> 01:24:19,750
I think to the point that they made earlier there's still

1944
01:24:19,750 --> 01:24:20,439
the forecasting

1945
01:24:20,439 --> 01:24:24,250
there's the there's the managing the load and supply

1946
01:24:24,250 --> 01:24:26,159
imbalance so like

1947
01:24:26,159 --> 01:24:31,329
they're not doing anything they're just doing different

1948
01:24:31,329 --> 01:24:31,760
things they're not

1949
01:24:31,760 --> 01:24:34,260
making incremental market purchases maybe they're making

1950
01:24:34,260 --> 01:24:35,079
incremental sales

1951
01:24:35,079 --> 01:24:41,170
could be market sales okay and so when we outsource it it

1952
01:24:41,170 --> 01:24:42,680
or in the past when

1953
01:24:42,680 --> 01:24:45,300
we outsource it we were still paying those people the same

1954
01:24:45,300 --> 01:24:46,119
rate even if they

1955
01:24:46,119 --> 01:24:50,539
weren't making purchases for us you're only paying you're

1956
01:24:50,539 --> 01:24:50,800
only paying that

1957
01:24:50,800 --> 01:24:53,439
you're talking about the counterparty yes we hired somebody

1958
01:24:53,439 --> 01:24:54,079
to do it are we

1959
01:24:54,079 --> 01:24:58,079
paying them all the time or only when they make purchases

1960
01:24:58,079 --> 01:24:59,439
only when they make

1961
01:24:59,439 --> 01:25:03,960
purchases but our emo operates and we pay them 100% of the

1962
01:25:03,960 --> 01:25:04,520
time but they're

1963
01:25:04,520 --> 01:25:08,329
not always making purchases true okay well so that's a

1964
01:25:08,329 --> 01:25:09,399
difference that's not

1965
01:25:09,399 --> 01:25:16,800
apples and apples that's that's different right the

1966
01:25:16,800 --> 01:25:19,000
calculation of the benchmark

1967
01:25:19,000 --> 01:25:22,989
I think the calculation the benchmark savings takes all of

1968
01:25:22,989 --> 01:25:23,760
that into account

1969
01:25:23,760 --> 01:25:29,640
so it's the cost of operating the EM and maintaining the

1970
01:25:29,640 --> 01:25:30,640
capabilities of the emo

1971
01:25:30,640 --> 01:25:34,449
in-house over that period of time versus the what you spent

1972
01:25:34,449 --> 01:25:35,279
on that incremental

1973
01:25:35,279 --> 01:25:41,359
power with the counterparty so it does bring it together I

1974
01:25:41,359 --> 01:25:43,399
understand why they

1975
01:25:43,399 --> 01:25:47,670
probably use the 1575 because that's what they thought that

1976
01:25:47,670 --> 01:25:48,039
was what was

1977
01:25:48,039 --> 01:25:52,720
quoted correct but I do think it has to be around the clock

1978
01:25:52,720 --> 01:25:54,359
to determine that

1979
01:25:54,359 --> 01:25:56,710
heat rate and I'm the one who has to leave so I want to get

1980
01:25:56,710 --> 01:25:57,439
my opinion out

1981
01:25:57,439 --> 01:26:01,250
there that I really think that's where the benchmark needs

1982
01:26:01,250 --> 01:26:02,520
to be is around the

1983
01:26:02,520 --> 01:26:05,600
clock and then add the little bit of profit margin for the

1984
01:26:05,600 --> 01:26:07,239
benchmarking but

1985
01:26:07,239 --> 01:26:11,649
and I do agree with these other doing an emo risk

1986
01:26:11,649 --> 01:26:14,279
assessment and make sure we're

1987
01:26:14,279 --> 01:26:20,239
doing okay all we can do thank you anybody else yeah I I

1988
01:26:20,239 --> 01:26:22,640
agree I'm I'm

1989
01:26:22,640 --> 01:26:26,449
convinced that the around the clock is the more

1990
01:26:26,449 --> 01:26:27,800
historically accurate more

1991
01:26:27,800 --> 01:26:32,399
useful benchmark it's interesting to see what peak rate is

1992
01:26:32,399 --> 01:26:34,000
but that's a very

1993
01:26:34,000 --> 01:26:39,579
myopic slice of time point of view that doesn't give us the

1994
01:26:39,579 --> 01:26:40,760
big picture that we

1995
01:26:40,760 --> 01:26:45,130
want when doing this kind of work I would suggest that the

1996
01:26:45,130 --> 01:26:46,960
heat rate reflect

1997
01:26:46,960 --> 01:26:51,340
the actual needs right so what and so I think we can look

1998
01:26:51,340 --> 01:26:52,840
at how much was around

1999
01:26:52,840 --> 01:26:55,340
the clock versus how much was on peak and if if there's it

2000
01:26:55,340 --> 01:26:56,199
might be kind of a

2001
01:26:56,199 --> 01:26:59,960
weighted average kind of a approach so I don't think it's

2002
01:26:59,960 --> 01:27:01,000
at one pole or the

2003
01:27:01,000 --> 01:27:04,000
either the answer is probably so absolutely which is why

2004
01:27:04,000 --> 01:27:05,119
which is why I

2005
01:27:05,119 --> 01:27:07,460
made a point of saying it's interesting to see and

2006
01:27:07,460 --> 01:27:08,760
important to see what peak

2007
01:27:08,760 --> 01:27:11,470
rate is you want to know what the peak rate is yeah but is

2008
01:27:11,470 --> 01:27:12,319
this the one you

2009
01:27:12,319 --> 01:27:16,130
know the benchmark that you're gonna use so anyway I do

2010
01:27:16,130 --> 01:27:17,319
agree with that

2011
01:27:17,319 --> 01:27:22,840
recommendation and I would I was just curious to know so we

2012
01:27:22,840 --> 01:27:25,720
got this on well

2013
01:27:25,720 --> 01:27:29,609
PPU got this presentation the same time the public did that

2014
01:27:29,609 --> 01:27:30,880
was which was Friday

2015
01:27:30,880 --> 01:27:33,579
so we've had just the weekend to you know read up and

2016
01:27:33,579 --> 01:27:34,720
research on all this

2017
01:27:34,720 --> 01:27:40,239
but in my very preliminary over the weekend research it

2018
01:27:40,239 --> 01:27:42,439
looks like most other

2019
01:27:42,439 --> 01:27:45,520
EMOs and please correct me if I'm if I'm wrong this is a

2020
01:27:45,520 --> 01:27:46,720
question more than a

2021
01:27:46,720 --> 01:27:51,970
statement but it looked to me that most other groups that

2022
01:27:51,970 --> 01:27:53,840
do this kind of work

2023
01:27:53,840 --> 01:28:00,199
this this work use the historical but a historical

2024
01:28:00,199 --> 01:28:01,880
perspective as a benchmark

2025
01:28:01,880 --> 01:28:07,130
that what we've got here is kind of more of an anomaly is

2026
01:28:07,130 --> 01:28:09,640
that correct I want to

2027
01:28:09,640 --> 01:28:11,779
know the truth it doesn't matter to me because this is just

2028
01:28:11,779 --> 01:28:12,680
preliminary looking

2029
01:28:12,680 --> 01:28:15,819
around because all because these terms these terms are new

2030
01:28:15,819 --> 01:28:16,520
to me so I was

2031
01:28:16,520 --> 01:28:18,659
really giving myself a crash course in this over the

2032
01:28:18,659 --> 01:28:20,560
weekend I don't know if I

2033
01:28:20,560 --> 01:28:23,659
can comment on kind of general trends or most I think it's

2034
01:28:23,659 --> 01:28:24,800
very common to see a

2035
01:28:24,800 --> 01:28:28,609
product that would be quoted that would be very closely

2036
01:28:28,609 --> 01:28:29,640
reflective of the

2037
01:28:29,640 --> 01:28:31,520
incremental energy needs that you would have for that

2038
01:28:31,520 --> 01:28:32,359
period of time so we would

2039
01:28:32,359 --> 01:28:37,079
recommend matching them essentially whether everyone does I

2040
01:28:37,079 --> 01:28:37,800
can't comment

2041
01:28:37,800 --> 01:28:42,609
more or I mean or even so but so you don't have a sense off

2042
01:28:42,609 --> 01:28:44,039
hand of this is

2043
01:28:44,039 --> 01:28:47,140
the way most people do it well I remember what we're trying

2044
01:28:47,140 --> 01:28:48,000
to do is is

2045
01:28:48,000 --> 01:28:51,930
validate or understand a calculation that was done to

2046
01:28:51,930 --> 01:28:54,079
understand what for the

2047
01:28:54,079 --> 01:28:56,649
organization did we in fact say of course so there was a

2048
01:28:56,649 --> 01:28:57,199
little bit unique

2049
01:28:57,199 --> 01:29:00,640
to what we have of course of course yes no they had this

2050
01:29:00,640 --> 01:29:01,680
yeah I and I appreciate

2051
01:29:01,680 --> 01:29:03,710
that you went about this the right way I was just cute

2052
01:29:03,710 --> 01:29:04,479
though this was a

2053
01:29:04,479 --> 01:29:07,460
curiosity a question I tried to answer myself I wasn't

2054
01:29:07,460 --> 01:29:08,319
satisfied with my

2055
01:29:08,319 --> 01:29:10,489
ability to answer yeah maybe a better answer for that

2056
01:29:10,489 --> 01:29:12,119
question come if we do

2057
01:29:12,119 --> 01:29:16,149
the FY 17 set up of the new yes mark yes that would I would

2058
01:29:16,149 --> 01:29:17,319
think be part of that

2059
01:29:17,319 --> 01:29:20,010
to see are there you know leading practices that we could

2060
01:29:20,010 --> 01:29:20,800
that we can lean

2061
01:29:20,800 --> 01:29:22,949
on from from other organizations that are doing something

2062
01:29:22,949 --> 01:29:23,880
excellent thank you

2063
01:29:23,880 --> 01:29:34,920
yeah questions no okay yeah I think I like to recommend

2064
01:29:34,920 --> 01:29:35,840
next steps I think

2065
01:29:35,840 --> 01:29:42,479
that's especially one of the risk assessment to me it's

2066
01:29:42,479 --> 01:29:43,800
about risk and

2067
01:29:43,800 --> 01:29:46,569
risk reward you know I know there's savings there's

2068
01:29:46,569 --> 01:29:48,199
obviously savings there I

2069
01:29:48,199 --> 01:29:52,180
mean anytime there's a profit margin that you're taking out

2070
01:29:52,180 --> 01:29:53,319
of something that

2071
01:29:53,319 --> 01:29:56,439
I mean if nothing else it's a profit margin right on what

2072
01:29:56,439 --> 01:29:58,359
the cost is but is

2073
01:29:58,359 --> 01:30:05,399
that absorbing that profit margin worth the risk absolutely

2074
01:30:05,399 --> 01:30:07,439
okay all right thank

2075
01:30:07,439 --> 01:30:10,640
you again thank you appreciate it

2076
01:30:14,600 --> 01:30:17,000
just one final item on this I did want to mention just like

2077
01:30:17,000 --> 01:30:19,159
the enterprise risk

2078
01:30:19,159 --> 01:30:21,680
consulting we do have a second phase that's mentioned here

2079
01:30:21,680 --> 01:30:22,119
staff does

2080
01:30:22,119 --> 01:30:24,310
recommend that we proceed with that so we'll be bringing

2081
01:30:24,310 --> 01:30:25,239
forward a contract to

2082
01:30:25,239 --> 01:30:27,810
you for your consideration to recommend to counsel okay do

2083
01:30:27,810 --> 01:30:29,159
that shortly all

2084
01:30:29,159 --> 01:30:37,060
right thank all right thank you okay next we have sorry can

2085
01:30:37,060 --> 01:30:38,239
I just sure so

2086
01:30:38,239 --> 01:30:42,880
where we and sorry this is my first meeting yeah so are we

2087
01:30:42,880 --> 01:30:44,199
giving staff

2088
01:30:44,199 --> 01:30:50,439
directive now to go ahead with the round-the-clock yeah I

2089
01:30:50,439 --> 01:30:52,279
don't think it's

2090
01:30:52,279 --> 01:30:55,550
not a formal vote just kind of a recommendation yeah direct

2091
01:30:55,550 --> 01:30:56,439
yeah direct

2092
01:30:56,439 --> 01:30:59,609
okay yeah yeah so and I so I just wanted to I want to add

2093
01:30:59,609 --> 01:31:00,479
to that that I also

2094
01:31:00,479 --> 01:31:04,289
since just because they raised these issues as well in the

2095
01:31:04,289 --> 01:31:06,000
report that I like

2096
01:31:06,000 --> 01:31:09,810
I really like the idea of doing a benchmark and now the

2097
01:31:09,810 --> 01:31:10,319
benchmark analysis

2098
01:31:10,319 --> 01:31:14,590
risk profile and head strategy assessment and Emo risk

2099
01:31:14,590 --> 01:31:15,479
assessment

2100
01:31:15,479 --> 01:31:19,750
because it I mean clearly we're still saving by doing this

2101
01:31:19,750 --> 01:31:20,840
in-house not as

2102
01:31:20,840 --> 01:31:23,960
much as we thought about 50% less than we thought but we're

2103
01:31:23,960 --> 01:31:25,279
still saving so I

2104
01:31:25,279 --> 01:31:30,000
think that's great but if we're only looking at the savings

2105
01:31:30,000 --> 01:31:31,199
right now then I

2106
01:31:31,199 --> 01:31:34,439
feel like we're making that same mistake of a you know my

2107
01:31:34,439 --> 01:31:35,720
opic slice-in-time

2108
01:31:35,720 --> 01:31:41,760
perspective and not looking at the big picture of potential

2109
01:31:41,760 --> 01:31:42,680
risks in

2110
01:31:42,680 --> 01:31:47,279
historic you know historically and moving forward so I

2111
01:31:47,279 --> 01:31:48,199
really like this

2112
01:31:48,199 --> 01:31:52,010
idea I think in terms of our obligation to ratepayers I

2113
01:31:52,010 --> 01:31:53,479
like this idea of doing

2114
01:31:53,479 --> 01:31:58,649
the risk analysis as well just to make to make sure and and

2115
01:31:58,649 --> 01:32:00,680
yeah that is that

2116
01:32:00,680 --> 01:32:03,380
that's what I wanted to add to that I don't know if now if

2117
01:32:03,380 --> 01:32:04,319
now is the time to

2118
01:32:04,319 --> 01:32:07,319
get others points of view on that or did you want that to

2119
01:32:07,319 --> 01:32:08,479
wait till later but

2120
01:32:08,479 --> 01:32:11,109
only because they mentioned it up and we've got them here I

2121
01:32:11,109 --> 01:32:12,720
was that's what I

2122
01:32:12,720 --> 01:32:17,319
was talking about risk reward is okay here's the risk the

2123
01:32:17,319 --> 01:32:18,260
reward worth the

2124
01:32:18,260 --> 01:32:22,069
risk yes what I want to know yes and that's exactly what

2125
01:32:22,069 --> 01:32:22,560
what they're

2126
01:32:22,560 --> 01:32:26,829
recommending yes okay excellent yeah I didn't say it is the

2127
01:32:26,829 --> 01:32:27,439
way same way you

2128
01:32:27,439 --> 01:32:31,710
did oh no no that's it I just wanted to be clear I didn't

2129
01:32:31,710 --> 01:32:32,279
miss that opportunity

2130
01:32:32,279 --> 01:32:38,029
thank you okay any other comments before we move on all

2131
01:32:38,029 --> 01:32:43,920
right okay first on our

2132
01:32:43,920 --> 01:32:49,920
our next on our agenda we have the consent agenda we have

2133
01:32:49,920 --> 01:32:53,319
three items there

2134
01:32:53,319 --> 01:32:58,489
when any any member like to pull any of those consent

2135
01:32:58,489 --> 01:33:00,119
agenda items for

2136
01:33:00,119 --> 01:33:05,359
individual consideration I'd like to pull a and see a and

2137
01:33:05,359 --> 01:33:07,199
see me too that's

2138
01:33:07,199 --> 01:33:12,949
exactly what I was gonna recommend all right we have item a

2139
01:33:12,949 --> 01:33:14,399
and C we're gonna

2140
01:33:14,399 --> 01:33:19,239
pull from consent is there a motion then to approve the

2141
01:33:19,239 --> 01:33:21,039
consent agenda item with

2142
01:33:21,039 --> 01:33:31,189
item B motion second any discussion all in favor say aye

2143
01:33:31,189 --> 01:33:32,600
any opposed same sign

2144
01:33:32,600 --> 01:33:37,399
okay okay item number a

2145
01:33:43,640 --> 01:33:47,909
good morning board members and I don't have a formal

2146
01:33:47,909 --> 01:33:49,600
presentation on either one

2147
01:33:49,600 --> 01:33:51,939
of those items a or C they're both me but I'm happy to

2148
01:33:51,939 --> 01:33:53,079
answer any questions

2149
01:33:53,079 --> 01:33:55,640
that you have and sorry I introduced myself I'm Jessica

2150
01:33:55,640 --> 01:33:56,340
Rogers I'm the

2151
01:33:56,340 --> 01:33:59,279
energy services manager I know we've met before many times

2152
01:33:59,279 --> 01:34:00,199
so I'm great to see

2153
01:34:00,199 --> 01:34:04,470
you again but any any questions so basically this is the

2154
01:34:04,470 --> 01:34:06,279
item a here is a

2155
01:34:06,279 --> 01:34:10,090
is this the ordinance that we're putting in place for

2156
01:34:10,090 --> 01:34:11,199
commercial for larger

2157
01:34:11,199 --> 01:34:15,470
commercial solar installations and then that kind of just

2158
01:34:15,470 --> 01:34:16,520
and we didn't have a

2159
01:34:16,520 --> 01:34:19,479
ordinance in place so we're not replacing or amending one

2160
01:34:19,479 --> 01:34:20,000
this is a

2161
01:34:20,000 --> 01:34:23,949
brand new ordinance this is yet when we brought that target

2162
01:34:23,949 --> 01:34:25,239
item for you at the

2163
01:34:25,239 --> 01:34:27,840
last pub morning meeting I mentioned I'd come back to you

2164
01:34:27,840 --> 01:34:29,000
because that was the

2165
01:34:29,000 --> 01:34:31,449
first time that we were seeing these systems installed and

2166
01:34:31,449 --> 01:34:32,119
that actually

2167
01:34:32,119 --> 01:34:36,149
exceeded that 50 KW limitation and two systems that have

2168
01:34:36,149 --> 01:34:37,359
active applications

2169
01:34:37,359 --> 01:34:39,920
they've gone and gone through that interconnection process

2170
01:34:39,920 --> 01:34:40,520
and have been

2171
01:34:40,520 --> 01:34:43,670
improved and now we're in the rate setting process for

2172
01:34:43,670 --> 01:34:44,279
those two

2173
01:34:44,279 --> 01:34:48,170
commercial installations so this enables us to enter into a

2174
01:34:48,170 --> 01:34:50,119
rate agreement and

2175
01:34:50,119 --> 01:34:52,649
what we're proposing is that we would be setting them on

2176
01:34:52,649 --> 01:34:53,840
the same distributed

2177
01:34:53,840 --> 01:34:58,239
generation rate and that we use for residential

2178
01:34:58,239 --> 01:35:01,359
installations oh so now my

2179
01:35:01,359 --> 01:35:04,619
impression was that that you're talking about from reading

2180
01:35:04,619 --> 01:35:06,199
the backup that you're

2181
01:35:06,199 --> 01:35:11,380
talking about anything over 50 KW is you're be dealing with

2182
01:35:11,380 --> 01:35:12,680
on a case-by-case

2183
01:35:12,680 --> 01:35:17,159
basis right I'm sorry I was referencing back I apologize

2184
01:35:17,159 --> 01:35:18,159
previously we had a

2185
01:35:18,159 --> 01:35:21,970
very specific presentation about an okay got it yes this

2186
01:35:21,970 --> 01:35:23,279
would be and we would do

2187
01:35:23,279 --> 01:35:26,000
that on any application that comes through we would analyze

2188
01:35:26,000 --> 01:35:26,720
it to make sure

2189
01:35:26,720 --> 01:35:30,300
that it meets those two conditions that are outlined one if

2190
01:35:30,300 --> 01:35:31,520
it's over 50 KW

2191
01:35:31,520 --> 01:35:35,329
that it's not for a primary generate you're not doing it

2192
01:35:35,329 --> 01:35:36,520
you're doing it off

2193
01:35:36,520 --> 01:35:40,539
set your demand not to just generate yes so we do review on

2194
01:35:40,539 --> 01:35:41,600
a case-by-case basis

2195
01:35:41,600 --> 01:35:45,439
I apologize oh no no no my bad I think we're just giving

2196
01:35:45,439 --> 01:35:46,840
authority to the city

2197
01:35:46,840 --> 01:35:56,359
manager and or designate and so I'm I'm gonna have to vote

2198
01:35:56,359 --> 01:35:58,479
no to a and I but I

2199
01:35:58,479 --> 01:36:03,659
want to explain why I I like the idea of doing on a case-by

2200
01:36:03,659 --> 01:36:05,859
-case basis for for 50

2201
01:36:05,859 --> 01:36:13,350
KW and above so that that makes sense to me whereas for

2202
01:36:13,350 --> 01:36:16,479
under 50 having a just

2203
01:36:16,479 --> 01:36:21,369
something regular in place what I don't like about it is I

2204
01:36:21,369 --> 01:36:23,039
don't like the idea

2205
01:36:23,039 --> 01:36:32,479
of the city manager having the full authority on that

2206
01:36:32,479 --> 01:36:33,800
without it going

2207
01:36:33,800 --> 01:36:37,789
through council and that's in no disrespect you know I love

2208
01:36:37,789 --> 01:36:39,359
you Todd but

2209
01:36:39,359 --> 01:36:43,279
you know I'm thinking not just about you but whoever future

2210
01:36:43,279 --> 01:36:44,439
city managers and

2211
01:36:44,439 --> 01:36:48,479
also you know even if we had all perfect city managers who

2212
01:36:48,479 --> 01:36:50,119
always made the right

2213
01:36:50,119 --> 01:36:54,119
decisions just in terms of accountability to the public and

2214
01:36:54,119 --> 01:36:54,380
the

2215
01:36:54,380 --> 01:36:59,250
ratepayer and checks and balances I want to see the bigger

2216
01:36:59,250 --> 01:37:00,760
contracts that are

2217
01:37:00,760 --> 01:37:03,239
done on a case-by-case basis which I like I want to see

2218
01:37:03,239 --> 01:37:04,239
that go to council

2219
01:37:04,239 --> 01:37:07,939
sure and I think that one thing that I would be comfortable

2220
01:37:07,939 --> 01:37:08,880
with is anytime we

2221
01:37:08,880 --> 01:37:12,840
would deviate from the norm that we would most likely bring

2222
01:37:12,840 --> 01:37:13,840
that back from

2223
01:37:13,840 --> 01:37:17,699
you and in the two instances that we have in front of us we

2224
01:37:17,699 --> 01:37:18,039
would be

2225
01:37:18,039 --> 01:37:20,829
recommending them put on the same rate that already exists

2226
01:37:20,829 --> 01:37:21,720
so if we were gonna

2227
01:37:21,720 --> 01:37:23,850
deviate from that in any way we would certainly want to

2228
01:37:23,850 --> 01:37:24,800
bring that back yes

2229
01:37:24,800 --> 01:37:33,609
yes thank you thank you any other comments questions I

2230
01:37:33,609 --> 01:37:34,680
personally I like

2231
01:37:34,680 --> 01:37:42,829
the the the ability to make a make a more a quicker answer

2232
01:37:42,829 --> 01:37:43,840
as long as we have

2233
01:37:43,840 --> 01:37:49,949
a set of standards established and that's kind of because

2234
01:37:49,949 --> 01:37:51,319
you want to I

2235
01:37:51,319 --> 01:37:56,289
want to encourage people to do this I want to encourage

2236
01:37:56,289 --> 01:38:00,560
large-scale commercial

2237
01:38:01,880 --> 01:38:08,039
distributed generation and so I like the person I like I

2238
01:38:08,039 --> 01:38:10,199
like the fact that it's

2239
01:38:10,199 --> 01:38:13,279
going to be a streamlined and you don't have to wait around

2240
01:38:13,279 --> 01:38:14,800
for because I don't

2241
01:38:14,800 --> 01:38:18,079
know I think the target even the target deal came to us

2242
01:38:18,079 --> 01:38:19,359
kind of they kind of

2243
01:38:19,359 --> 01:38:23,369
moved forward and it came to this last minute like we were

2244
01:38:23,369 --> 01:38:24,279
trying to help them

2245
01:38:24,279 --> 01:38:28,090
get their permit yeah it was kind of a last afterthought

2246
01:38:28,090 --> 01:38:29,239
time deal so anyway

2247
01:38:29,239 --> 01:38:35,479
it's my opinion all right any other discussion on that is

2248
01:38:35,479 --> 01:38:36,039
there a motion

2249
01:38:36,039 --> 01:38:41,210
move approval most approved excuse me item a and a second

2250
01:38:41,210 --> 01:38:44,920
second from Alan

2251
01:38:44,920 --> 01:38:52,159
discussion all in favor say aye aye any opposed no I say

2252
01:38:52,159 --> 01:38:53,600
nay for opposed nay

2253
01:38:53,600 --> 01:39:02,800
nay thank you that's good okay item a passes all right item

2254
01:39:02,800 --> 01:39:04,319
number C which was

2255
01:39:04,319 --> 01:39:10,319
pulled as well are there any specific questions about now

2256
01:39:10,319 --> 01:39:11,319
this is just part of

2257
01:39:11,319 --> 01:39:14,260
the same component to make this process a little more fluid

2258
01:39:14,260 --> 01:39:15,840
this is existing yeah

2259
01:39:15,840 --> 01:39:20,399
and in this particular process and one of the things we we

2260
01:39:20,399 --> 01:39:22,840
talked about oh sorry

2261
01:39:22,840 --> 01:39:24,560
maybe I talked about it with the committee on the

2262
01:39:24,560 --> 01:39:25,399
environment as we're

2263
01:39:25,399 --> 01:39:28,989
working towards getting a solar friendly designation and

2264
01:39:28,989 --> 01:39:31,680
one of the sort of areas

2265
01:39:31,680 --> 01:39:34,539
you can get points is the efficiency in which you're able

2266
01:39:34,539 --> 01:39:35,159
to process

2267
01:39:35,159 --> 01:39:38,439
applications for interconnection so by having an

2268
01:39:38,439 --> 01:39:39,840
administrative process within

2269
01:39:39,840 --> 01:39:44,109
we can help facilitate that efficiency okay and ordinarily

2270
01:39:44,109 --> 01:39:44,720
they would have come

2271
01:39:44,720 --> 01:39:48,050
through us and then to City Council we brought the target

2272
01:39:48,050 --> 01:39:49,260
one forward we had a

2273
01:39:49,260 --> 01:39:52,220
change in process and to bring that that one forward and

2274
01:39:52,220 --> 01:39:53,399
that like I said that

2275
01:39:53,399 --> 01:39:55,829
one was just special that it happened to be the largest one

2276
01:39:55,829 --> 01:39:56,600
we ever had that

2277
01:39:56,600 --> 01:39:59,380
brought forward and then we we kind of took a harder look

2278
01:39:59,380 --> 01:40:00,359
at and we realized

2279
01:40:00,359 --> 01:40:03,060
that we get about what we had 45 applications come this

2280
01:40:03,060 --> 01:40:03,960
year that would be

2281
01:40:03,960 --> 01:40:07,770
45 individual actions for this body in the City Council and

2282
01:40:07,770 --> 01:40:08,640
it would have to

2283
01:40:08,640 --> 01:40:13,840
meet those schedules on top of that we we've seen a really

2284
01:40:13,840 --> 01:40:14,920
exponential growth

2285
01:40:14,920 --> 01:40:19,380
in application so my estimate would be 45 plus for next

2286
01:40:19,380 --> 01:40:20,960
year and this was really

2287
01:40:20,960 --> 01:40:23,779
just to make that process a little bit more efficient and

2288
01:40:23,779 --> 01:40:24,880
customers won't have

2289
01:40:24,880 --> 01:40:28,180
to meet that schedule where PB is not meeting this month

2290
01:40:28,180 --> 01:40:29,239
and then they're

2291
01:40:29,239 --> 01:40:32,260
offset with council which could delay it by a month to get

2292
01:40:32,260 --> 01:40:32,640
their

2293
01:40:32,640 --> 01:40:35,130
interconnection application approved that could delay their

2294
01:40:35,130 --> 01:40:36,439
permit process we

2295
01:40:36,439 --> 01:40:39,510
really want to be customer friendly on this interconnection

2296
01:40:39,510 --> 01:40:40,479
side so that's why

2297
01:40:40,479 --> 01:40:44,289
we were asking to approve these administratively thank you

2298
01:40:44,289 --> 01:40:46,840
okay so my

2299
01:40:46,840 --> 01:40:51,279
objection to see doesn't have to do with the streamlining

2300
01:40:51,279 --> 01:40:52,960
in this case I really I

2301
01:40:52,960 --> 01:40:58,770
think it makes absolute sense to give the city manager or

2302
01:40:58,770 --> 01:41:00,159
his designee

2303
01:41:00,159 --> 01:41:05,600
unilateral authority to decide because we've got a system

