WEBVTT 00:00:00.000 --> 00:00:07.599 Before we get into our agenda, I guess I want to welcome 00:00:07.599 --> 00:00:09.000 Deb Armatar. This is her 00:00:09.000 --> 00:00:12.939 first meeting as a PUB board member, so Deb, welcome. Thank 00:00:12.939 --> 00:00:14.759 you. If you want to 00:00:14.759 --> 00:00:17.059 tell us a little bit about yourself, that's kind of the 00:00:17.059 --> 00:00:17.960 tradition here. 00:00:17.960 --> 00:00:25.559 Where you from and how you got here, I guess. 00:00:25.559 --> 00:00:32.640 Well, first of all, I'm happy to be here. Thank you so much 00:00:32.640 --> 00:00:33.079 and thanks to 00:00:33.079 --> 00:00:36.890 everyone who works for our utilities. I was born in Denmark 00:00:36.890 --> 00:00:38.039 , grew up in Rhode 00:00:38.039 --> 00:00:44.380 Island. I've been a Texan since 1995. I got a job at 00:00:44.380 --> 00:00:46.719 teaching English here at UNT 00:00:46.719 --> 00:00:50.530 in 2002 and I've been living here ever since. Don't want to 00:00:50.530 --> 00:00:51.359 live anywhere else. 00:00:51.359 --> 00:00:56.960 Married to East Texan, got two Texan kids and I just love 00:00:56.960 --> 00:00:58.600 Denton. I'm thrilled 00:00:58.600 --> 00:01:03.840 to be here. So thank you. Thanks for the introduction. Okay 00:01:03.840 --> 00:01:06.599 , our first item, we have a couple of 00:01:06.599 --> 00:01:10.200 work session items. So we'll go into work session. This 00:01:10.200 --> 00:01:12.079 time item A, which is to 00:01:12.079 --> 00:01:14.560 receive a report, hold a discussion, and give staff 00:01:14.560 --> 00:01:16.640 direction regarding resource 00:01:16.640 --> 00:01:23.230 planning and power supply strategy for DME. Brian? Good 00:01:23.230 --> 00:01:25.400 morning. This is the first 00:01:25.400 --> 00:01:27.930 of two presentations we have today for some consultants 00:01:27.930 --> 00:01:29.000 doing some work for us 00:01:29.000 --> 00:01:33.680 at UNT, with DME, not UNT. I was thinking UNT as I was 00:01:33.680 --> 00:01:35.159 looking over at you. I got confused. 00:01:35.159 --> 00:01:38.079 But we've been looking at some different elements of our 00:01:38.079 --> 00:01:39.200 resource planning and 00:01:39.200 --> 00:01:43.010 our power supply and we've hired enterprise resource risk 00:01:43.010 --> 00:01:43.280 consulting to 00:01:43.280 --> 00:01:45.579 do this work for us. Larry Lawrence is here. He's gonna 00:01:45.579 --> 00:01:46.879 make the presentation and 00:01:46.879 --> 00:01:49.560 Neil McAndreys is also here. So I'll turn it over to them. 00:01:49.560 --> 00:01:50.439 I did want to mention 00:01:50.439 --> 00:01:53.170 this is part of a two-phase process that we've been looking 00:01:53.170 --> 00:01:53.959 at with enterprise 00:01:53.959 --> 00:01:56.730 risk. This is the first phase. They're not yet complete 00:01:56.730 --> 00:01:57.680 with this phase. We hope 00:01:57.680 --> 00:02:00.760 to have that completed by mid-October and in the second 00:02:00.760 --> 00:02:01.280 phase we'll be 00:02:01.280 --> 00:02:04.510 bringing back a contract for your consideration and for the 00:02:04.510 --> 00:02:05.200 City Council's 00:02:05.200 --> 00:02:07.700 consideration probably next month. So with that, I'll turn 00:02:07.700 --> 00:02:08.400 it over to Larry. 00:02:08.400 --> 00:02:11.719 Thank you, Brian. Thank you. Good morning everyone. I'm 00:02:11.719 --> 00:02:12.719 Larry Lawrence and this is 00:02:12.719 --> 00:02:16.530 Neil McAndreys. We appreciate the opportunity to be here. 00:02:16.530 --> 00:02:17.960 The intent of 00:02:17.960 --> 00:02:22.639 this presentation is we've been, we were engaged in August 00:02:22.639 --> 00:02:24.120 and so we've started 00:02:24.120 --> 00:02:27.930 work. We're gonna wrap up the deliverable for this in 00:02:27.930 --> 00:02:28.560 October but we 00:02:28.560 --> 00:02:30.979 wanted to give you an early look because we have a pretty 00:02:30.979 --> 00:02:31.840 good sense of where 00:02:31.840 --> 00:02:35.800 we're going. We need to do some additional analysis and 00:02:35.800 --> 00:02:36.840 modeling to 00:02:36.840 --> 00:02:39.189 really refine the conclusions but we have a good sense of 00:02:39.189 --> 00:02:39.960 where we're gonna 00:02:39.960 --> 00:02:42.550 go in terms of what the recommendations will be for a 00:02:42.550 --> 00:02:44.680 resource plan. So Brian 00:02:44.680 --> 00:02:48.280 thought it was a very good idea to get this to you now so 00:02:48.280 --> 00:02:49.479 we can get some 00:02:49.479 --> 00:02:52.750 feedback and be able to refine the work as we go forward 00:02:52.750 --> 00:02:54.240 here. Just a brief 00:02:54.240 --> 00:02:58.050 introduction of the organization. We do risk management 00:02:58.050 --> 00:02:59.439 consulting in a variety 00:02:59.439 --> 00:03:03.250 of areas. We haven't had a lot of clients in ERCOT so we do 00:03:03.250 --> 00:03:04.560 a variety of things 00:03:04.560 --> 00:03:07.740 for them. We help them establish power supply programs. We 00:03:07.740 --> 00:03:08.960 do resource planning. 00:03:08.960 --> 00:03:13.229 We train traders. We do a lot of outsource work for them as 00:03:13.229 --> 00:03:14.520 well so we 00:03:14.520 --> 00:03:17.800 have a lot of experience. The people that work for the 00:03:17.800 --> 00:03:18.759 organization have been in 00:03:18.759 --> 00:03:23.030 the industry for multiple decades. Experience from Wall 00:03:23.030 --> 00:03:24.800 Street, utilities in 00:03:24.800 --> 00:03:28.719 Texas. We do a lot of work in the renewable space, have 00:03:28.719 --> 00:03:30.400 been through coal, 00:03:30.400 --> 00:03:33.580 gas, and renewables so there's a lot of experience in terms 00:03:33.580 --> 00:03:35.039 of what we've 00:03:35.039 --> 00:03:38.110 covered here. And as I go through the presentation we will 00:03:38.110 --> 00:03:39.199 invite questions at 00:03:39.199 --> 00:03:42.199 any time. You don't need to to wait or hold those till 00:03:42.199 --> 00:03:44.560 later because the the 00:03:44.560 --> 00:03:47.740 answers that we could give to those questions may be just 00:03:47.740 --> 00:03:48.719 as valuable as the 00:03:48.719 --> 00:03:51.460 material that's in the presentation. So we invite this to 00:03:51.460 --> 00:03:52.879 be as much of an open 00:03:52.879 --> 00:03:58.280 discussion as possible. So we want to start with sort of a 00:03:58.280 --> 00:03:59.860 benchmark reference 00:03:59.860 --> 00:04:04.129 here. We know that Denton has some goals in terms of 00:04:04.129 --> 00:04:05.879 advancing and increasing the 00:04:05.879 --> 00:04:08.659 amount of renewables, renewable resources in your supply 00:04:08.659 --> 00:04:10.479 portfolio and so a good 00:04:10.479 --> 00:04:14.180 benchmark for this is the city of Georgetown. Neil McAndrew 00:04:14.180 --> 00:04:14.639 s here 00:04:14.639 --> 00:04:18.449 successfully helped them build their renewable resource 00:04:18.449 --> 00:04:19.000 portfolio for 00:04:19.000 --> 00:04:23.649 supplies and one of the things we want to get across here 00:04:23.649 --> 00:04:24.879 is that as much as 00:04:24.879 --> 00:04:27.730 Georgetown has made a lot of hay with the branding for 00:04:27.730 --> 00:04:29.240 being 100% renewable 00:04:29.240 --> 00:04:33.839 and that's really been a tremendous boon to the city itself 00:04:33.839 --> 00:04:36.079 and the utility, their 00:04:36.079 --> 00:04:39.079 main goal was to come up with the least cost supply. They 00:04:39.079 --> 00:04:40.600 didn't start out trying 00:04:40.600 --> 00:04:43.730 to go 100% renewable. They had a customer, they had rate 00:04:43.730 --> 00:04:44.839 payer advocates 00:04:44.839 --> 00:04:48.339 that wanted that so they were clearly open to that message 00:04:48.339 --> 00:04:49.480 but the main thing 00:04:49.480 --> 00:04:53.750 they initially looked at was least cost and fortunately it 00:04:53.750 --> 00:04:54.759 was a, I don't 00:04:54.759 --> 00:04:57.379 know what the antithesis is of a perfect storm, but it all 00:04:57.379 --> 00:04:58.439 came together for them. 00:04:58.439 --> 00:05:02.250 It met the renewable goals and met their cost goals. So 00:05:02.250 --> 00:05:03.839 they originally did not 00:05:03.839 --> 00:05:07.649 intend to go 100% renewable but when they saw how cost- 00:05:07.649 --> 00:05:08.439 effective it was and 00:05:08.439 --> 00:05:11.759 how clean the power was and especially something that doesn 00:05:11.759 --> 00:05:12.480 't often get 00:05:12.480 --> 00:05:15.509 mentioned was the fact that it dramatically reduced the 00:05:15.509 --> 00:05:16.720 water usage, the 00:05:16.720 --> 00:05:20.000 water consumption for the power supply production as well, 00:05:20.000 --> 00:05:21.180 they opted to then 00:05:21.180 --> 00:05:25.230 kind of jump in full force and go 100%. Neil, I don't know 00:05:25.230 --> 00:05:26.040 if you want to speak to 00:05:26.040 --> 00:05:29.160 anything else about that. Neil was on the ground with them 00:05:29.160 --> 00:05:30.439 all the time and was 00:05:30.439 --> 00:05:33.350 heavily involved in that project. Right, they started off 00:05:33.350 --> 00:05:34.399 with a renewable 00:05:34.399 --> 00:05:38.879 portfolio standard or their, you know, their planning 00:05:38.879 --> 00:05:40.319 standard of 30% 00:05:40.319 --> 00:05:44.649 renewable. They also thought they were going to buy into a 00:05:44.649 --> 00:05:46.199 nuke. This was in 00:05:46.199 --> 00:05:51.370 2008. The nuke became way too expensive but the idea was 00:05:51.370 --> 00:05:54.000 they wanted to not have 00:05:54.000 --> 00:05:57.920 emissions, not as much emissions in their new portfolio. 00:05:57.920 --> 00:05:59.519 Also Georgetown's growing 00:05:59.519 --> 00:06:06.410 at about 7% per year and has been and so they needed, they 00:06:06.410 --> 00:06:07.839 had no supply so they 00:06:07.839 --> 00:06:10.949 needed to get a supply quickly out there. Those are things 00:06:10.949 --> 00:06:11.759 that helped 00:06:11.759 --> 00:06:15.050 spur them into the decisions that they made. So we just 00:06:15.050 --> 00:06:16.439 want to establish that 00:06:16.439 --> 00:06:18.540 as a benchmark because it's well known as a city that's 00:06:18.540 --> 00:06:20.120 gone 100% renewable and 00:06:20.120 --> 00:06:22.370 so we have a lot of experience in terms of the thought 00:06:22.370 --> 00:06:23.480 process and the planning 00:06:23.480 --> 00:06:27.339 process and the implementation process for that. Further, 00:06:27.339 --> 00:06:28.399 one thing that's 00:06:28.399 --> 00:06:32.170 important is managing, because of the intermittent nature 00:06:32.170 --> 00:06:32.879 of renewable 00:06:32.879 --> 00:06:36.689 resources, it's really important to have a daily active 00:06:36.689 --> 00:06:37.600 management operation in 00:06:37.600 --> 00:06:40.120 your power supply portfolio to manage around that 00:06:40.120 --> 00:06:42.480 intermittent nature. This is 00:06:42.480 --> 00:06:45.449 something that we provide even to Georgetown on an outsour 00:06:45.449 --> 00:06:46.639 ced basis. So not 00:06:46.639 --> 00:06:49.639 saying it has to be outsourced but we do this successfully 00:06:49.639 --> 00:06:50.639 on a daily basis for 00:06:50.639 --> 00:06:53.120 Georgetown so this is something that we can help build the 00:06:53.120 --> 00:06:54.000 capabilities within 00:06:54.000 --> 00:07:00.209 the utility. So the expected essential findings here in the 00:07:00.209 --> 00:07:00.879 program, this is 00:07:00.879 --> 00:07:03.899 just what we, in terms of our first look, the first few 00:07:03.899 --> 00:07:05.360 weeks on the ground here 00:07:05.360 --> 00:07:08.459 and you're getting a sense of what's going on, is that A, 00:07:08.459 --> 00:07:10.399 it's fortunate that 00:07:10.399 --> 00:07:13.689 you're in a position where you have needs for additional 00:07:13.689 --> 00:07:14.879 power supply because 00:07:14.879 --> 00:07:19.730 costs are very low right now. Renewables are low, costs are 00:07:19.730 --> 00:07:20.959 low. So we think 00:07:20.959 --> 00:07:22.920 additional renewable resources will be found to be the 00:07:22.920 --> 00:07:24.000 least cost alternative 00:07:24.000 --> 00:07:27.810 for Denton. This will also reduce the long-term cost 00:07:27.810 --> 00:07:29.160 volatility or the cost 00:07:29.160 --> 00:07:32.170 uncertainty for Denton so there'll be a tremendous 00:07:32.170 --> 00:07:33.839 advantage in reducing the 00:07:33.839 --> 00:07:38.129 price or cost uncertainty for your power supply. The DEC, 00:07:38.129 --> 00:07:39.040 the Denton Energy 00:07:39.040 --> 00:07:42.009 Center, will assist in lowering that supply cost volatility 00:07:42.009 --> 00:07:42.959 . We're still 00:07:42.959 --> 00:07:45.930 continuing to analyze how that would best fit in with the 00:07:45.930 --> 00:07:47.879 resource plan. We will 00:07:47.879 --> 00:07:51.480 also recommend alternative ways to dispose of the 00:07:51.480 --> 00:07:52.160 prospective excess 00:07:52.160 --> 00:07:56.430 production potential. And as I mentioned before, Denton 00:07:56.430 --> 00:07:57.120 will need to develop 00:07:57.120 --> 00:08:01.389 forecasting and congestion management processes to best 00:08:01.389 --> 00:08:03.120 optimize and manage a 00:08:03.120 --> 00:08:08.920 portfolio that is substantially renewable resource, is made 00:08:08.920 --> 00:08:09.439 up of 00:08:09.439 --> 00:08:11.889 substantial amounts of renewable resources. So that's 00:08:11.889 --> 00:08:12.759 another finding and 00:08:12.759 --> 00:08:15.680 that will a lot of the detail on how that needs to be 00:08:15.680 --> 00:08:17.000 managed will also be 00:08:17.000 --> 00:08:22.279 included in our plan that we'll be delivering in October. 