2304
01:41:05,600 --> 01:41:06,399
in place not just a

2305
01:41:06,399 --> 01:41:09,449
norm but an actual you know but from which you can deviate

2306
01:41:09,449 --> 01:41:10,279
but just a system

2307
01:41:10,279 --> 01:41:14,090
where you just plug in the numbers and there you go so it

2308
01:41:14,090 --> 01:41:16,000
for see I approve of

2309
01:41:16,000 --> 01:41:18,829
the part of this of course there are many parts to this but

2310
01:41:18,829 --> 01:41:20,039
I approve of the

2311
01:41:20,039 --> 01:41:25,210
part that is about streamlining it here's what I don't like

2312
01:41:25,210 --> 01:41:26,920
I don't like

2313
01:41:26,920 --> 01:41:32,090
that it's tied that the language in in the ordinance is

2314
01:41:32,090 --> 01:41:34,319
tied to the tariffs and

2315
01:41:34,319 --> 01:41:36,729
mentions the tariff which is something we're going to be

2316
01:41:36,729 --> 01:41:37,720
discussing later on

2317
01:41:37,720 --> 01:41:44,840
for the in that individual item I think item D maybe for

2318
01:41:44,840 --> 01:41:45,760
individual

2319
01:41:45,760 --> 01:41:54,239
consideration and that's all let's see on page four it says

2320
01:41:54,239 --> 01:41:55,840
page four of the

2321
01:41:55,840 --> 01:42:00,130
backup is there a way to show it so that I don't know the

2322
01:42:00,130 --> 01:42:01,159
public can see

2323
01:42:01,159 --> 01:42:03,819
maybe get that to come up which one if it would take too

2324
01:42:03,819 --> 01:42:05,119
much time so this is

2325
01:42:05,119 --> 01:42:10,869
the let me see what's the title it's just the agreement for

2326
01:42:10,869 --> 01:42:11,760
interconnection and

2327
01:42:11,760 --> 01:42:14,789
parallel operation of distributed generation this is

2328
01:42:14,789 --> 01:42:15,840
exhibit that

2329
01:42:15,840 --> 01:42:20,739
consent agenda see exhibit to I can do it page well thank

2330
01:42:20,739 --> 01:42:21,560
you so much

2331
01:42:21,560 --> 01:42:29,079
legislature should and please if anything I'm saying is

2332
01:42:29,079 --> 01:42:31,920
wrong please let me know

2333
01:42:31,920 --> 01:42:35,729
and don't hesitate to cut me off if I'm going off on

2334
01:42:35,729 --> 01:42:35,960
something that's

2335
01:42:35,960 --> 01:42:43,560
happy to answer any questions so yeah so see consent agenda

2336
01:42:43,560 --> 01:42:44,840
you time at the

2337
01:42:44,840 --> 01:42:51,050
actual ordinance see yeah and it's a big yeah and the

2338
01:42:51,050 --> 01:42:54,359
agenda it's okay yes yes so

2339
01:42:54,359 --> 01:42:59,529
on page four so this is the eight page document right on

2340
01:42:59,529 --> 01:43:02,479
page four item number

2341
01:43:02,479 --> 01:43:08,199
11 a mm-hmm has a word says the city's authority the city

2342
01:43:08,199 --> 01:43:08,680
shall not be

2343
01:43:08,680 --> 01:43:12,380
obligated to accept or pay for produced energy from

2344
01:43:12,380 --> 01:43:14,399
generating unit larger than

2345
01:43:14,399 --> 01:43:18,210
50k W separate agreements that are the next sentence for

2346
01:43:18,210 --> 01:43:18,960
generating units from

2347
01:43:18,960 --> 01:43:23,229
a renewable source not more than 50k W city electric tariff

2348
01:43:23,229 --> 01:43:25,159
schedule shall

2349
01:43:25,159 --> 01:43:28,970
apply so it's got that language about the tariff in there

2350
01:43:28,970 --> 01:43:30,640
that's for am I you're

2351
01:43:30,640 --> 01:43:33,909
right it's it's actually referring to schedule DGRs are

2352
01:43:33,909 --> 01:43:34,840
distributed generation

2353
01:43:34,840 --> 01:43:38,680
credit rates so that sets what the payback is what we're

2354
01:43:38,680 --> 01:43:39,640
gonna credit the

2355
01:43:39,640 --> 01:43:43,449
customer for their general yes yes so what I'm what I'm

2356
01:43:43,449 --> 01:43:47,079
nervous about is and

2357
01:43:47,079 --> 01:43:53,770
is because I have objections to moving from net metering to

2358
01:43:53,770 --> 01:43:56,720
the tariff which is

2359
01:43:56,720 --> 01:44:00,100
something we're gonna get to an item D I believe dearie oh

2360
01:44:00,100 --> 01:44:00,560
we're not proposing

2361
01:44:00,560 --> 01:44:05,729
any changes to no no not not here not not not in this but I

2362
01:44:05,729 --> 01:44:07,279
'm in this is

2363
01:44:07,279 --> 01:44:11,090
further on today right that's also me or individual okay

2364
01:44:11,090 --> 01:44:12,079
that that presentation

2365
01:44:12,079 --> 01:44:17,250
that's coming up won't actually affect the DGR except for

2366
01:44:17,250 --> 01:44:19,359
what the ECA and RCA

2367
01:44:19,359 --> 01:44:22,949
are since they're variable so in the ECA side the customer

2368
01:44:22,949 --> 01:44:24,039
will be paying less

2369
01:44:24,039 --> 01:44:26,340
when they're buying energy from us and they'll see the

2370
01:44:26,340 --> 01:44:27,520
corresponding decrease

2371
01:44:27,520 --> 01:44:32,689
on the credit back it'll net it it'll net the same okay so

2372
01:44:32,689 --> 01:44:33,399
they're paying less

2373
01:44:33,399 --> 01:44:35,729
okay they're getting a little bit less back but the the

2374
01:44:35,729 --> 01:44:37,119
rate of changes is the

2375
01:44:37,119 --> 01:44:40,930
same on both sides of the equation okay the customer okay

2376
01:44:40,930 --> 01:44:41,840
so this is different

2377
01:44:41,840 --> 01:44:46,109
than what's being referred to here yes tariff schedule DGR

2378
01:44:46,109 --> 01:44:47,439
is different than

2379
01:44:47,439 --> 01:44:51,680
the tariff schedule yes the ones that will be yes the ones

2380
01:44:51,680 --> 01:44:52,159
we'll be talking

2381
01:44:52,159 --> 01:44:56,020
about later are the ECA RCA and TCRF it's a lot of acronyms

2382
01:44:56,020 --> 01:44:57,279
I apologize thank

2383
01:44:57,279 --> 01:45:01,090
you thank you and again so apologies we just had no that

2384
01:45:01,090 --> 01:45:03,600
Friday you know Friday

2385
01:45:03,600 --> 01:45:07,359
after work till today so excellent okay so that removes one

2386
01:45:07,359 --> 01:45:09,800
of my and there was

2387
01:45:09,800 --> 01:45:19,119
the one more objection that I had is the part on page six

2388
01:45:19,119 --> 01:45:24,079
which is item 14 and 15

2389
01:45:25,119 --> 01:45:38,260
in in the same document so and I realized that this is the

2390
01:45:38,260 --> 01:45:39,520
part about

2391
01:45:39,520 --> 01:45:45,630
right of access and removal and inspection and disconnect

2392
01:45:45,630 --> 01:45:46,680
ion and I do

2393
01:45:46,680 --> 01:45:52,180
realize that this is tied into existing law can I call upon

2394
01:45:52,180 --> 01:45:54,079
order here yeah we

2395
01:45:54,079 --> 01:45:59,079
were talking about item three on the consent agenda right

2396
01:45:59,079 --> 01:46:00,600
and we're

2397
01:46:00,600 --> 01:46:06,750
discussing an exhibit that we haven't seen yet it just

2398
01:46:06,750 --> 01:46:09,399
seems like we're

2399
01:46:09,399 --> 01:46:13,239
straying from the topic that's actually the exhibit and

2400
01:46:13,239 --> 01:46:15,920
item B that's okay it's

2401
01:46:15,920 --> 01:46:23,869
all right yeah so but but this this part right here 14 and

2402
01:46:23,869 --> 01:46:26,920
15 is referring to a

2403
01:46:26,920 --> 01:46:30,369
law that we is referring to ordinance that we already have

2404
01:46:30,369 --> 01:46:31,560
on the books about

2405
01:46:31,560 --> 01:46:38,460
right of access is that correct I don't think it says upon

2406
01:46:38,460 --> 01:46:39,520
reasonable notice the

2407
01:46:39,520 --> 01:46:44,069
city may send qualified representatives to the premises the

2408
01:46:44,069 --> 01:46:45,880
city may send an

2409
01:46:45,880 --> 01:46:48,369
employee to the premises of reasonable hours or any time

2410
01:46:48,369 --> 01:46:50,560
without notice and the

2411
01:46:50,560 --> 01:46:53,970
event of an emergency or hazardous condition as determined

2412
01:46:53,970 --> 01:46:55,640
by the city the

2413
01:46:55,640 --> 01:46:58,140
city shall have access to customers premises for any

2414
01:46:58,140 --> 01:46:59,319
reasonable purpose and

2415
01:46:59,319 --> 01:47:05,409
connection or or inspection and then the next part is about

2416
01:47:05,409 --> 01:47:07,199
the city can terminate

2417
01:47:07,199 --> 01:47:13,159
this agreement at will and without cause just with 30 days

2418
01:47:13,159 --> 01:47:15,119
prior notice and it's

2419
01:47:15,119 --> 01:47:18,430
my understanding and correct me if I'm wrong that this is

2420
01:47:18,430 --> 01:47:19,199
just kind of

2421
01:47:19,199 --> 01:47:21,899
replicating what we already have written into that the the

2422
01:47:21,899 --> 01:47:23,760
ordinance 20 2010 -

2423
01:47:23,760 --> 01:47:28,439
92 it is slightly different in this case and this is an

2424
01:47:28,439 --> 01:47:30,720
actual that references I

2425
01:47:30,720 --> 01:47:34,529
believe to metering yes and the service connection this is

2426
01:47:34,529 --> 01:47:35,880
an actual generating

2427
01:47:35,880 --> 01:47:39,880
device oh of course that has certain hazards and safety

2428
01:47:39,880 --> 01:47:40,960
hazards that it can

2429
01:47:40,960 --> 01:47:45,760
create and so I don't know if Brent wants to add anything

2430
01:47:45,760 --> 01:47:46,439
from an

2431
01:47:46,439 --> 01:47:49,659
engineering perspective but when we have a generating

2432
01:47:49,659 --> 01:47:51,119
device on a line and we may

2433
01:47:51,119 --> 01:47:54,890
have workers in the area you may not be at home we may need

2434
01:47:54,890 --> 01:47:55,439
to enter your

2435
01:47:55,439 --> 01:47:59,250
premises to make sure that that generation device is

2436
01:47:59,250 --> 01:47:59,920
disconnected and

2437
01:47:59,920 --> 01:48:03,729
not pushing back in that would endanger the lives of any

2438
01:48:03,729 --> 01:48:04,600
line workers that may

2439
01:48:04,600 --> 01:48:09,300
be working in that area so that that's why those clauses

2440
01:48:09,300 --> 01:48:10,479
are in there and then

2441
01:48:10,479 --> 01:48:13,300
the terminations of the agreements it just lays out some

2442
01:48:13,300 --> 01:48:14,239
conditions under

2443
01:48:14,239 --> 01:48:18,050
which we're not arbitrarily deciding to terminate

2444
01:48:18,050 --> 01:48:19,800
agreements and it just lays

2445
01:48:19,800 --> 01:48:22,880
out a couple conditions that need to be met but then but it

2446
01:48:22,880 --> 01:48:23,600
's the part of it

2447
01:48:23,600 --> 01:48:28,800
without cause that it gives me pause that that makes me

2448
01:48:28,800 --> 01:48:30,159
nervous that at will

2449
01:48:30,159 --> 01:48:34,460
or without cause I mean why why put that in if there's if

2450
01:48:34,460 --> 01:48:35,760
there if it's never

2451
01:48:35,760 --> 01:48:38,369
going to be done arbitrarily then why put that is there a

2452
01:48:38,369 --> 01:48:39,159
way that could be

2453
01:48:39,159 --> 01:48:43,229
deleted pretty much legal phrase I don't know if our

2454
01:48:43,229 --> 01:48:44,359
attorney would if that could

2455
01:48:44,359 --> 01:48:49,069
be if that could be struck if you if you had in there that

2456
01:48:49,069 --> 01:48:50,199
you had to have cause

2457
01:48:50,199 --> 01:48:54,869
and what is cause and that that deletes that argument from

2458
01:48:54,869 --> 01:48:56,279
any kind of legal

2459
01:48:56,279 --> 01:49:02,199
liability I mean that's kind of standard it's it's not it

2460
01:49:02,199 --> 01:49:03,760
doesn't say you can

2461
01:49:03,760 --> 01:49:07,600
just go for no reason well but no that's not what it means

2462
01:49:07,600 --> 01:49:09,039
what it means is we

2463
01:49:09,039 --> 01:49:17,079
have no obligation to to establish that that we have to

2464
01:49:17,079 --> 01:49:20,279
that and Larry may be

2465
01:49:20,279 --> 01:49:24,090
explained a little better but it's not it's a it's a it's a

2466
01:49:24,090 --> 01:49:25,279
legal yeah it's a

2467
01:49:25,279 --> 01:49:30,989
legal standard I guess if you will that we a hurdle that we

2468
01:49:30,989 --> 01:49:32,359
don't have to meet

2469
01:49:32,359 --> 01:49:36,630
if we feel like we needed to do it and again this is we're

2470
01:49:36,630 --> 01:49:37,640
not talking about

2471
01:49:37,640 --> 01:49:39,970
disconnecting somebody's power we're talking about

2472
01:49:39,970 --> 01:49:40,800
disconnecting the

2473
01:49:40,800 --> 01:49:45,399
devices that generate into our system so we we need to have

2474
01:49:45,399 --> 01:49:46,640
the ability to go in

2475
01:49:46,640 --> 01:49:50,130
and do it and terminate it yeah I'm just asking I just want

2476
01:49:50,130 --> 01:49:51,600
to be sure and again

2477
01:49:51,600 --> 01:49:55,479
this is not not just for my benefit but for for people who

2478
01:49:55,479 --> 01:49:57,760
are considering so

2479
01:49:57,760 --> 01:50:00,869
are yeah exactly solar generation and people who already

2480
01:50:00,869 --> 01:50:01,880
have it I'm just

2481
01:50:01,880 --> 01:50:04,939
concerned about that you know we very much we can modify

2482
01:50:04,939 --> 01:50:06,199
this however the the

2483
01:50:06,199 --> 01:50:10,010
board sees fit this was the direction we were given from a

2484
01:50:10,010 --> 01:50:11,319
policy point purview

2485
01:50:11,319 --> 01:50:17,909
from DMA mm-hmm and I'm not exactly certain what that you

2486
01:50:17,909 --> 01:50:18,279
know what they

2487
01:50:18,279 --> 01:50:26,560
base their policy decision on on that so you know I would

2488
01:50:26,560 --> 01:50:27,199
expect there's a

2489
01:50:27,199 --> 01:50:30,159
similar clause for just having utilities connected to the

2490
01:50:30,159 --> 01:50:31,720
outside of your house

2491
01:50:31,720 --> 01:50:37,000
that you can that they can come and if your house if the

2492
01:50:37,000 --> 01:50:38,960
meter is causing some

2493
01:50:38,960 --> 01:50:41,390
kind of issue or you're having some kind of back load that

2494
01:50:41,390 --> 01:50:42,560
they can come without

2495
01:50:42,560 --> 01:50:46,369
cause and stop it from happening well I want to make sure I

2496
01:50:46,369 --> 01:50:47,520
understand your

2497
01:50:47,520 --> 01:50:51,789
point on this is I think your concern is that the city at

2498
01:50:51,789 --> 01:50:53,239
some point can just

2499
01:50:53,239 --> 01:50:57,510
unhook somebody that has put the solar unit on their house

2500
01:50:57,510 --> 01:50:58,600
for no reason yeah

2501
01:50:58,600 --> 01:51:02,869
yeah it's just arbitrary it's just arbitrary yeah and I don

2502
01:51:02,869 --> 01:51:03,319
't think you know

2503
01:51:03,319 --> 01:51:08,359
again I'm Brent you're walking out here I'm not sure

2504
01:51:09,960 --> 01:51:13,229
Brent Heath executive manager for energy delivery this is

2505
01:51:13,229 --> 01:51:14,479
an interesting question

2506
01:51:14,479 --> 01:51:18,289
actually case in point a couple years ago we were looking

2507
01:51:18,289 --> 01:51:18,920
through some

2508
01:51:18,920 --> 01:51:21,729
information that we were reading and there was one

2509
01:51:21,729 --> 01:51:23,199
installation that had been

2510
01:51:23,199 --> 01:51:27,470
known to cause problems a photovoltaics system it was one

2511
01:51:27,470 --> 01:51:28,279
single element

2512
01:51:28,279 --> 01:51:32,090
within the inverter and so we went to look to see did we

2513
01:51:32,090 --> 01:51:33,520
have any of those on

2514
01:51:33,520 --> 01:51:37,329
our system as lo and behold we did so we contacted the home

2515
01:51:37,329 --> 01:51:38,359
owner they didn't know

2516
01:51:38,359 --> 01:51:41,279
anything about it we contacted the installer they didn't

2517
01:51:41,279 --> 01:51:41,960
know anything about

2518
01:51:41,960 --> 01:51:45,770
it so for safety reasons we went ahead and padlocked it

2519
01:51:45,770 --> 01:51:46,960
disconnected it until

2520
01:51:46,960 --> 01:51:49,579
we could make sure that it wouldn't have made issue yes

2521
01:51:49,579 --> 01:51:50,560
okay so thank you yeah

2522
01:51:50,560 --> 01:51:53,760
and so I like that because I like that you went and the

2523
01:51:53,760 --> 01:51:55,279
first thing you did was

2524
01:51:55,279 --> 01:51:58,560
you contacted the owner and then you contact the installer

2525
01:51:58,560 --> 01:52:00,039
so I approve of

2526
01:52:00,039 --> 01:52:02,699
that and I understand that there's need for that what I'm

2527
01:52:02,699 --> 01:52:04,800
nervous about having

2528
01:52:04,800 --> 01:52:13,630
on the books is you know if it is this possibility of you

2529
01:52:13,630 --> 01:52:16,159
know doing it with

2530
01:52:16,159 --> 01:52:21,039
without cause whatever that means legally why put that in

2531
01:52:21,039 --> 01:52:22,119
there if there's

2532
01:52:22,119 --> 01:52:25,930
never going to be an arbitrary I mean because I can't that

2533
01:52:25,930 --> 01:52:26,760
's what I'm not

2534
01:52:26,760 --> 01:52:30,560
understanding so maybe so if it is a legal something legal

2535
01:52:30,560 --> 01:52:31,479
that illegal term

2536
01:52:31,479 --> 01:52:35,289
I'm not understanding then I want to know but if there's if

2537
01:52:35,289 --> 01:52:36,319
there's no good

2538
01:52:36,319 --> 01:52:43,239
reason for that then for the sake of the rights of people

2539
01:52:43,239 --> 01:52:45,319
who are currently have

2540
01:52:45,319 --> 01:52:48,810
have distributed generation and considering it I would like

2541
01:52:48,810 --> 01:52:49,319
to see that

2542
01:52:49,319 --> 01:52:53,170
part about with that cause struck all right that was just a

2543
01:52:53,170 --> 01:52:54,560
suspicion that we

2544
01:52:54,560 --> 01:52:56,819
had from reading the information so we want to make sure it

2545
01:52:56,819 --> 01:52:57,600
was safe contact

2546
01:52:57,600 --> 01:53:00,600
the homeowner notify them contact the installer and make it

2547
01:53:00,600 --> 01:53:01,079
safe for

2548
01:53:01,079 --> 01:53:04,930
everybody yes determine yes it was an issue or not and they

2549
01:53:04,930 --> 01:53:05,640
did go ahead and

2550
01:53:05,640 --> 01:53:08,220
replace that that piece yes and that and I love and it's

2551
01:53:08,220 --> 01:53:09,399
extremely important

2552
01:53:09,399 --> 01:53:11,979
thank you yeah that's extremely important so it's just it's

2553
01:53:11,979 --> 01:53:12,520
a little

2554
01:53:12,520 --> 01:53:17,880
detail of it and sorry to hold up the proceedings with it

2555
01:53:17,880 --> 01:53:19,600
but it seems well I

2556
01:53:19,600 --> 01:53:22,310
think what you need to do you need to read that sentence in

2557
01:53:22,310 --> 01:53:23,479
in context with

2558
01:53:23,479 --> 01:53:27,289
our paragraph is when you go into the next part provided

2559
01:53:27,289 --> 01:53:27,720
however this

2560
01:53:27,720 --> 01:53:31,720
agreement shall not automatically terminate upon the

2561
01:53:31,720 --> 01:53:32,359
disconnection of

2562
01:53:32,359 --> 01:53:35,109
electric electric service to the house because they're del

2563
01:53:35,109 --> 01:53:36,439
inquent the closing

2564
01:53:36,439 --> 01:53:40,710
of their account a change in ownership it goes on that

2565
01:53:40,710 --> 01:53:42,680
impacts what that first

2566
01:53:42,680 --> 01:53:48,430
sentence says first since gives a ride to the utility to go

2567
01:53:48,430 --> 01:53:49,920
in there by giving

2568
01:53:49,920 --> 01:53:54,250
written notice about what they're going to do and I think

2569
01:53:54,250 --> 01:53:55,880
mr. Heath explained

2570
01:53:55,880 --> 01:53:58,800
that perfectly adequately about how why they're doing that

2571
01:53:58,800 --> 01:54:00,359
and that's there's a

2572
01:54:00,359 --> 01:54:02,970
caveat on that that's remainder of the paragraph yeah and

2573
01:54:02,970 --> 01:54:04,159
you know the last

2574
01:54:04,159 --> 01:54:06,880
caveat though is just kind of the failure to comply with

2575
01:54:06,880 --> 01:54:07,520
all terms of

2576
01:54:07,520 --> 01:54:10,539
this agreement and there are so many terms and then a

2577
01:54:10,539 --> 01:54:13,520
number 14 it says the

2578
01:54:13,520 --> 01:54:16,630
city may send an employee to the premises at any time

2579
01:54:16,630 --> 01:54:18,680
without notice now

2580
01:54:18,680 --> 01:54:21,010
of course it says in the event of emergency or hazardous

2581
01:54:21,010 --> 01:54:21,800
condition is

2582
01:54:21,800 --> 01:54:26,970
determined by the city so but you know so on the one hand

2583
01:54:26,970 --> 01:54:27,920
we're saying without

2584
01:54:27,920 --> 01:54:31,729
notice on the other hand we're saying notice is given it's

2585
01:54:31,729 --> 01:54:33,159
those parts so I

2586
01:54:33,159 --> 01:54:36,100
hope I'm making this clear for me it's just the privacy

2587
01:54:36,100 --> 01:54:37,439
privacy rights issue I

2588
01:54:37,439 --> 01:54:40,739
completely understand and agree that it's important to have

2589
01:54:40,739 --> 01:54:41,560
for the city to

2590
01:54:41,560 --> 01:54:45,439
have control this is our it's feeding into our system and

2591
01:54:45,439 --> 01:54:46,199
we want to make sure

2592
01:54:46,199 --> 01:54:51,369
it's safe for everybody and for the linemen but in terms of

2593
01:54:51,369 --> 01:54:53,680
the owners rights

2594
01:54:53,680 --> 01:54:59,220
I'm just not comfortable with that come entering their

2595
01:54:59,220 --> 01:55:01,359
private citizens premises

2596
01:55:01,359 --> 01:55:05,420
without notice and the part about without cause and having

2597
01:55:05,420 --> 01:55:06,199
the term so

2598
01:55:06,199 --> 01:55:09,359
loose is to be you know that the failure to comply with all

2599
01:55:09,359 --> 01:55:10,439
the terms of this

2600
01:55:10,439 --> 01:55:14,710
agreement well I think staff has given an adequate

2601
01:55:14,710 --> 01:55:15,800
explanation but you have

2602
01:55:15,800 --> 01:55:18,800
emergencies come up you have an energy producing device

2603
01:55:18,800 --> 01:55:19,800
that's placed on a

2604
01:55:19,800 --> 01:55:25,529
house that's pushing energy back in to DME's grid and I

2605
01:55:25,529 --> 01:55:27,560
think both mr. Heath

2606
01:55:27,560 --> 01:55:29,539
and miss Rogers has explained you're gonna have it you're

2607
01:55:29,539 --> 01:55:30,479
gonna have employees

2608
01:55:30,479 --> 01:55:33,500
out there working is on a regular basis just doing their

2609
01:55:33,500 --> 01:55:34,680
work or an emergency

2610
01:55:34,680 --> 01:55:37,500
basis that they have to get back there the homeowners not

2611
01:55:37,500 --> 01:55:38,520
there that needs to

2612
01:55:38,520 --> 01:55:40,819
be turned off they don't want to get out there and get lit

2613
01:55:40,819 --> 01:55:42,119
up yes when they're

2614
01:55:42,119 --> 01:55:48,350
because you know that privacy concern is it becomes a lot

2615
01:55:48,350 --> 01:55:50,000
less yeah I mean this

2616
01:55:50,000 --> 01:55:53,270
is oh yeah they're coming into this and it's same thing

2617
01:55:53,270 --> 01:55:54,840
with the metering and so

2618
01:55:54,840 --> 01:55:57,750
you've got a balancing there and there is not going in

2619
01:55:57,750 --> 01:55:58,880
there at will oh yeah

2620
01:55:58,880 --> 01:56:03,479
whenever they want yeah I think we've I think we all

2621
01:56:03,479 --> 01:56:05,600
understand the risk and the

2622
01:56:05,600 --> 01:56:10,310
positions that everybody's having here what I'd like to do

2623
01:56:10,310 --> 01:56:11,520
is either move move

2624
01:56:11,520 --> 01:56:17,229
this forward with a motion either way thank you I've moved

2625
01:56:17,229 --> 01:56:18,520
that we approve as

2626
01:56:18,520 --> 01:56:24,039
presented okay is there a second second any other

2627
01:56:24,039 --> 01:56:27,840
discussion all in favor say I

2628
01:56:27,840 --> 01:56:35,840
aye any opposed nay just because of that with one night

2629
01:56:35,840 --> 01:56:38,439
that cause sorry Adam see

2630
01:56:38,439 --> 01:56:42,250
passions I think procedurally though what you could have

2631
01:56:42,250 --> 01:56:43,359
done is made a motion

2632
01:56:43,359 --> 01:56:46,600
with the amendments that you would have liked to have seen

2633
01:56:46,600 --> 01:56:48,039
so you could have

2634
01:56:48,039 --> 01:56:52,020
per se I'm saying that you wanted to move that along

2635
01:56:52,020 --> 01:56:52,500
definitely to see if you

2636
01:56:52,500 --> 01:56:56,880
got support for your yeah yeah my sense was it was that

2637
01:56:56,880 --> 01:56:57,720
nobody else had that

2638
01:56:57,720 --> 01:57:01,680
concern which is why I didn't make that that motion so

2639
01:57:01,680 --> 01:57:03,199
thank you everybody for

2640
01:57:03,199 --> 01:57:08,609
individual next we have individual items item number a

2641
01:57:08,609 --> 01:57:12,119
which is the minutes from

2642
01:57:12,119 --> 01:57:16,810
the public utility board meeting of August 14th 2017 these

2643
01:57:16,810 --> 01:57:17,600
have been

2644
01:57:17,600 --> 01:57:25,090
distributed in advance are there any corrections changes

2645
01:57:25,090 --> 01:57:27,399
comments on these

2646
01:57:27,399 --> 01:57:33,810
hearing none those stand approved as presented next item we

2647
01:57:33,810 --> 01:57:35,079
have is item

2648
01:57:35,079 --> 01:57:41,039
number B which is not item B it's not a number to receive

2649
01:57:41,039 --> 01:57:42,680
report hold discussion

2650
01:57:42,680 --> 01:57:46,539
provide recommendation regarding solid waste departments

2651
01:57:46,539 --> 01:57:47,640
landfill mining

2652
01:57:47,640 --> 01:57:56,949
operation good morning morning so we have a presentation to

2653
01:57:56,949 --> 01:57:57,239
give you a little

2654
01:57:57,239 --> 01:57:59,149
bit of an update and seek some direction on our landfill

2655
01:57:59,149 --> 01:58:00,260
mining operation at

2656
01:58:00,260 --> 01:58:03,159
solid waste before I do that I do want to mention that we

2657
01:58:03,159 --> 01:58:03,760
did send out some

2658
01:58:03,760 --> 01:58:06,979
corrections over the weekend I want to apologize for that

2659
01:58:06,979 --> 01:58:07,760
but it felt like

2660
01:58:07,760 --> 01:58:10,300
those changes were significant enough that we needed to get

2661
01:58:10,300 --> 01:58:11,079
that to you ahead

2662
01:58:11,079 --> 01:58:14,119
of today's meeting in addition I realize that there's been

2663
01:58:14,119 --> 01:58:15,479
a newspaper article as

2664
01:58:15,479 --> 01:58:18,350
well as a lot of good discussion of social media over the

2665
01:58:18,350 --> 01:58:19,239
weekend and so I

2666
01:58:19,239 --> 01:58:21,989
feel it's important to mention that you know this is a

2667
01:58:21,989 --> 01:58:23,359
project that has really

2668
01:58:23,359 --> 01:58:25,609
kind of been a passion project for solid waste and a number

2669
01:58:25,609 --> 01:58:26,359
of members in the

2670
01:58:26,359 --> 01:58:30,149
community for a number of years and so really if I do my

2671
01:58:30,149 --> 01:58:31,359
job correctly today

2672
01:58:31,359 --> 01:58:34,680
this is going to be kind of a fair and balanced approach to

2673
01:58:34,680 --> 01:58:35,920
not just looking at

2674
01:58:35,920 --> 01:58:39,729
the benefits of what landfill mining can potentially bring

2675
01:58:39,729 --> 01:58:41,000
but also analyzing the

2676
01:58:41,000 --> 01:58:43,840
risk and some of the challenges that are inherent in a

2677
01:58:43,840 --> 01:58:45,279
project like this as well

2678
01:58:45,279 --> 01:58:48,409
I also mentioned that a number of our staff members have

2679
01:58:48,409 --> 01:58:49,439
worked a lot of long

2680
01:58:49,439 --> 01:58:52,199
hours on this and we also want to thank Weaver and their

2681
01:58:52,199 --> 01:58:53,319
folks for helping us

2682
01:58:53,319 --> 01:58:56,470
out with this analysis Nick Gunson David Duggar here from

2683
01:58:56,470 --> 01:58:57,199
the solid waste

2684
01:58:57,199 --> 01:59:01,840
department today as well lastly before you get started this

2685
01:59:01,840 --> 01:59:02,479
is kind of a

2686
01:59:02,479 --> 01:59:05,800
complex analysis and so out of the interest of time I'm

2687
01:59:05,800 --> 01:59:06,760
going to try to

2688
01:59:06,760 --> 01:59:09,340
keep this at a fairly high level but we'll certainly

2689
01:59:09,340 --> 01:59:10,479
entertain any questions

2690
01:59:10,479 --> 01:59:13,600
that you have there's essentially a couple of key

2691
01:59:13,600 --> 01:59:14,560
assumptions that really

2692
01:59:14,560 --> 01:59:18,369
swing the original analysis to the current analysis and I

2693
01:59:18,369 --> 01:59:19,000
will spend a bit

2694
01:59:19,000 --> 01:59:24,670
more time on that so without further ado a few things

2695
01:59:24,670 --> 01:59:26,520
conceptually that you'll

2696
01:59:26,520 --> 01:59:28,630
really kind of need to wrap your head around as we go

2697
01:59:28,630 --> 01:59:29,279
through this

2698
01:59:29,279 --> 01:59:33,560
presentation is some of the benefits that might be realized

2699
01:59:33,560 --> 01:59:34,300
by doing a

2700
01:59:34,300 --> 01:59:37,279
landfill mining operation first of which is airspace

2701
01:59:37,279 --> 01:59:39,680
recovery and when you own

2702
01:59:39,680 --> 01:59:43,279
and operate a landfill as the city does it's really an

2703
01:59:43,279 --> 01:59:44,479
asset to our ratepayers

2704
01:59:44,479 --> 01:59:48,750
into our community and so making good use of our airspace

2705
01:59:48,750 --> 01:59:49,720
is paramount makes

2706
01:59:49,720 --> 01:59:52,739
basically makes that asset lengthens that life and make

2707
01:59:52,739 --> 01:59:53,880
sure that it's there

2708
01:59:53,880 --> 01:59:56,979
for future generations and in addition you can also put a

2709
01:59:56,979 --> 01:59:58,680
revenue value on that

2710
01:59:58,680 --> 02:00:02,970
airspace essentially that's the backbone how the solid

2711
02:00:02,970 --> 02:00:03,800
waste department generates

2712
02:00:03,800 --> 02:00:07,090
revenue you also have reduced environmental risk when you

2713
02:00:07,090 --> 02:00:08,159
look at a cell

2714
02:00:08,159 --> 02:00:10,409
like the cell that is being contemplated for landfill

2715
02:00:10,409 --> 02:00:11,560
mining that's

2716
02:00:11,560 --> 02:00:14,880
what we call a pre-subtitled D landfill cell which means

2717
02:00:14,880 --> 02:00:16,119
that there's a clay

2718
02:00:16,119 --> 02:00:20,390
liner at the bottom of this cell that is essentially at a

2719
02:00:20,390 --> 02:00:21,960
medium risk for failure

2720
02:00:21,960 --> 02:00:24,539
for groundwater contamination to some other hazards over

2721
02:00:24,539 --> 02:00:25,779
the next 30 to 60

2722
02:00:25,779 --> 02:00:30,380
years and then lastly you also have the recovered material

2723
02:00:30,380 --> 02:00:32,159
revenue and so in

2724
02:00:32,159 --> 02:00:34,630
order to get to your airspace recovery you essentially

2725
02:00:34,630 --> 02:00:35,640
would have to mine up

2726
02:00:35,640 --> 02:00:39,449
this material and divert it versus rebury it to recognize

2727
02:00:39,449 --> 02:00:40,319
those airspace

2728
02:00:40,319 --> 02:00:44,130
savings to do that the the original pro forma assumed that

2729
02:00:44,130 --> 02:00:44,840
we would be

2730
02:00:44,840 --> 02:00:48,239
liquidating that or selling it for a profit and so those

2731
02:00:48,239 --> 02:00:49,720
are really kind of

2732
02:00:49,720 --> 02:00:52,989
the key benefits that you may or may not seen in meetings

2733
02:00:52,989 --> 02:00:54,920
past one thing I will

2734
02:00:54,920 --> 02:00:58,199
mention is that a pro forma was conducted on this

2735
02:00:58,199 --> 02:00:59,520
previously but we don't believe

2736
02:00:59,520 --> 02:01:01,729
that that was presented to the pub or the City Council and

2737
02:01:01,729 --> 02:01:02,399
so I want to make

2738
02:01:02,399 --> 02:01:05,140
that clarification and so as we go through the presentation

2739
02:01:05,140 --> 02:01:05,840
we'll give you

2740
02:01:05,840 --> 02:01:10,140
a look at that original pro forma as well as our updated

2741
02:01:10,140 --> 02:01:12,960
assumptions excuse

2742
02:01:12,960 --> 02:01:15,130
me aside from the benefits you also have a number of

2743
02:01:15,130 --> 02:01:16,359
assumptions or risk factors

2744
02:01:16,359 --> 02:01:20,439
this would be a very risky project if we do take it on and

2745
02:01:20,439 --> 02:01:22,000
we feel like that's

2746
02:01:22,000 --> 02:01:24,750
really important that we acknowledge these and that we talk

2747
02:01:24,750 --> 02:01:25,239
about our

2748
02:01:25,239 --> 02:01:28,510
assumptions as we deal with them first of which is the

2749
02:01:28,510 --> 02:01:29,600
timeline associated with

2750
02:01:29,600 --> 02:01:33,409
the project like this this is not one or two year project

2751
02:01:33,409 --> 02:01:34,680
it potentially will run

2752
02:01:34,680 --> 02:01:39,279
multiple years perhaps even a couple of decades that's

2753
02:01:39,279 --> 02:01:40,319
really a function of our

2754
02:01:40,319 --> 02:01:43,090
processing capacity when I say capacity it's really

2755
02:01:43,090 --> 02:01:44,560
function of how quickly can

2756
02:01:44,560 --> 02:01:48,369
we mine up the old landfill material process it divert it

2757
02:01:48,369 --> 02:01:49,199
get it to its final

2758
02:01:49,199 --> 02:01:53,010
destination that's a component or the components to really

2759
02:01:53,010 --> 02:01:53,819
impact that are

2760
02:01:53,819 --> 02:01:56,199
going to be your workforce how quickly can they process

2761
02:01:56,199 --> 02:01:57,279
that and your equipment

2762
02:01:57,279 --> 02:01:59,880
you also have the composition of what's in the landfill you

2763
02:01:59,880 --> 02:02:00,840
have a little image

2764
02:02:00,840 --> 02:02:04,119
here and you can kind of see there's a variety of waste in

2765
02:02:04,119 --> 02:02:05,159
there we do have

2766
02:02:05,159 --> 02:02:08,039
some good data that we feel like we could work off of UTA

2767
02:02:08,039 --> 02:02:09,039
did a number of

2768
02:02:09,039 --> 02:02:12,850
samples at our site we have some reliable data on that

2769
02:02:12,850 --> 02:02:14,000
front but there

2770
02:02:14,000 --> 02:02:16,899
are also a number of unknowns the core samples that they

2771
02:02:16,899 --> 02:02:18,039
conducted could not

2772
02:02:18,039 --> 02:02:21,020
penetrate all the material found in the land cell and so

2773
02:02:21,020 --> 02:02:22,640
the material that they

2774
02:02:22,640 --> 02:02:25,939
come penetrate our assumptions are that could be metal wood

2775
02:02:25,939 --> 02:02:26,880
large pieces of

2776
02:02:26,880 --> 02:02:29,829
concrete all those are kind of unknown quantities to us as

2777
02:02:29,829 --> 02:02:31,640
we look at this you

2778
02:02:31,640 --> 02:02:34,270
also have the condition of the material and when we talk

2779
02:02:34,270 --> 02:02:35,159
about diverting

2780
02:02:35,159 --> 02:02:38,229
material if we're going to be selling that on the market if

2781
02:02:38,229 --> 02:02:39,119
that materials

2782
02:02:39,119 --> 02:02:42,170
contaminated we need to know that there's material testing

2783
02:02:42,170 --> 02:02:43,039
that may need to

2784
02:02:43,039 --> 02:02:47,460
take place and much like any market the commodities market

2785
02:02:47,460 --> 02:02:48,760
for recyclables they're

2786
02:02:48,760 --> 02:02:50,800
going to be picky about the products that they choose

2787
02:02:50,800 --> 02:02:51,800
contamination is

2788
02:02:51,800 --> 02:02:55,130
something that someone buying these materials are going to

2789
02:02:55,130 --> 02:02:55,920
look at and so

2790
02:02:55,920 --> 02:02:58,420
that does affect your market potential and you're trying to

2791
02:02:58,420 --> 02:02:58,880
sell these

2792
02:02:58,880 --> 02:03:02,800
recyclable materials lastly you have material price

2793
02:03:02,800 --> 02:03:05,439
volatility recyclables

2794
02:03:05,439 --> 02:03:08,199
are a commodity market there's some risk there it's

2795
02:03:08,199 --> 02:03:09,479
something we deal with today

2796
02:03:09,479 --> 02:03:13,800
but you also have to factor in these other risk factors

2797
02:03:13,800 --> 02:03:15,560
before we can even get

2798
02:03:15,560 --> 02:03:19,430
to that so as we go through the next few slides essentially

2799
02:03:19,430 --> 02:03:20,079
what we're going to

2800
02:03:20,079 --> 02:03:23,890
be trying to do is tackling the key risk factors or

2801
02:03:23,890 --> 02:03:25,000
assumptions that were made in

2802
02:03:25,000 --> 02:03:28,810
the original analysis versus our current analysis as we

2803
02:03:28,810 --> 02:03:30,000
work through this we

2804
02:03:30,000 --> 02:03:32,100
found that our assumptions in some cases were very

2805
02:03:32,100 --> 02:03:33,359
different than the original

2806
02:03:33,359 --> 02:03:36,460
analysis and that's really the value of having weaver come

2807
02:03:36,460 --> 02:03:37,640
in and challenge our

2808
02:03:37,640 --> 02:03:39,989
assumptions and really talk us through or us talk them

2809
02:03:39,989 --> 02:03:41,119
through here's what our

2810
02:03:41,119 --> 02:03:44,159
thinking was here's the original thinking you know where's

2811
02:03:44,159 --> 02:03:44,840
your comfort

2812
02:03:44,840 --> 02:03:48,000
level and your confidence level on this so on on each of

2813
02:03:48,000 --> 02:03:49,239
these slides I'm going

2814
02:03:49,239 --> 02:03:51,130
to go through the current assumptions down here and then I

2815
02:03:51,130 --> 02:03:51,760
'll tie it into the

2816
02:03:51,760 --> 02:03:55,569
data that we have up here in the table so the first

2817
02:03:55,569 --> 02:03:56,960
assumption that we have all

2818
02:03:56,960 --> 02:04:00,770
these benefits up here are they're tangible benefits but

2819
02:04:00,770 --> 02:04:01,840
understand that

2820
02:04:01,840 --> 02:04:05,649
that's not necessarily a money coming in annually these are

2821
02:04:05,649 --> 02:04:06,399
benefits that would

2822
02:04:06,399 --> 02:04:09,229
only be recognized if we complete the project in its

2823
02:04:09,229 --> 02:04:10,600
entirety I'll talk a

2824
02:04:10,600 --> 02:04:12,899
little bit more about timelines but you can see some bullet

2825
02:04:12,899 --> 02:04:13,680
points here that

2826
02:04:13,680 --> 02:04:17,489
these numbers are 10-year numbers neither the original

2827
02:04:17,489 --> 02:04:18,479
analysis or the

2828
02:04:18,479 --> 02:04:20,979
current analysis would be complete the project would not be

2829
02:04:20,979 --> 02:04:22,000
completed 10 years

2830
02:04:22,000 --> 02:04:25,600
so our first assumption that we have here is everybody air

2831
02:04:25,600 --> 02:04:26,600
space is a value is

2832
02:04:26,600 --> 02:04:29,710
a function of material diverted and the revenue potential

2833
02:04:29,710 --> 02:04:31,439
of that airspace so

2834
02:04:31,439 --> 02:04:34,260
there's two key assumptions that are there under the

2835
02:04:34,260 --> 02:04:35,560
original analysis the

2836
02:04:35,560 --> 02:04:38,489
first assumption was that we would divert at least 75% of

2837
02:04:38,489 --> 02:04:39,199
the material that

2838
02:04:39,199 --> 02:04:43,010
we mine we feel that that's a little bit optimistic that's

2839
02:04:43,010 --> 02:04:43,600
something that we

2840
02:04:43,600 --> 02:04:47,409
come from conferred with weaver on our analysis was that

2841
02:04:47,409 --> 02:04:48,640
about 50% would be

2842
02:04:48,640 --> 02:04:52,909
diverted about 50% of what's in the landfill right now is

2843
02:04:52,909 --> 02:04:54,199
what's called

2844
02:04:54,199 --> 02:04:57,569
small objects that is your degraded material your soil

2845
02:04:57,569 --> 02:04:58,479
things that are too

2846
02:04:58,479 --> 02:05:01,510
small for us to process and divert through any other means

2847
02:05:01,510 --> 02:05:02,399
if you're going

2848
02:05:02,399 --> 02:05:04,920
to sell that soil like I said it's probably gonna need to

2849
02:05:04,920 --> 02:05:05,720
be tested to some

2850
02:05:05,720 --> 02:05:09,529
degree we just assumed in our analysis that that's probably

2851
02:05:09,529 --> 02:05:10,119
not how we would

2852
02:05:10,119 --> 02:05:14,920
treat that material so as you can see with that that that

2853
02:05:14,920 --> 02:05:17,079
75% to 50% has a

2854
02:05:17,079 --> 02:05:21,399
decidedly decided impact on that the other thing and this

2855
02:05:21,399 --> 02:05:22,039
is the correction

2856
02:05:22,039 --> 02:05:25,340
that you received via email over the weekend when we ever

2857
02:05:25,340 --> 02:05:26,199
looked at this they

2858
02:05:26,199 --> 02:05:29,210
really looked at well how much waste can we fit into a

2859
02:05:29,210 --> 02:05:30,199
cubic yard of airspace

2860
02:05:30,199 --> 02:05:34,010
which is how we value the revenue potential the original

2861
02:05:34,010 --> 02:05:34,960
assumption and

2862
02:05:34,960 --> 02:05:37,550
the assumption that we were operating on up until last week

2863
02:05:37,550 --> 02:05:38,319
was we could fit

2864
02:05:38,319 --> 02:05:42,130
about 1,300 pounds into a cubic yard of airspace recent

2865
02:05:42,130 --> 02:05:43,119
survey data came back

2866
02:05:43,119 --> 02:05:45,270
on our landfill site and said you're really probably going

2867
02:05:45,270 --> 02:05:45,960
to be looking at

2868
02:05:45,960 --> 02:05:49,159
closer to 1,100 so we've recommended that we write that

2869
02:05:49,159 --> 02:05:50,199
down and we made that

2870
02:05:50,199 --> 02:05:53,039
correction and that's kind of the net difference between

2871
02:05:53,039 --> 02:05:54,279
the 14 million that

2872
02:05:54,279 --> 02:05:58,170
was originally in the presentation and the 8.7 that's here

2873
02:05:58,170 --> 02:05:59,640
now the other

2874
02:05:59,640 --> 02:06:03,449
assumptions here land land value is applicable if a land

2875
02:06:03,449 --> 02:06:04,600
purchase is avoided

2876
02:06:04,600 --> 02:06:10,470
so reclaimed airspace or reclaim land value a lot of landf

2877
02:06:10,470 --> 02:06:12,279
ills that pursue

2878
02:06:12,279 --> 02:06:16,090
landfill mining they're landlocked they have no growth

2879
02:06:16,090 --> 02:06:16,960
potential in the out

2880
02:06:16,960 --> 02:06:19,789
years they're basically up against a wall if they want to

2881
02:06:19,789 --> 02:06:20,560
continue to

2882
02:06:20,560 --> 02:06:24,369
operate and so land reclaim land value is very important

2883
02:06:24,369 --> 02:06:24,800
for them because

2884
02:06:24,800 --> 02:06:28,159
otherwise they're gonna have to go purchase land and do a

2885
02:06:28,159 --> 02:06:28,680
green field

2886
02:06:28,680 --> 02:06:32,380
a green field investment in that that's not really the case

2887
02:06:32,380 --> 02:06:33,039
with us we have

2888
02:06:33,039 --> 02:06:36,159
about 17 to 20 more years of life potentially in our

2889
02:06:36,159 --> 02:06:37,279
existing development

2890
02:06:37,279 --> 02:06:41,090
and we also have permitted expansion that's going through

2891
02:06:41,090 --> 02:06:42,000
the TCEQ right now

2892
02:06:42,000 --> 02:06:46,270
so we didn't feel like that was worth realizing as a

2893
02:06:46,270 --> 02:06:48,279
benefit lastly on this

2894
02:06:48,279 --> 02:06:52,880
slide you have avoided post closure enclosure a quick word

2895
02:06:52,880 --> 02:06:54,359
on that closure

2896
02:06:54,359 --> 02:06:57,640
and post closures really like a retirement fund for your

2897
02:06:57,640 --> 02:06:58,920
landfill and a

2898
02:06:58,920 --> 02:07:02,729
lot of privately owned landfills and see will file

2899
02:07:02,729 --> 02:07:04,119
bankruptcy and walk away and

2900
02:07:04,119 --> 02:07:07,930
leave it as a liability for the community to deal with we

2901
02:07:07,930 --> 02:07:08,760
can't be that

2902
02:07:08,760 --> 02:07:11,920
irresponsible we must have funds available to close our

2903
02:07:11,920 --> 02:07:12,560
landfill site

2904
02:07:12,560 --> 02:07:15,260
whenever we're finished filling it with waste and so we

2905
02:07:15,260 --> 02:07:17,199
must recognize that we

2906
02:07:17,199 --> 02:07:21,079
must put those funds back the original analysis assumed

2907
02:07:21,079 --> 02:07:23,600
that these values were

2908
02:07:23,600 --> 02:07:26,869
not just for the cell that we would be mining but for the

2909
02:07:26,869 --> 02:07:27,800
entire site to

2910
02:07:27,800 --> 02:07:31,659
recognize that as a benefit you would essentially have to

2911
02:07:31,659 --> 02:07:32,760
never close the

2912
02:07:32,760 --> 02:07:36,569
entire side to do that you would be mining perpetually not

2913
02:07:36,569 --> 02:07:37,800
just the cell but

2914
02:07:37,800 --> 02:07:41,579
all the other cells in the side we felt strongly that that

2915
02:07:41,579 --> 02:07:42,439
is not a benefit

2916
02:07:42,439 --> 02:07:46,250
that we could recognize in fact we had another consultant

2917
02:07:46,250 --> 02:07:47,159
run a post closure

2918
02:07:47,159 --> 02:07:50,159
analysis they felt like there's actually a net liability

2919
02:07:50,159 --> 02:07:51,159
for mining this

2920
02:07:51,159 --> 02:07:54,520
particular cell if we were to do it and so we feel strongly

2921
02:07:54,520 --> 02:07:55,760
that that should be

2922
02:07:55,760 --> 02:07:58,729
removed we had weaver look at it they felt the same way so

2923
02:07:58,729 --> 02:07:59,880
that is not

2924
02:07:59,880 --> 02:08:05,970
recognized in our current analysis so as you take all that

2925
02:08:05,970 --> 02:08:07,119
in consideration the

2926
02:08:07,119 --> 02:08:10,289
the benefits which again would be recognized at the end of

2927
02:08:10,289 --> 02:08:12,039
the process has

2928
02:08:12,039 --> 02:08:14,920
been written down pretty dramatically from the original

2929
02:08:14,920 --> 02:08:15,720
analysis to our

2930
02:08:15,720 --> 02:08:20,319
current review of the benefits and that takes us next to

2931
02:08:20,319 --> 02:08:21,960
our material sales

2932
02:08:21,960 --> 02:08:26,000
analysis which is another area where our assumptions differ

2933
02:08:26,000 --> 02:08:26,600
ed quite

2934
02:08:26,600 --> 02:08:30,409
substantially from the original pro forma I'll just run

2935
02:08:30,409 --> 02:08:31,399
through quickly our

2936
02:08:31,399 --> 02:08:33,750
assumptions down here and then I'll walk you through all

2937
02:08:33,750 --> 02:08:34,840
this data that's up here

2938
02:08:34,840 --> 02:08:37,399
in this table all the data on this slide is from the

2939
02:08:37,399 --> 02:08:39,079
original analysis and so I

2940
02:08:39,079 --> 02:08:41,770
want to make sure that a spend a little bit of time talking

2941
02:08:41,770 --> 02:08:42,680
about why we felt

2942
02:08:42,680 --> 02:08:45,619
our assumptions were different our current assumption is

2943
02:08:45,619 --> 02:08:46,520
that the UTA

2944
02:08:46,520 --> 02:08:51,369
landfill composition research is reliable UTA did a number

2945
02:08:51,369 --> 02:08:52,520
of borings and

2946
02:08:52,520 --> 02:08:55,329
core samples at our side essentially picking spots out

2947
02:08:55,329 --> 02:08:56,439
around the location

2948
02:08:56,439 --> 02:08:59,180
drilling down and analyzing okay what kind of material are

2949
02:08:59,180 --> 02:08:59,960
we dealing with

2950
02:08:59,960 --> 02:09:03,520
right here what's the condition of that material so one of

2951
02:09:03,520 --> 02:09:04,119
the things that you

2952
02:09:04,119 --> 02:09:06,420
would see when you go through the UTA research there's a

2953
02:09:06,420 --> 02:09:07,279
phrase that pops up

2954
02:09:07,279 --> 02:09:10,279
again and again and it's waste is heterogeneous which

2955
02:09:10,279 --> 02:09:12,079
basically is another

2956
02:09:12,079 --> 02:09:15,069
way of saying that no two bags of waste are the same the

2957
02:09:15,069 --> 02:09:15,880
components and the

2958
02:09:15,880 --> 02:09:18,420
contents are very different and that really plays out when

2959
02:09:18,420 --> 02:09:19,199
you look at those

2960
02:09:19,199 --> 02:09:22,680
core samples from UTA that being said we still feel like

2961
02:09:22,680 --> 02:09:23,399
their research is

2962
02:09:23,399 --> 02:09:27,210
valuable because we feel like over time if we mined the

2963
02:09:27,210 --> 02:09:28,119
entire location we

2964
02:09:28,119 --> 02:09:30,750
would probably get pretty close to the figures that they

2965
02:09:30,750 --> 02:09:31,640
gave us we thought

2966
02:09:31,640 --> 02:09:34,750
they gave us a representative sample our next assumption

2967
02:09:34,750 --> 02:09:35,800
was that the market

2968
02:09:35,800 --> 02:09:40,539
wants clean material a lot more recycling material is made

2969
02:09:40,539 --> 02:09:40,640
available

2970
02:09:40,640 --> 02:09:44,960
today cardboard paper we do a much better job as a society

2971
02:09:44,960 --> 02:09:46,159
today of recycling

2972
02:09:46,159 --> 02:09:49,119
material than we did back when this landfill was being

2973
02:09:49,119 --> 02:09:50,279
filled up this site

2974
02:09:50,279 --> 02:09:54,250
closed in 2000 except to waste well back into the 80s and

2975
02:09:54,250 --> 02:09:56,239
so understand that when

2976
02:09:56,239 --> 02:10:00,979
we bring this material to market some recycling vendors

2977
02:10:00,979 --> 02:10:02,479
they struggle with the

2978
02:10:02,479 --> 02:10:05,189
contamination that's in your blue cart today they may not

2979
02:10:05,189 --> 02:10:06,020
accept all that

2980
02:10:06,020 --> 02:10:08,720
material and so what we're going to be bringing to market

2981
02:10:08,720 --> 02:10:09,760
will be inferior to

2982
02:10:09,760 --> 02:10:12,890
even the contamination that they're used to seeing in

2983
02:10:12,890 --> 02:10:14,479
addition about 30 to 50

2984
02:10:14,479 --> 02:10:17,250
percent of the material be degraded or those small objects

2985
02:10:17,250 --> 02:10:18,239
like I talked about

2986
02:10:18,239 --> 02:10:22,920
a little bit earlier soil coming old with decomposed waste

2987
02:10:22,920 --> 02:10:24,520
we also have an

2988
02:10:24,520 --> 02:10:27,069
assumption that the tetrapack and bulky materials I'll talk

2989
02:10:27,069 --> 02:10:27,840
more about those in

2990
02:10:27,840 --> 02:10:31,180
just a second are complete unknowns this is material that

2991
02:10:31,180 --> 02:10:32,399
the boring could not

2992
02:10:32,399 --> 02:10:35,859
get down and penetrate and so we know something's there but

2993
02:10:35,859 --> 02:10:36,560
we don't know

2994
02:10:36,560 --> 02:10:40,880
exactly what it is the volume or the composition or the

2995
02:10:40,880 --> 02:10:41,720
condition of it and

2996
02:10:41,720 --> 02:10:45,550
so those are really complete unknowns for us and highly

2997
02:10:45,550 --> 02:10:47,079
speculative if we move

2998
02:10:47,079 --> 02:10:51,960
forward with this lastly and I'll tie this into the the

2999
02:10:51,960 --> 02:10:53,479
table above the

3000
02:10:53,479 --> 02:10:56,569
original pro forma have banked on revenue for the liquid

3001
02:10:56,569 --> 02:10:57,479
ation or sell of

3002
02:10:57,479 --> 02:11:01,789
recyclable commodities to be about $44 per ton understand

3003
02:11:01,789 --> 02:11:02,760
that today on

3004
02:11:02,760 --> 02:11:05,489
relatively clean material that we get out of our building

3005
02:11:05,489 --> 02:11:06,520
materials recovery

3006
02:11:06,520 --> 02:11:10,329
operation as well as the cart material that we divert to Pr

3007
02:11:10,329 --> 02:11:11,439
att we get on average

3008
02:11:11,439 --> 02:11:16,199
about $22 per ton so essentially for the original pro forma

3009
02:11:16,199 --> 02:11:16,800
revenues to be

3010
02:11:16,800 --> 02:11:20,680
realized we would have to get twice what we're getting for

3011
02:11:20,680 --> 02:11:21,359
relatively clean

3012
02:11:21,359 --> 02:11:25,170
material now we don't believe that's achievable so I'll go

3013
02:11:25,170 --> 02:11:25,800
through real

3014
02:11:25,800 --> 02:11:29,800
quickly on this table the commodity assumptions up here are

3015
02:11:29,800 --> 02:11:30,439
essentially what

3016
02:11:30,439 --> 02:11:33,359
I've just talked through this is original pro forma data

3017
02:11:33,359 --> 02:11:34,100
these are the

3018
02:11:34,100 --> 02:11:38,020
materials that were assumed to be in the landfill I

3019
02:11:38,020 --> 02:11:39,279
mentioned that we felt like

3020
02:11:39,279 --> 02:11:43,090
the UTA assumptions could be or the UT findings could be

3021
02:11:43,090 --> 02:11:43,680
counted on the

3022
02:11:43,680 --> 02:11:46,479
problem with the composition numbers here these percentages

3023
02:11:46,479 --> 02:11:47,239
and why they're

3024
02:11:47,239 --> 02:11:50,399
in red is these are not representative of what we saw in

3025
02:11:50,399 --> 02:11:52,560
the UTA reports doesn't

3026
02:11:52,560 --> 02:11:54,670
mean that there's not data to support these assumptions we