00:08:22.279 --> 00:08:24.040 So go ahead Neil, 00:08:24.040 --> 00:08:26.379 why don't you speak to this one in terms of the first 00:08:26.379 --> 00:08:29.480 principles here. Okay, one of 00:08:29.480 --> 00:08:32.440 the things that you have to start off with is you have to 00:08:32.440 --> 00:08:33.080 understand the rules 00:08:33.080 --> 00:08:37.350 of ERCOT. It's an energy only market. So you just buy 00:08:37.350 --> 00:08:38.919 energy, that's all you need. 00:08:38.919 --> 00:08:43.820 Other jurisdictions have capacity markets, but we don't 00:08:43.820 --> 00:08:45.679 here. We just have an 00:08:45.679 --> 00:08:47.899 energy only market. And so the first thing is you've got 00:08:47.899 --> 00:08:48.679 you have to figure 00:08:48.679 --> 00:08:56.629 out how much energy am I buying. So all the load has to do, 00:08:56.629 --> 00:08:58.320 and this is very, very 00:08:58.320 --> 00:09:02.129 consumer friendly, that's and all you have to do is buy 00:09:02.129 --> 00:09:03.480 your energy schedules, 00:09:03.480 --> 00:09:08.450 schedule against your load, and you're done basically, 00:09:08.450 --> 00:09:11.080 right. And so the other 00:09:11.080 --> 00:09:15.370 thing is you have to measure your actual risk as your load 00:09:15.370 --> 00:09:16.559 and then you have to 00:09:16.559 --> 00:09:21.620 match the energy so it's sort of equal but opposite. That's 00:09:21.620 --> 00:09:22.879 an opposition hedge, 00:09:22.879 --> 00:09:26.029 that's what hedging is all about. But the idea it's a 00:09:26.029 --> 00:09:27.399 little tricky because 00:09:27.399 --> 00:09:32.870 loads vary and so do renewables or any other generation. So 00:09:32.870 --> 00:09:34.159 you always have to 00:09:34.159 --> 00:09:36.629 forecast these so they're always matching up and you don't 00:09:36.629 --> 00:09:38.240 want too much of either 00:09:38.240 --> 00:09:45.789 one, right. They have to be balanced. The other thing is it 00:09:45.789 --> 00:09:47.679 's very important, the 00:09:47.679 --> 00:09:51.950 other principle in the ERCOT market is it has what is known 00:09:51.950 --> 00:09:53.679 as a basis market or a 00:09:53.679 --> 00:09:58.850 congestion market and these are congestion CRRs as they're 00:09:58.850 --> 00:09:59.600 called. And 00:09:59.600 --> 00:10:01.960 what those are, they're instruments to bring whatever 00:10:01.960 --> 00:10:04.000 resource you have and 00:10:04.000 --> 00:10:08.269 translate it geographically and economically to your load. 00:10:08.269 --> 00:10:09.519 So that's one 00:10:09.519 --> 00:10:13.220 of the key things in renewables and all generation has to 00:10:13.220 --> 00:10:14.440 do this but renewables 00:10:14.440 --> 00:10:19.639 in particular because what it does is matches the whatever 00:10:19.639 --> 00:10:20.480 production that you 00:10:20.480 --> 00:10:24.350 have and serves the load directly and that's a key thing. A 00:10:24.350 --> 00:10:25.580 lot of people miss 00:10:25.580 --> 00:10:29.879 this step, large utilities and what they and we've been 00:10:29.879 --> 00:10:31.360 hired by several of them 00:10:31.360 --> 00:10:35.370 this year because they they have poor economic performance 00:10:35.370 --> 00:10:36.059 when they don't do 00:10:36.059 --> 00:10:41.669 that. The things explode on them, congestion incurs, all 00:10:41.669 --> 00:10:42.679 this other stuff 00:10:42.679 --> 00:10:46.490 and what the CRRs it turns out are really inexpensive 00:10:46.490 --> 00:10:47.940 insurance so you can 00:10:47.940 --> 00:10:51.100 ensure that the renewables actually match up with your load 00:10:51.100 --> 00:10:52.600 . So you'll see that 00:10:52.600 --> 00:10:55.159 point made several times throughout the presentation but 00:10:55.159 --> 00:10:56.159 one of the things that 00:10:56.159 --> 00:10:58.960 we also want to bring to the table for you is we've seen a 00:10:58.960 --> 00:11:00.360 lot of mistakes made 00:11:00.360 --> 00:11:03.629 especially with the municipalities and some cooperatives in 00:11:03.629 --> 00:11:04.519 Texas and how they 00:11:04.519 --> 00:11:07.370 built and then managed a renewable resource portfolio so we 00:11:07.370 --> 00:11:08.000 can help you 00:11:08.000 --> 00:11:10.970 avoid some of those mistakes that we've seen other people 00:11:10.970 --> 00:11:12.720 make. So as Neil 00:11:12.720 --> 00:11:16.529 alluded to the goal here is a balanced opposition hedge. 00:11:16.529 --> 00:11:17.960 Essentially when you 00:11:17.960 --> 00:11:21.659 have demand with insufficient resources you need to acquire 00:11:21.659 --> 00:11:21.759 sufficient 00:11:21.759 --> 00:11:25.029 resources in opposition to that demand to balance that 00:11:25.029 --> 00:11:26.159 portfolio and as Neil 00:11:26.159 --> 00:11:30.759 alluded to part of that supply piece is bringing the 00:11:30.759 --> 00:11:33.200 pricing to where your load 00:11:33.200 --> 00:11:38.519 is actually priced. ERCOT has overlapping but I hate to use 00:11:38.519 --> 00:11:39.519 the word mismatched but 00:11:39.519 --> 00:11:42.320 they're mismatched pricing points. Load is priced according 00:11:42.320 --> 00:11:43.159 to load zones across 00:11:43.159 --> 00:11:46.909 the state. Resources or production or generation production 00:11:46.909 --> 00:11:47.360 is priced at 00:11:47.360 --> 00:11:51.340 resource nodes and those don't always match. We don't have 00:11:51.340 --> 00:11:52.240 the time here but 00:11:52.240 --> 00:11:54.330 Neil could tell you an amusing story about the city of 00:11:54.330 --> 00:11:55.559 Austin who thought one 00:11:55.559 --> 00:11:57.529 of their power plants that happened to be in the city 00:11:57.529 --> 00:11:58.720 limits would be a natural 00:11:58.720 --> 00:12:00.820 offset to their load knowing to find out that that power 00:12:00.820 --> 00:12:01.720 plant which was in the 00:12:01.720 --> 00:12:04.240 city limits was priced at a different resource node and 00:12:04.240 --> 00:12:05.039 they had a tremendous 00:12:05.039 --> 00:12:10.580 pricing mismatch between those. So our goal here in terms 00:12:10.580 --> 00:12:12.080 of devising an 00:12:12.080 --> 00:12:15.929 optimal portfolio for you is to close that gap to make sure 00:12:15.929 --> 00:12:17.120 that the pricing 00:12:17.120 --> 00:12:22.049 matches that your supply and your demand are offset as 00:12:22.049 --> 00:12:24.399 efficiently as possible to 00:12:24.399 --> 00:12:28.210 reduce your cost and your cost variability. I'm gonna let 00:12:28.210 --> 00:12:28.860 Neil speak to 00:12:28.860 --> 00:12:33.129 this we're gonna in just a moment we're gonna show you sort 00:12:33.129 --> 00:12:34.279 of a slice of two 00:12:34.279 --> 00:12:38.250 different days a high load day and then a day in the spring 00:12:38.250 --> 00:12:39.399 which would have 00:12:39.399 --> 00:12:44.159 different outputs for things like wind resources, solar, 00:12:44.159 --> 00:12:45.240 how the deck might 00:12:45.240 --> 00:12:47.990 perform and so forth just to give you a picture of the 00:12:47.990 --> 00:12:49.279 things we're gonna look 00:12:49.279 --> 00:12:52.259 at and how these different resources can be applied to your 00:12:52.259 --> 00:12:53.799 load. Go ahead Neil you can 00:12:53.799 --> 00:13:00.909 describe the graph. Sure so this is wind resources produce 00:13:00.909 --> 00:13:03.120 their lowest capacity 00:13:03.120 --> 00:13:08.289 factor and their lowest output in the summer but they still 00:13:08.289 --> 00:13:09.320 produce some off 00:13:09.320 --> 00:13:14.350 peak but not so much and that's shown in red here and you 00:13:14.350 --> 00:13:15.679 can see that daily 00:13:15.679 --> 00:13:27.419 production it's U-shaped right. That's the green screen. 00:13:27.419 --> 00:13:29.320 Now solar is just the 00:13:29.320 --> 00:13:33.129 opposite and that's why you want to marry the two they're 00:13:33.129 --> 00:13:33.519 compliment perfectly 00:13:33.519 --> 00:13:38.220 complimentary it produces and this is all comes as amaz 00:13:38.220 --> 00:13:39.360 ement to some people 00:13:39.360 --> 00:13:43.629 it only produces during daylight hours right and so in its 00:13:43.629 --> 00:13:45.399 production the Sun 00:13:45.399 --> 00:13:49.840 is some of the its highest like June 22nd summer solstice 00:13:49.840 --> 00:13:51.679 and that's the 00:13:51.679 --> 00:13:57.000 highest production and so those two that's what happens 00:13:57.000 --> 00:13:58.240 sort of on a typical 00:13:58.240 --> 00:14:02.220 summer day when the wind is low. Now the wind can also blow 00:14:02.220 --> 00:14:03.200 on even on summer 00:14:03.200 --> 00:14:08.480 days or for instance the Georgetown wind last three days it 00:14:08.480 --> 00:14:09.480 's been blowing at 00:14:09.480 --> 00:14:13.570 maximum and it's when September that's really counted to 00:14:13.570 --> 00:14:15.639 summer and so the 00:14:15.639 --> 00:14:18.740 other thing that you have is market purchases and a lot of 00:14:18.740 --> 00:14:19.360 people don't 00:14:19.360 --> 00:14:23.169 understand the market purchases are designed to dynamically 00:14:23.169 --> 00:14:23.879 fill in any gaps 00:14:23.879 --> 00:14:27.929 on your resources day to day for instance on this day you 00:14:27.929 --> 00:14:29.039 had these 00:14:29.039 --> 00:14:32.850 purple purchases at night when it's really inexpensive to 00:14:32.850 --> 00:14:34.799 fill in the gap 00:14:34.799 --> 00:14:41.700 and that's that's part of the forecasting process that you 00:14:41.700 --> 00:14:42.759 have to do 00:14:42.759 --> 00:14:46.360 now if the wind was blowing full out you wouldn't have to 00:14:46.360 --> 00:14:47.240 buy any market 00:14:47.240 --> 00:14:50.120 purchases and so that's the that's what you have to manage 00:14:50.120 --> 00:14:51.360 every day the deck 00:14:51.360 --> 00:14:55.200 which is the you know the Denton Energy Center is a peaking 00:14:55.200 --> 00:14:56.600 plant essentially 00:14:56.600 --> 00:15:01.220 and you can see that it's dispatched wherever the blue 00:15:01.220 --> 00:15:02.720 levels are now these 00:15:02.720 --> 00:15:06.529 things it's probably dispatched mostly full out during 00:15:06.529 --> 00:15:09.639 those periods so on this 00:15:09.639 --> 00:15:14.200 day though when you run the deck you also see below zero 00:15:14.200 --> 00:15:15.720 these purple numbers 00:15:15.720 --> 00:15:20.009 those were also markets but actions but they're sales you 00:15:20.009 --> 00:15:20.519 have too much 00:15:20.519 --> 00:15:24.340 generation so you're selling into the market so that's that 00:15:24.340 --> 00:15:26.039 what you try to do 00:15:26.039 --> 00:15:33.120 for 8600 hours 8760 hours a year the entire year hourly you 00:15:33.120 --> 00:15:34.000 try to match all 00:15:34.000 --> 00:15:38.049 those different resources to minimize cost and so if you 00:15:38.049 --> 00:15:39.480 think about it it's 00:15:39.480 --> 00:15:41.629 it's kind of a hard thing to do because a lot of these 00:15:41.629 --> 00:15:42.759 things vary you have to 00:15:42.759 --> 00:15:47.049 model them prices you have to model the outputs you have to 00:15:47.049 --> 00:15:48.080 brought model low and 00:15:48.080 --> 00:15:51.889 they're all under uncertainty so you can see in this little 00:15:51.889 --> 00:15:52.960 square in the bottom 00:15:52.960 --> 00:15:58.129 and right what the the relative outputs of each are solar 00:15:58.129 --> 00:15:59.799 is 21% the markets 00:15:59.799 --> 00:16:05.720 27% the deck produces 28% and when produces 24% of their 00:16:05.720 --> 00:16:07.360 capacity and you 00:16:07.360 --> 00:16:09.590 can see that's kind of balanced and that's that's a pretty 00:16:09.590 --> 00:16:10.799 good portfolio so 00:16:10.799 --> 00:16:15.169 that means when you have a portfolio like that the variance 00:16:15.169 --> 00:16:16.879 goes down so you 00:16:16.879 --> 00:16:22.049 have a very secure supply so this is where the energy 00:16:22.049 --> 00:16:23.120 management operation yes 00:16:23.120 --> 00:16:28.139 yes sir so this this is a I'm assuming the blue line is our 00:16:28.139 --> 00:16:31.799 demand yes yeah so 00:16:31.799 --> 00:16:37.519 in a typical August day this is what it would look like 00:16:37.519 --> 00:16:39.000 that the market 00:16:39.000 --> 00:16:45.210 purchases when we when we contract market purchases do we I 00:16:45.210 --> 00:16:45.919 mean typically 00:16:45.919 --> 00:16:49.850 are we gonna say we're gonna take this this amount of 00:16:49.850 --> 00:16:52.000 energy during this August 00:16:52.000 --> 00:16:57.559 day so there may be some over purchase on that mark 00:17:10.720 --> 00:17:14.529 you're waiting as long as possible to get that forecast 00:17:14.529 --> 00:17:15.920 error down so those 00:17:15.920 --> 00:17:19.069 are likely be day ahead purchases where you can be much 00:17:19.069 --> 00:17:20.440 more precise in how much 00:17:20.440 --> 00:17:24.250 you're paying for those so it's just you buy it day to day 00:17:24.250 --> 00:17:25.880 to day hour by hour by 00:17:25.880 --> 00:17:28.509 hour so you don't you're only buying the minimum amount you 00:17:28.509 --> 00:17:29.079 need that you need 00:17:29.079 --> 00:17:33.960 and notice this is all at night most of these are at night 00:17:33.960 --> 00:17:35.160 because you have 00:17:35.160 --> 00:17:37.920 enough supplies during the daylight at night are the 00:17:37.920 --> 00:17:39.160 cheapest prices so you're 00:17:39.160 --> 00:17:42.549 only buying cheap stuff at night to fill them yeah so that 00:17:42.549 --> 00:17:43.480 's where the deck in 00:17:43.480 --> 00:17:45.569 this case would protect you because that's likely when the 00:17:45.569 --> 00:17:46.200 highest market 00:17:46.200 --> 00:17:49.000 prices would be and you have that unit to generate power 00:17:49.000 --> 00:17:50.480 right as a substitute 00:17:50.480 --> 00:17:53.430 to buying higher price from the market yet when the deck is 00:17:53.430 --> 00:17:54.440 not economical to 00:17:54.440 --> 00:17:57.789 run you're purchasing things at night to fill in the gaps 00:17:57.789 --> 00:17:58.880 when the price is 00:17:58.880 --> 00:18:02.690 generally cheap it's also the peak time to sell the excess 00:18:02.690 --> 00:18:02.960 production that's 00:18:02.960 --> 00:18:07.319 correct well that's correct yes so this is where the energy 00:18:07.319 --> 00:18:07.720 management 00:18:07.720 --> 00:18:10.329 organization that I believe you set up and I believe the 00:18:10.329 --> 00:18:11.440 gentleman from Deloitte 00:18:11.440 --> 00:18:14.460 are going to discuss that further that's something that we 00:18:14.460 --> 00:18:15.839 're learning more about 00:18:15.839 --> 00:18:17.980 as we get engaged here but that's something that will be a 00:18:17.980 --> 00:18:18.640 very valuable 00:18:18.640 --> 00:18:22.450 component to how you manage this because this will require 00:18:22.450 --> 00:18:23.480 active management this 00:18:23.480 --> 00:18:27.289 isn't what we would call a set and forget kind of portfolio 00:18:27.289 --> 00:18:28.119 because of the 00:18:28.119 --> 00:18:31.019 variability of the output in the need to forecast the need 00:18:31.019 --> 00:18:32.119 to purchase from the 00:18:32.119 --> 00:18:35.470 market to fill in the balance to sell excess and maximize 00:18:35.470 --> 00:18:36.400 the revenue of 00:18:36.400 --> 00:18:40.289 excess production capacity all of these things are an 00:18:40.289 --> 00:18:42.680 ongoing operation that a 00:18:42.680 --> 00:18:44.650 lot of other utilities do all the time and successfully 00:18:44.650 --> 00:18:45.640 this wouldn't be unique 00:18:45.640 --> 00:18:48.799 to you but that you do need an internal organization to do 00:18:48.799 --> 00:18:50.000 that I think it'd be 00:18:50.000 --> 00:18:52.789 more efficient than outsourcing that for example there are 00:18:52.789 --> 00:18:53.880 certain functions you 00:18:53.880 --> 00:18:56.259 might outsource but the people that are making the ultimate 00:18:56.259 --> 00:18:57.079 decision and pulling 00:18:57.079 --> 00:19:03.559 the trigger it's very useful to have that internally yes so 00:19:03.559 --> 00:19:04.079 when you talk 00:19:04.079 --> 00:19:07.890 about the market what are you talking about purchasing 00:19:07.890 --> 00:19:08.759 purchasing energy 00:19:08.759 --> 00:19:14.319 purchasing energy from I know but what kind just the market 00:19:14.319 --> 00:19:15.079 energy and market 00:19:15.079 --> 00:19:17.900 energy is composed of all the whatever is dispatching at 00:19:17.900 --> 00:19:20.319 that the ratio of you 00:19:20.319 --> 00:19:26.589 know renewables some coal some wind are not when some 00:19:26.589 --> 00:19:29.319 natural gas maybe some 00:19:29.319 --> 00:19:33.640 hydros thrown in there other other solar things whatever 00:19:33.640 --> 00:19:34.720 makes up that whole 00:19:34.720 --> 00:19:37.289 thing you're just buying a slice of it and you can't you 00:19:37.289 --> 00:19:38.640 can't avoid that yeah 00:19:38.640 --> 00:19:42.450 this is you know I just wanted to be clear yeah what we're 00:19:42.450 --> 00:19:42.680 talking about 00:19:42.680 --> 00:19:47.359 market was not more solar or more wind from somewhere