3027
02:11:54,670 --> 02:11:55,439
've just been unable

3028
02:11:55,439 --> 02:11:59,039
to locate it had conversations with the UTA professor and

3029
02:11:59,039 --> 02:11:59,899
it's really

3030
02:11:59,899 --> 02:12:03,710
speculation on our part on where these numbers came from

3031
02:12:03,710 --> 02:12:05,000
down below these you

3032
02:12:05,000 --> 02:12:08,229
see the Tetra pack and the recoverable materials and these

3033
02:12:08,229 --> 02:12:09,000
are blank and

3034
02:12:09,000 --> 02:12:12,779
highlighted in blue the reason why is like I said earlier

3035
02:12:12,779 --> 02:12:13,640
we have no idea

3036
02:12:13,640 --> 02:12:17,619
what's in there from a composition standpoint a little bit

3037
02:12:17,619 --> 02:12:18,560
more information

3038
02:12:18,560 --> 02:12:20,710
on the Tetra pack we believe that there's a substantial

3039
02:12:20,710 --> 02:12:21,520
quantity of that

3040
02:12:21,520 --> 02:12:25,560
material in there from a bulky recoverable materials

3041
02:12:25,560 --> 02:12:26,520
standpoint the

3042
02:12:26,520 --> 02:12:30,409
definition of that is that could be old brush it could be

3043
02:12:30,409 --> 02:12:32,000
big pieces of metal or

3044
02:12:32,000 --> 02:12:36,270
concrete it could be old furniture refrigerators cars you

3045
02:12:36,270 --> 02:12:37,680
name it it's it's

3046
02:12:37,680 --> 02:12:41,489
kind of a mixed bag and so trying to tie down composition

3047
02:12:41,489 --> 02:12:42,479
on that is is really

3048
02:12:42,479 --> 02:12:46,289
going to be a big gamble and that takes us over to sellable

3049
02:12:46,289 --> 02:12:46,760
material which is

3050
02:12:46,760 --> 02:12:50,170
really you know out of this material that we recover how

3051
02:12:50,170 --> 02:12:50,880
much of that is

3052
02:12:50,880 --> 02:12:53,970
going to be marketable that we think we can sell on the

3053
02:12:53,970 --> 02:12:55,340
open market to our

3054
02:12:55,340 --> 02:12:58,710
knowledge based on what I've seen there's really not been

3055
02:12:58,710 --> 02:12:59,560
any thorough

3056
02:12:59,560 --> 02:13:02,520
analysis done on this the reason why I feel like these are

3057
02:13:02,520 --> 02:13:03,920
complete unknowns is

3058
02:13:03,920 --> 02:13:06,560
we don't have any contracts with any vendors to purchase

3059
02:13:06,560 --> 02:13:08,399
this material and so

3060
02:13:08,399 --> 02:13:11,140
we are again going to be taking what we believe to be an

3061
02:13:11,140 --> 02:13:12,319
inferior product to

3062
02:13:12,319 --> 02:13:16,130
market and then trying to get it liquidated offside the

3063
02:13:16,130 --> 02:13:17,479
numbers over here

3064
02:13:17,479 --> 02:13:19,800
in the far right column these are the original pro forma

3065
02:13:19,800 --> 02:13:20,880
total revenue figures

3066
02:13:20,880 --> 02:13:27,880
I think some of these are probably within a reason I will

3067
02:13:27,880 --> 02:13:29,079
say this that

3068
02:13:29,079 --> 02:13:31,760
there's a lot of research out there that says when you do a

3069
02:13:31,760 --> 02:13:32,680
landfill mining

3070
02:13:32,680 --> 02:13:36,090
project do not count on the revenues to really the float

3071
02:13:36,090 --> 02:13:37,640
the project most of

3072
02:13:37,640 --> 02:13:40,319
your gains is going to be an airspace that's really why you

3073
02:13:40,319 --> 02:13:41,600
do this or is to

3074
02:13:41,600 --> 02:13:43,550
address some of those environmental concerns like we

3075
02:13:43,550 --> 02:13:44,220
mentioned at the

3076
02:13:44,220 --> 02:13:48,029
outset understand that on this pro forma that there's a

3077
02:13:48,029 --> 02:13:49,159
substantial amount of

3078
02:13:49,159 --> 02:13:52,970
revenue that's counted on here and the concerning factor or

3079
02:13:52,970 --> 02:13:53,800
the concerning part

3080
02:13:53,800 --> 02:13:57,659
for us in our analysis was that the lion's share of this

3081
02:13:57,659 --> 02:13:59,279
revenue about 60 to

3082
02:13:59,279 --> 02:14:03,090
70 percent was in the areas that we felt were most

3083
02:14:03,090 --> 02:14:05,359
speculative and so these areas

3084
02:14:05,359 --> 02:14:08,319
right here the Tetra Pak the bulky recoverable materials

3085
02:14:08,319 --> 02:14:09,680
there are huge

3086
02:14:09,680 --> 02:14:12,199
quantities assumed for this and it's also assumed that we

3087
02:14:12,199 --> 02:14:12,960
're going to be able

3088
02:14:12,960 --> 02:14:15,930
to get a certain dollar amount for that we don't feel any

3089
02:14:15,930 --> 02:14:17,119
level of confidence

3090
02:14:17,119 --> 02:14:21,060
in these numbers here today and so we wrote those down as

3091
02:14:21,060 --> 02:14:23,720
part of our analysis

3092
02:14:23,720 --> 02:14:28,279
I'm going too fast you have questions please stop me all

3093
02:14:28,279 --> 02:14:29,520
right so this is

3094
02:14:29,520 --> 02:14:31,960
essentially the final pro forma this is kind of the before

3095
02:14:31,960 --> 02:14:32,600
and after the

3096
02:14:32,600 --> 02:14:36,090
original analysis versus our current analysis real quickly

3097
02:14:36,090 --> 02:14:36,840
I want to remind

3098
02:14:36,840 --> 02:14:39,449
everyone that this is 10 year total so this is an apples-to

3099
02:14:39,449 --> 02:14:41,520
-apples comparison I

3100
02:14:41,520 --> 02:14:45,329
mentioned the time factor on this project is this is not a

3101
02:14:45,329 --> 02:14:46,079
quick project

3102
02:14:46,079 --> 02:14:49,890
to undertake it's multi-year but the original analysis

3103
02:14:49,890 --> 02:14:50,760
assumed that we'd be

3104
02:14:50,760 --> 02:14:53,939
processing it much faster than our current analysis and you

3105
02:14:53,939 --> 02:14:54,720
see down here

3106
02:14:54,720 --> 02:14:58,600
that the original had us about 69 percent complete after 10

3107
02:14:58,600 --> 02:14:59,960
years the

3108
02:14:59,960 --> 02:15:03,079
project would be done in about 14 was that that analysis

3109
02:15:03,079 --> 02:15:05,079
ours is a little bit

3110
02:15:05,079 --> 02:15:08,890
less optimistic we'd be about 52 percent complete at the 10

3111
02:15:08,890 --> 02:15:10,279
-year mark we think

3112
02:15:10,279 --> 02:15:13,979
it's going to take at least 19 years to do this I'll talk

3113
02:15:13,979 --> 02:15:15,239
about more operational

3114
02:15:15,239 --> 02:15:18,350
challenges on the next slide even when we were looked at

3115
02:15:18,350 --> 02:15:19,439
this they felt like

3116
02:15:19,439 --> 02:15:21,930
this was was very optimistic that there's a number of

3117
02:15:21,930 --> 02:15:22,960
challenges that we're

3118
02:15:22,960 --> 02:15:25,479
going to have to contend with as we get into it so you can

3119
02:15:25,479 --> 02:15:26,600
see the benefits

3120
02:15:26,600 --> 02:15:28,520
which we've just walked through there's a sizable

3121
02:15:28,520 --> 02:15:29,640
difference in the original

3122
02:15:29,640 --> 02:15:33,640
analysis versus ours we did strip out a number of

3123
02:15:33,640 --> 02:15:34,920
expenditures trying to reach

3124
02:15:34,920 --> 02:15:39,520
break even on this so we eliminated some overhead we didn't

3125
02:15:39,520 --> 02:15:40,199
purchase some pieces

3126
02:15:40,199 --> 02:15:43,800
of equipment so that has some reductions and impact them a

3127
02:15:43,800 --> 02:15:44,680
lot of these numbers

3128
02:15:44,680 --> 02:15:48,489
throughout unfortunately we still could not approach a

3129
02:15:48,489 --> 02:15:49,399
break even on this at a

3130
02:15:49,399 --> 02:15:53,210
10-year period so this is really the the original analysis

3131
02:15:53,210 --> 02:15:54,199
and this is what we

3132
02:15:54,199 --> 02:15:58,010
believe we'd be looking at after 10 years on this again I

3133
02:15:58,010 --> 02:15:59,159
'll re-emphasize

3134
02:15:59,159 --> 02:16:02,970
that you only recognize the airspace and benefits value

3135
02:16:02,970 --> 02:16:04,439
once you complete the

3136
02:16:04,439 --> 02:16:08,250
project and so this is not cash flow coming in you'd

3137
02:16:08,250 --> 02:16:09,600
essentially be operating

3138
02:16:09,600 --> 02:16:13,569
this project at a loss for a 10-year period before you

3139
02:16:13,569 --> 02:16:15,239
start realizing any of

3140
02:16:15,239 --> 02:16:21,000
that benefit in our analysis about a 19-year period some

3141
02:16:21,000 --> 02:16:23,119
additional risk and

3142
02:16:23,119 --> 02:16:25,420
challenges that I want to point these out because these

3143
02:16:25,420 --> 02:16:26,279
were not a component

3144
02:16:26,279 --> 02:16:30,090
of either of the pro formas essentially we got to some of

3145
02:16:30,090 --> 02:16:30,560
this and we can

3146
02:16:30,560 --> 02:16:34,370
tighten some of these up but especially from a financial

3147
02:16:34,370 --> 02:16:35,200
perspective of where

3148
02:16:35,200 --> 02:16:37,299
this is right now we really didn't see the value and

3149
02:16:37,299 --> 02:16:38,319
continuing to do that

3150
02:16:38,319 --> 02:16:42,129
until we had some type of policy discussion with the PUB

3151
02:16:42,129 --> 02:16:43,200
and the council

3152
02:16:43,200 --> 02:16:46,340
number one is equipment failure and replacement we have a

3153
02:16:46,340 --> 02:16:47,200
number of pieces

3154
02:16:47,200 --> 02:16:50,270
of equipment that are going to be critical components of

3155
02:16:50,270 --> 02:16:52,040
this project we

3156
02:16:52,040 --> 02:16:55,840
must count on some of those being down at some point of

3157
02:16:55,840 --> 02:16:56,959
time even if we have

3158
02:16:56,959 --> 02:17:00,239
five pieces of equipment they're down 1% independent of one

3159
02:17:00,239 --> 02:17:01,659
another then we're at

3160
02:17:01,659 --> 02:17:05,930
95% of our production capacity right off the job this is a

3161
02:17:05,930 --> 02:17:06,719
very rugged

3162
02:17:06,719 --> 02:17:09,680
environment this equipment is only warrantied for about one

3163
02:17:09,680 --> 02:17:10,159
year or a

3164
02:17:10,159 --> 02:17:12,850
thousand hours so even the manufacturers look at this and

3165
02:17:12,850 --> 02:17:13,479
say that you're gonna

3166
02:17:13,479 --> 02:17:16,110
have some challenges dealing with what you you're cont

3167
02:17:16,110 --> 02:17:18,200
ending with out there at

3168
02:17:18,200 --> 02:17:20,709
ten years I would assess that we probably have to replace a

3169
02:17:20,709 --> 02:17:21,200
couple of

3170
02:17:21,200 --> 02:17:24,129
pieces of equipment at least at 19 to 20 years you're

3171
02:17:24,129 --> 02:17:25,299
probably gonna have to

3172
02:17:25,299 --> 02:17:29,110
replace all of it at some point that's not been factored in

3173
02:17:29,110 --> 02:17:29,659
there's some

3174
02:17:29,659 --> 02:17:32,799
environmental risks that we have not put a dollar amount on

3175
02:17:32,799 --> 02:17:34,079
yes we could address

3176
02:17:34,079 --> 02:17:37,889
the clay liner but there's also some some methane gas in

3177
02:17:37,889 --> 02:17:38,879
this that has not

3178
02:17:38,879 --> 02:17:41,430
been pulled out yet and so as we get in there start digging

3179
02:17:41,430 --> 02:17:42,360
some of that will be

3180
02:17:42,360 --> 02:17:45,340
released and we'll have to contend with that some way you

3181
02:17:45,340 --> 02:17:46,319
also have the

3182
02:17:46,319 --> 02:17:50,129
potential of running into some toxic materials some

3183
02:17:50,129 --> 02:17:51,040
contaminated materials as

3184
02:17:51,040 --> 02:17:54,360
well that kind of ties into the next item which is the

3185
02:17:54,360 --> 02:17:55,079
health and safety of

3186
02:17:55,079 --> 02:18:00,250
our workers out there we have a lot of cost or expense tied

3187
02:18:00,250 --> 02:18:02,000
into this for safety

3188
02:18:02,000 --> 02:18:05,809
equipment but again we solid waste is a hazardous

3189
02:18:05,809 --> 02:18:07,600
profession as is this

3190
02:18:07,600 --> 02:18:11,409
would increase that a little bit and we need to look at it

3191
02:18:11,409 --> 02:18:11,959
workforce loss is

3192
02:18:11,959 --> 02:18:15,219
really something that is is a component of what happens

3193
02:18:15,219 --> 02:18:16,360
when someone when

3194
02:18:16,360 --> 02:18:18,879
attrition happens when someone leaves how long does it take

3195
02:18:18,879 --> 02:18:19,559
us to fill that

3196
02:18:19,559 --> 02:18:22,299
position do we want to give people breaks and lunches do we

3197
02:18:22,299 --> 02:18:22,760
want to give

3198
02:18:22,760 --> 02:18:27,159
them second vacation time in an operation sense if you don

3199
02:18:27,159 --> 02:18:27,840
't account for

3200
02:18:27,840 --> 02:18:30,479
those things one of two things will happen your

3201
02:18:30,479 --> 02:18:32,120
productivity is going to go

3202
02:18:32,120 --> 02:18:34,920
way down or your expense is going to go way up as you try

3203
02:18:34,920 --> 02:18:36,079
to compensate for it

3204
02:18:36,079 --> 02:18:39,889
understand that it has not been built into this model yet

3205
02:18:39,889 --> 02:18:40,680
lastly you have

3206
02:18:40,680 --> 02:18:43,229
material testing and storage we do have some storage

3207
02:18:43,229 --> 02:18:44,559
contemplated but what we

3208
02:18:44,559 --> 02:18:46,920
see in another landfill mining operations is this is a

3209
02:18:46,920 --> 02:18:47,840
challenge that a

3210
02:18:47,840 --> 02:18:51,649
lot of them contend with and then there's inventory and

3211
02:18:51,649 --> 02:18:52,520
logistics assuming

3212
02:18:52,520 --> 02:18:56,600
that we are able to sell these materials on the market we

3213
02:18:56,600 --> 02:18:57,920
need to devise an

3214
02:18:57,920 --> 02:19:01,040
inventory system for that we need to be able to account for

3215
02:19:01,040 --> 02:19:02,639
it effectively the

3216
02:19:02,639 --> 02:19:06,239
biggest challenge that we will run into from a financial

3217
02:19:06,239 --> 02:19:07,079
standpoint is if we are

3218
02:19:07,079 --> 02:19:09,809
shipping this to someone there will be a logistics expense

3219
02:19:09,809 --> 02:19:11,000
for us if we're asking

3220
02:19:11,000 --> 02:19:14,399
someone to come pick it up off site then they were going to

3221
02:19:14,399 --> 02:19:15,559
pay us less than they

3222
02:19:15,559 --> 02:19:18,959
would on the open market so with all these what I would say

3223
02:19:18,959 --> 02:19:19,760
is kind of a

3224
02:19:19,760 --> 02:19:22,809
blanket statement is this has not been factored into the

3225
02:19:22,809 --> 02:19:23,799
pro forma when we

3226
02:19:23,799 --> 02:19:26,799
talked with Weaver about this information essentially the

3227
02:19:26,799 --> 02:19:27,360
way that we

3228
02:19:27,360 --> 02:19:31,170
view this and they agree is our current analysis from an

3229
02:19:31,170 --> 02:19:31,920
expenditure standpoint

3230
02:19:31,920 --> 02:19:35,729
maybe even from a benefit standpoint is is a bit too

3231
02:19:35,729 --> 02:19:37,079
optimistic and that it may

3232
02:19:37,079 --> 02:19:41,350
need to be written down if we get serious about pursuing

3233
02:19:41,350 --> 02:19:43,159
this project so

3234
02:19:43,159 --> 02:19:46,079
that brings us to options or recommendations you know one

3235
02:19:46,079 --> 02:19:46,440
of the

3236
02:19:46,440 --> 02:19:50,020
things I will say is I realized that landfill mining it has

3237
02:19:50,020 --> 02:19:50,920
a number of good

3238
02:19:50,920 --> 02:19:54,459
benefits it's a passion project for a number of people in

3239
02:19:54,459 --> 02:19:55,200
the organization

3240
02:19:55,200 --> 02:19:57,829
there's folks in the community they're very passionate

3241
02:19:57,829 --> 02:19:59,159
about that you know we

3242
02:19:59,159 --> 02:20:02,170
didn't take this process lightly I know staff spent a lot

3243
02:20:02,170 --> 02:20:03,879
of hours on it Weaver

3244
02:20:03,879 --> 02:20:06,840
took it very seriously as well so when we looked at our

3245
02:20:06,840 --> 02:20:08,440
options here we really

3246
02:20:08,440 --> 02:20:12,250
balanced what are the benefits with the potential risks the

3247
02:20:12,250 --> 02:20:13,399
hazards the cost and

3248
02:20:13,399 --> 02:20:16,040
really where we stand to staff today is is we would

3249
02:20:16,040 --> 02:20:17,399
recommend option one which

3250
02:20:17,399 --> 02:20:20,399
would be eliminate the operation doesn't mean that we step

3251
02:20:20,399 --> 02:20:21,639
away from exploring

3252
02:20:21,639 --> 02:20:25,959
some of the benefits that our possibilities out there if we

3253
02:20:25,959 --> 02:20:26,479
want to

3254
02:20:26,479 --> 02:20:29,829
address that liner we can certainly go do some research and

3255
02:20:29,829 --> 02:20:30,879
see what are some

3256
02:20:30,879 --> 02:20:33,530
better ways that we can go about doing that if we do

3257
02:20:33,530 --> 02:20:35,680
eliminate the operation we

3258
02:20:35,680 --> 02:20:38,260
have kind of prepared for this moment a little bit

3259
02:20:38,260 --> 02:20:39,879
internally already we've

3260
02:20:39,879 --> 02:20:42,700
stopped some orders for equipment we've been diverting

3261
02:20:42,700 --> 02:20:44,159
staff to other operations

3262
02:20:44,159 --> 02:20:48,520
as vacancies come up we think that if we stop today on the

3263
02:20:48,520 --> 02:20:49,440
operation there would

3264
02:20:49,440 --> 02:20:52,680
be about a 1.4 million dollar write-down on revenues we don

3265
02:20:52,680 --> 02:20:53,440
't think we would

3266
02:20:53,440 --> 02:20:56,409
realize that anyhow but we also think that day zero we

3267
02:20:56,409 --> 02:20:57,639
could probably reduce

3268
02:20:57,639 --> 02:21:01,559
expenditures by about 2 million and the vast majority of

3269
02:21:01,559 --> 02:21:02,360
our own M could be

3270
02:21:02,360 --> 02:21:04,969
reduced within about a six-month period the one exception

3271
02:21:04,969 --> 02:21:05,879
of that would be the

3272
02:21:05,879 --> 02:21:08,079
debt service on the equipment that we've already purchased

3273
02:21:08,079 --> 02:21:08,600
I believe in your

3274
02:21:08,600 --> 02:21:12,409
backup that's about 3.5 million dollars for that equipment

3275
02:21:12,409 --> 02:21:13,319
the good news is it

3276
02:21:13,319 --> 02:21:16,690
does have some utility in our other operations at the site

3277
02:21:16,690 --> 02:21:17,600
and so it's not

3278
02:21:17,600 --> 02:21:20,840
really a strained asset we wouldn't be forced into liquid

3279
02:21:20,840 --> 02:21:21,840
ating that we can

3280
02:21:21,840 --> 02:21:25,709
certainly put that to use in other operations if we do that

3281
02:21:25,709 --> 02:21:26,719
then what we

3282
02:21:26,719 --> 02:21:29,629
recommend what we're what is currently underway as we're

3283
02:21:29,629 --> 02:21:30,959
doing a department

3284
02:21:30,959 --> 02:21:34,770
wide equipment analysis and where there's redundancy or not

3285
02:21:34,770 --> 02:21:35,639
enough utility

3286
02:21:35,639 --> 02:21:38,790
to justify the expense we'll be salvaging some of that

3287
02:21:38,790 --> 02:21:39,600
other equipment

3288
02:21:39,600 --> 02:21:42,280
as well so over the next 8 to 12 months we think that there

3289
02:21:42,280 --> 02:21:42,760
will be an

3290
02:21:42,760 --> 02:21:46,569
equipment reduction site wide option 2 is obviously to

3291
02:21:46,569 --> 02:21:47,639
proceed with landfill

3292
02:21:47,639 --> 02:21:51,510
mining and it's something that we understand the benefits

3293
02:21:51,510 --> 02:21:52,280
to this project

3294
02:21:52,280 --> 02:21:56,090
but we also make sure that if we proceed with that that

3295
02:21:56,090 --> 02:21:56,959
both the board the

3296
02:21:56,959 --> 02:22:00,000
council all of us go in with eyes wide open and understand

3297
02:22:00,000 --> 02:22:01,280
that we have a number

3298
02:22:01,280 --> 02:22:03,860
of risk challenges and financial issues that we would need

3299
02:22:03,860 --> 02:22:04,879
to deal with if we go

3300
02:22:04,879 --> 02:22:08,579
that route so I know I blew through this very quickly there

3301
02:22:08,579 --> 02:22:09,200
's a lot to unpack

3302
02:22:09,200 --> 02:22:13,840
here I'm happy to stand for any questions that you might

3303
02:22:13,840 --> 02:22:14,479
have

3304
02:22:14,760 --> 02:22:21,760
questions first one concerns the previous pro forma when

3305
02:22:21,760 --> 02:22:23,879
was it prepared

3306
02:22:23,879 --> 02:22:29,239
and who put it together for us I'm not exactly sure on on

3307
02:22:29,239 --> 02:22:31,000
the who I've talked

3308
02:22:31,000 --> 02:22:34,030
with staff I know that the previous director had a hand in

3309
02:22:34,030 --> 02:22:34,840
that I know there

3310
02:22:34,840 --> 02:22:38,649
was some input from UTA we've had a number of internal

3311
02:22:38,649 --> 02:22:39,239
discussions as we go

3312
02:22:39,239 --> 02:22:41,530
through that and we've really had some challenges as staff

3313
02:22:41,530 --> 02:22:42,319
understanding where

3314
02:22:42,319 --> 02:22:46,129
some of those assumptions came from so it's to be honest it

3315
02:22:46,129 --> 02:22:46,760
's a bit of a

3316
02:22:46,760 --> 02:22:49,750
clouded picture on that there were a number of different

3317
02:22:49,750 --> 02:22:50,719
versions of that

3318
02:22:50,719 --> 02:22:56,239
pro forma the one that I've represented here was dated 2017

3319
02:22:56,239 --> 02:22:56,920
I believe was March

3320
02:22:56,920 --> 02:23:01,610
April timeframe so it was being updated up until this last

3321
02:23:01,610 --> 02:23:03,879
spring as I visited

3322
02:23:03,879 --> 02:23:06,520
with staff on this I think there's been a number of

3323
02:23:06,520 --> 02:23:07,440
different points of view or

3324
02:23:07,440 --> 02:23:10,159
a number of different opinions on where the data came from

3325
02:23:10,159 --> 02:23:11,680
we struggled with

3326
02:23:11,680 --> 02:23:13,719
some of these assumptions quite frankly and that's why we

3327
02:23:13,719 --> 02:23:14,440
really felt it was

3328
02:23:14,440 --> 02:23:16,899
important especially given the differences between the

3329
02:23:16,899 --> 02:23:17,879
original and the

3330
02:23:17,879 --> 02:23:21,690
current analysis to have weaver help us out with this

3331
02:23:21,690 --> 02:23:23,120
thanks for your question

3332
02:23:23,120 --> 02:23:28,170
yes the second question concerns the clay liner do we have

3333
02:23:28,170 --> 02:23:28,840
environmental

3334
02:23:28,840 --> 02:23:37,250
monitoring in place - we have groundwater wells I'm gonna

3335
02:23:37,250 --> 02:23:38,200
defer to David Dougher

3336
02:23:38,200 --> 02:23:43,159
he's our facility manager to come up and help answer that

3337
02:23:43,159 --> 02:23:43,559
question

3338
02:23:46,719 --> 02:23:56,360
doesn't work my name is David Dougher I'm an MSW facility

3339
02:23:56,360 --> 02:23:57,319
manager from city of

3340
02:23:57,319 --> 02:24:00,020
Denton we do have groundwater wells that are located all

3341
02:24:00,020 --> 02:24:01,520
the way around that site

3342
02:24:01,520 --> 02:24:07,540
basically when we incorporated into our 1590 - a site it

3343
02:24:07,540 --> 02:24:09,399
basically left the line

3344
02:24:09,399 --> 02:24:13,209
of wells on the backside so that side is monitored for

3345
02:24:13,209 --> 02:24:14,079
groundwater after it

3346
02:24:14,079 --> 02:24:18,649
passes by the landfill to be looked at in our every six

3347
02:24:18,649 --> 02:24:20,719
months so but outside of

3348
02:24:20,719 --> 02:24:24,530
that we have methane monitors around it as well but that's

3349
02:24:24,530 --> 02:24:26,799
the extent of that

3350
02:24:26,799 --> 02:24:36,950
monitoring that we have okay so if we don't do the landfill

3351
02:24:36,950 --> 02:24:37,719
mining now is this

3352
02:24:37,719 --> 02:24:40,170
something that we're just delaying and we're gonna have to

3353
02:24:40,170 --> 02:24:42,040
do later on or is

3354
02:24:42,040 --> 02:24:44,989
this something that's just going to be laid to rest forever

3355
02:24:44,989 --> 02:24:46,120
and ever amen I

3356
02:24:46,120 --> 02:24:48,850
wouldn't say that we would lay it to rest and and I think

3357
02:24:48,850 --> 02:24:49,840
part of the benefit

3358
02:24:49,840 --> 02:24:52,790
to having the equipment still on site and use in other

3359
02:24:52,790 --> 02:24:54,000
operations is we may

3360
02:24:54,000 --> 02:24:57,809
have a different way to approach this project that is a

3361
02:24:57,809 --> 02:24:58,840
little bit more

3362
02:24:58,840 --> 02:25:02,809
fiscally responsible and may be able to reduce some of the

3363
02:25:02,809 --> 02:25:03,959
risk a number of

3364
02:25:03,959 --> 02:25:07,770
projects have removed and relocated waste and address the

3365
02:25:07,770 --> 02:25:08,719
liner issues that

3366
02:25:08,719 --> 02:25:11,940
we had talked about that's something that we've talked

3367
02:25:11,940 --> 02:25:12,920
about has some

3368
02:25:12,920 --> 02:25:18,120
cursory discussions about internally the biggest thing that

3369
02:25:18,120 --> 02:25:18,959
we feel is a

3370
02:25:18,959 --> 02:25:21,549
challenge with mining is this currently proposed is the

3371
02:25:21,549 --> 02:25:22,520
timeline that we're

3372
02:25:22,520 --> 02:25:25,850
looking at with any project the longer you go the more risk

3373
02:25:25,850 --> 02:25:26,760
you incur the more

3374
02:25:26,760 --> 02:25:32,680
cost you incur and I think that we also need to recognize

3375
02:25:32,680 --> 02:25:33,319
that we're not going

3376
02:25:33,319 --> 02:25:36,010
to totally eliminate the risk of groundwater contamination

3377
02:25:36,010 --> 02:25:36,600
by putting a

3378
02:25:36,600 --> 02:25:40,420
geosynthetic liner in there we will reduce it we had one of

3379
02:25:40,420 --> 02:25:41,600
our engineers

3380
02:25:41,600 --> 02:25:44,049
look at the potential of groundwater contamination and he

3381
02:25:44,049 --> 02:25:44,920
basically assessed

3382
02:25:44,920 --> 02:25:47,930
this as medium risk which would be you know there's a

3383
02:25:47,930 --> 02:25:49,799
potential that this liner

3384
02:25:49,799 --> 02:25:52,959
could fail in a 30 to 60 year timeline so we think it's

3385
02:25:52,959 --> 02:25:54,239
worth taking a look at

3386
02:25:54,239 --> 02:25:58,200
we don't want to say that this is basically going to be

3387
02:25:58,200 --> 02:25:59,280
shelved and never

3388
02:25:59,280 --> 02:26:02,760
brought back up again we just think that if we are going to