else 00:19:47.359 --> 00:19:48.680 it could be but it 00:19:48.680 --> 00:19:51.720 could also be gas it could also be coal it could be correct 00:19:51.720 --> 00:19:52.799 and part of this is 00:19:52.799 --> 00:19:54.900 a function of yes that's a very good question it's a 00:19:54.900 --> 00:19:55.880 function of being in 00:19:55.880 --> 00:20:00.819 Urquhart because you essentially it's we we could spend 00:20:00.819 --> 00:20:02.359 hours talking about the 00:20:02.359 --> 00:20:04.119 way Urquhart works but you're essentially buying everything 00:20:04.119 --> 00:20:04.759 from Urquhart and 00:20:04.759 --> 00:20:06.730 selling thing everything to Urquhart and they match all 00:20:06.730 --> 00:20:07.799 that up so you're you're 00:20:07.799 --> 00:20:10.950 buying that's a good point in terms of the mix of what that 00:20:10.950 --> 00:20:12.200 can be but one way 00:20:12.200 --> 00:20:14.930 to think about it too is this is like the city of 00:20:14.930 --> 00:20:16.480 Georgetown the way they 00:20:16.480 --> 00:20:20.289 think about it is this is that as long as they purchased a 00:20:20.289 --> 00:20:21.039 hundred percent 00:20:21.039 --> 00:20:24.849 renewable relative to their energy so that let's say the 00:20:24.849 --> 00:20:25.839 planning basis so they 00:20:25.839 --> 00:20:29.549 have they have a load of 700,000 megawatt hours they bought 00:20:29.549 --> 00:20:30.279 700,000 00:20:30.279 --> 00:20:34.349 megawatt hours of production from then that means they're a 00:20:34.349 --> 00:20:35.079 hundred percent 00:20:35.079 --> 00:20:39.349 renewable and what happens a lot of that gets served you 00:20:39.349 --> 00:20:40.079 know it gets thrown in 00:20:40.079 --> 00:20:44.589 to Urquhart so Urquhart becomes more renewable and at times 00:20:44.589 --> 00:20:45.279 they have to buy 00:20:45.279 --> 00:20:49.609 sort of back from back from it and it's we use sort of an 00:20:49.609 --> 00:20:51.480 ATM analogy that is if 00:20:51.480 --> 00:20:55.069 you put money in your account you can pull it out but it's 00:20:55.069 --> 00:20:56.240 not necessarily the 00:20:56.240 --> 00:20:59.380 same money if you go to Mexico you're pulling out pesos and 00:20:59.380 --> 00:20:59.920 you didn't put 00:20:59.920 --> 00:21:02.700 the pesos into your account right but it's it's it's an 00:21:02.700 --> 00:21:04.880 accounting identity so 00:21:04.880 --> 00:21:10.160 you're you are and that's how most of the 100% renewables 00:21:10.160 --> 00:21:12.880 now described in 00:21:12.880 --> 00:21:18.559 around the country. So in terms of the Denton Energy Center 00:21:18.559 --> 00:21:19.640 more specifically 00:21:19.640 --> 00:21:22.289 the initial models of price suggests that the deck is 00:21:22.289 --> 00:21:23.440 likely to have excess 00:21:23.440 --> 00:21:26.119 capacity for most of the year it is a peaking plan so there 00:21:26.119 --> 00:21:27.359 'd be many times of 00:21:27.359 --> 00:21:31.170 day in many seasons where you don't need a peaking plan. 00:21:31.170 --> 00:21:32.920 Under some prospective 00:21:32.920 --> 00:21:36.730 coal retirement schedules in other words if coal units are 00:21:36.730 --> 00:21:37.660 retired ahead of what 00:21:37.660 --> 00:21:41.000 some projections may be the deck capacity factor may end up 00:21:41.000 --> 00:21:41.519 being higher 00:21:41.519 --> 00:21:45.920 but this is an uncertainty. In either case it may be an 00:21:45.920 --> 00:21:47.799 opportunity to sell 00:21:47.799 --> 00:21:51.609 excess deck potential production on a seasonal basis to 00:21:51.609 --> 00:21:52.440 capture additional 00:21:52.440 --> 00:21:55.519 revenue to pay debt service so this is part of the mission 00:21:55.519 --> 00:21:56.599 that we have is how 00:21:56.599 --> 00:22:02.119 best to optimize that generation asset to help reduce your 00:22:02.119 --> 00:22:04.319 debt service. Because 00:22:04.319 --> 00:22:07.559 most 70% to 100% renewable portfolios produce too much 00:22:07.559 --> 00:22:08.440 renewable production 00:22:08.440 --> 00:22:11.529 during the spring and fall season may also be beneficial to 00:22:11.529 --> 00:22:12.240 sell excess 00:22:12.240 --> 00:22:16.529 renewable power during those periods. So the issue is as 00:22:16.529 --> 00:22:17.880 you saw here earlier 00:22:17.880 --> 00:22:22.200 you've got variable load but you're typically buying block 00:22:22.200 --> 00:22:23.359 power so this is 00:22:23.359 --> 00:22:26.960 part of what your organization would need to manage is 00:22:26.960 --> 00:22:28.119 selling the excess and 00:22:28.119 --> 00:22:30.819 filling in the periods of time where you have a deficit in 00:22:30.819 --> 00:22:32.000 the most efficient way 00:22:32.000 --> 00:22:35.369 possible that's part of what that needs to be done. Yeah we 00:22:35.369 --> 00:22:35.799 have a slide that 00:22:35.799 --> 00:22:39.609 shows that it's coming up. So I'll let Neil speak to this 00:22:39.609 --> 00:22:40.880 again here's April so 00:22:40.880 --> 00:22:44.690 you saw a summer day here is an April day which is 00:22:44.690 --> 00:22:46.440 typically some of your peak 00:22:46.440 --> 00:22:51.039 wind generation season. Great thanks for pointing out I 00:22:51.039 --> 00:22:51.920 didn't mention that the 00:22:51.920 --> 00:22:56.670 blue line is your load so that was kind of key. So this is 00:22:56.670 --> 00:22:58.519 an April day and in 00:22:58.519 --> 00:23:01.890 April the winds are high typically and you can see that the 00:23:01.890 --> 00:23:03.000 the wind portfolio 00:23:03.000 --> 00:23:06.809 that you have it sometimes blows all over Texas all the 00:23:06.809 --> 00:23:07.680 time and that's why 00:23:07.680 --> 00:23:10.500 it's just a straight line there and that's like I said the 00:23:10.500 --> 00:23:11.640 Georgetown wind 00:23:11.640 --> 00:23:17.579 did that like three days last three days and so what 00:23:17.579 --> 00:23:19.839 happens is you have these 00:23:19.839 --> 00:23:25.990 sales an hour those are the purple below zero during that 00:23:25.990 --> 00:23:27.039 time so you have too 00:23:27.039 --> 00:23:35.450 much wind being produced at that time. The other thing is 00:23:35.450 --> 00:23:38.359 that you 00:23:38.359 --> 00:23:44.180 have I think the scale got off a little bit our market 00:23:44.180 --> 00:23:46.400 purchases here is 00:23:46.400 --> 00:23:53.640 somehow I got off is that these are the avoided these are 00:23:53.640 --> 00:23:54.519 market purchases that 00:23:54.519 --> 00:23:57.440 aren't quite right actually this somehow this I'm sorry 00:23:57.440 --> 00:23:58.519 this I'm sorry about this 00:23:58.519 --> 00:24:02.400 slide by screwed up this slide there's whenever there is 00:24:02.400 --> 00:24:03.720 production over your 00:24:03.720 --> 00:24:06.769 blue line here we must have adjusted the line somehow and 00:24:06.769 --> 00:24:08.799 all of this will be 00:24:08.799 --> 00:24:12.849 sold off of the solar so solar you'll have slightly too 00:24:12.849 --> 00:24:14.440 much of and that will 00:24:14.440 --> 00:24:18.250 produce sales you won't buy any of these things these 00:24:18.250 --> 00:24:20.400 market purchases and so 00:24:20.400 --> 00:24:24.210 you'll have sales all through this period whenever any of 00:24:24.210 --> 00:24:25.279 the two supplies 00:24:25.279 --> 00:24:30.200 which is wind and solar is over the blue line and so what 00:24:30.200 --> 00:24:32.000 that does is your 00:24:32.000 --> 00:24:36.269 supply in the down here in this region it shows that wind 00:24:36.269 --> 00:24:38.160 provides 85 percent of 00:24:38.160 --> 00:24:43.160 your energy the deck doesn't execute at all because it's 00:24:43.160 --> 00:24:44.839 the prices are low and 00:24:44.839 --> 00:24:50.009 so it will have no production at all and the market 00:24:50.009 --> 00:24:52.200 purchases actually I don't 00:24:52.200 --> 00:24:55.079 think there will be any market purchase here and the solar 00:24:55.079 --> 00:24:56.079 produces about six 00:24:56.079 --> 00:24:58.940 percent of your supplies and there's much more sales I'm 00:24:58.940 --> 00:24:59.480 sorry about this 00:24:59.480 --> 00:25:05.680 slides we got I did this it's my we can correct that in a 00:25:05.680 --> 00:25:07.000 submit a new version 00:25:07.000 --> 00:25:17.150 yeah so this slide shows the part of the presentation if 00:25:17.150 --> 00:25:18.519 you yeah um so number 00:25:18.519 --> 00:25:24.829 one I understand how selling renewable generation works if 00:25:24.829 --> 00:25:26.039 we actually have 00:25:26.039 --> 00:25:30.539 physical solar and wind power but how exactly does that 00:25:30.539 --> 00:25:32.000 work when we're 00:25:32.000 --> 00:25:36.599 contracting out so we're buying other people's solar and 00:25:36.599 --> 00:25:37.920 wind and then where's 00:25:37.920 --> 00:25:42.630 in where's then we're selling it well you really when you 00:25:42.630 --> 00:25:43.720 buy yeah you're the 00:25:43.720 --> 00:25:47.759 owner okay yeah nobody yeah so are the only only you yeah 00:25:47.759 --> 00:25:48.920 you bought the energy 00:25:48.920 --> 00:25:53.190 at the price and you want all the environmental attributes 00:25:53.190 --> 00:25:54.160 of connected 00:25:54.160 --> 00:25:59.200 with that yes okay so it's yours and if it's in excess and 00:25:59.200 --> 00:26:01.319 only in excess you 00:26:01.319 --> 00:26:05.130 may and it happens in the spring when you have a lot of 00:26:05.130 --> 00:26:06.400 production you may know 00:26:06.400 --> 00:26:10.359 do you mind I'm sorry it's not picking you up oh sorry you 00:26:10.359 --> 00:26:13.079 you will make sales 00:26:13.079 --> 00:26:17.450 either into the market or you can you can you know if you 00:26:17.450 --> 00:26:18.920 have forecasted 00:26:18.920 --> 00:26:22.630 let's say for an entire month too much wind you could you 00:26:22.630 --> 00:26:24.680 could sell it off and 00:26:24.680 --> 00:26:27.849 say to other munis or other people who want to increase 00:26:27.849 --> 00:26:29.200 their environmental 00:26:29.200 --> 00:26:33.200 thing because let's say you have a hundred percent 00:26:33.200 --> 00:26:36.319 renewable portfolio goal 00:26:36.319 --> 00:26:40.130 you probably wind up buying something like a hundred and 00:26:40.130 --> 00:26:40.759 twenty percent 00:26:40.759 --> 00:26:45.930 energy something like that in order to fit it in that that 00:26:45.930 --> 00:26:46.599 may be the way that 00:26:46.599 --> 00:26:50.500 it maximizes and so you're like twenty percent a little 00:26:50.500 --> 00:26:52.039 long so what you do is 00:26:52.039 --> 00:26:54.579 you you can sell that you'll either sell it into the market 00:26:54.579 --> 00:26:55.559 or you can sell it to 00:26:55.559 --> 00:26:59.369 other people in a forward basis and it just whatever is 00:26:59.369 --> 00:27:00.519 best okay so you're so 00:27:00.519 --> 00:27:03.680 you're saying it so it works of selling energy that way on 00:27:03.680 --> 00:27:05.079 the market works this 00:27:05.079 --> 00:27:08.890 kind of the same way as as selling energy that we would 00:27:08.890 --> 00:27:10.079 generate it's the 00:27:10.079 --> 00:27:14.150 same on the market it's right apples and apples and you can 00:27:14.150 --> 00:27:15.759 I and you can add you 00:27:15.759 --> 00:27:19.809 can actually add instead of having it variable you can add 00:27:19.809 --> 00:27:20.920 in a what we call 00:27:20.920 --> 00:27:26.150 affirming so and you use the deck can be used to do that 00:27:26.150 --> 00:27:28.079 and and that may create 00:27:28.079 --> 00:27:31.890 extra revenue for the deck so that you can pay down debt 00:27:31.890 --> 00:27:32.680 service that's one of 00:27:32.680 --> 00:27:37.119 the things to use it so you're really using the deck to 00:27:37.119 --> 00:27:39.799 essentially buy or to 00:27:39.799 --> 00:27:46.319 to affect renewables but we don't this is a question but we 00:27:46.319 --> 00:27:48.920 don't need the deck 00:27:48.920 --> 00:27:54.089 to do that right well there to firm it you would use the 00:27:54.089 --> 00:27:56.160 deck but you could sell 00:27:56.160 --> 00:28:06.309 it on unfurmed yes question and you know you talked about 00:28:06.309 --> 00:28:07.119 the hundred twenty 00:28:07.119 --> 00:28:11.720 percent so is the additional twenty percent that's kind of 00:28:11.720 --> 00:28:12.960 your farming part 00:28:12.960 --> 00:28:17.960 of the of the energy that you're right it says you're gonna 00:28:17.960 --> 00:28:19.640 buy excess yeah and 00:28:19.640 --> 00:28:21.789 we have a slide that shows how fitting this is kind of 00:28:21.789 --> 00:28:24.480 somewhat difficult and 00:28:24.480 --> 00:28:30.309 that is that that is one of the things one thing this this 00:28:30.309 --> 00:28:32.640 is a little something 00:28:32.640 --> 00:28:36.450 a lot I saw in some reports they were saying well you have 00:28:36.450 --> 00:28:38.240 to buy 200% or 00:28:38.240 --> 00:28:41.160 something like this this is all nonsense right you don't 00:28:41.160 --> 00:28:42.720 buy 200% the 00:28:42.720 --> 00:28:47.890 solar has a capacity factor of around 20% the wind has a 00:28:47.890 --> 00:28:50.920 capacity factor of 35% so 00:28:50.920 --> 00:28:54.009 when people say you have to buy twice the capacity in fact 00:28:54.009 --> 00:28:55.079 you're only buying 00:28:55.079 --> 00:28:59.599 55% of the energy and the other thing is they it implies 00:28:59.599 --> 00:29:01.400 that those are additive 00:29:01.400 --> 00:29:05.799 well they're not because you can't add wind at night 00:29:05.799 --> 00:29:07.559 because it doesn't exist 00:29:07.559 --> 00:29:11.509 so that's a very misleading I've seen this in reports and I 00:29:11.509 --> 00:29:12.400 just go what are 00:29:12.400 --> 00:29:15.299 they talking about these are people who are sort of deeply 00:29:15.299 --> 00:29:16.319 ignorant or they have 00:29:16.319 --> 00:29:20.799 some kind of an agenda so the challenge here is that you've 00:29:20.799 --> 00:29:21.960 got 8,000 in a 00:29:21.960 --> 00:29:25.769 typical year you have 8,760 hours so how do you get to be a 00:29:25.769 --> 00:29:27.079 perfectly 100% match 00:29:27.079 --> 00:29:29.319 in every one of those hours you can't you're gonna have 00:29:29.319 --> 00:29:30.200 some excess in some 00:29:30.200 --> 00:29:33.089 hours and deficiency in other hours where do you draw that 00:29:33.089 --> 00:29:34.559 line as Neil said 00:29:34.559 --> 00:29:37.329 the to us the most practical way is just add up all the meg 00:29:37.329 --> 00:29:38.400 awatt hours of load 00:29:38.400 --> 00:29:41.440 you have in the year and then you take this capacity 00:29:41.440 --> 00:29:42.119 factors of these 00:29:42.119 --> 00:29:44.369 generation units and you'll you'll understand that a little 00:29:44.369 --> 00:29:44.960 better when you 00:29:44.960 --> 00:29:47.960 see a graph later and so you multiply the capacity factors 00:29:47.960 --> 00:29:48.480 by the total 00:29:48.480 --> 00:29:50.829 capacity of the units and you sum all those up and then you 00:29:50.829 --> 00:29:51.559 get your perfect 00:29:51.559 --> 00:29:54.599 opposition edge so you'll be a little long have excess in 00:29:54.599 --> 00:29:55.839 some hours some 00:29:55.839 --> 00:30:00.519 deficiencies in other hours but when we have those acts 00:30:00.519 --> 00:30:03.480 yeah when we have those 00:30:03.480 --> 00:30:06.319 excesses we can always sell those in the market