3389
02:26:02,760 --> 02:26:03,959
reintroduce it again

3390
02:26:03,959 --> 02:26:06,860
if that's the direction from the PB and the council that it

3391
02:26:06,860 --> 02:26:08,000
would probably be in

3392
02:26:08,000 --> 02:26:12,979
a different kind of a different design if you will does

3393
02:26:12,979 --> 02:26:13,920
that answer your

3394
02:26:13,920 --> 02:26:17,729
question so you're basically you're just looking for better

3395
02:26:17,729 --> 02:26:18,760
market a better mark

3396
02:26:18,760 --> 02:26:22,569
time when the market is more conducive to doing this so

3397
02:26:22,569 --> 02:26:23,600
what you're saying is

3398
02:26:23,600 --> 02:26:28,200
that at this point in time it's not conducive based on what

3399
02:26:28,200 --> 02:26:28,920
's out there in

3400
02:26:28,920 --> 02:26:32,729
the market as far as what we will be able to get on a

3401
02:26:32,729 --> 02:26:34,000
return at this point in

3402
02:26:34,000 --> 02:26:37,809
time that may be in a couple of years things will change

3403
02:26:37,809 --> 02:26:39,520
other things will get

3404
02:26:39,520 --> 02:26:42,889
invented or whatever to be able to do this a little bit

3405
02:26:42,889 --> 02:26:44,159
more effectively I

3406
02:26:44,159 --> 02:26:46,579
don't know that I would say that that's a function of the

3407
02:26:46,579 --> 02:26:47,520
market I think it's

3408
02:26:47,520 --> 02:26:51,440
really of how the project is conceived is if we conceive

3409
02:26:51,440 --> 02:26:53,040
this project that we're

3410
02:26:53,040 --> 02:26:57,069
going to be relying on you know material sales to bridge

3411
02:26:57,069 --> 02:26:58,639
the financial gap

3412
02:26:58,639 --> 02:27:02,159
I talking to Weaver and some of the discussions and review

3413
02:27:02,159 --> 02:27:03,079
that we've done

3414
02:27:03,079 --> 02:27:06,370
this is probably we really can't bank on the commodities

3415
02:27:06,370 --> 02:27:07,520
market coming back

3416
02:27:07,520 --> 02:27:12,149
around to us on this doesn't mean that it won't like I said

3417
02:27:12,149 --> 02:27:12,680
that mark is

3418
02:27:12,680 --> 02:27:15,389
volatile but understand that especially for a lot of

3419
02:27:15,389 --> 02:27:16,879
recycling vendors they are

3420
02:27:16,879 --> 02:27:20,149
really looking for clean clean product so much so that they

3421
02:27:20,149 --> 02:27:21,159
're contracting

3422
02:27:21,159 --> 02:27:24,250
directly with manufacturers to get it straight out of their

3423
02:27:24,250 --> 02:27:24,920
side versus

3424
02:27:24,920 --> 02:27:29,239
contending with what's coming out of the blue cards and so

3425
02:27:29,239 --> 02:27:31,319
I don't think again

3426
02:27:31,319 --> 02:27:33,659
never say never but I think looking at the recyclable

3427
02:27:33,659 --> 02:27:35,120
commodities I don't think

3428
02:27:35,120 --> 02:27:36,850
that that's something that we're holding our breath that

3429
02:27:36,850 --> 02:27:37,520
that will come back

3430
02:27:37,520 --> 02:27:40,840
around to us that being said if we can find a way to reduce

3431
02:27:40,840 --> 02:27:41,719
the expense on this

3432
02:27:41,719 --> 02:27:44,299
and address the environmental concerns and I think that's

3433
02:27:44,299 --> 02:27:44,920
something we

3434
02:27:44,920 --> 02:27:48,280
definitely are open to that makes sense yeah and because

3435
02:27:48,280 --> 02:27:49,719
that's that's basically

3436
02:27:49,719 --> 02:27:55,690
my concern is the environmental concerns of waiting on you

3437
02:27:55,690 --> 02:27:56,879
know for a little bit

3438
02:27:56,879 --> 02:28:02,049
later but you were saying medium concerns on the failure of

3439
02:28:02,049 --> 02:28:03,360
this right

3440
02:28:03,360 --> 02:28:10,809
this is that I mean medium concerns just sounds really yeah

3441
02:28:10,809 --> 02:28:12,040
and I don't want to

3442
02:28:12,040 --> 02:28:15,850
it doesn't sound good I don't want to assume how medium is

3443
02:28:15,850 --> 02:28:17,040
defined by our

3444
02:28:17,040 --> 02:28:20,850
engineer what I will say is this is one of probably

3445
02:28:20,850 --> 02:28:22,000
hundreds maybe even

3446
02:28:22,000 --> 02:28:25,700
thousands of pre-subtitled D landfills and not only Texas

3447
02:28:25,700 --> 02:28:26,879
but around the nation

3448
02:28:26,879 --> 02:28:30,690
and so we're not the only one faced with these types of

3449
02:28:30,690 --> 02:28:31,920
issues there are

3450
02:28:31,920 --> 02:28:35,379
remediation strategies if we run into issues I mean all

3451
02:28:35,379 --> 02:28:36,959
those incur a cost and

3452
02:28:36,959 --> 02:28:40,770
an expense I will also say that there are probably other

3453
02:28:40,770 --> 02:28:41,479
ways for us to tackle

3454
02:28:41,479 --> 02:28:45,290
addressing that installing a new line or if that's what we

3455
02:28:45,290 --> 02:28:46,559
decide to do to be

3456
02:28:46,559 --> 02:28:48,600
honest we haven't done a lot of due diligence on that but

3457
02:28:48,600 --> 02:28:49,319
that's something

3458
02:28:49,319 --> 02:28:55,239
that we do intend to take some action on following this

3459
02:28:55,239 --> 02:28:55,399
okay one other question

3460
02:28:55,399 --> 02:28:59,670
as far as the methane mining is that continuing at this

3461
02:28:59,670 --> 02:29:02,000
point we will we this

3462
02:29:02,000 --> 02:29:05,809
cell notwithstanding the remainder of ourselves are

3463
02:29:05,809 --> 02:29:06,479
enhanced leachate

3464
02:29:06,479 --> 02:29:10,239
recirculation cells ELR which those are basically designed

3465
02:29:10,239 --> 02:29:11,159
to increase the

3466
02:29:11,159 --> 02:29:14,370
production of methane gas so we continue to draw off of

3467
02:29:14,370 --> 02:29:15,280
that there is some

3468
02:29:15,280 --> 02:29:18,030
electricity that's generated as a result and the remainder

3469
02:29:18,030 --> 02:29:19,959
is flared the methane

3470
02:29:19,959 --> 02:29:22,420
output on this is much reduced because a lot of the

3471
02:29:22,420 --> 02:29:24,799
materials already decomposed

3472
02:29:24,799 --> 02:29:28,389
to my knowledge and David I'm kind of looking for you over

3473
02:29:28,389 --> 02:29:29,079
there we're not

3474
02:29:29,079 --> 02:29:34,360
doing any active pull of methane off of this site currently

3475
02:29:34,360 --> 02:29:39,840
is that correct we

3476
02:29:39,840 --> 02:29:42,959
have several groundwater I mean methane wells on top that

3477
02:29:42,959 --> 02:29:44,040
are that we're drawing

3478
02:29:44,040 --> 02:29:47,850
off of in some of the preparation that Ethan mentioned

3479
02:29:47,850 --> 02:29:49,440
about the mining we did

3480
02:29:49,440 --> 02:29:52,829
take some of those offline which we would add back on back

3481
02:29:52,829 --> 02:29:54,379
on to the methane

3482
02:29:54,379 --> 02:29:59,920
system so it is active it has because of the age of the

3483
02:29:59,920 --> 02:30:02,920
site it has peaks and

3484
02:30:02,920 --> 02:30:06,719
valleys so they can draw methane off of it for a while and

3485
02:30:06,719 --> 02:30:07,479
then it will the

3486
02:30:07,479 --> 02:30:10,190
methane will fall off and then they'll let it build and

3487
02:30:10,190 --> 02:30:11,319
then they'll pull it

3488
02:30:11,319 --> 02:30:16,100
again so it's somewhat active back and forth with those

3489
02:30:16,100 --> 02:30:22,200
guys so if we if we do

3490
02:30:22,200 --> 02:30:26,500
nothing let's say we do nothing and it comes time to decomm

3491
02:30:26,500 --> 02:30:27,760
ission our current

3492
02:30:27,760 --> 02:30:33,399
landfill can we leave this cell the way it is certainly

3493
02:30:33,399 --> 02:30:34,319
there there's a subtitle

3494
02:30:34,319 --> 02:30:38,129
D sites that are closed permanently that they go through

3495
02:30:38,129 --> 02:30:38,719
the closure and

3496
02:30:38,719 --> 02:30:42,530
post closure protocol that's certainly an option here the

3497
02:30:42,530 --> 02:30:43,079
one thing that's in

3498
02:30:43,079 --> 02:30:47,149
our site plan is that we would put waste on top of this if

3499
02:30:47,149 --> 02:30:48,719
we were to do that we

3500
02:30:48,719 --> 02:30:51,149
would need to put an intermediate liner between this cell

3501
02:30:51,149 --> 02:30:52,100
in any waste that was

3502
02:30:52,100 --> 02:30:55,229
up above it and again that's something that before we get

3503
02:30:55,229 --> 02:30:56,120
to that point we feel

3504
02:30:56,120 --> 02:30:58,940
like we really need to evaluate do we need to address that

3505
02:30:58,940 --> 02:30:59,639
liner before

3506
02:30:59,639 --> 02:31:02,920
moving in that direction to us that's probably a cost-bene

3507
02:31:02,920 --> 02:31:04,120
fit analysis that we

3508
02:31:04,120 --> 02:31:06,319
would prepare assuming we hadn't addressed it before that

3509
02:31:06,319 --> 02:31:06,680
but you

3510
02:31:06,680 --> 02:31:09,719
believe we could leave it with the clay liner and decomm

3511
02:31:09,719 --> 02:31:10,639
ission it right if we

3512
02:31:10,639 --> 02:31:13,920
were closing yeah does that cost more money to decommission

3513
02:31:13,920 --> 02:31:15,020
a cell compared

3514
02:31:15,020 --> 02:31:18,129
to ones that have the other liner we actually just finished

3515
02:31:18,129 --> 02:31:18,799
a study on on

3516
02:31:18,799 --> 02:31:21,190
closure post closure with a consultant and they actually

3517
02:31:21,190 --> 02:31:22,120
believe the cost would

3518
02:31:22,120 --> 02:31:25,510
be higher for dealing with the mined cell versus the un min

3519
02:31:25,510 --> 02:31:27,079
ed cell okay okay

3520
02:31:27,079 --> 02:31:34,579
and one more question so part of this is a was a miscalcul

3521
02:31:34,579 --> 02:31:36,159
ation of how much waste

3522
02:31:36,159 --> 02:31:40,430
fits in airspace so how does this impact our regular

3523
02:31:40,430 --> 02:31:41,799
operations I mean it seems

3524
02:31:41,799 --> 02:31:45,610
like we should have a calculation that we're using already

3525
02:31:45,610 --> 02:31:46,139
absolutely have we

3526
02:31:46,139 --> 02:31:49,739
been using the wrong calculation all along or not one that

3527
02:31:49,739 --> 02:31:50,680
was in line with

3528
02:31:50,680 --> 02:31:54,489
our consultants so so the the not a waste that you can

3529
02:31:54,489 --> 02:31:55,600
compact into a cubic

3530
02:31:55,600 --> 02:31:59,409
yard especially for both the original and the current

3531
02:31:59,409 --> 02:31:59,840
analysis is not

3532
02:31:59,840 --> 02:32:02,340
necessarily what's in the ground now what's our compaction

3533
02:32:02,340 --> 02:32:03,000
rate going to be

3534
02:32:03,000 --> 02:32:06,809
when we're putting waste back into the landfill the

3535
02:32:06,809 --> 02:32:07,600
original assumption was

3536
02:32:07,600 --> 02:32:11,409
that we'd be about 1,300 pounds per cubic yard we felt like

3537
02:32:11,409 --> 02:32:12,159
that was too high

3538
02:32:12,159 --> 02:32:16,430
simply because our target internally is about 1,200 you can

3539
02:32:16,430 --> 02:32:17,319
certainly get much

3540
02:32:17,319 --> 02:32:19,719
more compression on that depending on the type of landfill

3541
02:32:19,719 --> 02:32:20,520
site that you run

3542
02:32:20,520 --> 02:32:25,350
ours like we mentioned is really designed to recirculate

3543
02:32:25,350 --> 02:32:26,799
liquids within

3544
02:32:26,799 --> 02:32:30,610
the cell decompose that faster generate gas get compression

3545
02:32:30,610 --> 02:32:32,000
that way as a result

3546
02:32:32,000 --> 02:32:35,809
our goal is right around 1,200 cubic yards we recently had

3547
02:32:35,809 --> 02:32:37,040
a site survey that

3548
02:32:37,040 --> 02:32:41,360
was in the 1,100 to 1,200 range to be conservative we've

3549
02:32:41,360 --> 02:32:41,879
overlooked at this

3550
02:32:41,879 --> 02:32:44,829
and said don't use the 1,300 that was originally conceived

3551
02:32:44,829 --> 02:32:45,719
you need to adjust

3552
02:32:45,719 --> 02:32:49,750
this back to the 1,100 to be consistent with that other

3553
02:32:49,750 --> 02:32:52,799
study okay okay any other

3554
02:32:52,799 --> 02:32:59,879
questions yeah I had two questions one about the concern

3555
02:32:59,879 --> 02:33:00,799
about safety to

3556
02:33:00,799 --> 02:33:06,579
workers this was so recently you and Charlie and I we went

3557
02:33:06,579 --> 02:33:08,280
on a tour of the

3558
02:33:08,280 --> 02:33:13,829
facilities and there were some workers that that we saw who

3559
02:33:13,829 --> 02:33:15,959
were going through

3560
02:33:15,959 --> 02:33:21,680
materials and picking things out right where were they

3561
02:33:21,680 --> 02:33:24,520
doing landfill mining I

3562
02:33:24,520 --> 02:33:26,790
mean because of the impression I get here is that that hasn

3563
02:33:26,790 --> 02:33:27,799
't started yet so

3564
02:33:27,799 --> 02:33:31,610
okay yeah they were actually working our building materials

3565
02:33:31,610 --> 02:33:32,319
recovery operation

3566
02:33:32,319 --> 02:33:36,219
okay which is probably a good kind of visual comparison for

3567
02:33:36,219 --> 02:33:37,159
what would be done on

3568
02:33:37,159 --> 02:33:39,540
this I think the big difference between the building

3569
02:33:39,540 --> 02:33:40,399
materials recovery and

3570
02:33:40,399 --> 02:33:45,569
mining is that the BMR folks are using or basically dealing

3571
02:33:45,569 --> 02:33:46,680
with fresh material

3572
02:33:46,680 --> 02:33:49,260
that hasn't been impacted with a lot of the waste in the

3573
02:33:49,260 --> 02:33:50,719
site so typically what

3574
02:33:50,719 --> 02:33:53,360
we would probably equip these folks with would be some

3575
02:33:53,360 --> 02:33:54,680
stuff that kind of knocks

3576
02:33:54,680 --> 02:33:57,329
down some of the odors some of the gas some of the other

3577
02:33:57,329 --> 02:33:58,319
things that they might

3578
02:33:58,319 --> 02:34:01,139
be exposed to so you'd have a little bit higher level of

3579
02:34:01,139 --> 02:34:02,319
materials to kind of

3580
02:34:02,319 --> 02:34:05,360
knock down that risk yeah so there's less of a has because

3581
02:34:05,360 --> 02:34:05,959
I immediately

3582
02:34:05,959 --> 02:34:08,290
thought of the you know those people and I'm trying to

3583
02:34:08,290 --> 02:34:09,360
remember if they were

3584
02:34:09,360 --> 02:34:13,959
wearing you know protective you know if they had a master

3585
02:34:13,959 --> 02:34:15,040
anything we definitely

3586
02:34:15,040 --> 02:34:17,129
have to have that in this operation would be our so it's

3587
02:34:17,129 --> 02:34:17,760
gonna be a very

3588
02:34:17,760 --> 02:34:21,569
dusty environment at the very least yeah yeah and the other

3589
02:34:21,569 --> 02:34:23,520
question that I had

3590
02:34:23,520 --> 02:34:27,329
you had said that weaver and correct me if I heard this

3591
02:34:27,329 --> 02:34:28,680
wrong we that weaver

3592
02:34:28,680 --> 02:34:32,489
said that if you were gonna do this this wouldn't be the

3593
02:34:32,489 --> 02:34:34,079
cell to do it on did

3594
02:34:34,079 --> 02:34:37,209
they have a suggestion for did they say it would be better

3595
02:34:37,209 --> 02:34:38,079
to do it on this

3596
02:34:38,079 --> 02:34:41,790
other cell or if you did want to do landfill mining it

3597
02:34:41,790 --> 02:34:42,719
would be better to

3598
02:34:42,719 --> 02:34:46,239
do it over here no that this is probably the only cell that

3599
02:34:46,239 --> 02:34:46,719
's really a

3600
02:34:46,719 --> 02:34:50,600
candidate for landfill mining this is what a dry cell which

3601
02:34:50,600 --> 02:34:51,540
does not have the

3602
02:34:51,540 --> 02:34:55,129
liquid component in it this preserves some of the materials

3603
02:34:55,129 --> 02:34:55,600
that are in there

3604
02:34:55,600 --> 02:34:58,639
so there's a higher opportunity to divert it you get into

3605
02:34:58,639 --> 02:34:59,559
any LR cell water

3606
02:34:59,559 --> 02:35:03,590
that's gonna be really wet and so I think again that's that

3607
02:35:03,590 --> 02:35:04,500
's one of the

3608
02:35:04,500 --> 02:35:06,930
things that when we looked at is this is not something that

3609
02:35:06,930 --> 02:35:07,819
we're going to mine

3610
02:35:07,819 --> 02:35:10,549
every side on the landfill it's just really this cell that

3611
02:35:10,549 --> 02:35:11,559
would be the best

3612
02:35:11,559 --> 02:35:19,680
candidate for it yeah thank you okay there's no other

3613
02:35:19,680 --> 02:35:20,440
questions is there a

3614
02:35:20,440 --> 02:35:26,979
motion either way on this it's kind of a rough one because

3615
02:35:26,979 --> 02:35:28,319
I like the idea of

3616
02:35:28,319 --> 02:35:33,239
landfill mining understand but it doesn't really seem like

3617
02:35:33,239 --> 02:35:34,760
it doesn't seem

3618
02:35:34,760 --> 02:35:37,790
like it's worth the money to do it you know I mean it's

3619
02:35:37,790 --> 02:35:39,319
hard to say that really

3620
02:35:39,319 --> 02:35:44,799
one way or another but it's kind of a bummer well I think

3621
02:35:44,799 --> 02:35:48,040
the I recall a

3622
02:35:48,040 --> 02:35:51,049
little bit of my thought process when we first talked about

3623
02:35:51,049 --> 02:35:52,120
this peeling thing

3624
02:35:52,120 --> 02:36:02,270
was was the recovery of recovered airspace and I see now

3625
02:36:02,270 --> 02:36:04,559
from 25.3

3626
02:36:04,559 --> 02:36:11,959
million 8.7 difference yes a deal breaker yeah that's kind

3627
02:36:11,959 --> 02:36:14,440
of the the

3628
02:36:14,440 --> 02:36:18,250
mining of them in the resell of the recyclables was one

3629
02:36:18,250 --> 02:36:19,879
thing but it was

3630
02:36:19,879 --> 02:36:25,389
kind of an added benefit I guess if you will so I'll just

3631
02:36:25,389 --> 02:36:27,280
say that I too really

3632
02:36:27,280 --> 02:36:30,579
like the idea of landfill mining and up until before this

3633
02:36:30,579 --> 02:36:31,840
came out it was one of

3634
02:36:31,840 --> 02:36:35,889
the things that I would always brag about that I was really

3635
02:36:35,889 --> 02:36:37,000
excited about

3636
02:36:37,000 --> 02:36:41,430
this project when I heard about it and it's very sad to me

3637
02:36:41,430 --> 02:36:43,559
to hear that this

3638
02:36:43,559 --> 02:36:49,829
came from data that was not substantiated so I had a

3639
02:36:49,829 --> 02:36:51,000
question about

3640
02:36:51,000 --> 02:36:53,829
that in a statement I guess I'll just say the statement

3641
02:36:53,829 --> 02:36:55,000
first just to say you

3642
02:36:55,000 --> 02:36:59,700
know in terms of staff morale that I'm I'm still so I'm so

3643
02:36:59,700 --> 02:37:01,360
happy that people

3644
02:37:01,360 --> 02:37:05,379
work so hard on this and that it's not their fault that

3645
02:37:05,379 --> 02:37:07,399
this was bad data they

3646
02:37:07,399 --> 02:37:11,319
were working on and that regardless of what happens in

3647
02:37:11,319 --> 02:37:12,440
terms of next steps the

3648
02:37:12,440 --> 02:37:18,440
problem that that this is is is solving even though we don

3649
02:37:18,440 --> 02:37:19,760
't have as you say

3650
02:37:19,760 --> 02:37:22,700
there's not we don't have a landlocked issue problem but

3651
02:37:22,700 --> 02:37:23,799
any way to reuse and

3652
02:37:23,799 --> 02:37:26,690
reduce and recycle benefits our environment there are

3653
02:37:26,690 --> 02:37:27,479
people when we

3654
02:37:27,479 --> 02:37:30,559
went and visited the landfill I saw I hadn't quite realized

3655
02:37:30,559 --> 02:37:31,399
even though I've

3656
02:37:31,399 --> 02:37:33,790
been there before I hadn't been up high and I hadn't

3657
02:37:33,790 --> 02:37:35,040
realized that there is a

3658
02:37:35,040 --> 02:37:38,170
trailer park next right next door so people who live right

3659
02:37:38,170 --> 02:37:39,920
there so whatever

3660
02:37:39,920 --> 02:37:44,250
we can do to reduce the waste would would be really good

3661
02:37:44,250 --> 02:37:45,680
and I just want to

3662
02:37:45,680 --> 02:37:49,530
thank everybody who works so hard on it the question that I

3663
02:37:49,530 --> 02:37:50,680
have and this might

3664
02:37:50,680 --> 02:37:56,479
be kind of more a question for legal than for you well so

3665
02:37:56,479 --> 02:37:57,399
first of all I'm

3666
02:37:57,399 --> 02:38:01,209
glad to know in terms of the finance whatever financial

3667
02:38:01,209 --> 02:38:01,920
damage that's been

3668
02:38:01,920 --> 02:38:05,450
done that's irrecoverable I'm glad to know the equipment is

3669
02:38:05,450 --> 02:38:06,000
not stranded

3670
02:38:06,000 --> 02:38:11,649
assets but I'm wondering this UTA professor who gave us

3671
02:38:11,649 --> 02:38:12,680
this data that

3672
02:38:12,680 --> 02:38:16,950
can't be substantiated was there a contract that was

3673
02:38:16,950 --> 02:38:18,120
entered into with this

3674
02:38:18,120 --> 02:38:26,020
professor as a consultant that we can get refunded on and

3675
02:38:26,020 --> 02:38:27,040
were there

3676
02:38:27,040 --> 02:38:30,850
conditions on the sales of any conditions on the sales of

3677
02:38:30,850 --> 02:38:31,479
equipment in

3678
02:38:31,479 --> 02:38:35,500
terms of contracts made on the equipment that were tied

3679
02:38:35,500 --> 02:38:37,040
into this data that now

3680
02:38:37,040 --> 02:38:40,270
turns out to be insubstantiated you can probably see where

3681
02:38:40,270 --> 02:38:41,200
I'm going with that

3682
02:38:41,200 --> 02:38:44,799
question yeah in terms of the equipment there's no direct

3683
02:38:44,799 --> 02:38:47,000
link to the data and

3684
02:38:47,000 --> 02:38:51,319
also say from UTA's perspective the biggest piece of data

3685
02:38:51,319 --> 02:38:52,239
that we received

3686
02:38:52,239 --> 02:38:56,729
from UTA is really your composition information and again

3687
02:38:56,729 --> 02:38:57,440
this is not

3688
02:38:57,440 --> 02:39:00,549
representative of what UTA provided I'll show you kind of

3689
02:39:00,549 --> 02:39:01,639
behind the slide this

3690
02:39:01,639 --> 02:39:05,450
is the boring data collection they provided to us it's a

3691
02:39:05,450 --> 02:39:06,079
bit of an eye

3692
02:39:06,079 --> 02:39:08,600
chart but essentially this is the type of data that we

3693
02:39:08,600 --> 02:39:10,159
looked at and said if we

3694
02:39:10,159 --> 02:39:12,790
were going to proceed with this we feel like this is data

3695
02:39:12,790 --> 02:39:14,600
that we could feel

3696
02:39:14,600 --> 02:39:17,870
confident about in proceeding understand that there's a

3697
02:39:17,870 --> 02:39:18,719
number of other

3698
02:39:18,719 --> 02:39:21,600
assumptions that were made in the original pro forma also

3699
02:39:21,600 --> 02:39:22,399
in our pro forma

3700
02:39:22,399 --> 02:39:26,209
that UTA didn't really provide an opinion on and so I don't

3701
02:39:26,209 --> 02:39:27,000
want to assume

3702
02:39:27,000 --> 02:39:31,510
that they they provided bad data I just I'm not sure that

3703
02:39:31,510 --> 02:39:32,760
they were asked to

3704
02:39:32,760 --> 02:39:36,360
look at it to be honest okay so some of these miss the

3705
02:39:36,360 --> 02:39:38,079
errors were likely made

3706
02:39:38,079 --> 02:39:40,709
I mean this was already clear I just wanted to be sure how

3707
02:39:40,709 --> 02:39:41,600
if there were any

3708
02:39:41,600 --> 02:39:46,430
consulting contracts so there were no consulting contracts

3709
02:39:46,430 --> 02:39:48,620
that we paid we do

3710
02:39:48,620 --> 02:39:50,920
have an agreement and Larry I don't know if you want to

3711
02:39:50,920 --> 02:39:52,799
speak to it but we do

3712
02:39:52,799 --> 02:39:54,979
have an agreement with UTA that we're currently part of it

3713
02:39:54,979 --> 02:39:55,680
's a multi-year

3714
02:39:55,680 --> 02:39:57,829
agreement three years we're in the last year of that

3715
02:39:57,829 --> 02:39:59,639
agreement right now we also

3716
02:39:59,639 --> 02:40:06,040
have been in some type of consultant in our local type of

3717
02:40:06,040 --> 02:40:06,879
arrangement with UTA

3718
02:40:06,879 --> 02:40:09,940
for a number of years as well okay yeah thank you and just

3719
02:40:09,940 --> 02:40:10,559
to be clear I'm not

3720
02:40:10,559 --> 02:40:13,459
looking to point fingers whose fault is it but to say

3721
02:40:13,459 --> 02:40:15,040
mistakes were made is there

3722
02:40:15,040 --> 02:40:21,280
any way to get to get money back Ethan I think it's

3723
02:40:21,280 --> 02:40:23,360
important to share with the

3724
02:40:23,360 --> 02:40:28,200
PUB regarding some interest question I mean you did meet

3725
02:40:28,200 --> 02:40:30,440
with the UTA professor

3726
02:40:30,440 --> 02:40:33,739
and they in fact disagreed with the assumptions put in that

3727
02:40:33,739 --> 02:40:34,559
they were way

3728
02:40:34,559 --> 02:40:38,649
too aggressive yes so I I don't I wouldn't I don't think we

3729
02:40:38,649 --> 02:40:39,319
can go back and

3730
02:40:39,319 --> 02:40:42,440
blame blame them they're good clearly there was clearly a

3731
02:40:42,440 --> 02:40:44,159
decision made as far

3732
02:40:44,159 --> 02:40:48,430
as how optimistic the assumptions were in order to you know

3733
02:40:48,430 --> 02:40:49,479
and and I think the

3734
02:40:49,479 --> 02:40:52,920
thing both PUB and council have to make the decision on is

3735
02:40:52,920 --> 02:40:54,200
this worth you know a

3736
02:40:54,200 --> 02:40:56,899
million to million and a half dollars a year loss and some

3737
02:40:56,899 --> 02:40:58,040
communities that may

3738
02:40:58,040 --> 02:41:00,639
be fine for the environmental reason that you know

3739
02:41:00,639 --> 02:41:02,840
rationale but we wanted to

3740
02:41:02,840 --> 02:41:05,729
make sure you had the facts he did circle back and speak

3741
02:41:05,729 --> 02:41:07,059
with UTA we did

3742
02:41:07,059 --> 02:41:09,459
bring in an outside accounting firm to make sure that we

3743
02:41:09,459 --> 02:41:10,280
weren't missing

3744
02:41:10,280 --> 02:41:13,299
something and tried to build in as many checks and balances

3745
02:41:13,299 --> 02:41:14,280
for our data to you

3746
02:41:14,280 --> 02:41:17,110
as possible but I just wanted to clear that out that we don

3747
02:41:17,110 --> 02:41:19,280
't believe that the

3748
02:41:19,280 --> 02:41:23,090
UTA professor in any way misled our staff yes thank you and

3749
02:41:23,090 --> 02:41:23,680
if that UTA

3750
02:41:23,680 --> 02:41:31,420
professor is watching maybe the question is and you've read

3751
02:41:31,420 --> 02:41:33,559
so 14 million over 10

3752
02:41:33,559 --> 02:41:37,370
years or a million for let's say that's off and it's 2

3753
02:41:37,370 --> 02:41:40,719
million a year yeah where

3754
02:41:40,719 --> 02:41:44,530
we thought there may be some revenue offsetting of the cost

3755
02:41:44,530 --> 02:41:46,040
there's not and

3756
02:41:46,040 --> 02:41:49,280
so the question is is it worth spending a million four to

3757
02:41:49,280 --> 02:41:51,280
two million for life

3758
02:41:51,280 --> 02:41:59,229
safety and environmental or not right and and and is that a

3759
02:41:59,229 --> 02:42:00,239
risk that needs to

3760
02:42:00,239 --> 02:42:06,040
be addressed or not especially based on a medium I mean a

3761
02:42:06,040 --> 02:42:07,719
medium chance that it

3762
02:42:07,719 --> 02:42:14,639
could well I think the policy question initially was was

3763
02:42:14,639 --> 02:42:15,239
not framed

3764
02:42:15,239 --> 02:42:18,280
in the way that we would frame it today and I think the the

3765
02:42:18,280 --> 02:42:19,520
question is that may

3766
02:42:19,520 --> 02:42:23,329
be an acceptable cost from an environmental perspective a

3767
02:42:23,329 --> 02:42:23,559
philosophical

3768
02:42:23,559 --> 02:42:26,610
perspective for a community that's fine but we wanted to be

3769
02:42:26,610 --> 02:42:27,760
sure before we move

3770
02:42:27,760 --> 02:42:30,930
forward and potentially hit the you know encourage some of

3771
02:42:30,930 --> 02:42:31,959
these losses that

3772
02:42:31,959 --> 02:42:34,659
we're talking about and the impact of the ratepayers that

3773
02:42:34,659 --> 02:42:35,719
you were aware of it

3774
02:42:35,719 --> 02:42:39,510
there's really not a right answer here but we felt like the

3775
02:42:39,510 --> 02:42:40,559
pro forma so off

3776
02:42:40,559 --> 02:42:44,469
that we really knew that you needed the opportunity to

3777
02:42:44,469 --> 02:42:45,680
think about it yeah as far

3778
02:42:45,680 --> 02:42:50,399
as the environmental potential environmental benefits go it

3779
02:42:50,399 --> 02:42:51,639
's as far as

3780
02:42:51,639 --> 02:42:55,450
I'm concerned that you know any situation where there are

3781
02:42:55,450 --> 02:42:55,559
potential

3782
02:42:55,559 --> 02:42:58,600
environment when when potential environmental hazards

3783
02:42:58,600 --> 02:42:59,319
actually I would

3784
02:42:59,319 --> 02:43:03,670
say very real environmental hazards exist as a result of

3785
02:43:03,670 --> 02:43:05,280
doing this business

3786
02:43:05,280 --> 02:43:10,850
that has environmental benefits that is a situation where

3787
02:43:10,850 --> 02:43:12,600
to me the cons would

3788
02:43:12,600 --> 02:43:17,030
outweigh the the pros in terms of both you know the actual

3789
02:43:17,030 --> 02:43:18,360
safe physical safety

3790
02:43:18,360 --> 02:43:23,280
of worker the workers uncovering methane and and toxic

3791
02:43:23,280 --> 02:43:26,159
materials and just having

3792
02:43:26,159 --> 02:43:31,579
all that released into the atmosphere so I want to make you

3793
02:43:31,579 --> 02:43:33,239
know that clear to

3794
02:43:33,239 --> 02:43:35,950
you know people who are watching in the media or whatever

3795
02:43:35,950 --> 02:43:36,959
that that there are

3796
02:43:36,959 --> 02:43:40,770
environmental hazards and I would hope if at some point

3797
02:43:40,770 --> 02:43:42,559
down the line we

3798
02:43:42,559 --> 02:43:48,159
consider doing this in some other way that a that we would

3799
02:43:48,159 --> 02:43:49,760
look into doing

3800
02:43:49,760 --> 02:43:52,159
this you know contracting out and I realize it's for

3801
02:43:52,159 --> 02:43:53,360
another discussion but

3802
02:43:53,360 --> 02:43:56,270
you know contracting out with a company that is well

3803
02:43:56,270 --> 02:43:57,719
trained in dealing with

3804
02:43:57,719 --> 02:44:00,780
these environmental hazards because I wouldn't want to put

3805
02:44:00,780 --> 02:44:01,520
any any of our

3806
02:44:01,520 --> 02:44:03,670
workers at risk but that there are it's not just

3807
02:44:03,670 --> 02:44:05,280
environmental benefits versus

3808
02:44:05,280 --> 02:44:09,290
financial hazards there are environmental hazards too and I

3809
02:44:09,290 --> 02:44:10,280
'm I'm so sorry about

3810
02:44:10,280 --> 02:44:18,350
that okay do we have again I'll ask is there a motion

3811
02:44:18,350 --> 02:44:24,479
either way on this I mean

3812
02:44:24,479 --> 02:44:30,219
for to go with option number one option one okay which is

3813
02:44:30,219 --> 02:44:32,840
to eliminate the

3814
02:44:32,840 --> 02:44:39,760
landfill mining is there a second second in a second any

3815
02:44:39,760 --> 02:44:44,200
further discussion I

3816
02:44:44,200 --> 02:44:50,000
think that when we bring it up in the future maybe we can

3817
02:44:50,000 --> 02:44:52,280
have some some

3818
02:44:52,280 --> 02:44:56,790
additional details of the of what the costs are to manage

3819
02:44:56,790 --> 02:44:58,399
this cell the way it

3820
02:44:58,399 --> 02:45:03,719
is and when we're done with it what the cost will be to dec

3821
02:45:03,719 --> 02:45:04,799
ommission it because

3822
02:45:04,799 --> 02:45:07,010
there's some you know there's lots of unknowns but those

3823
02:45:07,010 --> 02:45:07,920
things it seems like

3824
02:45:07,920 --> 02:45:12,399
we can put you know some kind of detail on certainly I know

3825
02:45:12,399 --> 02:45:13,600
we already have some

3826
02:45:13,600 --> 02:45:19,920
other landfill out in East Ninton that is still our

3827
02:45:19,920 --> 02:45:21,920
environmental responsibility

3828
02:45:21,920 --> 02:45:24,739
that we'd kind of don't know what we're really doing with

3829
02:45:24,739 --> 02:45:25,719
and it would just be

3830
02:45:25,719 --> 02:45:28,739
nice to know that we're doing what we're supposed to be

3831
02:45:28,739 --> 02:45:30,040
doing and knowing how

3832
02:45:30,040 --> 02:45:32,860
much it's gonna cost to do the things that we're supposed

3833
02:45:32,860 --> 02:45:33,600
to do we should

3834
02:45:33,600 --> 02:45:37,309
have most of those figures fairly close at hand we'll check

3835
02:45:37,309 --> 02:45:38,239
with staff and some

3836
02:45:38,239 --> 02:45:40,440
of the consultants I just think that would help weighing

3837
02:45:40,440 --> 02:45:41,000
you know if we

3838
02:45:41,000 --> 02:45:44,110
already know we're gonna spend seven million to dump it

3839
02:45:44,110 --> 02:45:45,280
then we know that we

3840
02:45:45,280 --> 02:45:49,090
need to do something with it we can save some money by

3841
02:45:49,090 --> 02:45:51,719
improving you know what it

3842
02:45:51,719 --> 02:45:54,920
costs to decommission it we'll provide that to the pub okay

3843
02:45:54,920 --> 02:45:57,440
thank you all right

3844
02:45:57,440 --> 02:46:04,600
all in favor say aye any opposed same sign motion passes

3845
02:46:04,600 --> 02:46:05,879
thank you very much

3846
02:46:05,879 --> 02:46:15,540
thank you okay next we have item C which is receive report

3847
02:46:15,540 --> 02:46:18,559
hold a discussion

3848
02:46:21,719 --> 02:46:33,479
we have a we have another okay all right very good I just

3849
02:46:33,479 --> 02:46:33,920
looked at the

3850
02:46:33,920 --> 02:46:37,219
clock and there's another there's another committee meeting

3851
02:46:37,219 --> 02:46:40,360
here at 12 so

3852
02:46:43,879 --> 02:46:48,760
item C receive report hold discussion provide staff

3853
02:46:48,760 --> 02:46:49,920
direction regarding

3854
02:46:49,920 --> 02:46:53,959
municipal electric community sponsorship program well I

3855
02:46:53,959 --> 02:46:55,159
know it is getting late

3856
02:46:55,159 --> 02:46:57,159
and when you've had a lot of discussion today I will go

3857
02:46:57,159 --> 02:46:57,920
through this very

3858
02:46:57,920 --> 02:47:00,920
quickly this just to continue our discussion the community

3859
02:47:00,920 --> 02:47:01,360
sponsorship

3860
02:47:01,360 --> 02:47:04,040
program as a reminder we had a hundred thousand dollars

3861
02:47:04,040 --> 02:47:05,239
budgeted for for these

3862
02:47:05,239 --> 02:47:09,049
and DME these funds had typically been used for nonprofit

3863
02:47:09,049 --> 02:47:10,000
organizations and

3864
02:47:10,000 --> 02:47:13,809
sometimes other city departments is the list in the backup

3865
02:47:13,809 --> 02:47:14,799
shows the purpose of

3866
02:47:14,799 --> 02:47:17,530
these ostensibly was to provide a similar benefit as what

3867
02:47:17,530 --> 02:47:18,239
you'd find an

3868
02:47:18,239 --> 02:47:22,020
investor-owned utilities over the past few years we've

3869
02:47:22,020 --> 02:47:23,440
spent about 42 to 64

3870
02:47:23,440 --> 02:47:26,079
thousand dollars per year again you have that detail in

3871
02:47:26,079 --> 02:47:29,159
your backup other city

3872
02:47:29,159 --> 02:47:32,760
sponsorships do require a City Council approval process

3873
02:47:32,760 --> 02:47:33,799
these sponsorships

3874
02:47:33,799 --> 02:47:36,620
have an application process selection criteria and a formal

3875
02:47:36,620 --> 02:47:37,520
agreement that's

3876
02:47:37,520 --> 02:47:39,709
entered into we did not have that and that's one of the

3877
02:47:39,709 --> 02:47:40,639
reasons that we want

3878
02:47:40,639 --> 02:47:43,799
to bring this forward to you so in August we presented this

3879
02:47:43,799 --> 02:47:44,040
information

3880
02:47:44,040 --> 02:47:47,389
both to the PUB and City Council the direction from both of

3881
02:47:47,389 --> 02:47:48,319
both this board

3882
02:47:48,319 --> 02:47:50,969
and the City Council was that there was an intent to

3883
02:47:50,969 --> 02:47:52,520
continue the program there

3884
02:47:52,520 --> 02:47:55,079
was a need to continue that but the council did request

3885
02:47:55,079 --> 02:47:56,040
that we provide them

3886
02:47:56,040 --> 02:47:59,850
with some information on citywide sponsorships received

3887
02:47:59,850 --> 02:48:00,360
from these

3888
02:48:00,360 --> 02:48:03,629
organizations from other different departments and proposed

3889
02:48:03,629 --> 02:48:04,040
policy

3890
02:48:04,040 --> 02:48:08,360
guidelines so in your backup you have the different

3891
02:48:08,360 --> 02:48:09,239
sponsorships that have

3892
02:48:09,239 --> 02:48:12,040
been received by other different departments so you can see

3893
02:48:12,040 --> 02:48:12,600
that but in

3894
02:48:12,600 --> 02:48:14,920
terms of the sponsorship policy what we're recommending is

3895
02:48:14,920 --> 02:48:15,680
that we reduce the

3896
02:48:15,680 --> 02:48:18,190
budget from a hundred thousand to fifty thousand which

3897
02:48:18,190 --> 02:48:19,040
would most more closely

3898
02:48:19,040 --> 02:48:21,479
align it with what's been spent what's needed to be spent

3899
02:48:21,479 --> 02:48:22,959
in prior years that

3900
02:48:22,959 --> 02:48:26,879
no funding be given to internal departments and the reason

3901
02:48:26,879 --> 02:48:27,639
for this is

3902
02:48:27,639 --> 02:48:30,760
there is a budget process for those internal processes if

3903
02:48:30,760 --> 02:48:32,159
they need funds

3904
02:48:32,159 --> 02:48:33,959
for a particular program then we can bring that forward

3905
02:48:33,959 --> 02:48:34,639
through the budget

3906
02:48:34,639 --> 02:48:37,629
process and asking another City Department to fund that

3907
02:48:37,629 --> 02:48:38,079
really

3908
02:48:38,079 --> 02:48:41,979
complicates that matter the criteria that we would propose

3909
02:48:41,979 --> 02:48:42,840
is that each

3910
02:48:42,840 --> 02:48:46,620
organization would be a non-profit of 501c3 organization

3911
02:48:46,620 --> 02:48:46,799
must be a

3912
02:48:46,799 --> 02:48:51,280
non-discriminatory organization it must the sponsorship

3913
02:48:51,280 --> 02:48:52,559
must further some

3914
02:48:52,559 --> 02:48:55,340
type of charitable cause or public interest in the

3915
02:48:55,340 --> 02:48:56,879
community and that the

3916
02:48:56,879 --> 02:49:00,920
organization will be required to recognize the City of Dinn

3917
02:49:00,920 --> 02:49:01,719
and DME and

3918
02:49:01,719 --> 02:49:03,600
any kind of marketing materials that they have so a lot of

3919
02:49:03,600 --> 02:49:04,319
times you'll find

3920
02:49:04,319 --> 02:49:07,139
these are tables that are purchased for an event to raise

3921
02:49:07,139 --> 02:49:07,760
money for an

3922
02:49:07,760 --> 02:49:10,760
organization and a purpose in the community but this the D

3923
02:49:10,760 --> 02:49:11,719
ME and the City

3924
02:49:11,719 --> 02:49:14,979
of Denton be specifically recognized in that effort we do

3925
02:49:14,979 --> 02:49:16,239
have some other

3926
02:49:16,239 --> 02:49:19,159
industry related organizations such as the Texas Lyman rode

3927
02:49:19,159 --> 02:49:20,000
o the municipal

3928
02:49:20,000 --> 02:49:23,200
safety exchange and etc other other types of organizations

3929
02:49:23,200 --> 02:49:23,879
in DME that we

3930
02:49:23,879 --> 02:49:26,860
think also should be allowed these are sponsorships to

3931
02:49:26,860 --> 02:49:28,100
promote safety in the

3932
02:49:28,100 --> 02:49:31,469
industry and those organizations do that we'd recommend

3933
02:49:31,469 --> 02:49:32,799
that sponsorships over

3934
02:49:32,799 --> 02:49:36,610
$2,500 be presented to PUB and a council for approval

3935
02:49:36,610 --> 02:49:37,680
specifically but anything

3936
02:49:37,680 --> 02:49:40,680
less than that could be approved administratively by staff

3937
02:49:40,680 --> 02:49:41,479
and we'll

3938
02:49:41,479 --> 02:49:43,610
bring forth if this is agreeable to you we bring forward a

3939
02:49:43,610 --> 02:49:44,360
policy that would

3940
02:49:44,360 --> 02:49:47,770
articulate that and that finally the list of organizations

3941
02:49:47,770 --> 02:49:48,680
that receive a

3942
02:49:48,680 --> 02:49:52,379
sponsorship whether they're over $2,500 or less that they

3943
02:49:52,379 --> 02:49:53,440
were reported to the

3944
02:49:53,440 --> 02:49:55,860
PUB and council on a quarterly basis so you'd have a

3945
02:49:55,860 --> 02:49:58,200
running list of what's been

3946
02:49:58,200 --> 02:50:02,010
applied for and what's received an application excuse me a

3947
02:50:02,010 --> 02:50:03,040
sponsorship so

3948
02:50:03,040 --> 02:50:05,840
that's the recommendation if you're in agreement with this

3949
02:50:05,840 --> 02:50:06,639
we'll take this

3950
02:50:06,639 --> 02:50:09,000
forward to council for their concurrence and then bring

3951
02:50:09,000 --> 02:50:10,680
back a formal policy to

3952
02:50:10,680 --> 02:50:16,000
proceed forward questions

3953
02:50:18,239 --> 02:50:26,399
yeah no question I have some comments but I think would

3954
02:50:26,399 --> 02:50:27,879
after a motion be

3955
02:50:27,879 --> 02:50:33,049
better time sure yeah I've got a question Brian on this one

3956
02:50:33,049 --> 02:50:33,760
the dollar

3957
02:50:33,760 --> 02:50:41,940
amount was that from 150 I mean if we spent 60 these

3958
02:50:41,940 --> 02:50:45,200
numbers I don't want to

3959
02:50:45,200 --> 02:50:51,469
split hairs but from 105 to 50 is that kind of based upon

3960
02:50:51,469 --> 02:50:52,600
something that we've

3961
02:50:52,600 --> 02:50:58,200
done in the past taking out the inner department yes sir so

3962
02:50:58,200 --> 02:50:59,079
we've typically

3963
02:50:59,079 --> 02:51:03,120
spent spent less than $50,000 a year for our past year yes

3964
02:51:03,120 --> 02:51:03,719
sir we spent

3965
02:51:03,719 --> 02:51:07,639
64,000 but that included $10,000 going to the CVB which is

3966
02:51:07,639 --> 02:51:08,479
separately funded

3967
02:51:08,479 --> 02:51:12,290
from the city and that some of those interdepartmental

3968
02:51:12,290 --> 02:51:12,719
transfers I was

3969
02:51:12,719 --> 02:51:15,120
talking about okay so that's the number we feel like is

3970
02:51:15,120 --> 02:51:16,239
appropriate given what

3971
02:51:16,239 --> 02:51:18,090
we've been asked to do in the past certainly if we were

3972
02:51:18,090 --> 02:51:18,879
asked to do more we

3973
02:51:18,879 --> 02:51:21,950
could always bring that back and having a discussion about

3974
02:51:21,950 --> 02:51:22,799
that and this this

3975
02:51:22,799 --> 02:51:26,610
program in these programs they're different than the

3976
02:51:26,610 --> 02:51:27,840
program we sponsor to

3977
02:51:27,840 --> 02:51:32,329
assist people to pay their electric yes sir that is that is

3978
02:51:32,329 --> 02:51:32,920
completely separate

3979
02:51:32,920 --> 02:51:37,520
yes sir and you're thinking of the plus one program which

3980
02:51:37,520 --> 02:51:39,520
is for citizens that

3981
02:51:39,520 --> 02:51:41,670
are in need of assistance with the utility bills yes sir

3982
02:51:41,670 --> 02:51:43,200
and do you how do

3983
02:51:43,200 --> 02:51:47,270
you see the council do you see them approving this in a

3984
02:51:47,270 --> 02:51:48,520
closed session an

3985
02:51:48,520 --> 02:51:52,479
open session and sure it'd be certainly be an open session

3986
02:51:52,479 --> 02:51:53,639
item the discussion

3987
02:51:53,639 --> 02:51:56,600
that we've had with PB has also been an open session item

3988
02:51:56,600 --> 02:51:58,120
so there's no reason

3989
02:51:58,120 --> 02:52:00,909
at all to have that as close would that give the public an

3990
02:52:00,909 --> 02:52:02,440
option to discuss it

3991
02:52:02,440 --> 02:52:06,250
because that would kind of almost politicize the decision

3992
02:52:06,250 --> 02:52:06,879
instead of

3993
02:52:06,879 --> 02:52:10,840
making it more of a well at this point it's been a work

3994
02:52:10,840 --> 02:52:11,680
session so it hasn't

3995
02:52:11,680 --> 02:52:14,139
been open to public comment if any kind of action was to

3996
02:52:14,139 --> 02:52:15,159
take place where they

3997
02:52:15,159 --> 02:52:17,659
would formally approve a policy that then certainly citizen

3998
02:52:17,659 --> 02:52:18,520
comments would be

3999
02:52:18,520 --> 02:52:22,860
allowed and accepted on those but that's that's the process

4000
02:52:22,860 --> 02:52:23,879
would be following

4001
02:52:23,879 --> 02:52:26,520
right now okay and I would say also just in addition to

4002
02:52:26,520 --> 02:52:28,159
that council does have

4003
02:52:28,159 --> 02:52:32,430
individual sponsorships that that are put on the consent

4004
02:52:32,430 --> 02:52:33,200
agenda and they're

4005
02:52:33,200 --> 02:52:37,520
out in public as well which has not been an issue and they

4006
02:52:37,520 --> 02:52:38,479
typically do require

4007
02:52:38,479 --> 02:52:43,459
that there be the requisite paperwork in justification sent

4008
02:52:43,459 --> 02:52:44,520
in after the fact to

4009
02:52:44,520 --> 02:52:47,100
justify the payment but it really hasn't been much of an

4010
02:52:47,100 --> 02:52:48,159
issue on the on their

4011
02:52:48,159 --> 02:52:51,969
other issue grants we also have an example parks and

4012
02:52:51,969 --> 02:52:52,799
recreation department

4013
02:52:52,799 --> 02:52:55,329
they do these types of sponsorship agreements and they are

4014
02:52:55,329 --> 02:52:55,799
formally

4015
02:52:55,799 --> 02:52:58,020
approved by the council on the agenda as well as the

4016
02:52:58,020 --> 02:52:59,360
council contingency items

4017
02:52:59,360 --> 02:53:02,799
that Nick Todd was referencing okay thank you okay actually

4018
02:53:02,799 --> 02:53:04,200
I do Brandon's

4019
02:53:04,200 --> 02:53:07,559
question reminded me it made me think of a question that is

4020
02:53:07,559 --> 02:53:08,479
also like that

4021
02:53:08,479 --> 02:53:11,420
question of more of a procedure procedural than as opposed

4022
02:53:11,420 --> 02:53:11,639
to a

4023
02:53:11,639 --> 02:53:19,590
substantive question so I realize that PUB has already

4024
02:53:19,590 --> 02:53:21,559
approved and I believe

4025
02:53:21,559 --> 02:53:26,059
council has to approve to continue this program that has

4026
02:53:26,059 --> 02:53:28,000
already happened so I

4027
02:53:28,000 --> 02:53:34,479
I happen to be I happen to disapprove of this program all

4028
02:53:34,479 --> 02:53:35,600
altogether for

4029
02:53:35,600 --> 02:53:39,870
specific reasons but my sense is that and correct me if I'm

4030
02:53:39,870 --> 02:53:40,719
wrong that it

4031
02:53:40,719 --> 02:53:45,489
would be it's too late in the game for me to I can't make a

4032
02:53:45,489 --> 02:53:47,079
motion to reduce

4033
02:53:47,079 --> 02:53:50,889
the budget of this program to zero because I object to it

4034
02:53:50,889 --> 02:53:51,600
and see if

4035
02:53:51,600 --> 02:53:54,700
there's a discussion on that right it's too late in the

4036
02:53:54,700 --> 02:53:55,920
game for that is that

4037
02:53:55,920 --> 02:54:00,930
correct I think basically what we're voting on the day is

4038
02:54:00,930 --> 02:54:01,479
kind of a

4039
02:54:01,479 --> 02:54:07,479
procedural how we do this for the budgets already been

4040
02:54:07,479 --> 02:54:08,360
approved recommended

4041
02:54:08,360 --> 02:54:12,170
and approved yes it's there yes yes so yeah thank you for

4042
02:54:12,170 --> 02:54:12,760
clarifying that was

4043
02:54:12,760 --> 02:54:15,379
my understanding in the I guess just to further that to the

4044
02:54:15,379 --> 02:54:16,319
council did want to

4045
02:54:16,319 --> 02:54:20,129
continue the program along with PUB so they just we were

4046
02:54:20,129 --> 02:54:21,079
asked specifically to

4047
02:54:21,079 --> 02:54:24,889
bring back those requirements and how the program would be

4048
02:54:24,889 --> 02:54:25,479
authorized for both

4049
02:54:25,479 --> 02:54:31,319
so that's the action item today so any comments I have

4050
02:54:31,319 --> 02:54:32,879
about this I will save

4051
02:54:32,879 --> 02:54:37,899
it for after but the motion is me thank you okay other

4052
02:54:37,899 --> 02:54:41,959
questions their motion

4053
02:54:41,959 --> 02:54:50,239
motion to prove I'm sure yes second any other discussion

4054
02:54:50,239 --> 02:54:52,559
yeah yeah I just wanted

4055
02:54:52,559 --> 02:54:59,799
to to state the reason why I object to this program even

4056
02:54:59,799 --> 02:55:01,120
though I understand

4057
02:55:01,120 --> 02:55:07,620
council has already approved it and I hope that next time

4058
02:55:07,620 --> 02:55:08,799
this issue comes

4059
02:55:08,799 --> 02:55:16,290
before us that will consider this this question again maybe

4060
02:55:16,290 --> 02:55:17,559
a year from now I

4061
02:55:17,559 --> 02:55:21,860
guess would be the timeline all of these these these

4062
02:55:21,860 --> 02:55:24,040
charities seem like very

4063
02:55:24,040 --> 02:55:27,850
good causes to me so I don't have a problem with that but I

4064
02:55:27,850 --> 02:55:29,879
believe that the

4065
02:55:29,879 --> 02:55:35,049
purpose of pub of any public utility should be local

4066
02:55:35,049 --> 02:55:37,200
control and saving money

4067
02:55:37,200 --> 02:55:42,370
for ratepayers and also the along with the local control

4068
02:55:42,370 --> 02:55:43,559
the environmental

4069
02:55:43,559 --> 02:55:47,370
benefits safety issues and reliability issues that we get

4070
02:55:47,370 --> 02:55:48,440
from having our own

4071
02:55:48,440 --> 02:55:53,899
utility so I have nothing against in fact I'm a proof of

4072
02:55:53,899 --> 02:55:54,879
all these charities

4073
02:55:54,879 --> 02:55:58,690
I would have liked to see them go through council instead

4074
02:55:58,690 --> 02:55:59,360
particularly at

4075
02:55:59,360 --> 02:56:04,530
this time when we've got our this unprecedented debt burden

4076
02:56:04,530 --> 02:56:05,159
that we've got

4077
02:56:05,159 --> 02:56:08,370
with the gas plant regardless of whether you're for or

4078
02:56:08,370 --> 02:56:09,559
against the gas plant we

4079
02:56:09,559 --> 02:56:13,350
still have this debt burden and so I don't like the message

4080
02:56:13,350 --> 02:56:14,120
that it sends to

4081
02:56:14,120 --> 02:56:20,000
ratepayers who are struggling to residential ratepayers

4082
02:56:20,000 --> 02:56:22,520
struggling to to

4083
02:56:22,520 --> 02:56:26,790
pay their their utility bills to see that we're giving away

4084
02:56:26,790 --> 02:56:27,440
to other

4085
02:56:27,440 --> 02:56:31,250
charities and we have have people in need you know and I'm

4086
02:56:31,250 --> 02:56:32,159
you know it's like

4087
02:56:32,159 --> 02:56:36,579
this our plus one program help keep the lights on for a

4088
02:56:36,579 --> 02:56:38,479
dent in family in need

4089
02:56:38,479 --> 02:56:42,290
this I feel should be the job of and I realize we do do

4090
02:56:42,290 --> 02:56:43,559
this to a certain

4091
02:56:43,559 --> 02:56:46,299
extent our rates could be higher but if we have extra money

4092
02:56:46,299 --> 02:56:47,280
that where we could

4093
02:56:47,280 --> 02:56:54,180
be using any more 50,000 that's 50,000 more that we can use

4094
02:56:54,180 --> 02:56:56,040
to reduce reduce

4095
02:56:56,040 --> 02:56:59,850
rates and not stick residents who are struggling to pay the

4096
02:56:59,850 --> 02:57:00,959
bills with this

4097
02:57:00,959 --> 02:57:04,000
debt burden so sorry for all that those words but that's my

4098
02:57:04,000 --> 02:57:05,040
way of explaining to

4099
02:57:05,040 --> 02:57:09,920
you all and to the public what my objections are so thank

4100
02:57:09,920 --> 02:57:13,040
you okay all

4101
02:57:13,040 --> 02:57:18,229
right we have a motion and second any other comments all in

4102
02:57:18,229 --> 02:57:19,840
favor say aye aye

4103
02:57:19,840 --> 02:57:32,389
any opposed okay motion carries item number item D is to

4104
02:57:32,389 --> 02:57:33,239
receive report

4105
02:57:33,239 --> 02:57:37,049
hold discussion consider recommending adoption of a

4106
02:57:37,049 --> 02:57:38,239
resolution proving the

4107
02:57:38,239 --> 02:57:44,350
fiscal year 2017-18 green sentence incentive program the

4108
02:57:44,350 --> 02:57:45,159
green sense and

4109
02:57:45,159 --> 02:57:48,510
sort of program manual and distributed generation manual

4110
02:57:48,510 --> 02:57:49,799
yes and board members

4111
02:57:49,799 --> 02:57:53,610
I promise to give you a very short presentation on this be