absolutely 00:30:06.319 --> 00:30:07.519 and that will bull or 00:30:07.519 --> 00:30:10.339 deck or whatever exactly exactly and that's one of the that 00:30:10.339 --> 00:30:11.039 's one of our 00:30:11.039 --> 00:30:14.160 missions is to help figure out the optimal way to dispose 00:30:14.160 --> 00:30:15.200 of that excess 00:30:15.200 --> 00:30:17.769 because that reduces your overall cost that's just part of 00:30:17.769 --> 00:30:18.960 the whole pie that 00:30:18.960 --> 00:30:22.769 you're dealing with and if you do nothing it all happens 00:30:22.769 --> 00:30:24.039 automatically both if 00:30:24.039 --> 00:30:27.849 you're don't have enough energy or cotton will make you buy 00:30:27.849 --> 00:30:28.519 to make that 00:30:28.519 --> 00:30:31.539 up if you have too much or couple buy it for you or they 00:30:31.539 --> 00:30:32.359 buy it in the market 00:30:32.359 --> 00:30:38.279 automatically yes so you're hedging you're trying to hedge 00:30:38.279 --> 00:30:39.440 against cost 00:30:39.440 --> 00:30:46.000 price yes and against demand to make sure you have enough 00:30:46.000 --> 00:30:47.240 right and not be 00:30:47.240 --> 00:30:51.049 forced to where you control your own market right is that 00:30:51.049 --> 00:30:52.799 right yes so is 00:30:52.799 --> 00:30:57.069 there a percentage a target kind of I think the Randy's 00:30:57.069 --> 00:30:58.720 question that hundred 00:30:58.720 --> 00:31:01.420 and twenty percent is it twenty one hundred and twenty 00:31:01.420 --> 00:31:02.519 percent that's kind 00:31:02.519 --> 00:31:05.859 of on a day-to-day hour-to-hour that you want to be ahead 00:31:05.859 --> 00:31:07.079 of the curve or is it 00:31:07.079 --> 00:31:10.160 110 or does it work that's probably more if you look at it 00:31:10.160 --> 00:31:11.039 in aggregate over a 00:31:11.039 --> 00:31:13.880 year in advance you might be roughly 120 percent in terms 00:31:13.880 --> 00:31:14.759 of the way you need 00:31:14.759 --> 00:31:18.150 just to stack up your resources to meet that but going into 00:31:18.150 --> 00:31:19.319 any hour you want to 00:31:19.319 --> 00:31:22.920 be 100% 100% that's right and that's another question that 00:31:22.920 --> 00:31:23.240 we're going to 00:31:23.240 --> 00:31:25.740 answer later on you may not have specifically asked this 00:31:25.740 --> 00:31:26.359 but I'll answer 00:31:26.359 --> 00:31:30.789 it now which is you need to be a hundred percent five years 00:31:30.789 --> 00:31:32.359 out not necessarily 00:31:32.359 --> 00:31:34.059 you need to be a hundred percent ten years out not 00:31:34.059 --> 00:31:34.839 necessarily that's 00:31:34.839 --> 00:31:38.200 something that will work with you all to do to fit that but 00:31:38.200 --> 00:31:39.440 you've you've come 00:31:39.440 --> 00:31:44.039 into this in a very advantageous position because you're 00:31:44.039 --> 00:31:44.960 not full of 00:31:44.960 --> 00:31:48.769 supply yet and costs are coming down this market has really 00:31:48.769 --> 00:31:49.680 benefited energy 00:31:49.680 --> 00:31:52.059 consumers so you have a tremendous advantage in the fact 00:31:52.059 --> 00:31:52.759 that you didn't 00:31:52.759 --> 00:31:55.920 lock everything up five or ten years ago we have clients 00:31:55.920 --> 00:31:57.519 that are really dealing 00:31:57.519 --> 00:32:00.720 with that but they've got very high price power just up 00:32:00.720 --> 00:32:02.160 down the road in 00:32:02.160 --> 00:32:05.130 Austin you know they they took pride in being an early 00:32:05.130 --> 00:32:06.599 mover in renewables but 00:32:06.599 --> 00:32:09.890 they've paid five to ten times the cost of what you would 00:32:09.890 --> 00:32:11.039 be paying now it 00:32:11.039 --> 00:32:13.859 always pays my dad always told me never buy the first mile 00:32:13.859 --> 00:32:14.640 of anything I always 00:32:14.640 --> 00:32:17.759 go for the second one so you're in that position now where 00:32:17.759 --> 00:32:19.019 prices have come way 00:32:19.019 --> 00:32:21.589 down and you can take advantage of that just from the fact 00:32:21.589 --> 00:32:22.519 that you've had an 00:32:22.519 --> 00:32:26.869 open portion of your demand that has not been filled so 00:32:26.869 --> 00:32:29.259 there's a there's an 00:32:29.259 --> 00:32:31.750 efficient balance between buying too much and not buying 00:32:31.750 --> 00:32:32.440 enough that's 00:32:32.440 --> 00:32:35.289 something else will be working with your staff to try to 00:32:35.289 --> 00:32:36.480 figure out how best to 00:32:36.480 --> 00:32:39.299 fit that going forward here and that'll be part of what we 00:32:39.299 --> 00:32:41.680 recommend here so in 00:32:41.680 --> 00:32:45.549 terms of the path of what we're going to do in terms of 00:32:45.549 --> 00:32:46.480 developing 00:32:46.480 --> 00:32:49.210 recommendations for your renewable resource portfolio a we 00:32:49.210 --> 00:32:50.119 've got the goal 00:32:50.119 --> 00:32:54.599 of least cost B we want to be diversified you already have 00:32:54.599 --> 00:32:55.279 some purchases 00:32:55.279 --> 00:32:57.849 we need to work around those Neil will speak a little more 00:32:57.849 --> 00:32:58.240 to that 00:32:58.240 --> 00:33:00.750 diversification but diversification is very important in 00:33:00.750 --> 00:33:01.720 reducing the overall 00:33:01.720 --> 00:33:04.710 risk and the variability of the portfolio its divers 00:33:04.710 --> 00:33:05.880 ification in terms 00:33:05.880 --> 00:33:09.690 of asset types solar and wind are perfectly uncorrelated so 00:33:09.690 --> 00:33:10.279 that's a great 00:33:10.279 --> 00:33:14.089 diversification but it's also diversification in terms of 00:33:14.089 --> 00:33:14.319 locations of 00:33:14.319 --> 00:33:18.029 where these production for these generation units are 00:33:18.029 --> 00:33:19.119 located and its 00:33:19.119 --> 00:33:22.900 diversification in terms of wind wind is not wind coastal 00:33:22.900 --> 00:33:23.839 wind is different from 00:33:23.839 --> 00:33:26.190 panhandle when panhandle wind is different from West Texas 00:33:26.190 --> 00:33:26.759 when in terms 00:33:26.759 --> 00:33:29.650 of how often it blows what time of day and so forth so you 00:33:29.650 --> 00:33:29.960 need 00:33:29.960 --> 00:33:32.970 diversification and all of those factors to really have a 00:33:32.970 --> 00:33:33.839 very efficient 00:33:33.839 --> 00:33:37.430 portfolio and then the renewable goal that's something that 00:33:37.430 --> 00:33:38.839 70% 100% we need 00:33:38.839 --> 00:33:41.250 to figure that out we'll offer alternatives to that but we 00:33:41.250 --> 00:33:41.839 need to you 00:33:41.839 --> 00:33:44.920 know know where that is so then Neil will oversee this 00:33:44.920 --> 00:33:45.799 portion of the work 00:33:45.799 --> 00:33:48.190 we've done this for a lot of other people we run Monte 00:33:48.190 --> 00:33:49.119 Carlo simulation 00:33:49.119 --> 00:33:52.930 models to model the cost and the variability in the makeup 00:33:52.930 --> 00:33:53.440 of these 00:33:53.440 --> 00:33:57.400 different portfolio mixes that we'll be discussing so in 00:33:57.400 --> 00:33:58.759 terms of least cost 00:33:58.759 --> 00:34:01.630 we'll go down these things quickly in terms of the pieces 00:34:01.630 --> 00:34:02.599 of that last slide 00:34:02.599 --> 00:34:05.920 that you saw current wind resources are offered from 17 to 00:34:05.920 --> 00:34:06.720 22 dollars per 00:34:06.720 --> 00:34:09.840 megawatt hour these are really great low prices solar is 00:34:09.840 --> 00:34:10.960 offered in the mid 20s 00:34:10.960 --> 00:34:14.269 they just these are tremendously low prices the benefit of 00:34:14.269 --> 00:34:15.079 not having locked 00:34:15.079 --> 00:34:18.889 things up a few years ago these power prices are the lowest 00:34:18.889 --> 00:34:19.079 offered in the 00:34:19.079 --> 00:34:22.079 last 50 years this is in contrast as I was mentioning 00:34:22.079 --> 00:34:23.119 earlier four years earlier 00:34:23.119 --> 00:34:25.760 who win prices were offered between 40 and 65 dollars per 00:34:25.760 --> 00:34:26.679 megawatt hour and 00:34:26.679 --> 00:34:30.090 solar was as much as five to seven times the current offers 00:34:30.090 --> 00:34:31.159 the city of Austin's 00:34:31.159 --> 00:34:34.969 Weber's ill Weberville site for example at $165 per megaw 00:34:34.969 --> 00:34:36.480 att hour subsidies for 00:34:36.480 --> 00:34:39.760 solar and winter being phased out so it's good to move now 00:34:39.760 --> 00:34:40.960 natural gas is the 00:34:40.960 --> 00:34:43.670 marginal fuel nationwide and supplies declining at current 00:34:43.670 --> 00:34:44.519 price levels while 00:34:44.519 --> 00:34:48.219 demand is increasing dramatically so you can make a 00:34:48.219 --> 00:34:49.199 fundamental case the gas 00:34:49.199 --> 00:34:52.800 prices are fairly low right now as well if gas prices go up 00:34:52.800 --> 00:34:54.079 it'll make renewables 00:34:54.079 --> 00:34:56.980 more competitive and likely be higher prices so this is 00:34:56.980 --> 00:34:58.920 really an ideal time to 00:34:58.920 --> 00:35:01.019 be in the position you're in right now to lock up 00:35:01.019 --> 00:35:03.320 additional renewables and add 00:35:03.320 --> 00:35:06.400 to the portfolio now in terms of diversification I'll let 00:35:06.400 --> 00:35:10.119 Neil speak yeah 00:35:10.119 --> 00:35:13.269 this is a chart from the independent market monitor for ERC 00:35:13.269 --> 00:35:14.119 OT and what 00:35:14.119 --> 00:35:17.929 they've done is just taken the average load for ERCOT and 00:35:17.929 --> 00:35:18.639 that's in the blue 00:35:18.639 --> 00:35:23.880 and they've showed different renewable resources the in the 00:35:23.880 --> 00:35:25.400 red is the wind 00:35:25.400 --> 00:35:30.360 coastal that's that's right on the coast of Texas and then 00:35:30.360 --> 00:35:32.400 they've on the other 00:35:32.400 --> 00:35:35.469 side of Texas on way up north is the wind up in the panhand 00:35:35.469 --> 00:35:37.440 le and that's in 00:35:37.440 --> 00:35:45.389 green and solar is in purple here and and so that's those 00:35:45.389 --> 00:35:46.519 are the different 00:35:46.519 --> 00:35:51.119 regions and you can see they're all different and they core 00:35:51.119 --> 00:35:52.719 they the big 00:35:52.719 --> 00:35:55.539 thing is the one thing that really correlates with you know 00:35:55.539 --> 00:35:56.360 peak demand is 00:35:56.360 --> 00:36:01.000 solar it has it has production during the day and so that 00:36:01.000 --> 00:36:02.800 load where load kind 00:36:02.800 --> 00:36:08.909 of goes up it also goes up if you marry that solar with the 00:36:08.909 --> 00:36:10.239 red the coastal wind 00:36:10.239 --> 00:36:15.039 you can see that that curve matches almost perfectly that 00:36:15.039 --> 00:36:16.559 this this slope on 00:36:16.559 --> 00:36:22.119 this whoops I just whoops you go back hands off the wheel 00:36:22.119 --> 00:36:22.840 for a second okay 00:36:22.840 --> 00:36:29.440 thank you you know I says that so so this curve goes down 00:36:29.440 --> 00:36:30.119 like that these two 00:36:30.119 --> 00:36:34.050 curves you know almost match that so all you have to do is 00:36:34.050 --> 00:36:35.760 you know raise this up 00:36:35.760 --> 00:36:38.840 and they'll match it perfectly basically the other thing 00:36:38.840 --> 00:36:40.280 about coastal wind which 00:36:40.280 --> 00:36:43.570 is this coastal wind notice that it produces the least off- 00:36:43.570 --> 00:36:44.960 peak and so 00:36:44.960 --> 00:36:51.159 that's when if you're if you're having to at night right so 00:36:51.159 --> 00:36:52.800 what happens there 00:36:52.800 --> 00:36:56.639 is it in competing with say some of these in the spring 00:36:56.639 --> 00:36:57.860 this has an 00:36:57.860 --> 00:37:00.460 advantage in that it doesn't produce when everybody else is 00:37:00.460 --> 00:37:01.760 over producing so 00:37:01.760 --> 00:37:06.030 what we'll go is try to measure all of these and see what 00:37:06.030 --> 00:37:07.639 the relative advantage 00:37:07.639 --> 00:37:10.440 when they fit into your portfolio and that's that's kind of 00:37:10.440 --> 00:37:11.440 a hard thing to do 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 00:37:16.039 --> 00:37:18.079 do it now on top of 00:37:18.079 --> 00:37:20.980 this you know on a daily basis we will have these dynamic 00:37:20.980 --> 00:37:22.079 purchases and that 00:37:22.079 --> 00:37:25.090 sort of thing and we've been doing that for years we do 00:37:25.090 --> 00:37:26.280 this every hour for 00:37:26.280 --> 00:37:30.610 Georgetown every day so and we've been doing it for two two 00:37:30.610 --> 00:37:32.039 point three years 00:37:32.039 --> 00:37:37.210 or something like that and so it turns out when you do that 00:37:37.210 --> 00:37:38.400 the price of your 00:37:38.400 --> 00:37:41.840 portfolio your renewables are also turn out to be the price 00:37:41.840 --> 00:37:43.440 at your loads that's 00:37:43.440 --> 00:37:48.760 the that's the goal low zone so they both match so you're 00:37:48.760 --> 00:37:50.440 perfectly hedged if 00:37:50.440 --> 00:37:56.559 gas prices go up to ten dollars you don't see any change so 00:37:56.559 --> 00:37:58.800 just to sort of 00:37:58.800 --> 00:38:01.210 reinforce some of the points that Neil was talking about we 00:38:01.210 --> 00:38:02.119 've talked about 00:38:02.119 --> 00:38:04.289 these earlier renewables are intermittent producers and 00:38:04.289 --> 00:38:04.719 carry two 00:38:04.719 --> 00:38:06.869 risk elements but spotty hedge performance meaning that 00:38:06.869 --> 00:38:07.360 they're all 00:38:07.360 --> 00:38:09.300 they're not always there when you want them and sometimes 00:38:09.300 --> 00:38:10.039 they're there more 00:38:10.039 --> 00:38:13.070 than when you want them and the increased forecast area so 00:38:13.070 --> 00:38:13.719 that's why 00:38:13.719 --> 00:38:16.420 portfolio renewables needs to be composed of resources that 00:38:16.420 --> 00:38:16.960 are poorly 00:38:16.960 --> 00:38:20.150 correlated with each other meaning that when the Sun is 00:38:20.150 --> 00:38:22.000 shining the wind usually 00:38:22.000 --> 00:38:25.809 on average is not blowing so you've got a great offset so 00:38:25.809 --> 00:38:27.239 the main risk reduction 00:38:27.239 --> 00:38:29.980 is a combination of solar and wind but as I said earlier 00:38:29.980 --> 00:38:30.800 wind resource 00:38:30.800 --> 00:38:32.739 combinations have varying correlations due to the 00:38:32.739 --> 00:38:33.840 differences in quality and 00:38:33.840 --> 00:38:36.900 location so as you saw on that other graph that's part of 00:38:36.900 --> 00:38:37.639 the best fit 00:38:37.639 --> 00:38:40.139 analysis that we'll be conducting is how best to fit those 00:38:40.139 --> 00:38:41.159 different locations 00:38:41.159 --> 00:38:44.969 and types and qualities of wind and solar and I thought 00:38:44.969 --> 00:38:45.800 this is a really 00:38:45.800 --> 00:38:48.090 important point that Neil added here very few commodity 00:38:48.090 --> 00:38:49.039 portfolios have the 00:38:49.039 --> 00:38:52.360 opportunity of such advantageous pairing of assets you will 00:38:52.360 --> 00:38:54.239 not find I've come 00:38:54.239 --> 00:38:57.059 through oil we've done a lot of work in other areas Neil 00:38:57.059 --> 00:38:58.079 grew up in the in the 00:38:58.079 --> 00:39:02.690 cattle business you will not find such a perfectly opposing 00:39:02.690 --> 00:39:04.039 correlation to solar 00:39:04.039 --> 00:39:06.190 and wind it just doesn't exist in any other commodity 00:39:06.190 --> 00:39:07.320 complex so you have a 00:39:07.320 --> 00:39:11.260 very natural advantage here to take it to take advantage of 00:39:11.260 --> 00:39:12.199 yes so I have a 00:39:12.199 --> 00:39:19.760 question when you have storage does that decrease the 00:39:19.760 --> 00:39:22.679 problem of forecast error 00:39:22.679 --> 00:39:27.639 because you've got it you know you're not you to an extent 00:39:27.639 --> 00:39:29.880 storage we're on 00:39:29.880 --> 00:39:33.690 the cusp of storage being commercially viable it's being 00:39:33.690 --> 00:39:34.679 deployed in some areas 00:39:34.679 --> 00:39:37.920 it's not quite there I'll let Neil speak to this in a 00:39:37.920 --> 00:39:38.880 moment but typically 00:39:38.880 --> 00:39:43.760 storage would best be used to behind congestion points 00:39:43.760 --> 00:39:45.280 storage may be valuable 00:39:45.280 --> 00:39:48.309 for a few hours but this isn't like other commodities where 00:39:48.309 --> 00:39:48.960 you can just put 00:39:48.960 --> 00:39:52.559 it away for weeks and then deploy it later we're talking on 00:39:52.559 --> 00:39:53.719 an hourly basis 00:39:53.719 --> 00:40:02.039 but we do have utility scale storage that's being used well 00:40:02.039 --> 00:40:02.800 no well there are 00:40:02.800 --> 00:40:07.599 some smaller that will that will happen that's something 00:40:07.599 --> 00:40:08.320 that will happen I've 00:40:08.320 --> 00:40:13.489 done storage I wrote a thesis in graduate school on natural 00:40:13.489 --> 00:40:14.000 gas storage 00:40:14.000 --> 00:40:18.699 which LCRA was building and so I did after we built it I 00:40:18.699 --> 00:40:19.320 did all the 00:40:19.320 --> 00:40:22.170 operational things that they started and that's been going 00:40:22.170 --> 00:40:25.440 on since 20 years or 00:40:25.440 --> 00:40:30.099 so and and I've also done large case that's compressed air 00:40:30.099 --> 00:40:31.840 energy storage in 00:40:31.840 --> 00:40:35.730 other and those were utility scale like 400 megawatts and 00:40:35.730 --> 00:40:37.760 so you asked first 00:40:37.760 --> 00:40:41.570 about forecasting forecasting is key because we're 00:40:41.570 --> 00:40:42.519 basically storage takes 00:40:42.519 --> 00:40:46.559 power from one period and then it deploys in another period 00:40:46.559 --> 00:40:47.159 we have to 00:40:47.159 --> 00:40:49.840 know what the price differentials are how much you fill it 00:40:49.840 --> 00:40:50.519 up and this is 00:40:50.519 --> 00:40:55.320 difficult stuff and and then how to depose it but 00:40:55.320 --> 00:40:57.119 absolutely storage will 00:40:57.119 --> 00:41:02.349 help do that in your case here you have you know if you buy 00:41:02.349 --> 00:41:03.920 a solar thing with 00:41:03.920 --> 00:41:08.190 the deck you have too much of that you have too much 00:41:08.190 --> 00:41:10.280 certainty on peak you will 00:41:10.280 --> 00:41:15.920 you that's what you'll wind up with and so that's that's 00:41:15.920 --> 00:41:17.440 something that you'll 00:41:17.440 --> 00:41:21.280 have to consider about I wanted to point this out this is 00:41:21.280 --> 00:41:23.360 again from the 2016 00:41:23.360 --> 00:41:28.349 state of the market report and what it does is show in 2016 00:41:28.349 --> 00:41:29.239 by months and that 00:41:29.239 --> 00:41:34.239 the the very last chart these were there were four of them 00:41:34.239 --> 00:41:35.159 together and they're 00:41:35.159 --> 00:41:38.179 split apart but those are the months of the year and then 00:41:38.179 --> 00:41:39.119 the different zones 00:41:39.119 --> 00:41:41.650 and you'll notice you're in the north zone which is in the 00:41:41.650 --> 00:41:42.639 lower left corner 00:41:42.639 --> 00:41:48.389 and you can see that congestion for y'all is is some of the 00:41:48.389 --> 00:41:49.960 lowest and the 00:41:49.960 --> 00:41:54.710 least volatile and that's great so that means the insurance 00:41:54.710 --> 00:41:55.639 to buy for that is 00:41:55.639 --> 00:42:00.920 incredibly cheap but in renewables they come from the west 00:42:00.920 --> 00:42:03.280 and the south and so 00:42:03.280 --> 00:42:07.889 you'll quickly have to merge those two and so say half your 00:42:07.889 --> 00:42:10.079 congestion risk is 00:42:10.079 --> 00:42:14.380 easy to manage with congestion but the renewables would be 00:42:14.380 --> 00:42:15.800 more difficult to 00:42:15.800 --> 00:42:19.610 manage that but it's completely you're buying insurance 00:42:19.610 --> 00:42:20.960 essentially and so you 00:42:20.960 --> 00:42:23.230 just have to look at all the comparative costs and that 00:42:23.230 --> 00:42:24.480 sort of thing but that's 00:42:24.480 --> 00:42:29.719 there's 20 markets a year to go out in the forward markets 00:42:29.719 --> 00:42:30.719 and so you have to 00:42:30.719 --> 00:42:34.739 have a real rigid point or real well thought-out plan and 00:42:34.739 --> 00:42:35.880 execute it in a 00:42:35.880 --> 00:42:41.199 very very disciplined way to get this but when you do that 00:42:41.199 --> 00:42:43.440 again you wind up 00:42:43.440 --> 00:42:47.250 with their renewables at the loud sound at the price you 00:42:47.250 --> 00:42:50.280 want so this is yes but 00:42:50.280 --> 00:42:54.800 if we had renewable physical renewables here renewable 00:42:54.800 --> 00:42:56.679 generation well we do 00:42:56.679 --> 00:43:01.429 already but so with with our renewable generation that we 00:43:01.429 --> 00:43:01.960 have here our 00:43:01.960 --> 00:43:07.130 physical generation there's not a congestion problem that's 00:43:07.130 --> 00:43:07.559 right correct 00:43:07.559 --> 00:43:10.280 because it's being produced here so correct so that's one 00:43:10.280 --> 00:43:11.079 advantage that 00:43:11.079 --> 00:43:15.139 actually having the distributed generation has over the 00:43:15.139 --> 00:43:16.239 contracting out 00:43:16.239 --> 00:43:22.130 that's right the as long as it's not too big or cut as soon 00:43:22.130 --> 00:43:23.239 as you get over a 00:43:23.239 --> 00:43:27.719 megawatt they it's they take away that advantage from you 00:43:27.719 --> 00:43:29.239 because then they say 00:43:29.239 --> 00:43:32.210 that's a transmission thing and it might as well be an am 00:43:32.210 --> 00:43:33.519 aryllis or something okay 00:43:33.519 --> 00:43:36.469 so so but that means any rooftop as long as you don't 00:43:36.469 --> 00:43:38.199 exceed one megawatt all the 00:43:38.199 --> 00:43:42.469 rooftop solars absolutely that congestion or the basis and 00:43:42.469 --> 00:43:43.639 what we like 00:43:43.639 --> 00:43:46.760 to say is geographic basis it's the same place right yeah 00:43:46.760 --> 00:43:47.559 so you don't need a 00:43:47.559 --> 00:43:51.369 basis on that case that's right thanks so just just one 00:43:51.369 --> 00:43:52.760 very last quick thing on 00:43:52.760 --> 00:43:56.570 here as Neil alluded to the congestion risk is small here 00:43:56.570 --> 00:43:57.360 this is an advantage 00:43:57.360 --> 00:44:01.170 you have being in the north as he said the renewables are 00:44:01.170 --> 00:44:02.239 likely to come from 00:44:02.239 --> 00:44:04.349 other zones of congestion is going to be a bigger problem 00:44:04.349 --> 00:44:05.840 we've had some 00:44:05.840 --> 00:44:08.380 customers that have said we don't want to spend this money 00:44:08.380 --> 00:44:09.119 this is just an 00:44:09.119 --> 00:44:12.929 additional cost why should we buy insurance when nothing is 00:44:12.929 --> 00:44:13.480 happening here 00:44:13.480 --> 00:44:16.090 but to us this is like somebody in Houston a month ago 00:44:16.090 --> 00:44:17.119 saying you know what 00:44:17.119 --> 00:44:19.780 hadn't flooded here in ten years I don't need to pay that $ 00:44:19.780 --> 00:44:20.800 500 a year to 00:44:20.800 --> 00:44:23.760 ensure my house when the insurance is cheap you take 00:44:23.760 --> 00:44:24.840 advantage of it insure 00:44:24.840 --> 00:44:26.599 it that's our philosophy and that's going to be something 00:44:26.599 --> 00:44:27.480 that will integrate 00:44:27.480 --> 00:44:32.650 into our plan so just to wrap this up our anticipated 00:44:32.650 --> 00:44:33.800 recommendations for the 00:44:33.800 --> 00:44:36.590 plan that we're going to be delivering in October to 00:44:36.590 --> 00:44:38.039 purchase additional wind 00:44:38.039 --> 00:44:40.659 with a lower correlation to your current wind supplies to 00:44:40.659 --> 00:44:41.639 better complete the 00:44:41.639 --> 00:44:44.809 supply hedge and achieve greater diversification purchase 00:44:44.809 --> 00:44:45.480 solar at two 00:44:45.480 --> 00:44:47.510 or more additional locations to improve aggregate 00:44:47.510 --> 00:44:48.599 reliability and that also 00:44:48.599 --> 00:44:52.409 increases your diversification 30% of the load would be 00:44:52.409 --> 00:44:53.119 purchased with short 00:44:53.119 --> 00:44:55.550 to intermediate term solar and wind contracts two to five 00:44:55.550 --> 00:44:56.280 years so you're 00:44:56.280 --> 00:45:00.199 not loading up a hundred percent too far out we'll talk 00:45:00.199 --> 00:45:01.719 about this more when we 00:45:01.719 --> 00:45:04.820 get into the deliverable portion of the report but you need 00:45:04.820 --> 00:45:05.920 to balance staying 00:45:05.920 --> 00:45:08.469 somewhat competitive versus making sure you don't have too 00:45:08.469 --> 00:45:09.320 much uncertainty 00:45:09.320 --> 00:45:11.710 there's a balance there and that can be achieved through 00:45:11.710 --> 00:45:12.800 staggering these things 00:45:12.800 --> 00:45:15.730 are laddering them through time we want to avoid known 00:45:15.730 --> 00:45:16.880 congestion areas if 00:45:16.880 --> 00:45:20.469 possible we're going to emphasize 345 KB interconnects 00:45:20.469 --> 00:45:21.679 these are higher capacity 00:45:21.679 --> 00:45:24.769 transmission lines you don't be connecting to something we 00:45:24.769 --> 00:45:25.559 've had clients 00:45:25.559 --> 00:45:28.389 that did this and then brought us in later after they've 00:45:28.389 --> 00:45:29.199 made the decisions 00:45:29.199 --> 00:45:32.230 have connected to low capacity interconnection points and 00:45:32.230 --> 00:45:32.880 they've got 00:45:32.880 --> 00:45:35.829 tremendous congestion problems expected prices for the 00:45:35.829 --> 00:45:36.880 renewables in the mid 00:45:36.880 --> 00:45:39.269 twenty dollars per megawatt hour and we will propose a 00:45:39.269 --> 00:45:40.480 variety of alternatives 00:45:40.480 --> 00:45:43.739 for maximizing the value the deck including how to dispose 00:45:43.739 --> 00:45:44.199 of that 00:45:44.199 --> 00:45:49.809 perspective excess production potential just very lastly in 00:45:49.809 --> 00:45:51.199 a second part of our 00:45:51.199 --> 00:45:55.590 work we're going to assist we propose assist the city in 00:45:55.590 --> 00:45:57.280 revising RFPs for 00:45:57.280 --> 00:46:01.079 both renewable resources and for natural gas supplies 00:46:01.079 --> 00:46:02.199 making sure that you have 00:46:02.199 --> 00:46:05.489 the right type of supply contract for the deck is crucial 00:46:05.489 --> 00:46:06.360 to make sure it 00:46:06.360 --> 00:46:09.820 operates optimally so this is just something that we have 00:46:09.820 --> 00:46:10.760 in your on your 00:46:10.760 --> 00:46:15.030 desk in terms of a proposal to help you evaluate the offers 00:46:15.030 --> 00:46:16.039 for both renewable 00:46:16.039 --> 00:46:19.000 resources and for gas supplies that's the end of the 00:46:19.000 --> 00:46:20.119 presentation any final 00:46:20.119 --> 00:46:23.909 questions that you have if not we thank you very much for 00:46:23.909 --> 00:46:25.639 your time yes yeah 00:46:25.639 --> 00:46:29.909 earlier in the presentation you said something about you 00:46:29.909 --> 00:46:31.280 already have some 00:46:31.280 --> 00:46:37.989 some purchases and we need to work around those are you imp 00:46:37.989 --> 00:46:38.800 lying what would 00:46:38.800 --> 00:46:42.610 you say that those purchases that were made are not 00:46:42.610 --> 00:46:44.239 necessarily the ones that 00:46:44.239 --> 00:46:49.960 you would have gone with head you reasonable assumption mm- 00:46:49.960 --> 00:46:52.159 hmm yeah so I'll 00:46:52.159 --> 00:46:59.090 I'll just say that I really like the idea of of contracting 00:46:59.090 --> 00:47:00.000 out renewable 00:47:00.000 --> 00:47:05.530 portfolio management either with this group or some some 00:47:05.530 --> 00:47:07.599 other group but it 00:47:07.599 --> 00:47:11.429 it just seems to me that there's too much risk of trying to 00:47:11.429 --> 00:47:12.559 manage this in 00:47:12.559 --> 00:47:17.539 house and you know trying to reinvent the wheel the wheel 00:47:17.539 --> 00:47:18.280 and teach ourselves 00:47:18.280 --> 00:47:24.800 skills that take many many years to acquire so I'm I'm all 00:47:24.800 --> 00:47:27.079 for contracting 00:47:27.079 --> 00:47:30.880 out for these kinds of services and for the insurance I 00:47:30.880 --> 00:47:32.039 just wanted to say that 00:47:32.039 --> 00:47:36.309 just to speak about two things to that one is you've you've 00:47:36.309 --> 00:47:37.400 already the city's 00:47:37.400 --> 00:47:41.210 already contracted out to us to help design the right yes I 00:47:41.210 --> 00:47:41.440 understand I mean 00:47:41.440 --> 00:47:45.309 we're confident that you can you can acquire the skill set 00:47:45.309 --> 00:47:46.320 and the experience 00:47:46.320 --> 00:47:49.219 to do the day-to-day management we see that successfully 00:47:49.219 --> 00:47:50.320 across clients now a 00:47:50.320 --> 00:47:53.210 lot of them we advise on an ongoing basis but we think you 00:47:53.210 --> 00:47:54.079 can build that 00:47:54.079 --> 00:47:57.030 capability internally so there's two certain things yes 00:47:57.030 --> 00:47:58.119 yeah yeah yes sure 00:47:58.119 --> 00:48:02.610 yeah I mean having having somebody I'm not sure what the 00:48:02.610 --> 00:48:03.400 you know what the 00:48:03.400 --> 00:48:06.239 official terms are thank you for clarifying yeah I mean 00:48:06.239 --> 00:48:07.519 having somebody 00:48:07.519 --> 00:48:14.420 on our team around the clock yes not just yes not being 00:48:14.420 --> 00:48:15.360 entirely on our own 00:48:15.360 --> 00:48:20.800 mm-hmm thank you thank you very much thanks no any other 00:48:20.800 --> 00:48:21.559 questions from any 00:48:21.559 --> 00:48:35.719 any other board no thank you okay do we have on this item 00:48:35.719 --> 00:48:38.960 do we have anything to 00:48:38.960 --> 00:48:46.599 discuss or any direction we want to to give staff 00:48:47.239 --> 00:48:53.440 right yeah don't we already do I mean we we monitor on a 00:48:53.440 --> 00:48:55.159 minute by minute basis 00:48:55.159 --> 00:48:58.869 the energy and all don't we already pretty much have the 00:48:58.869 --> 00:49:00.159 platform and skill 00:49:00.159 --> 00:49:04.530 set we do have the platform what we're missing is a formal 00:49:04.530 --> 00:49:06.239 plan moving forward 00:49:06.239 --> 00:49:09.320 to implement so I think our team is very talented and I 00:49:09.320 --> 00:49:10.679 think that's gonna be 00:49:10.679 --> 00:49:14.489 born out in this next presentation one of the things though 00:49:14.489 --> 00:49:15.159 moving forward is 00:49:15.159 --> 00:49:18.239 just a longer-term renewable plan how we're going to 00:49:18.239 --> 00:49:19.480 operate it how we're 00:49:19.480 --> 00:49:23.070 going to manage it we very well could recommend bringing in 00:49:23.070 --> 00:49:23.679 assets such as 00:49:23.679 --> 00:49:28.079 enterprise risk to help us you know update the plan and and 00:49:28.079 --> 00:49:28.880 just have that 00:49:28.880 --> 00:49:32.219 that outside voice to bounce ideas off of but yes now we do 00:49:32.219 --> 00:49:33.199 have a very talented 00:49:33.199 --> 00:49:35.940 team in house to work with them I took a tour and it looked 00:49:35.940 --> 00:49:37.159 like yeah the stock 00:49:37.159 --> 00:49:42.519 market I mean yeah monitoring and the people I was very 00:49:42.519 --> 00:49:43.519 impressed with with 00:49:43.519 --> 00:49:46.010 what the city already has yeah I think I think the reason 00:49:46.010 --> 00:49:47.320 we brought them we 00:49:47.320 --> 00:49:50.019 brought enterprise risk in is to help us put together a 00:49:50.019 --> 00:49:51.519 formal plan moving forward 00:49:51.519 --> 00:49:54.820 and help us with that that resource allocation mix and also 00:49:54.820 --> 00:49:56.019 to make sure that 00:49:56.019 --> 00:49:59.829 our public understands what we're doing you know but moving 00:49:59.829 --> 00:50:00.960 forward what we will 00:50:00.960 --> 00:50:04.050 likely ask them to you know to help us refine the plan and 00:50:04.050 --> 00:50:05.079 make sure that we're 00:50:05.079 --> 00:50:07.840 operates officially as possible but we have no concerns 00:50:07.840 --> 00:50:09.119 about our current staff 00:50:09.119 --> 00:50:12.150 and their ability to pull this plan off their talented 00:50:12.150 --> 00:50:13.440 people and have saved 00:50:13.440 --> 00:50:16.320 quite a bit of money over the last millions of dollars 00:50:16.320 --> 00:50:17.639 right well as he 00:50:17.639 --> 00:50:21.050 said you have to have somebody here somebody's gonna be on 00:50:21.050 --> 00:50:22.239 it 24/7 to watch 00:50:22.239 --> 00:50:28.920 it third party look forward I don't know if there's no 00:50:28.920 --> 00:50:29.960 action to be taken but I 00:50:29.960 --> 00:50:36.940 look forward to the October 16th reports when it comes in 00:50:36.940 --> 00:50:40.360 16 is when is our we 00:50:40.360 --> 00:50:46.489 don't have what's that we have a PB meeting on the 6 second 00:50:46.489 --> 00:50:48.119 meeting okay 00:50:48.119 --> 00:51:03.960 okay that's the 23rd okay to the public but also my 00:51:03.960 --> 00:51:07.800 colleagues on on pub that the 00:51:07.800 --> 00:51:13.000 impression that I got from reading this presentation in 00:51:13.000 --> 00:51:14.639 advance and hearing this 00:51:14.639 --> 00:51:20.769 today is that the the plan that we had in place called the 00:51:20.769 --> 00:51:21.840 renewable dentin plan 00:51:21.840 --> 00:51:26.510 was very very bare bones and minimalistic so I'm kind of 00:51:26.510 --> 00:51:27.599 getting the 00:51:27.599 --> 00:51:32.539 impression here that where that what we're doing now is 00:51:32.539 --> 00:51:34.239 really building a 00:51:34.239 --> 00:51:38.510 plan from the ground up is that would you say that's 00:51:38.510 --> 00:51:40.280 correct Todd I think 00:51:40.280 --> 00:51:44.920 that's fair the there was there's obviously a concept and 00:51:44.920 --> 00:51:46.159 an idea behind 00:51:46.159 --> 00:51:49.510 the energy center at this point what we're trying to do is 00:51:49.510 --> 00:51:50.800 make sure that we 00:51:50.800 --> 00:51:56.119 include pub and council in terms of adopting our renewable 00:51:56.119 --> 00:51:56.800 plan moving 00:51:56.800 --> 00:51:59.219 forward what that's going to mean in terms of a divers 00:51:59.219 --> 00:52:00.260 ification what it's 00:52:00.260 --> 00:52:03.340 going to mean in terms of future contracts contracts the 00:52:03.340 --> 00:52:04.360 renewable market 00:52:04.360 --> 00:52:07.250 as well as the important policy decision it's really not 00:52:07.250 --> 00:52:08.440 been discussed yet and 00:52:08.440 --> 00:52:11.639 that is how the deck is gonna work yes you know and how in 00:52:11.639 --> 00:52:12.760 I think there's a 00:52:12.760 --> 00:52:15.340 lot of confusion around that and we just want to make sure 00:52:15.340 --> 00:52:16.360 that that both of our 00:52:16.360 --> 00:52:19.949 governing bodies and our public fully understand how this 00:52:19.949 --> 00:52:21.000 all works and that 00:52:21.000 --> 00:52:25.039 you know that we're operating from one set of facts mm-hmm 00:52:25.039 --> 00:52:26.280 yes thank you yeah 00:52:26.280 --> 00:52:30.550 this is essentially just going to give us a formal strategy 00:52:30.550 --> 00:52:31.440 of how we're going 00:52:31.440 --> 00:52:34.530 to be moving forward with renewables and everything and 00:52:34.530 --> 00:52:36.239 exactly in a very public 00:52:36.239 --> 00:52:41.550 way yes and and as implementation of the deck and how do we 00:52:41.550 --> 00:52:42.079 how do we utilize 00:52:42.079 --> 00:52:47.559 that as well in that plan so for what it's worth and 00:52:47.559 --> 00:52:49.000 regardless of how we've 00:52:49.000 --> 00:52:52.809 come up here to this point with or without a plan the 00:52:52.809 --> 00:52:53.800 gentleman did say 00:52:53.800 --> 00:52:57.610 that we were poised in a great position to begin putting 00:52:57.610 --> 00:52:59.000 this plan on paper so 00:52:59.000 --> 00:53:01.960 however we got into this good position I guess it's 00:53:01.960 --> 00:53:03.920 fortunate that we are in the 00:53:03.920 --> 00:53:07.329 position and I think I heard him say Georgetown fell into 00:53:07.329 --> 00:53:09.000 it so maybe 00:53:09.000 --> 00:53:17.269 into it too I do remember having discussion five six years 00:53:17.269 --> 00:53:18.840 ago about solar 00:53:18.840 --> 00:53:23.130 contracts and about the time that Austin got into it and 00:53:23.130 --> 00:53:24.880 and we were looking at 00:53:24.880 --> 00:53:29.150 hundred and twenty dollars minimum at that time so now we 00:53:29.150 --> 00:53:29.840 're talking about 00:53:29.840 --> 00:53:36.840 twenty dollars which is yeah yeah I'll go here that's good 00:53:36.840 --> 00:53:38.840 yes I'll just add to 00:53:38.840 --> 00:53:42.719 that yet we're absolutely in it clearly in it advantageous 00:53:42.719 --> 00:53:44.039 position financially 00:53:44.039 --> 00:53:48.940 in terms of purchasing renewables but of course we also are 00:53:48.940 --> 00:53:50.559 balancing that out 00:53:50.559 --> 00:53:59.469 with the the 265 million dollars bond debt for for the gas 00:53:59.469 --> 00:54:01.400 plant so that may 00:54:01.400 --> 00:54:05.210 have been of course we can't go back in time and and I'll 00:54:05.210 --> 00:54:06.440 alter the recent past 00:54:06.440 --> 00:54:08.760 but just to make sure in terms of being honest with the 00:54:08.760 --> 00:54:09.880 public that the public 00:54:09.880 --> 00:54:14.699 understands that we also have this big debt service and 00:54:14.699 --> 00:54:16.539 part of what we'll be 00:54:16.539 --> 00:54:20.809 doing it seems from from reading this report with these 00:54:20.809 --> 00:54:23.159 cheap renewables is 00:54:23.159 --> 00:54:28.460 helping to pay off the debt I know that's obvious to us 00:54:28.460 --> 00:54:29.679 just kind of stating 00:54:29.679 --> 00:54:33.489 that off for the public and I've made it you know just to 00:54:33.489 --> 00:54:35.239 put my cards on the 00:54:35.239 --> 00:54:40.760 table you know I've I've been been very vocal from the 00:54:40.760 --> 00:54:41.719 beginning in my 00:54:41.719 --> 00:54:49.619 opposition to the gas plant but I've always been thrilled 00:54:49.619 --> 00:54:51.079 with the idea of 00:54:51.079 --> 00:54:55.469 these renewables and I makes me really happy to know that 00:54:55.469 --> 00:54:56.800 we're doing this at 00:54:56.800 --> 00:55:01.820 at precisely the right time it is bittersweet for me though 00:55:01.820 --> 00:55:02.539 you know to 00:55:02.539 --> 00:55:06.969 see that all these all these gains will be you know paying 00:55:06.969 --> 00:55:08.159 off this this this 00:55:08.159 --> 00:55:15.320 burden well I think to your point we thought that you know 00:55:15.320 --> 00:55:16.199 based upon the 00:55:16.199 --> 00:55:21.159 council's goal of you know 70% renewable strategy moving 00:55:21.159 --> 00:55:21.519 forward and 00:55:21.519 --> 00:55:24.469 hopefully exceeding that you know we feel like we've got 00:55:24.469 --> 00:55:25.440 the right team in 00:55:25.440 --> 00:55:29.250 place to help us put that strategy in place they've 00:55:29.250 --> 00:55:30.199 obviously proven they can 00:55:30.199 --> 00:55:33.199 do that note with other communities but the the financial 00:55:33.199 --> 00:55:34.440 plan that's currently 00:55:34.440 --> 00:55:38.250 in place and which would be in the form of the five-year 00:55:38.250 --> 00:55:39.179 operating budget 00:55:39.179 --> 00:55:42.989 operating CIP budget that really is the those are the 00:55:42.989 --> 00:55:44.159 numbers we're trying to 00:55:44.159 --> 00:55:48.199 improve upon and so any strategy that's put in place yeah 00:55:48.199 --> 00:55:48.800 there's the debt 00:55:48.800 --> 00:55:52.130 there's mitigation for the debt service no question about 00:55:52.130 --> 00:55:53.119 it but one of the 00:55:53.119 --> 00:55:55.519 charges that we're hoping to see through this strategic 00:55:55.519 --> 00:55:56.599 planning is can we meet 00:55:56.599 --> 00:56:02.300 and exceed our financial goals and input the the DME and 00:56:02.300 --> 00:56:04.079 even more advantageous 00:56:04.079 --> 00:56:08.679 financial positions so we you know we're moving forward we 00:56:08.679 --> 00:56:09.800 've got the variable 00:56:09.800 --> 00:56:11.949 set and I think we've got the right team in place that can 00:56:11.949 --> 00:56:13.280 can help us provide 00:56:13.280 --> 00:56:17.090 that objective third-party look and improve our financial 00:56:17.090 --> 00:56:17.360 situation that's 00:56:17.360 --> 00:56:23.440 that's the goal thank you and I would just want to see to 00:56:23.440 --> 00:56:26.719 make sure that our 00:56:26.719 --> 00:56:31.639 rate payers our residential rate payers average Joe rate 00:56:31.639 --> 00:56:33.440 payer is reaping the 00:56:33.440 --> 00:56:38.150 benefits of this savings so that your average residential 00:56:38.150 --> 00:56:39.760 rate payer doesn't 00:56:39.760 --> 00:56:42.730 feel like they're strapped with this debt I know we're all 00:56:42.730 --> 00:56:43.840 strapped with it with 00:56:43.840 --> 00:56:49.079 the debt and that's a reality but I just wanted to put that 00:56:49.079 --> 00:56:50.599 in there so that the 00:56:50.599 --> 00:56:55.300 public knows that that that that will be something that 00:56:55.300 --> 00:56:57.159 that that will be talking 00:56:57.159 --> 00:57:01.429 about trying to ease the burden on the residential rate pay 00:57:01.429 --> 00:57:02.380 ers I think once we 00:57:02.380 --> 00:57:05.389 can get to a point where PUB and council feel comfortable 00:57:05.389 --> 00:57:06.800 adopting our operational 00:57:06.800 --> 00:57:09.880 plans moving forward the strategic plan moving forward you 00:57:09.880 --> 00:57:11.599 know and we start 00:57:11.599 --> 00:57:15.300 locking down some additional renewable contracts we should 00:57:15.300 --> 00:57:16.159 be able to be in a 00:57:16.159 --> 00:57:21.550 pretty solid position late next spring to assess how our 00:57:21.550 --> 00:57:23.519 new strategy or how our 00:57:23.519 --> 00:57:26.739 strategy is going to correlate to our assumptions and I 00:57:26.739 --> 00:57:27.840 think it's I think 00:57:27.840 --> 00:57:29.349 that will be the time where we can answer that question a 00:57:29.349 --> 00:57:29.920 little bit better 00:57:29.920 --> 00:57:37.880 for you excellent well I'm not quite ready to scrap the 00:57:37.880 --> 00:57:39.199 deck at this point I 00:57:39.199 --> 00:57:43.010 think I'm looking forward to this through the report in 00:57:43.010 --> 00:57:43.920 October because I 00:57:43.920 --> 00:57:47.869 think it's going to illustrate that not just paying off 00:57:47.869 --> 00:57:49.559 debt but also the value 00:57:49.559 --> 00:57:54.179 of having a start-up during peak hours because that is the 00:57:54.179 --> 00:57:55.920 most expensive time 00:57:55.920 --> 00:58:00.190 to try to buy energy when you need it is during the summer 00:58:00.190 --> 00:58:01.519 peak hours and so if 00:58:01.519 --> 00:58:05.809 that might makes that gap I think I think the jury is still 00:58:05.809 --> 00:58:07.880 out and and that 00:58:07.880 --> 00:58:11.880 that's also the time when of course the Sun the solar is 00:58:11.880 --> 00:58:12.840 most yeah we've got the 00:58:12.840 --> 00:58:18.480 most solar we'll look forward to the report yes yes me too 00:58:18.480 --> 00:58:21.880 okay next item we 00:58:21.880 --> 00:58:28.239 have is item B Brian to receive report whole discussion 00:58:28.239 --> 00:58:29.199 give staff direction 00:58:29.199 --> 00:58:36.690 regarding the energy management organization this is the 00:58:36.690 --> 00:58:40.039 second of two 00:58:40.039 --> 00:58:42.900 presentations this morning for you from some consultants 00:58:42.900 --> 00:58:44.039 that we've hired so as 00:58:44.039 --> 00:58:46.179 we were talking about earlier with you we did create an 00:58:46.179 --> 00:58:47.039 energy management 00:58:47.039 --> 00:58:49.699 organization about three years ago we had some internal 00:58:49.699 --> 00:58:50.679 benchmarks we were 00:58:50.679 --> 00:58:53.539 using to calculate what we thought the savings of having 00:58:53.539 --> 00:58:54.639 that group in-house 00:58:54.639 --> 00:58:57.510 was but we wanted to get an independent view of that and so 00:58:57.510 --> 00:58:58.519 we hired Deloitte 00:58:58.519 --> 00:59:01.179 consulting to come in and do a review of that and so the 00:59:01.179 --> 00:59:02.519 purpose of this item is 00:59:02.519 --> 00:59:05.199 to have them present that report to you tomorrow they'll 00:59:05.199 --> 00:59:05.960 also be repeating 00:59:05.960 --> 00:59:08.119 reporting on this to the City Council so with that I'm 00:59:08.119 --> 00:59:09.199 going to introduce Steve 00:59:09.199 --> 00:59:13.010 Engler and Tim Metz from Deloitte and turn the presentation 00:59:13.010 --> 00:59:14.920 over to them thank 00:59:14.920 --> 00:59:17.690 you Brian good morning ladies and gentlemen of the board as 00:59:17.690 --> 00:59:18.480 Brian mentioned 00:59:18.480 --> 00:59:21.300 my name is Steve Engler I'm a managing director with Delo 00:59:21.300 --> 00:59:22.280 itte's energy risk 00:59:22.280 --> 00:59:24.800 advisory practice and my colleague Tim Metz is a senior 00:59:24.800 --> 00:59:25.840 manager in that same 00:59:25.840 --> 00:59:28.190 practice pleased to speak with you this morning and like 00:59:28.190 --> 00:59:29.079 the gentleman that 00:59:29.079 --> 00:59:32.079 spoke earlier please don't hesitate to interrupt with 00:59:32.079 --> 00:59:33.639 questions I apologize in 00:59:33.639 --> 00:59:35.420 advance there's a lot of numbers on a lot of these slides 00:59:35.420 --> 00:59:36.199 but we're gonna try 00:59:36.199 --> 00:59:40.010 to