4112
02:57:53,610 --> 02:57:55,120
respectful of

4113
02:57:55,120 --> 02:57:57,420
your time I know we've been here for a long time but if you

4114
02:57:57,420 --> 02:57:58,239
have any questions

4115
02:57:58,239 --> 02:58:01,360
as I'm going through this please feel free to stop me and

4116
02:58:01,360 --> 02:58:02,719
so we are going to

4117
02:58:02,719 --> 02:58:04,690
be looking at the green sense incentive program and

4118
02:58:04,690 --> 02:58:07,319
distributed generation the

4119
02:58:07,319 --> 02:58:11,129
first thing I'll do is I'll bring Katherine Barnett up here

4120
02:58:11,129 --> 02:58:11,479
sustainability

4121
02:58:11,479 --> 02:58:14,620
is our partner in this program with DME and they actually

4122
02:58:14,620 --> 02:58:15,719
manage the energy

4123
02:58:15,719 --> 02:58:17,860
efficiency side so I'll turn it over her and then I'll come

4124
02:58:17,860 --> 02:58:18,600
back and walk you

4125
02:58:18,600 --> 02:58:22,920
through pretty quickly the proposed changes that we have

4126
02:58:24,280 --> 02:58:29,819
Mike please yeah thank you I was just going to say this

4127
02:58:29,819 --> 02:58:30,680
just explains the

4128
02:58:30,680 --> 02:58:34,610
rebates that were handed out last year so since it applied

4129
02:58:34,610 --> 02:58:36,200
we did 461 rebates

4130
02:58:36,200 --> 02:58:40,010
these are the categories and the dollar amounts if you have

4131
02:58:40,010 --> 02:58:40,639
any questions about

4132
02:58:40,639 --> 02:58:45,620
that I can answer them or we can just move on through and

4133
02:58:45,620 --> 02:58:46,959
you can email me if

4134
02:58:46,959 --> 02:58:55,120
you have any from the backup any questions on any of this

4135
02:58:57,399 --> 02:59:04,299
make sense that HVAC would be 48% in Texas just out of

4136
02:59:04,299 --> 02:59:05,399
curiosity how many

4137
02:59:05,399 --> 02:59:10,159
requests for funding did we not fund like I mean I don't

4138
02:59:10,159 --> 02:59:11,840
know if we know the

4139
02:59:11,840 --> 02:59:14,639
number but we will talk about that okay

4140
02:59:19,639 --> 02:59:21,700
we did quite a bit of advertising that we were getting

4141
02:59:21,700 --> 02:59:24,200
ready to run out of

4142
02:59:24,200 --> 02:59:28,010
funds and the funds were getting short so people weren't

4143
02:59:28,010 --> 02:59:28,959
applying as much as we

4144
02:59:28,959 --> 02:59:34,000
had last year after we ran out so yeah so we didn't have as

4145
02:59:34,000 --> 02:59:35,239
many rejections the

4146
02:59:35,239 --> 02:59:39,180
sheer so I don't really know how many okay okay that just

4147
02:59:39,180 --> 02:59:39,840
be interesting to

4148
02:59:39,840 --> 02:59:46,979
know how many we can't fund okay so switching over to the

4149
02:59:46,979 --> 02:59:47,399
greens and

4150
02:59:47,399 --> 02:59:51,209
incentive program this is just a history I just wanted to

4151
02:59:51,209 --> 02:59:52,040
bring this up because

4152
02:59:52,040 --> 02:59:54,860
the program has existed in its sort of formal capacity

4153
02:59:54,860 --> 02:59:57,000
since 1998 so FY 2018

4154
02:59:57,000 --> 03:00:00,809
will be our 20-year sort of celebration of the program it

4155
03:00:00,809 --> 03:00:01,719
has taken on many

4156
03:00:01,719 --> 03:00:05,510
different iterations over the time and that's that's what

4157
03:00:05,510 --> 03:00:06,600
we want to continue

4158
03:00:06,600 --> 03:00:10,409
to do is be flexible and change as new products come

4159
03:00:10,409 --> 03:00:11,600
available that we can use

4160
03:00:11,600 --> 03:00:14,340
this incentive program to make those available to our

4161
03:00:14,340 --> 03:00:16,239
customers so currently

4162
03:00:16,239 --> 03:00:20,629
the incentive program includes the free home energy audits

4163
03:00:20,629 --> 03:00:22,040
the energy efficiency

4164
03:00:22,040 --> 03:00:25,379
rebates for residential multifamily and small commercial

4165
03:00:25,379 --> 03:00:26,559
are a standard offered

4166
03:00:26,559 --> 03:00:29,139
incentive which is an energy efficiency rebate program for

4167
03:00:29,139 --> 03:00:30,040
our medium and large

4168
03:00:30,040 --> 03:00:33,850
customers our incentive for engineering audits and it

4169
03:00:33,850 --> 03:00:35,280
includes our COTS ERS

4170
03:00:35,280 --> 03:00:37,639
response it also includes our solar program I've separated

4171
03:00:37,639 --> 03:00:38,399
that out because

4172
03:00:38,399 --> 03:00:41,680
we'll talk about it a little a little set up in a little

4173
03:00:41,680 --> 03:00:43,959
bit and so getting

4174
03:00:43,959 --> 03:00:46,819
back to board member Carol's question about how much could

4175
03:00:46,819 --> 03:00:48,079
we have funded if

4176
03:00:48,079 --> 03:00:50,520
we had funded all of the requests we received this year

4177
03:00:50,520 --> 03:00:51,680
that's one of the

4178
03:00:51,680 --> 03:00:55,950
changes we're proposing so we did have about $90,000 worth

4179
03:00:55,950 --> 03:00:57,440
of solar

4180
03:00:57,440 --> 03:01:00,360
installations we weren't able to rebate and we had about $

4181
03:01:00,360 --> 03:01:01,920
10,000 of energy

4182
03:01:01,920 --> 03:01:05,959
efficiency programs we weren't able to rebate so what we've

4183
03:01:05,959 --> 03:01:07,520
asked asking is to

4184
03:01:07,520 --> 03:01:10,170
increase our budget by a hundred thousand dollars would

4185
03:01:10,170 --> 03:01:10,840
increase the

4186
03:01:10,840 --> 03:01:13,760
solar budget by 90,000 and we'd increase the energy

4187
03:01:13,760 --> 03:01:15,440
efficiency rebate by 10,000

4188
03:01:15,440 --> 03:01:17,739
the good news is that we're going to be able to repurpose

4189
03:01:17,739 --> 03:01:18,479
dollars from an

4190
03:01:18,479 --> 03:01:22,520
existing project within energy services so we don't have to

4191
03:01:22,520 --> 03:01:23,440
actually fund an

4192
03:01:23,440 --> 03:01:26,620
additional hundred thousand dollars so we're really excited

4193
03:01:26,620 --> 03:01:27,520
about that but as

4194
03:01:27,520 --> 03:01:30,209
you can see the budget has grown over time so we're really

4195
03:01:30,209 --> 03:01:31,040
happy that the

4196
03:01:31,040 --> 03:01:37,930
demand has continued to grow yeah I just wanted to to thank

4197
03:01:37,930 --> 03:01:38,799
you guys for putting

4198
03:01:38,799 --> 03:01:41,700
this together it was really exciting to read and see how

4199
03:01:41,700 --> 03:01:43,280
competitive our rebates

4200
03:01:43,280 --> 03:01:48,290
are this is something to be really proud of so I support

4201
03:01:48,290 --> 03:01:50,399
these incentives this is

4202
03:01:50,399 --> 03:01:52,659
a small thing that somebody had mentioned to me I don't

4203
03:01:52,659 --> 03:01:53,399
even know it's a

4204
03:01:53,399 --> 03:01:56,680
good idea but I wanted to just toss it out there the

4205
03:01:56,680 --> 03:01:58,840
electric car oh that's on

4206
03:01:58,840 --> 03:02:02,879
next slide yeah this is this this is part of this right

4207
03:02:02,879 --> 03:02:03,399
this would be the

4208
03:02:03,399 --> 03:02:07,319
time yes so somebody had mentioned to me I don't know if it

4209
03:02:07,319 --> 03:02:10,120
's reasonable but that

4210
03:02:10,120 --> 03:02:13,930
there's some language in there about that says you know you

4211
03:02:13,930 --> 03:02:15,200
get this $300

4212
03:02:15,200 --> 03:02:21,280
rebate if you recharge your car between these certain hours

4213
03:02:21,280 --> 03:02:22,639
and he had

4214
03:02:22,639 --> 03:02:29,610
suggested that it might be fairer or more realistic to

4215
03:02:29,610 --> 03:02:32,360
change that to you know

4216
03:02:32,360 --> 03:02:36,430
customers should try to to do it during those hours so that

4217
03:02:36,430 --> 03:02:38,600
people so anyway you

4218
03:02:38,600 --> 03:02:40,889
can you can see where he was going to me that sounded

4219
03:02:40,889 --> 03:02:42,280
reasonable but I'm just

4220
03:02:42,280 --> 03:02:45,520
wondering what you thought we were asking for a commitment

4221
03:02:45,520 --> 03:02:46,760
and from the

4222
03:02:46,760 --> 03:02:51,030
customer to charge their their the electric vehicles and

4223
03:02:51,030 --> 03:02:53,280
off-peak hours the

4224
03:02:53,280 --> 03:02:57,549
reason for that being is that the more that they populate

4225
03:02:57,549 --> 03:02:58,799
the more cars and

4226
03:02:58,799 --> 03:03:00,909
more people come home from work and they plug it in that's

4227
03:03:00,909 --> 03:03:01,879
in our highest demand

4228
03:03:01,879 --> 03:03:05,469
period of time the higher energy costs at that time which

4229
03:03:05,469 --> 03:03:06,239
could drive rates up

4230
03:03:06,239 --> 03:03:09,219
so we're asking for a commitment from our customers to

4231
03:03:09,219 --> 03:03:10,559
charge during off-peak

4232
03:03:10,559 --> 03:03:14,850
I understand the language concern the reality would be that

4233
03:03:14,850 --> 03:03:16,079
I wouldn't know I

4234
03:03:16,079 --> 03:03:19,049
wouldn't be able to tell that yes that's where that I can

4235
03:03:19,049 --> 03:03:20,040
look at a customer's

4236
03:03:20,040 --> 03:03:22,579
history and if I know that they purchased a car and I see

4237
03:03:22,579 --> 03:03:23,280
that spike at

4238
03:03:23,280 --> 03:03:28,040
that time I have a pretty good indication so it is more of

4239
03:03:28,040 --> 03:03:29,000
a commitment

4240
03:03:29,000 --> 03:03:31,719
just from that that's that sounds reasonable to me thank

4241
03:03:31,719 --> 03:03:33,319
you sure and so

4242
03:03:33,319 --> 03:03:37,129
back on the three changes that we're proposing the first

4243
03:03:37,129 --> 03:03:38,000
will be the HVAC

4244
03:03:38,000 --> 03:03:41,809
rebate we're moving to we'd like to move to a graduated

4245
03:03:41,809 --> 03:03:43,159
structure where smaller

4246
03:03:43,159 --> 03:03:47,020
HVAC units get a smaller rebate as opposed to the larger HV

4247
03:03:47,020 --> 03:03:48,120
AC units this

4248
03:03:48,120 --> 03:03:50,620
will enable more customers to qualify for the rebate it

4249
03:03:50,620 --> 03:03:51,399
allows for more

4250
03:03:51,399 --> 03:03:53,690
impactful rebates for the larger units and the smaller

4251
03:03:53,690 --> 03:03:54,680
units make them kind of

4252
03:03:54,680 --> 03:03:58,489
fit the rebate fit the size of the HVAC again the electric

4253
03:03:58,489 --> 03:03:59,399
vehicle rebate

4254
03:03:59,399 --> 03:04:03,319
addition we're proposing $300 the reason for that number

4255
03:04:03,319 --> 03:04:04,719
the research we did it

4256
03:04:04,719 --> 03:04:08,010
takes about three dollars to charge an electric vehicle

4257
03:04:08,010 --> 03:04:09,200
that gets a 70 mile

4258
03:04:09,200 --> 03:04:12,010
radius that's pretty typical so that's about the first

4259
03:04:12,010 --> 03:04:13,280
hundred charges of that

4260
03:04:13,280 --> 03:04:17,319
vehicle so about three months of that vehicle and and one

4261
03:04:17,319 --> 03:04:18,559
thing we are looking

4262
03:04:18,559 --> 03:04:21,379
at with those is to sort of grandfather in existing

4263
03:04:21,379 --> 03:04:23,040
vehicles to have a 30-day

4264
03:04:23,040 --> 03:04:25,889
window that someone who had already owns that vehicle could

4265
03:04:25,889 --> 03:04:26,760
qualify for the

4266
03:04:26,760 --> 03:04:30,569
rebate and then we're looking at removing and two of our

4267
03:04:30,569 --> 03:04:31,360
demand response

4268
03:04:31,360 --> 03:04:34,059
programs that we have our for CP in our spot price program

4269
03:04:34,059 --> 03:04:34,639
we have no

4270
03:04:34,639 --> 03:04:38,610
participation in these programs and we really don't have

4271
03:04:38,610 --> 03:04:39,760
any interest in

4272
03:04:39,760 --> 03:04:42,860
participation in these programs the reason being is that

4273
03:04:42,860 --> 03:04:43,600
these are for

4274
03:04:43,600 --> 03:04:46,479
larger scale customers they do cost benefit analysis and

4275
03:04:46,479 --> 03:04:47,379
right now the way

4276
03:04:47,379 --> 03:04:50,600
the programs are structured they they just don't make sense

4277
03:04:50,600 --> 03:04:51,479
so we want to take

4278
03:04:51,479 --> 03:04:55,290
them down sort of put them to the side and spend the next

4279
03:04:55,290 --> 03:04:56,399
year and as part of

4280
03:04:56,399 --> 03:04:58,989
our cost of service study as part of our ongoing energy

4281
03:04:58,989 --> 03:05:00,399
service efforts to really

4282
03:05:00,399 --> 03:05:04,469
examine a way to make demand response work in Denton so any

4283
03:05:04,469 --> 03:05:06,200
questions on those

4284
03:05:06,200 --> 03:05:10,010
okay and the last thing that I'll talk about will be a

4285
03:05:10,010 --> 03:05:11,159
distributed generation

4286
03:05:11,159 --> 03:05:14,969
and when we talk about distributed generation we're talking

4287
03:05:14,969 --> 03:05:15,559
about any

4288
03:05:15,559 --> 03:05:18,729
electrical generating facility on the customer side of the

4289
03:05:18,729 --> 03:05:20,120
meter most

4290
03:05:20,120 --> 03:05:22,229
commonly we're going to be talking about solar

4291
03:05:22,229 --> 03:05:23,639
installations when we're talking

4292
03:05:23,639 --> 03:05:28,389
about so who this impact this manual is going to impact the

4293
03:05:28,389 --> 03:05:30,040
most but I will tell

4294
03:05:30,040 --> 03:05:34,010
you that all distributed generation solar wind storage and

4295
03:05:34,010 --> 03:05:35,239
generate you know

4296
03:05:35,239 --> 03:05:37,950
natural guest owners they all need to go through the same

4297
03:05:37,950 --> 03:05:39,840
process so this is

4298
03:05:39,840 --> 03:05:43,649
currently what the process looks like today it's pretty

4299
03:05:43,649 --> 03:05:44,200
complicated and you

4300
03:05:44,200 --> 03:05:47,440
deal with about four or five different departments at any

4301
03:05:47,440 --> 03:05:48,799
given time we want to

4302
03:05:48,799 --> 03:05:51,299
make that process again back to the earlier discussion we

4303
03:05:51,299 --> 03:05:52,159
had as efficient as

4304
03:05:52,159 --> 03:05:56,430
possible so what we're proposing to do is separate out

4305
03:05:56,430 --> 03:05:57,520
distributed generation to

4306
03:05:57,520 --> 03:06:01,590
its own manual customers get to file one application gets

4307
03:06:01,590 --> 03:06:02,579
to talk to one

4308
03:06:02,579 --> 03:06:05,129
department and we'll walk them through the entire process

4309
03:06:05,129 --> 03:06:06,200
hopefully speeding up

4310
03:06:06,200 --> 03:06:08,930
their ability to get through their permitting an

4311
03:06:08,930 --> 03:06:10,200
application to their

4312
03:06:10,200 --> 03:06:16,250
installation much faster oh wrong way as I said again I

4313
03:06:16,250 --> 03:06:17,360
said this is kind of our

4314
03:06:17,360 --> 03:06:20,559
motto in this one document one location customer friendly

4315
03:06:20,559 --> 03:06:22,360
let's get these solar

4316
03:06:22,360 --> 03:06:25,610
installations installed and help our customers as fast as

4317
03:06:25,610 --> 03:06:27,200
we can so we're

4318
03:06:27,200 --> 03:06:29,350
really excited and we think this will help streamline the

4319
03:06:29,350 --> 03:06:30,040
process both on

4320
03:06:30,040 --> 03:06:34,329
staffs in and for the customer this is important for our

4321
03:06:34,329 --> 03:06:35,799
soul smart designation

4322
03:06:35,799 --> 03:06:39,610
we're seeking a bronze designation by having a separate

4323
03:06:39,610 --> 03:06:40,600
distributed generation

4324
03:06:40,600 --> 03:06:43,579
manual we'll be able to achieve that bronze designation and

4325
03:06:43,579 --> 03:06:44,360
then we'll start

4326
03:06:44,360 --> 03:06:46,760
working towards that silver designation after that but all

4327
03:06:46,760 --> 03:06:47,799
of these efficiencies

4328
03:06:47,799 --> 03:06:52,579
that we're putting in place will help us get there and I

4329
03:06:52,579 --> 03:06:55,280
think that's it

4330
03:06:55,280 --> 03:06:59,180
question questions I don't know of any indent and yet but I

4331
03:06:59,180 --> 03:07:00,440
know a handful of

4332
03:07:00,440 --> 03:07:05,889
people that are looking at the solar city roof tiles do you

4333
03:07:05,889 --> 03:07:06,920
suppose that

4334
03:07:06,920 --> 03:07:10,889
those will fit into this manual that you just presented to

4335
03:07:10,889 --> 03:07:11,920
us they would they

4336
03:07:11,920 --> 03:07:14,930
would be just as any other solar products that we'd have

4337
03:07:14,930 --> 03:07:15,840
they would work

4338
03:07:15,840 --> 03:07:20,110
through the distributed generation mean so everybody's all

4339
03:07:20,110 --> 03:07:21,200
ready to evaluate

4340
03:07:21,200 --> 03:07:23,620
those and let people start putting them on their roofs I

4341
03:07:23,620 --> 03:07:24,399
won't speak for

4342
03:07:24,399 --> 03:07:28,000
engineering all I'll make sure since they have to do that

4343
03:07:28,000 --> 03:07:29,280
my I mean what I

4344
03:07:29,280 --> 03:07:33,600
mean I'm not sure how they're technically different than a

4345
03:07:33,600 --> 03:07:34,639
standard

4346
03:07:34,639 --> 03:07:37,760
panel other than they're going to look different I'm not

4347
03:07:37,760 --> 03:07:38,520
sure on the

4348
03:07:38,520 --> 03:07:43,010
engineering side what changes that may cause but there

4349
03:07:43,010 --> 03:07:44,920
there would be the same

4350
03:07:44,920 --> 03:07:48,350
and that there'd be a panel and an inverter and they would

4351
03:07:48,350 --> 03:07:49,479
be installed I'm

4352
03:07:49,479 --> 03:07:53,290
again I'm not sure how that would look for designing on the

4353
03:07:53,290 --> 03:07:53,920
engineering side

4354
03:07:53,920 --> 03:07:56,870
but from for the program perspective they'd be treated the

4355
03:07:56,870 --> 03:07:57,639
same and so are

4356
03:07:57,639 --> 03:08:03,840
we ready for them sorry I don't mean to make you get up we

4357
03:08:03,840 --> 03:08:05,159
need a

4358
03:08:06,680 --> 03:08:10,139
no Brandon that's a very good question now we are ready for

4359
03:08:10,139 --> 03:08:10,920
the program we're

4360
03:08:10,920 --> 03:08:13,819
also ready to start investigating the products Tesla has

4361
03:08:13,819 --> 03:08:14,799
come out with some

4362
03:08:14,799 --> 03:08:16,899
that you may be familiar with along with some other

4363
03:08:16,899 --> 03:08:18,600
companies as well so yes we're

4364
03:08:18,600 --> 03:08:20,319
very interested in trying to get some folks that are

4365
03:08:20,319 --> 03:08:21,120
interested in putting

4366
03:08:21,120 --> 03:08:23,610
those on give us the specifics and we will take a look at

4367
03:08:23,610 --> 03:08:24,239
that from an

4368
03:08:24,239 --> 03:08:26,719
engineering perspective make sure that the inverters

4369
03:08:26,719 --> 03:08:28,000
whether they be a single

4370
03:08:28,000 --> 03:08:30,579
inverter or micro inverters that they all will work

4371
03:08:30,579 --> 03:08:31,639
together and meet the

4372
03:08:31,639 --> 03:08:37,290
IEEE 1547 and the UL 1741 codes can it can anybody speak to

4373
03:08:37,290 --> 03:08:38,639
permitting building

4374
03:08:38,639 --> 03:08:43,000
permitting any of those code enforcement are those

4375
03:08:43,000 --> 03:08:44,760
departments ready for them to

4376
03:08:44,760 --> 03:08:49,969
be installed okay that's fine we would help them do that

4377
03:08:49,969 --> 03:08:50,440
process

4378
03:08:50,440 --> 03:08:54,250
good question yeah they do we do assist building

4379
03:08:54,250 --> 03:08:55,319
inspections and permitting

4380
03:08:55,319 --> 03:08:59,129
whenever any of the current any standard sort of solar perm

4381
03:08:59,129 --> 03:09:00,000
itting goes on so do

4382
03:09:00,000 --> 03:09:03,709
they evaluate the load of the panels and get some kind of

4383
03:09:03,709 --> 03:09:04,399
engineering sign off

4384
03:09:04,399 --> 03:09:08,209
they have engineering stamp designs yes and our engineering

4385
03:09:08,209 --> 03:09:08,319
department

4386
03:09:08,319 --> 03:09:13,319
absolutely approves all of them okay thanks okay other

4387
03:09:13,319 --> 03:09:16,000
questions yes so

4388
03:09:16,000 --> 03:09:21,770
there's a really big issue a really big change being

4389
03:09:21,770 --> 03:09:24,559
proposed in the distributed

4390
03:09:24,559 --> 03:09:28,159
generation manual that if I heard correctly didn't seem to

4391
03:09:28,159 --> 03:09:29,239
be addressed in

4392
03:09:29,239 --> 03:09:31,829
that the presentation and it's something I'm concerned

4393
03:09:31,829 --> 03:09:33,200
about and that is the move

4394
03:09:33,200 --> 03:09:41,879
for distributed generation under 50 kW to from a net met

4395
03:09:41,879 --> 03:09:45,319
ering system to a tariff

4396
03:09:45,319 --> 03:09:50,489
system is that is I understood it that that's part of the

4397
03:09:50,489 --> 03:09:51,159
that's not a change

4398
03:09:51,159 --> 03:09:54,250
that's current that that's the rule today and that's the

4399
03:09:54,250 --> 03:09:55,399
rule moving forward

4400
03:09:55,399 --> 03:09:59,360
is that just that 50 kW systems need a special agreement oh

4401
03:09:59,360 --> 03:10:03,000
yes yes so so but

4402
03:10:03,000 --> 03:10:07,270
the net metering I mean it looked to me so and correct me

4403
03:10:07,270 --> 03:10:08,719
if I'm wrong that we

4404
03:10:08,719 --> 03:10:14,100
are moving away that what's being proposed in that green

4405
03:10:14,100 --> 03:10:15,399
sense manual

4406
03:10:15,399 --> 03:10:24,309
redline for and the earth the proposed distribution the

4407
03:10:24,309 --> 03:10:25,360
distributed generation

4408
03:10:25,360 --> 03:10:31,459
manual is to do away with the it is to impose this tariff

4409
03:10:31,459 --> 03:10:33,639
by which if you

4410
03:10:33,639 --> 03:10:38,569
produce over a certain amount will only pay you this much

4411
03:10:38,569 --> 03:10:40,399
no what we're proposing

4412
03:10:40,399 --> 03:10:46,110
and what current schedule DGR set it just says that if you

4413
03:10:46,110 --> 03:10:47,559
are system sized

4414
03:10:47,559 --> 03:10:50,940
over 50 kW that we're gonna look we're gonna take a harder

4415
03:10:50,940 --> 03:10:51,479
look at it you're

4416
03:10:51,479 --> 03:10:53,700
not automatically going to be put on the same rate as a

4417
03:10:53,700 --> 03:10:54,639
residential system

4418
03:10:54,639 --> 03:10:56,840
doesn't mean that you won't be put on that rate it just

4419
03:10:56,840 --> 03:10:57,840
means we have to look

4420
03:10:57,840 --> 03:11:00,850
at it a little bit further and then we'll put you on that

4421
03:11:00,850 --> 03:11:01,719
same rate if we

4422
03:11:01,719 --> 03:11:07,200
deem it necessary okay so there's no there's no change so

4423
03:11:07,200 --> 03:11:07,879
all this stuff

4424
03:11:07,879 --> 03:11:14,879
about let's see on that and I'm just taking the time to do

4425
03:11:14,879 --> 03:11:15,319
this because I

4426
03:11:15,319 --> 03:11:20,840
ran this by some people I know who have solar generation

4427
03:11:20,840 --> 03:11:23,399
the business about let's

4428
03:11:23,399 --> 03:11:29,729
see where do they have it where we're reducing the if

4429
03:11:29,729 --> 03:11:32,440
somebody can help me out

4430
03:11:32,440 --> 03:11:41,540
there what page is the tariff on the red line the greens

4431
03:11:41,540 --> 03:11:43,239
and since in a program

4432
03:11:43,239 --> 03:11:47,309
manual doesn't actually set the rate the rate book sets the

4433
03:11:47,309 --> 03:11:48,280
distributed

4434
03:11:48,280 --> 03:11:54,719
generation rate where's the tariff set it's set in our I

4435
03:11:54,719 --> 03:11:55,879
have my handy dandy

4436
03:11:55,879 --> 03:11:59,790
rate book up here and thank you sorry there was some so

4437
03:11:59,790 --> 03:12:00,760
that's part of the

4438
03:12:00,760 --> 03:12:06,040
right ordinance in this right yeah yes this is yeah oh yes

4439
03:12:06,040 --> 03:12:07,959
yes okay and so the

4440
03:12:07,959 --> 03:12:12,700
tariff it's just a credit and it's just a credit rate it's

4441
03:12:12,700 --> 03:12:13,959
not actually any

4442
03:12:13,959 --> 03:12:16,920
additional cost to the customer it's simply what they're

4443
03:12:16,920 --> 03:12:17,680
paid back for

4444
03:12:17,680 --> 03:12:22,079
generation and any system under 50 KW defaults to this any

4445
03:12:22,079 --> 03:12:23,760
system over 50 KW

4446
03:12:23,760 --> 03:12:27,569
we're gonna evaluate and make sure that it meets conditions

4447
03:12:27,569 --> 03:12:28,520
that yes those

4448
03:12:28,520 --> 03:12:32,319
conditions and if it does we would recommend at this time

4449
03:12:32,319 --> 03:12:32,799
we would

4450
03:12:32,799 --> 03:12:36,610
recommend them going on the same rate okay yes okay they

4451
03:12:36,610 --> 03:12:37,600
just the the way it's

4452
03:12:37,600 --> 03:12:39,409
currently written is we have to we have to do that

4453
03:12:39,409 --> 03:12:40,600
separately because we need to

4454
03:12:40,600 --> 03:12:43,020
take a little bit harder look at that system to make sure

4455
03:12:43,020 --> 03:12:43,920
that they're meeting

4456
03:12:43,920 --> 03:12:48,260
those conditions a system that's 50 KW on a thousand square

4457
03:12:48,260 --> 03:12:49,559
foot house probably

4458
03:12:49,559 --> 03:12:52,430
isn't gonna meet those conditions yeah oh yeah and that

4459
03:12:52,430 --> 03:12:53,639
that all makes perfect

4460
03:12:53,639 --> 03:12:58,559
sense to me okay so did I miss read I guess I'm kind of

4461
03:12:58,559 --> 03:12:59,100
looking at there's

4462
03:12:59,100 --> 03:13:04,270
some people here who have anybody else who has solar who

4463
03:13:04,270 --> 03:13:06,440
noticed this tariff

4464
03:13:06,440 --> 03:13:08,920
that was that was just something that I had planned to ask

4465
03:13:08,920 --> 03:13:09,879
about that concerned

4466
03:13:09,879 --> 03:13:13,690
me but okay so I'm very glad sorry for taking the time for

4467
03:13:13,690 --> 03:13:14,879
that but that's okay

4468
03:13:14,879 --> 03:13:20,670
I'm very glad to learn that there's no not a change from no

4469
03:13:20,670 --> 03:13:21,639
we're not net

4470
03:13:21,639 --> 03:13:25,579
metering no okay and we actually have what's called you net

4471
03:13:25,579 --> 03:13:26,979
billing does the

4472
03:13:26,979 --> 03:13:29,780
term that we use is net billing net billing yes but we're