tell a story at the same time I love numbers before you 00:59:40.010 --> 00:59:40.679 start I have to leave 00:59:40.679 --> 00:59:45.079 at 1015 so if I get up and leave it's not your present 00:59:48.760 --> 00:59:51.030 so our attorneys require that we put a lot of verbiage 00:59:51.030 --> 00:59:53.559 upfront in the slides 00:59:53.559 --> 00:59:56.219 just to talk quickly about where we're gonna go we'll give 00:59:56.219 --> 00:59:57.039 a little bit of a 00:59:57.039 --> 00:59:59.519 background in terms of why we're here Brian gave an 00:59:59.519 --> 01:00:00.639 introduction to that 01:00:00.639 --> 01:00:04.449 effect talk about the three things that we set out to 01:00:04.449 --> 01:00:05.440 complete during this 01:00:05.440 --> 01:00:08.139 analysis and then we're going to talk about some of the 01:00:08.139 --> 01:00:08.940 details of that 01:00:08.940 --> 01:00:13.019 analysis specifically validating the model that the city's 01:00:13.019 --> 01:00:13.920 been using to 01:00:13.920 --> 01:00:18.530 calculate the savings then peel that back a little bit and 01:00:18.530 --> 01:00:19.760 look at some of 01:00:19.760 --> 01:00:22.849 the key assumptions that are in that model including the 01:00:22.849 --> 01:00:23.679 heat rate and the 01:00:23.679 --> 01:00:27.489 ancillary services and the QSE costs which we'll talk about 01:00:27.489 --> 01:00:28.719 and then the 01:00:28.719 --> 01:00:31.400 third piece was to look at on the cost side of the equation 01:00:31.400 --> 01:00:32.119 so what we're 01:00:32.119 --> 01:00:35.929 comparing to and we've got a summary at the end and some 01:00:35.929 --> 01:00:37.119 recommended next steps 01:00:37.119 --> 01:00:41.159 as well so I'm not going to read all this to you and I 01:00:41.159 --> 01:00:41.880 think this is probably 01:00:41.880 --> 01:00:45.019 familiar to all of you on the board and in the audience but 01:00:45.019 --> 01:00:46.760 dating back to 2002 01:00:46.760 --> 01:00:50.570 when the state of Texas deregulated the energy the electric 01:00:50.570 --> 01:00:52.139 markets Denton 01:00:52.139 --> 01:00:55.949 Municipal Electric began utilizing services from several 01:00:55.949 --> 01:00:57.159 counterparties to 01:00:57.159 --> 01:01:01.480 procure energy when required to meet the demand as well as 01:01:01.480 --> 01:01:02.599 fulfill this the 01:01:02.599 --> 01:01:07.519 scheduling requirements in ERCOT beginning in 2011 DME 01:01:07.519 --> 01:01:08.559 selected a single 01:01:08.559 --> 01:01:12.369 counterparty to perform that function on their behalf and 01:01:12.369 --> 01:01:13.440 through the course of 01:01:13.440 --> 01:01:16.610 that contract it was discussed that there was potential 01:01:16.610 --> 01:01:17.559 savings by bringing 01:01:17.559 --> 01:01:22.460 that capability in-house and that's when the the Emo was 01:01:22.460 --> 01:01:24.239 was created and launched 01:01:24.239 --> 01:01:28.050 as Brian said there were some expected savings in bringing 01:01:28.050 --> 01:01:29.159 the capabilities in 01:01:29.159 --> 01:01:34.400 house and in order to monitor to calculate those savings in 01:01:34.400 --> 01:01:36.280 2014 before 01:01:36.280 --> 01:01:40.090 the the Emo was established Denton went to that same 01:01:40.090 --> 01:01:41.719 counterparty for a quote to 01:01:41.719 --> 01:01:44.599 continue to provide those those services and that's been 01:01:44.599 --> 01:01:45.480 really the the 01:01:45.480 --> 01:01:50.320 benchmark cost that has been used in doing the savings 01:01:50.320 --> 01:01:52.280 calculation there were 01:01:52.280 --> 01:01:57.530 some budgeted savings that were put in place for fiscal 15 01:01:57.530 --> 01:02:00.199 and fiscal 16 and in 01:02:00.199 --> 01:02:02.849 the calculation of the performance against those 01:02:02.849 --> 01:02:05.280 expectations the DME has 01:02:05.280 --> 01:02:09.940 reported savings in excess of those budgeted savings and I 01:02:09.940 --> 01:02:10.679 'm here to 01:02:10.679 --> 01:02:13.099 foreshadow and the good news is we agree that there have 01:02:13.099 --> 01:02:14.239 been savings in excess 01:02:14.239 --> 01:02:17.489 of the budgeted amounts there are some details that could 01:02:17.489 --> 01:02:18.880 push those savings in 01:02:18.880 --> 01:02:24.269 one direction or the other okay so just to recap what we 01:02:24.269 --> 01:02:25.800 were asked to do the 01:02:25.800 --> 01:02:29.079 first piece of this is really a re performance of the 01:02:29.079 --> 01:02:30.360 calculation and the 01:02:30.360 --> 01:02:33.260 purpose of this was to check the inputs and see if that 01:02:33.260 --> 01:02:34.760 there are any really data 01:02:34.760 --> 01:02:39.079 gaps or inconsistencies or errors in the calculation of the 01:02:39.079 --> 01:02:39.920 saving using the 01:02:39.920 --> 01:02:43.920 savings using the model that's been in place here the 01:02:43.920 --> 01:02:44.960 second piece as I 01:02:44.960 --> 01:02:47.000 mentioned was to dig into the assumptions some of the 01:02:47.000 --> 01:02:47.519 underlying 01:02:47.519 --> 01:02:51.570 assumptions and understand what's driving the majority of 01:02:51.570 --> 01:02:52.679 the savings that have 01:02:52.679 --> 01:02:57.039 been reported and then finally looking at the Emo itself 01:02:57.039 --> 01:02:58.840 and it's important to 01:02:58.840 --> 01:03:02.349 keep in mind when the the function was outsourced there are 01:03:02.349 --> 01:03:03.199 a number of 01:03:03.199 --> 01:03:07.010 capabilities that we see at similar organizations that 01:03:07.010 --> 01:03:08.360 provide energy risk 01:03:08.360 --> 01:03:11.559 management and scheduling capabilities and so we were asked 01:03:11.559 --> 01:03:12.519 to do a high level 01:03:12.519 --> 01:03:17.119 assessment of those capabilities because that's really what 01:03:17.119 --> 01:03:18.159 you're in effect 01:03:18.159 --> 01:03:21.150 replacing by bringing it in-house it's important that we 01:03:21.150 --> 01:03:22.280 did not do a detailed 01:03:22.280 --> 01:03:25.440 process review kind of a front-to-back office assessment it 01:03:25.440 --> 01:03:26.719 was really what we 01:03:26.719 --> 01:03:30.420 want to do here is point out some capabilities some 01:03:30.420 --> 01:03:30.880 functions some 01:03:30.880 --> 01:03:35.170 underlying costs that we would recommend to you are in fact 01:03:35.170 --> 01:03:35.880 included in the 01:03:35.880 --> 01:03:39.690 cost side of the equation so that you truly are replacing 01:03:39.690 --> 01:03:40.719 apples with apples 01:03:40.719 --> 01:03:45.170 okay I'm going too fast slowing down I'm from New Jersey so 01:03:45.170 --> 01:03:47.840 I talked quickly okay 01:03:47.840 --> 01:03:51.650 so here's one of those numbers slides so this is the first 01:03:51.650 --> 01:03:52.280 part of the 01:03:52.280 --> 01:03:55.059 assessment and we broke it down into two time periods 01:03:55.059 --> 01:03:56.400 October 14 through 01:03:56.400 --> 01:04:01.219 September 15 and then October 15 through September 16 and 01:04:01.219 --> 01:04:03.239 the takeaway from this 01:04:03.239 --> 01:04:07.050 calculation this is where we re-performed the model and the 01:04:07.050 --> 01:04:07.360 savings 01:04:07.360 --> 01:04:12.530 calculation as performed by the city prior is that with 01:04:12.530 --> 01:04:13.519 very minor 01:04:13.519 --> 01:04:17.329 differences we were able to match the calculation of the 01:04:17.329 --> 01:04:18.400 savings in fact the 01:04:18.400 --> 01:04:21.750 difference in cost savings is you know in a small way to 01:04:21.750 --> 01:04:22.639 the good in other 01:04:22.639 --> 01:04:25.420 words you under reported the savings based on the 01:04:25.420 --> 01:04:26.920 calculation of the model 01:04:26.920 --> 01:04:30.519 that you've been using some drivers for that includes some 01:04:30.519 --> 01:04:31.360 data elements that we 01:04:31.360 --> 01:04:33.570 when we dug into the model the details of the model and 01:04:33.570 --> 01:04:34.559 found that there were 01:04:34.559 --> 01:04:39.400 some some minor anomalies but for the most part it was a 01:04:39.400 --> 01:04:40.559 given the numbers 01:04:40.559 --> 01:04:43.030 that we're talking about the differences were very minor so 01:04:43.030 --> 01:04:44.719 for the first part of 01:04:44.719 --> 01:04:48.530 this we would conclude that the calculation was done 01:04:48.530 --> 01:04:49.860 correctly and the 01:04:49.860 --> 01:04:54.280 inputs were used appropriately and that there were no data 01:04:54.280 --> 01:04:56.599 gaps to speak of so 01:04:56.599 --> 01:04:58.570 now we're going to get into the next part of the analysis 01:04:58.570 --> 01:04:59.679 and really this was to 01:04:59.679 --> 01:05:03.489 understand the key drivers of the savings and also to 01:05:03.489 --> 01:05:04.840 understand you know 01:05:04.840 --> 01:05:09.309 the sensitivity of those savings to certain inputs and I'm 01:05:09.309 --> 01:05:10.559 going to spend a 01:05:10.559 --> 01:05:12.610 minute on this slide just to make sure we're on all on the 01:05:12.610 --> 01:05:13.360 same page in terms 01:05:13.360 --> 01:05:18.150 of heat rate and heat rate is effectively a measure of the 01:05:18.150 --> 01:05:19.239 efficiency 01:05:19.239 --> 01:05:23.510 of a generation unit to convert fuel to electricity so the 01:05:23.510 --> 01:05:25.000 lower the heat rate 01:05:25.000 --> 01:05:30.400 number the better the it's there's a simplistic example 01:05:30.400 --> 01:05:32.280 here if it takes 10 01:05:32.280 --> 01:05:36.090 units of natural gas of MMBT use to create one unit of 01:05:36.090 --> 01:05:37.199 electricity or one 01:05:37.199 --> 01:05:43.309 unit of power that would be a heat rate of 10 so the drive 01:05:43.309 --> 01:05:45.360 to build and dispatch 01:05:45.360 --> 01:05:48.389 more efficient units is hopefully has the effect of 01:05:48.389 --> 01:05:49.960 lowering the overall heat 01:05:49.960 --> 01:05:54.559 rate in a particular area so in a calculation such as the 01:05:54.559 --> 01:05:55.800 one that we were 01:05:55.800 --> 01:06:01.440 asked to to review it's the heat rate itself is a key 01:06:01.440 --> 01:06:03.199 contributor to the cost 01:06:03.199 --> 01:06:07.519 of the you know the effective cost of the contract that you 01:06:07.519 --> 01:06:08.719 were replacing 01:06:08.719 --> 01:06:12.530 another key element that that we want to make sure we 01:06:12.530 --> 01:06:14.400 emphasize is the notion of 01:06:14.400 --> 01:06:18.449 on peak versus off peak versus around the clock the on peak 01:06:18.449 --> 01:06:20.400 hours which would 01:06:20.400 --> 01:06:26.210 be the hours between 6 a.m. and 10 p.m. reflect generally 01:06:26.210 --> 01:06:27.280 the the period of 01:06:27.280 --> 01:06:31.739 highest demand for electricity and then the off peak hours 01:06:31.739 --> 01:06:32.840 obviously by by 01:06:32.840 --> 01:06:35.869 extension of that are the evening hours the overnight hours 01:06:35.869 --> 01:06:36.719 where demand is 01:06:36.719 --> 01:06:40.530 lower and then there's a notion of around the clock which 01:06:40.530 --> 01:06:41.840 would be the full 24 01:06:41.840 --> 01:06:45.650 hour period which would be some combination of that the 01:06:45.650 --> 01:06:47.000 heat rate that 01:06:47.000 --> 01:06:51.280 was quoted in the contract extension offer by the 01:06:51.280 --> 01:06:53.559 counterparty it's important 01:06:53.559 --> 01:06:57.630 to note that that was quoted at an on peak rate whereas the 01:06:57.630 --> 01:06:58.800 product that was 01:06:58.800 --> 01:07:02.610 provided was an around-the-clock product so in our mind 01:07:02.610 --> 01:07:04.039 there's some question as 01:07:04.039 --> 01:07:07.849 to what the appropriate heat rate should be in order to 01:07:07.849 --> 01:07:08.920 perform the calculation 01:07:08.920 --> 01:07:12.889 to calculate the savings this isn't as there's not a 01:07:12.889 --> 01:07:14.559 definitive answer here and 01:07:14.559 --> 01:07:18.550 we're not asked to opine on whether the heat rate was the 01:07:18.550 --> 01:07:19.719 correct one or the 01:07:19.719 --> 01:07:22.320 incorrect one what we want to point out is that the 01:07:22.320 --> 01:07:23.840 decision of which benchmark 01:07:23.840 --> 01:07:26.559 heat rate to use is a significant driver of what the 01:07:26.559 --> 01:07:28.480 savings would be reasonable 01:07:28.480 --> 01:07:31.559 people can and do disagree on what the right heat rate 01:07:31.559 --> 01:07:32.840 should be in any given 01:07:32.840 --> 01:07:36.650 model part of our recommendations going forward is that for 01:07:36.650 --> 01:07:37.360 future benchmark 01:07:37.360 --> 01:07:41.170 comparisons that there's clear and explicit agreement on 01:07:41.170 --> 01:07:41.880 that heat rate 01:07:41.880 --> 01:07:45.230 component so that the savings as calculated you know there 01:07:45.230 --> 01:07:45.719 's less 01:07:45.719 --> 01:07:50.349 question or less pushback so that's a key concept and what 01:07:50.349 --> 01:07:50.840 I'm going to 01:07:50.840 --> 01:07:53.730 demonstrate next is the impact that the heat rate has on 01:07:53.730 --> 01:07:54.880 the calculation and 01:07:54.880 --> 01:07:58.860 changing the heat rate has on the calculation the the red 01:07:58.860 --> 01:07:59.960 line here I'll 01:07:59.960 --> 01:08:03.769 try to walk you through these charts it's a clarified all 01:08:03.769 --> 01:08:06.679 the lines the the the 01:08:06.679 --> 01:08:08.949 blue line the blue and gray lines kind of going across 01:08:08.949 --> 01:08:09.800 through the year are 01:08:09.800 --> 01:08:14.250 forward heat rates for any particular year that that were 01:08:14.250 --> 01:08:16.279 recorded the red 01:08:16.279 --> 01:08:19.989 dotted line is the benchmark heat rate that was quoted in 01:08:19.989 --> 01:08:20.600 the counterparties 01:08:20.600 --> 01:08:26.520 contract of 15.75 by doing historic analysis of those lines 01:08:26.520 --> 01:08:27.399 with the peak 01:08:27.399 --> 01:08:31.800 you see in July in August the average forward on peak heat 01:08:31.800 --> 01:08:32.300 rate that we 01:08:32.300 --> 01:08:36.680 calculated for that time period between 13 and 14 was 12.26 01:08:36.680 --> 01:08:39.079 so 12.26 on peak 01:08:39.079 --> 01:08:43.159 heat rate versus 15.75 it's reasonable to assume that the 01:08:43.159 --> 01:08:45.619 counterparty would have some profit margin built into the 01:08:45.619 --> 01:08:46.439 heat rate that they 01:08:46.439 --> 01:08:50.250 quoted you and in fact DME and the email have calculated 01:08:50.250 --> 01:08:51.279 kind of backed into a 01:08:51.279 --> 01:08:55.550 calculation of what we think the the profit margin was for 01:08:55.550 --> 01:08:56.319 the counterparty 01:08:56.319 --> 01:08:58.890 and that would be expected in any in any contract where 01:08:58.890 --> 01:09:00.279 they're providing all of 01:09:00.279 --> 01:09:05.159 those services to you but we point this out that there is a 01:09:05.159 --> 01:09:05.960 significant gap 01:09:05.960 --> 01:09:10.039 between the actual on peak heat rate forward heat rate 01:09:10.039 --> 01:09:11.720 versus the one that was 01:09:11.720 --> 01:09:14.170 quoted and this may be a function of the fact that it was 01:09:14.170 --> 01:09:15.039 quoted on a particular 01:09:15.039 --> 01:09:18.000 day or a particular period in time whereas we look back 01:09:18.000 --> 01:09:19.199 over that course