4473
03:13:29,780 --> 03:13:30,579
not proposing a

4474
03:13:30,579 --> 03:13:33,479
change at this time okay no thank you it will be treated

4475
03:13:33,479 --> 03:13:34,159
exactly the same thank

4476
03:13:34,159 --> 03:13:37,360
you very very much sir and thank you for taking the time

4477
03:13:37,360 --> 03:13:38,520
for that that's that's a

4478
03:13:38,520 --> 03:13:44,280
big relief thank you okay is there a motion then on this

4479
03:13:44,280 --> 03:13:46,399
item

4480
03:13:51,440 --> 03:13:58,399
don't ever make it worn out yet yeah we recommend the

4481
03:13:58,399 --> 03:13:59,719
adoption of this

4482
03:13:59,719 --> 03:14:07,059
resolution okay and second second second any further

4483
03:14:07,059 --> 03:14:10,360
discussion all in favor say

4484
03:14:10,360 --> 03:14:21,440
aye any opposed same sign motion passes item number item e

4485
03:14:21,440 --> 03:14:23,040
is to consider

4486
03:14:23,040 --> 03:14:28,629
recommending approval of the fiscal year 2017-18 energy

4487
03:14:28,629 --> 03:14:31,079
cost adjustment renewal

4488
03:14:31,079 --> 03:14:36,799
cost adjustment and transmission cost recovery factor yes

4489
03:14:36,799 --> 03:14:38,360
board members I have

4490
03:14:38,360 --> 03:14:40,329
good news this will be a very quick presentation this is

4491
03:14:40,329 --> 03:14:41,040
all information

4492
03:14:41,040 --> 03:14:45,309
that you've seen before we stated what these rates were

4493
03:14:45,309 --> 03:14:45,840
going to be proposed

4494
03:14:45,840 --> 03:14:47,969
that when we did the ratebook adoption this is just the

4495
03:14:47,969 --> 03:14:49,040
formal recommendation

4496
03:14:49,040 --> 03:14:52,340
of these rates to council so I'll just go back over those

4497
03:14:52,340 --> 03:14:54,600
pretty quickly for you

4498
03:14:54,600 --> 03:14:59,110
and just a reminder of what each component is ECA are the

4499
03:14:59,110 --> 03:15:00,000
energy cost

4500
03:15:00,000 --> 03:15:02,479
adjustment is the portion of the rate in which we recover

4501
03:15:02,479 --> 03:15:03,799
our actual energy costs

4502
03:15:03,799 --> 03:15:09,399
RCA is our debt it's ECA plus the adder to recover the

4503
03:15:09,399 --> 03:15:11,239
variable rent costs and

4504
03:15:11,239 --> 03:15:14,280
our transmission cost recovery factors the portion of the

4505
03:15:14,280 --> 03:15:15,159
rate in which we

4506
03:15:15,159 --> 03:15:18,969
recover our transmission costs that's the portion of the

4507
03:15:18,969 --> 03:15:20,440
transmission cost in

4508
03:15:20,440 --> 03:15:24,250
which we expend not our investment in our own in our own

4509
03:15:24,250 --> 03:15:25,000
transmission but when

4510
03:15:25,000 --> 03:15:28,809
we have to pay into ERCOT to pay for our portion of t-costs

4511
03:15:28,809 --> 03:15:30,399
so and we do

4512
03:15:30,399 --> 03:15:34,209
review these monthly and quarterly and that's not actually

4513
03:15:34,209 --> 03:15:34,719
accurate and we

4514
03:15:34,719 --> 03:15:37,860
review these pretty much all the time and to make sure that

4515
03:15:37,860 --> 03:15:38,920
we're meeting the

4516
03:15:38,920 --> 03:15:42,280
financial conditions that are set in the rate writers and

4517
03:15:42,280 --> 03:15:43,440
then when we meet those

4518
03:15:43,440 --> 03:15:46,100
conditions we obviously need to come back to you guys and

4519
03:15:46,100 --> 03:15:46,440
make a

4520
03:15:46,440 --> 03:15:50,250
recommendation quarterly and if we don't come back with a

4521
03:15:50,250 --> 03:15:51,280
recommendation then

4522
03:15:51,280 --> 03:15:55,090
it's because we want to hold that rate steady and as we

4523
03:15:55,090 --> 03:15:56,520
proposed previously

4524
03:15:56,520 --> 03:16:00,329
we're looking at reductions in both the ECA and the RCA

4525
03:16:00,329 --> 03:16:02,840
from 361 to 341 and then

4526
03:16:02,840 --> 03:16:09,959
from 4.01 to 3.81 and then the TCRF does vary by class we

4527
03:16:09,959 --> 03:16:10,639
went over a few of

4528
03:16:10,639 --> 03:16:13,049
those big classes before but this is just to give you a

4529
03:16:13,049 --> 03:16:13,920
breakdown of how

4530
03:16:13,920 --> 03:16:17,729
detailed we get in dividing that cost fairly among our

4531
03:16:17,729 --> 03:16:19,040
different rate classes

4532
03:16:19,040 --> 03:16:21,829
so we do get in very much in the weeds in this so we wanted

4533
03:16:21,829 --> 03:16:22,799
to make you guys

4534
03:16:22,799 --> 03:16:24,969
aware that sometimes you just see the residential rate or a

4535
03:16:24,969 --> 03:16:26,540
commercial rate we

4536
03:16:26,540 --> 03:16:29,049
go through and we break it down break down that cost by

4537
03:16:29,049 --> 03:16:30,159
rate class and we do

4538
03:16:30,159 --> 03:16:34,430
break it down also by the billing unit under which a rate a

4539
03:16:34,430 --> 03:16:35,120
customer would fall

4540
03:16:35,120 --> 03:16:38,930
so a residential customers build on KWH a larger commercial

4541
03:16:38,930 --> 03:16:39,680
customer is going to

4542
03:16:39,680 --> 03:16:44,680
be built on KW or KVA and the next steps will we'll be

4543
03:16:44,680 --> 03:16:45,639
taking these forward to

4544
03:16:45,639 --> 03:16:48,639
City Council on September 19th with the full rate book and

4545
03:16:48,639 --> 03:16:49,760
to seek approval and

4546
03:16:49,760 --> 03:16:52,930
then we'll come back in the first quarter of 2018 to have a

4547
03:16:52,930 --> 03:16:53,520
more full

4548
03:16:53,520 --> 03:16:56,239
discussion about the over and under collection of the

4549
03:16:56,239 --> 03:16:57,319
balancing accounts

4550
03:16:57,319 --> 03:17:04,079
and with that I recommend approval and stand for questions

4551
03:17:04,639 --> 03:17:08,909
I got a question over over and under collection is that

4552
03:17:08,909 --> 03:17:10,000
will that discussion

4553
03:17:10,000 --> 03:17:15,000
be at what point does it trigger coming back automatically

4554
03:17:15,000 --> 03:17:17,040
or just a report it

4555
03:17:17,040 --> 03:17:20,850
will it'll come back for a discussion we we do have some

4556
03:17:20,850 --> 03:17:21,879
some kind of some of

4557
03:17:21,879 --> 03:17:24,030
those conditions that we needed to come back we wanted to

4558
03:17:24,030 --> 03:17:25,239
finish the fiscal year

4559
03:17:25,239 --> 03:17:29,049
summer being the the most expensive period of time so we

4560
03:17:29,049 --> 03:17:29,920
wanted to make sure

4561
03:17:29,920 --> 03:17:32,799
we made it through summer and then we'll bring it back end

4562
03:17:32,799 --> 03:17:33,680
of so end of quarter

4563
03:17:33,680 --> 03:17:39,049
four we'll get the results we'll come back in q1 okay good

4564
03:17:39,049 --> 03:17:40,399
one one question is

4565
03:17:40,399 --> 03:17:43,350
this are these consistent with the figures we saw when we

4566
03:17:43,350 --> 03:17:44,000
were doing the

4567
03:17:44,000 --> 03:17:48,309
budget yes yes these reductions are how we achieved that 1%

4568
03:17:48,309 --> 03:17:49,280
rate reduction

4569
03:17:49,280 --> 03:17:57,219
overall was those decreases in ECA and RCA okay questions

4570
03:17:57,219 --> 03:17:59,040
no is there a motion

4571
03:17:59,040 --> 03:18:03,799
to recommend approval motion to recommend approval is there

4572
03:18:03,799 --> 03:18:04,239
a second

4573
03:18:04,239 --> 03:18:09,829
second and a second any other discussion all in favor say

4574
03:18:09,829 --> 03:18:12,159
aye aye any opposed same

4575
03:18:12,159 --> 03:18:17,680
sign okay motion passes thank you thank you

4576
03:18:18,200 --> 03:18:24,879
item F is to consider recommending adoption of an ordinance

4577
03:18:24,879 --> 03:18:25,159
to approve a

4578
03:18:25,159 --> 03:18:30,329
uniform emergency aid agreement for the provision of aid by

4579
03:18:30,329 --> 03:18:30,680
DIC

4580
03:18:30,680 --> 03:18:34,969
Municipal Electric Brian very timely subject yes sir this

4581
03:18:34,969 --> 03:18:35,479
is my final

4582
03:18:35,479 --> 03:18:37,139
presentation for the day you'll be glad to know I don't

4583
03:18:37,139 --> 03:18:38,200
have any PowerPoint

4584
03:18:38,200 --> 03:18:42,010
slides so I'll make it quick as you know from time to time

4585
03:18:42,010 --> 03:18:43,000
in years past we've

4586
03:18:43,000 --> 03:18:45,319
had storms that have occurred hurricanes like we're going

4587
03:18:45,319 --> 03:18:46,280
through this

4588
03:18:46,280 --> 03:18:49,690
summer we've had to dispatch crews to help repair some of

4589
03:18:49,690 --> 03:18:50,559
that infrastructure

4590
03:18:50,559 --> 03:18:53,799
in other parts of the country we have dispatched two crews

4591
03:18:53,799 --> 03:18:54,559
as I mentioned to

4592
03:18:54,559 --> 03:18:57,979
you last week to go to Florida to respond to Hurricane Irma

4593
03:18:57,979 --> 03:18:58,639
as we were

4594
03:18:58,639 --> 03:19:00,540
going through that process we realized that we had

4595
03:19:00,540 --> 03:19:01,639
agreements in place when we

4596
03:19:01,639 --> 03:19:03,850
did that but it never really been brought through the PUB

4597
03:19:03,850 --> 03:19:04,399
and the City

4598
03:19:04,399 --> 03:19:07,520
Council for approval to authorize the city manager or his

4599
03:19:07,520 --> 03:19:08,719
designee to approve

4600
03:19:08,719 --> 03:19:11,940
those agreements so this is what this is meant to do is to

4601
03:19:11,940 --> 03:19:12,879
formalize that

4602
03:19:12,879 --> 03:19:16,120
arrangement so that in the future in times of emergency

4603
03:19:16,120 --> 03:19:16,719
either the city

4604
03:19:16,719 --> 03:19:20,530
manager or myself as acting general manager of DME could

4605
03:19:20,530 --> 03:19:22,040
authorize these

4606
03:19:22,040 --> 03:19:25,309
services to be performed and to be reimbursed once those

4607
03:19:25,309 --> 03:19:25,920
services are

4608
03:19:25,920 --> 03:19:28,399
performed so that's the purpose of this item and I'll be

4609
03:19:28,399 --> 03:19:29,000
happy to answer any

4610
03:19:29,000 --> 03:19:39,680
questions that you may have questions no are any of these

4611
03:19:39,680 --> 03:19:41,760
agreements reciprocal

4612
03:19:41,760 --> 03:19:46,360
no they don't but they could similarly similarly come back

4613
03:19:46,360 --> 03:19:47,319
and propose to us if

4614
03:19:47,319 --> 03:19:50,280
we ever needed help to propose a very similar agreement to

4615
03:19:50,280 --> 03:19:51,079
us but we don't do

4616
03:19:51,079 --> 03:19:54,159
it on on a reciprocal basis typically what happens is

4617
03:19:54,159 --> 03:19:56,040
through the TPPA or the

4618
03:19:56,040 --> 03:19:59,850
APPA a request goes out for assistance and then through

4619
03:19:59,850 --> 03:20:00,719
that process the cities

4620
03:20:00,719 --> 03:20:03,200
try to work out some arrangements with each other to

4621
03:20:03,200 --> 03:20:04,399
respond but it doesn't

4622
03:20:04,399 --> 03:20:11,670
have a reciprocal feature okay okay then is there a motion

4623
03:20:11,670 --> 03:20:14,280
on this item

4624
03:20:14,280 --> 03:20:20,350
recommend approval second and a second discussion all in

4625
03:20:20,350 --> 03:20:22,760
favor say aye aye any

4626
03:20:22,760 --> 03:20:28,239
opposed same sign thank you thank you motion passes ACM

4627
03:20:28,239 --> 03:20:30,440
update board members

4628
03:20:30,440 --> 03:20:33,090
with the interest of time the five items that you have

4629
03:20:33,090 --> 03:20:34,239
listed here on your agenda

4630
03:20:34,239 --> 03:20:37,120
they're included in your packet if you have any questions

4631
03:20:37,120 --> 03:20:39,040
we have staff here to

4632
03:20:39,040 --> 03:20:41,979
answer any of your questions as you saw there's a news

4633
03:20:41,979 --> 03:20:43,600
article that was forwarded

4634
03:20:43,600 --> 03:20:47,889
by Brian Langley that was sent on by new board member Armit

4635
03:20:47,889 --> 03:20:48,959
ter and then we have

4636
03:20:48,959 --> 03:20:51,819
Jessica Rogers here to answer any questions about the

4637
03:20:51,819 --> 03:20:52,639
wireless node

4638
03:20:52,639 --> 03:20:55,590
electric rates and Chuck Springer here to answer questions

4639
03:20:55,590 --> 03:20:56,719
about the third

4640
03:20:56,719 --> 03:21:03,979
quarter financial report I'll just say that I included that

4641
03:21:03,979 --> 03:21:06,280
article that was

4642
03:21:06,280 --> 03:21:12,700
about gas plants gas power plants are retiring all over the

4643
03:21:12,700 --> 03:21:14,079
country and

4644
03:21:14,079 --> 03:21:18,379
renewables pose zero threat to reliability the reason I

4645
03:21:18,379 --> 03:21:19,479
included dot

4646
03:21:19,479 --> 03:21:23,819
was because it came from a tray I forget the name of it but

4647
03:21:23,819 --> 03:21:25,440
it's a just a

4648
03:21:25,440 --> 03:21:33,909
generic utilities trade news source that has no as far as I

4649
03:21:33,909 --> 03:21:35,280
know anyway no

4650
03:21:35,280 --> 03:21:39,700
particular agenda it's not an environmental group so to me

4651
03:21:39,700 --> 03:21:40,399
that

4652
03:21:40,399 --> 03:21:43,270
causes a concern that just I hope is on our radar with the

4653
03:21:43,270 --> 03:21:45,159
gas plant you know is

4654
03:21:45,159 --> 03:21:49,989
this the best time to build a new gas plant and take on

4655
03:21:49,989 --> 03:21:51,639
this kind of debt

4656
03:21:51,639 --> 03:21:54,530
burden at a time when the trend is that they're retiring

4657
03:21:54,530 --> 03:21:55,680
all over the country

4658
03:21:55,680 --> 03:22:01,319
and considering that so much of the argument on taking on

4659
03:22:01,319 --> 03:22:03,799
this 200 plus

4660
03:22:03,799 --> 03:22:07,389
million dollar burden had to do with the renewables posing

4661
03:22:07,389 --> 03:22:08,120
a threat to

4662
03:22:08,120 --> 03:22:11,930
reliability now it just seems to be kind of standard

4663
03:22:11,930 --> 03:22:14,319
knowledge that they don't so

4664
03:22:14,319 --> 03:22:18,719
I just just wanted people to be aware of that and I hope

4665
03:22:18,719 --> 03:22:20,440
that staff is taking

4666
03:22:20,440 --> 03:22:23,840
that into account as we plan for the future of this gas

4667
03:22:23,840 --> 03:22:24,600
plant and what to do

4668
03:22:24,600 --> 03:22:29,770
about it thank you for including it I'm sure that the

4669
03:22:29,770 --> 03:22:31,079
enterprise risk consulting

4670
03:22:31,079 --> 03:22:35,399
will have that in their recommendations as we go forward

4671
03:22:35,399 --> 03:22:38,719
addressing that okay any

4672
03:22:38,719 --> 03:22:45,620
other questions on any of the any of the five items okay

4673
03:22:45,620 --> 03:22:46,680
hearing none then

4674
03:22:46,680 --> 03:22:53,840
completing items any comments from public utility board

4675
03:22:53,840 --> 03:22:58,120
members or about

4676
03:22:58,120 --> 03:23:01,930
maybe future agenda items or any announcements that need to

4677
03:23:01,930 --> 03:23:02,479
be made at

4678
03:23:02,479 --> 03:23:08,209
this point well I wonder if we might receive I'm sorry I

4679
03:23:08,209 --> 03:23:09,159
always ask you guys

4680
03:23:09,159 --> 03:23:13,860
to bring me some data but about about the the costs that we

4681
03:23:13,860 --> 03:23:15,799
've actually taken

4682
03:23:15,799 --> 03:23:20,709
on with the Denton Energy Center you know back in the day

4683
03:23:20,709 --> 03:23:21,440
we got lots of

4684
03:23:21,440 --> 03:23:26,090
numbers showing us you know how much the ratepayers could

4685
03:23:26,090 --> 03:23:28,040
be expected to pay for

4686
03:23:28,040 --> 03:23:34,559
their utilities if we can move forward at business as usual

4687
03:23:34,559 --> 03:23:35,959
if we did 70%

4688
03:23:35,959 --> 03:23:41,280
renewables if we did 30% renewables and you know if those

4689
03:23:41,280 --> 03:23:42,360
numbers have changed

4690
03:23:42,360 --> 03:23:46,760
it would be nice to know we keep hearing this burden of

4691
03:23:46,760 --> 03:23:48,760
debt and those numbers

4692
03:23:48,760 --> 03:23:52,840
suggested that the financial burden that we were assuming

4693
03:23:52,840 --> 03:23:55,760
was less by the by

4694
03:23:55,760 --> 03:23:58,209
moving with the Denton Energy Center I just want to see

4695
03:23:58,209 --> 03:23:59,239
that those numbers are

4696
03:23:59,239 --> 03:24:05,120
still the same a big part of enterprise risks the scope

4697
03:24:05,120 --> 03:24:06,440
that there for this next

4698
03:24:06,440 --> 03:24:10,409
phase will be in fact to help us double check our pro forma

4699
03:24:10,409 --> 03:24:12,000
as I stated earlier

4700
03:24:12,000 --> 03:24:15,229
we're using the original pro forma that on the deck that

4701
03:24:15,229 --> 03:24:17,239
you've all seen is sort

4702
03:24:17,239 --> 03:24:20,340
of the guidepost and the challenge has been is are there

4703
03:24:20,340 --> 03:24:21,520
ways of through the

4704
03:24:21,520 --> 03:24:25,329
through the strategic plan reducing our costs potentially

4705
03:24:25,329 --> 03:24:26,319
which would mitigate

4706
03:24:26,319 --> 03:24:30,309
that debt payment even more and is there anything that we

4707
03:24:30,309 --> 03:24:31,440
need to be concerned

4708
03:24:31,440 --> 03:24:35,709
about probably the biggest variable in all this was the

4709
03:24:35,709 --> 03:24:37,239
anticipated credit back

4710
03:24:37,239 --> 03:24:41,110
from ERCOT for the peak generation and how that offsets the

4711
03:24:41,110 --> 03:24:41,840
debt service

4712
03:24:41,840 --> 03:24:45,850
payments so that is going to be enterprise risk major

4713
03:24:45,850 --> 03:24:47,000
variable that

4714
03:24:47,000 --> 03:24:49,579
they'll be studying and you'll all get a report back on

4715
03:24:49,579 --> 03:24:50,760
that our second phase

4716
03:24:50,760 --> 03:24:55,930
as we determine how the the Energy Center will be used and

4717
03:24:55,930 --> 03:24:57,000
and how it will

4718
03:24:57,000 --> 03:25:00,000
actually function the ERCOT market there's clearly still a

4719
03:25:00,000 --> 03:25:00,959
lot of confusion

4720
03:25:00,959 --> 03:25:03,450
out there about when the deck would be potentially called

4721
03:25:03,450 --> 03:25:04,360
into service how it

4722
03:25:04,360 --> 03:25:07,350
would be used and and so we've asked them to double check

4723
03:25:07,350 --> 03:25:08,319
the assumptions and

4724
03:25:08,319 --> 03:25:10,959
double check our financial estimates so you will have an

4725
03:25:10,959 --> 03:25:12,120
answer to your question

4726
03:25:12,120 --> 03:25:23,280
okay thank you okay so to two issues one that I would like

4727
03:25:23,280 --> 03:25:26,319
I would like to see a

4728
03:25:26,319 --> 03:25:34,729
staff presentation and discussion on our ordinance 2010-292

4729
03:25:34,729 --> 03:25:39,120
and which includes a

4730
03:25:39,120 --> 03:25:43,079
at the very end of that ordinance there's a right of entry

4731
03:25:43,079 --> 03:25:44,079
clause about

4732
03:25:44,079 --> 03:25:51,610
that DME can has the right to enter the property and shut

4733
03:25:51,610 --> 03:25:54,239
off the power if people

4734
03:25:54,239 --> 03:25:58,049
haven't paid their bill the reason I'm bringing this up is

4735
03:25:58,049 --> 03:25:58,639
is because I know

4736
03:25:58,639 --> 03:26:04,799
that years ago there was a lot of citizen opposition to

4737
03:26:04,799 --> 03:26:06,840
this and concern

4738
03:26:06,840 --> 03:26:11,770
that it was unconstitutional and I'm not a constitutional

4739
03:26:11,770 --> 03:26:14,000
law expert but it seems

4740
03:26:14,000 --> 03:26:19,450
like it's now would be a good time as we're getting a new

4741
03:26:19,450 --> 03:26:22,200
director for DME to

4742
03:26:22,200 --> 03:26:26,520
start really examining this law and to look at every aspect

4743
03:26:26,520 --> 03:26:27,799
of it and to see if

4744
03:26:27,799 --> 03:26:31,129
we want to take to keep it on the books or to change it I

4745
03:26:31,129 --> 03:26:32,520
'll just mention one

4746
03:26:32,520 --> 03:26:36,329
there's a lot of things on in this law but another thing I

4747
03:26:36,329 --> 03:26:37,920
'm concerned about in

4748
03:26:37,920 --> 03:26:40,840
addition to the right of entry clause at the end of the

4749
03:26:40,840 --> 03:26:42,520
ordinance is that there's

4750
03:26:42,520 --> 03:26:48,239
something in there about if you're late on your payment

4751
03:26:48,239 --> 03:26:49,200
there's something like

4752
03:26:49,200 --> 03:26:54,040
you have to pay something like three months of you know

4753
03:26:54,040 --> 03:26:56,120
three months worth of

4754
03:26:56,120 --> 03:26:59,360
payments or you know something like that and I just want

4755
03:26:59,360 --> 03:27:00,639
what we would like to

4756
03:27:00,639 --> 03:27:03,639
see a rundown on that I don't know when's the last time PUB

4757
03:27:03,639 --> 03:27:05,600
has had that but

4758
03:27:05,600 --> 03:27:12,489
that's something I'd like to see and then and then the

4759
03:27:12,489 --> 03:27:13,559
second I'm thinking

4760
03:27:13,559 --> 03:27:18,360
maybe the maybe the I know Ethan was over customer service

4761
03:27:18,360 --> 03:27:19,719
at the time when

4762
03:27:19,719 --> 03:27:25,530
we looked at the that's actually a prepaid account where

4763
03:27:25,530 --> 03:27:27,680
you pay you pay

4764
03:27:27,680 --> 03:27:32,280
your utilities and then yes and then it gets you as it gets

4765
03:27:32,280 --> 03:27:33,719
used it reduces what

4766
03:27:33,719 --> 03:27:36,600
your credit is yeah yeah and we could we could probably get

4767
03:27:36,600 --> 03:27:37,840
it's been a couple

4768
03:27:37,840 --> 03:27:42,110
years since we looked at that yeah thank you yeah that

4769
03:27:42,110 --> 03:27:42,760
would be excellent

4770
03:27:42,760 --> 03:27:46,530
excellent if anything just for you know for clarity and so

4771
03:27:46,530 --> 03:27:47,680
we know what is on

4772
03:27:47,680 --> 03:27:53,049
what's on the books and then the second thing was so it

4773
03:27:53,049 --> 03:27:54,319
sounded like Todd that

4774
03:27:54,319 --> 03:27:58,129
you had mentioned that in the spring is when rates for DME

4775
03:27:58,129 --> 03:27:59,399
will be re-examined

4776
03:27:59,399 --> 03:28:02,620
is that what did I hear you right yeah I think we've got we

4777
03:28:02,620 --> 03:28:03,600
've got a number of

4778
03:28:03,600 --> 03:28:06,649
steps in place over the next few months before we could

4779
03:28:06,649 --> 03:28:07,760
answer the question that

4780
03:28:07,760 --> 03:28:09,909
you brought up earlier and that is to make sure that we get

4781
03:28:09,909 --> 03:28:10,559
our strategic

4782
03:28:10,559 --> 03:28:13,510
strategic plan in place for renewables we've got a couple

4783
03:28:13,510 --> 03:28:14,520
we've got at least

4784
03:28:14,520 --> 03:28:18,329
one RFP out right now that we've asked the group to help us

4785
03:28:18,329 --> 03:28:19,399
with you know as

4786
03:28:19,399 --> 03:28:23,670
you learn today about diversifying your win for instance

4787
03:28:23,670 --> 03:28:24,840
and so once those

4788
03:28:24,840 --> 03:28:27,989
contracts the additional contract is put into place and how

4789
03:28:27,989 --> 03:28:28,799
we're going to

4790
03:28:28,799 --> 03:28:31,489
operate the energy center because that flows right into

4791
03:28:31,489 --> 03:28:32,520
Brendan's question

4792
03:28:32,520 --> 03:28:36,549
regarding the the ERCOT credits we'll be able to revise our

4793
03:28:36,549 --> 03:28:37,360
financial

4794
03:28:37,360 --> 03:28:41,170
assumptions and look for any discrepancies or you know

4795
03:28:41,170 --> 03:28:41,479
either

4796
03:28:41,479 --> 03:28:45,959
improvement or not yeah excellent yeah thank you so one

4797
03:28:45,959 --> 03:28:47,840
issue that I would like

4798
03:28:47,840 --> 03:28:50,229
to be looked into along the way by staff and you know at

4799
03:28:50,229 --> 03:28:51,719
some point us here in

4800
03:28:51,719 --> 03:28:58,680
PUB when the time comes is why our rates for DME are such

4801
03:28:58,680 --> 03:29:01,319
that the discounts go to

4802
03:29:01,319 --> 03:29:08,209
the the bigger users who have the special agreements and

4803
03:29:08,209 --> 03:29:09,959
why the residential

4804
03:29:09,959 --> 03:29:15,700
ratepayers who are a hundred percent of our DME citizen

4805
03:29:15,700 --> 03:29:18,079
owners even though they

4806
03:29:18,079 --> 03:29:21,889
they're just as you know small as smaller percent much

4807
03:29:21,889 --> 03:29:22,680
smaller percentage

4808
03:29:22,680 --> 03:29:26,670
of our energy users and why they have to for the most part

4809
03:29:26,670 --> 03:29:29,120
pay a higher rate and

4810
03:29:29,120 --> 03:29:33,469
I was recently pleased to learn in water or have confirmed

4811
03:29:33,469 --> 03:29:34,840
for me rather by

4812
03:29:34,840 --> 03:29:38,649
looking over the water department's rate structure and by

4813
03:29:38,649 --> 03:29:39,280
touring that

4814
03:29:39,280 --> 03:29:43,090
department that they have kind of a reverse model where to

4815
03:29:43,090 --> 03:29:43,719
encourage

4816
03:29:43,719 --> 03:29:49,989
conservation and also to ease the burden on on you know

4817
03:29:49,989 --> 03:29:51,479
middle-class working class

4818
03:29:51,479 --> 03:29:56,290
and struggling ratepayers they have the bigger users pay

4819
03:29:56,290 --> 03:29:57,760
more what you know why

4820
03:29:57,760 --> 03:30:01,000
we can't do that in DME I'd like that at least to be looked

4821
03:30:01,000 --> 03:30:02,520
into the possibility

4822
03:30:02,520 --> 03:30:06,329
of making the the logic behind that rate those two rate

4823
03:30:06,329 --> 03:30:08,440
structures more uniform

4824
03:30:08,440 --> 03:30:11,739
maybe there's a good reason for it that I don't understand

4825
03:30:11,739 --> 03:30:12,920
but I would at least

4826
03:30:12,920 --> 03:30:19,559
like some consideration of that thanks okay

4827
03:30:22,000 --> 03:30:28,040
anybody else nope we have a motion to adjourn motion that

4828
03:30:28,040 --> 03:30:29,360
we adjourn second

4829
03:30:29,360 --> 03:30:36,000
all in favor say aye aye any opposed thank you