of 01:09:19.199 --> 01:09:23.609 time over that those those years and then to take that one 01:09:23.609 --> 01:09:26.039 step further if you 01:09:26.039 --> 01:09:29.960 agree that using an around-the-clock heat rate would be a 01:09:29.960 --> 01:09:32.119 reasonable benchmark 01:09:32.119 --> 01:09:35.409 for that same time period we calculated the average forward 01:09:35.409 --> 01:09:36.359 heat rate for those 01:09:36.359 --> 01:09:42.279 for those years to be at 10.1 so you can see using the 01:09:42.279 --> 01:09:43.199 around-the-clock heat rate 01:09:43.199 --> 01:09:48.380 pushes it down even further if we then add in some profit 01:09:48.380 --> 01:09:50.079 margin and in this 01:09:50.079 --> 01:09:54.350 case we use 2.5 we rounded the 10.1 up to 10.25 just to 01:09:54.350 --> 01:09:55.119 keep the math kind of 01:09:55.119 --> 01:10:00.619 clean and then we added a profit margin of 2.5 results in 01:10:00.619 --> 01:10:01.960 the the opportunity 01:10:01.960 --> 01:10:07.359 is 12.75 as a benchmark heat rate as opposed to 15.75 as 01:10:07.359 --> 01:10:09.520 one example and then 01:10:09.520 --> 01:10:14.359 the next chart we tried to summarize what changing the heat 01:10:14.359 --> 01:10:15.359 rate does to the 01:10:15.359 --> 01:10:19.170 calculated savings the yellow highlighted lines and this is 01:10:19.170 --> 01:10:19.680 what the 01:10:19.680 --> 01:10:24.970 top tables for 2015 the bottom tables for 2016 we only 01:10:24.970 --> 01:10:26.319 highlight that one 01:10:26.319 --> 01:10:28.960 line in yellow to point back to the prior slide it's an 01:10:28.960 --> 01:10:29.960 example of what the 01:10:29.960 --> 01:10:32.380 savings would be if you agree that that's the correct heat 01:10:32.380 --> 01:10:33.920 rate to use and 01:10:33.920 --> 01:10:38.880 you can see that the change in savings is you know you know 01:10:38.880 --> 01:10:39.840 significant based 01:10:39.840 --> 01:10:42.720 on the different heat rates that you use the closer you get 01:10:42.720 --> 01:10:44.880 to the 15.75 the 01:10:44.880 --> 01:10:49.539 changes become smaller so we offer that here is something 01:10:49.539 --> 01:10:50.640 for the for the board 01:10:50.640 --> 01:10:54.449 to consider and for the EMO to work with the board and DME 01:10:54.449 --> 01:10:55.319 in terms of 01:10:55.319 --> 01:10:58.510 determining what is the correct heat rate benchmark to use 01:10:58.510 --> 01:10:59.439 and then that will 01:10:59.439 --> 01:11:03.250 adjust the savings accordingly for both of these years I'll 01:11:03.250 --> 01:11:03.920 point out that even 01:11:03.920 --> 01:11:07.399 when using a very low heat rate you know in the nines there 01:11:07.399 --> 01:11:09.039 are still savings in 01:11:09.039 --> 01:11:12.439 excess of the budgeted savings it's a question really of 01:11:12.439 --> 01:11:13.760 how much in excess of 01:11:13.760 --> 01:11:18.359 those the savings is the appropriate the appropriate 01:11:18.359 --> 01:11:20.560 analysis I'll pause there to 01:11:20.560 --> 01:11:24.010 see if there are questions on that's being a key point I've 01:11:24.010 --> 01:11:25.039 got a question 01:11:25.039 --> 01:11:29.779 the in this you may not have looked into this but the 01:11:29.779 --> 01:11:32.840 previous contract we had 01:11:32.840 --> 01:11:40.800 for for this was the I guess was the fee we paid based upon 01:11:40.800 --> 01:11:42.680 something other than 01:11:42.680 --> 01:11:47.130 ATC or was it on peak it was based on on peak so we were 01:11:47.130 --> 01:11:48.479 actually paying on peak 01:11:48.479 --> 01:11:52.800 on the one prior to 2014 that was the quote that that was 01:11:52.800 --> 01:11:54.520 offered at the point 01:11:54.520 --> 01:11:59.420 then that was for the renewal yes the contract prior to do 01:11:59.420 --> 01:12:00.279 we actually pay 01:12:00.279 --> 01:12:04.090 that yeah it appears to have been based on an on peak price 01:12:04.090 --> 01:12:05.239 as well so if you 01:12:05.239 --> 01:12:08.390 go back and you look at what the forward price for power 01:12:08.390 --> 01:12:09.760 was around the time you 01:12:09.760 --> 01:12:13.119 were negotiating that contract it does line up with the on 01:12:13.119 --> 01:12:14.319 peak power prices 01:12:14.319 --> 01:12:18.590 now the markets changed I think significantly from when 01:12:18.590 --> 01:12:19.079 those 01:12:19.079 --> 01:12:23.109 negotiations were occurring in 2010 11 to what the price 01:12:23.109 --> 01:12:24.680 dynamic was in 14 so 01:12:24.680 --> 01:12:29.090 you did see a large change in prices in 2014 which did 01:12:29.090 --> 01:12:30.840 which explains part of 01:12:30.840 --> 01:12:33.500 the difference between what explains part of the reason why 01:12:33.500 --> 01:12:34.119 it went up so 01:12:34.119 --> 01:12:44.039 much in in 2014 okay okay so the next piece of this was to 01:12:44.039 --> 01:12:45.319 break down even if 01:12:45.319 --> 01:12:49.020 you look at that adjusted cost savings those are still 01:12:49.020 --> 01:12:49.920 significant numbers and 01:12:49.920 --> 01:12:53.090 we wanted to understand what's driving the lion's share of 01:12:53.090 --> 01:12:55.159 those savings and in 01:12:55.159 --> 01:12:59.829 our analysis the large part of that answer can come back to 01:12:59.829 --> 01:13:01.079 what you were 01:13:01.079 --> 01:13:03.779 paying for ancillary services and call what they call 01:13:03.779 --> 01:13:04.960 qualified scheduling 01:13:04.960 --> 01:13:08.770 entity costs queasy costs that you were paying the 01:13:08.770 --> 01:13:10.800 counterparty versus what you 01:13:10.800 --> 01:13:15.069 actually paid in managing it yourselves so I think the the 01:13:15.069 --> 01:13:16.560 headline or the good 01:13:16.560 --> 01:13:19.060 story here is that there were significant cost savings that 01:13:19.060 --> 01:13:19.520 are driven 01:13:19.520 --> 01:13:22.439 by the fact that you do this yourself as opposed to paying 01:13:22.439 --> 01:13:23.319 somebody with a 01:13:23.319 --> 01:13:28.840 premium we looked at the ancillary service cost is quoted 01:13:28.840 --> 01:13:29.880 and then assumed 01:13:29.880 --> 01:13:35.380 some increase for 15 into 16 look back at what the ancill 01:13:35.380 --> 01:13:36.800 ary services actual 01:13:36.800 --> 01:13:41.399 needs were for for those time periods and when you 01:13:41.399 --> 01:13:42.680 calculate the benchmark 01:13:42.680 --> 01:13:46.489 cost at 525 a megawatt and then at 551 a megawatt versus 01:13:46.489 --> 01:13:47.640 what you actually paid 01:13:47.640 --> 01:13:51.449 for those time periods the rough from both years over three 01:13:51.449 --> 01:13:52.680 million dollars of 01:13:52.680 --> 01:13:56.720 that savings that that remaining savings can be attributed 01:13:56.720 --> 01:13:58.000 to basically beating 01:13:58.000 --> 01:14:01.960 the beating the quote that you got by doing it yourselves 01:14:01.960 --> 01:14:05.439 okay Jim did I say 01:14:05.439 --> 01:14:12.159 that right perfect okay okay so this this table is just 01:14:12.159 --> 01:14:13.000 intended to summarize 01:14:13.000 --> 01:14:16.369 what I just what I just mentioned if you agree that the the 01:14:16.369 --> 01:14:17.880 heat rate at that 01:14:17.880 --> 01:14:22.699 number that lower number of sorry at ten point two five 01:14:22.699 --> 01:14:24.399 plus a two point five 01:14:24.399 --> 01:14:28.319 profit margin if you agree that that's the right benchmark 01:14:28.319 --> 01:14:29.319 to use it would 01:14:29.319 --> 01:14:33.130 adjust the savings by roughly seven million and fifteen and 01:14:33.130 --> 01:14:33.520 roughly six 01:14:33.520 --> 01:14:37.329 million and sixteen still resulting in cost savings of six 01:14:37.329 --> 01:14:38.880 point one million and 01:14:38.880 --> 01:14:43.729 fifteen and six point eight million in 2016 against the 01:14:43.729 --> 01:14:44.960 benchmarks which are in 01:14:44.960 --> 01:14:48.770 the first line there two point three million for fifteen 01:14:48.770 --> 01:14:49.840 and two point or five 01:14:49.840 --> 01:14:54.130 point two million for sixteen so again I think the debate 01:14:54.130 --> 01:14:55.479 that should stem from 01:14:55.479 --> 01:14:58.300 this is what's the right benchmark going forward and we'll 01:14:58.300 --> 01:14:59.880 talk about that in our 01:14:59.880 --> 01:15:02.539 recommended next steps and then the bottom part of the 01:15:02.539 --> 01:15:03.640 table just summarizes 01:15:03.640 --> 01:15:07.550 that a healthy chunk of those savings even the adjusted 01:15:07.550 --> 01:15:08.520 savings come from the 01:15:08.520 --> 01:15:12.350 fact that you are serving as your own queasy and paying 01:15:12.350 --> 01:15:13.840 actuals for ancillary 01:15:13.840 --> 01:15:18.319 services as opposed to actuals plus a plus a margin 01:15:19.880 --> 01:15:20.380 okay 01:15:24.720 --> 01:15:28.529 all right the final part of the assessment we looked at the 01:15:28.529 --> 01:15:29.640 elements 01:15:29.640 --> 01:15:33.699 that we as a service provider would expect to have in place 01:15:33.699 --> 01:15:34.079 at an 01:15:34.079 --> 01:15:38.810 organization that's providing queasy functions as well as 01:15:38.810 --> 01:15:39.800 the typical 01:15:39.800 --> 01:15:42.460 transacting and risk oversight function that you would see 01:15:42.460 --> 01:15:43.439 for an entity that's 01:15:43.439 --> 01:15:46.520 transacting in the forward energy commodity markets so we 01:15:46.520 --> 01:15:47.479 offer these here 01:15:47.479 --> 01:15:51.750 as considerations likely these types of functions or 01:15:51.750 --> 01:15:53.640 capabilities were included 01:15:53.640 --> 01:15:57.680 in the counterparties quote for you so we would recommend 01:15:57.680 --> 01:15:58.880 that the company and 01:15:58.880 --> 01:16:01.890 that the board are comfortable or get comfortable with the 01:16:01.890 --> 01:16:02.760 fact that we are 01:16:02.760 --> 01:16:07.130 replicating all of these capabilities inside of the Emo and 01:16:07.130 --> 01:16:08.279 and we because 01:16:08.279 --> 01:16:10.579 we're consultants we break things down in governance people 01:16:10.579 --> 01:16:11.119 process and 01:16:11.119 --> 01:16:14.930 technology on the governance side and we advise clients on 01:16:14.930 --> 01:16:16.000 these these elements 01:16:16.000 --> 01:16:19.810 on a regular basis we go into organizations that trade 01:16:19.810 --> 01:16:20.479 energy and we 01:16:20.479 --> 01:16:22.489 will perform assessments as to whether or not there's there 01:16:22.489 --> 01:16:23.199 's the appropriate 01:16:23.199 --> 01:16:26.039 level of risk oversight and governance so the governance 01:16:26.039 --> 01:16:27.159 includes things like 01:16:27.159 --> 01:16:30.970 external compliance elements as well as the internal 01:16:30.970 --> 01:16:32.319 committee structure and 01:16:32.319 --> 01:16:35.409 oversight that you have periodic assessments of the hedge 01:16:35.409 --> 01:16:35.960 strategy 01:16:35.960 --> 01:16:39.770 similar to what the gentleman spoke about earlier from the 01:16:39.770 --> 01:16:40.279 process 01:16:40.279 --> 01:16:44.550 perspective we typically see fairly rigorous internal audit 01:16:44.550 --> 01:16:45.359 oversight 01:16:45.359 --> 01:16:48.439 analysis of the cost of capital so for transacting in 01:16:48.439 --> 01:16:49.640 markets where we're 01:16:49.640 --> 01:16:52.649 required to post collateral what kind of impact is that 01:16:52.649 --> 01:16:53.960 having on the floor from 01:16:53.960 --> 01:17:00.000 a cash flow basis and the people side there's a heated 01:17:00.000 --> 01:17:00.960 debate or maybe 01:17:00.960 --> 01:17:03.300 vigorous debate in the industry around what's the right 01:17:03.300 --> 01:17:04.399 level of risk oversight 01:17:04.399 --> 01:17:08.210 for a transacting function and that I will tell you there's 01:17:08.210 --> 01:17:09.359 no clear ratio is 01:17:09.359 --> 01:17:12.409 it 10 for a 10 front office people the two middle and back 01:17:12.409 --> 01:17:13.800 office people there 01:17:13.800 --> 01:17:17.159 are no clean numbers but what I can say is that it should 01:17:17.159 --> 01:17:18.319 the the amount of 01:17:18.319 --> 01:17:20.550 oversight from back office and the middle office 01:17:20.550 --> 01:17:21.680 perspective should be 01:17:21.680 --> 01:17:24.819 driven by the type and the volume of transacting that you 01:17:24.819 --> 01:17:25.920 're doing and that 01:17:25.920 --> 01:17:29.729 should inform how much how much oversight is required and 01:17:29.729 --> 01:17:30.199 along with 01:17:30.199 --> 01:17:32.979 that is typically some IT and development support to have 01:17:32.979 --> 01:17:33.520 the right 01:17:33.520 --> 01:17:38.119 tools and systems in place to serve that bottom right box 01:17:38.119 --> 01:17:39.880 which is ongoing 01:17:39.880 --> 01:17:42.890 position in mark-to-market reporting you want to know are 01:17:42.890 --> 01:17:43.779 we long are we short 01:17:43.779 --> 01:17:47.590 you know some of the items that the gentleman earlier spoke 01:17:47.590 --> 01:17:48.479 about are you 01:17:48.479 --> 01:17:51.829 looking at risk calculations whether that's a value at risk 01:17:51.829 --> 01:17:52.640 or maybe a gross 01:17:52.640 --> 01:17:55.439 margin at risk or some other key performance or key risk 01:17:55.439 --> 01:17:56.680 indicators these 01:17:56.680 --> 01:18:00.489 would all be elements of the I would say the the 01:18:00.489 --> 01:18:02.159 infrastructure that would be 01:18:02.159 --> 01:18:06.590 required to be in place to support the the operations of 01:18:06.590 --> 01:18:08.239 the MO from a energy 01:18:08.239 --> 01:18:12.050 management perspective but also from a risk oversight 01:18:12.050 --> 01:18:13.760 perspective yes 01:18:13.760 --> 01:18:17.569 are you saying we're not doing these things no we're saying 01:18:17.569 --> 01:18:19.560 that there in 01:18:19.560 --> 01:18:22.680 order to know that the cost side of the equation is correct 01:18:22.680 --> 01:18:23.760 we would recommend 01:18:23.760 --> 01:18:29.050 that you include the cost yes okay exactly ensure that they 01:18:29.050 --> 01:18:29.720 're happening and 01:18:29.720 --> 01:18:33.789 ensure that the cost of being good yeah I think that's 01:18:33.789 --> 01:18:34.760 right I mean we're not 01:18:34.760 --> 01:18:37.270 suggesting that these things aren't being done okay I think 01:18:37.270 --> 01:18:38.319 in our initial 01:18:38.319 --> 01:18:42.130 review of the cost side you can't really tell when just 01:18:42.130 --> 01:18:43.239 looking at a bucket of 01:18:43.239 --> 01:18:46.000 costs you know whether things like independent you know the 01:18:46.000 --> 01:18:46.359 mark-to-market 01:18:46.359 --> 01:18:49.199 is being calculated independently and there's position 01:18:49.199 --> 01:18:50.319 reports so you know if 01:18:50.319 --> 01:18:52.880 you want to if you wanted to do a deeper dive on that which 01:18:52.880 --> 01:18:54.079 we recommend you know 01:18:54.079 --> 01:18:59.020 these are the types of things that we would look into okay 01:18:59.020 --> 01:19:02.680 in the spirit of 01:19:02.680 --> 01:19:04.479 telling what you're gonna tell them and tell them and then 01:19:04.479 --> 01:19:05.119 tell them one more 01:19:05.119 --> 01:19:10.109 time the takeaways from our from our assessment are that 01:19:10.109 --> 01:19:10.840 the in the 01:19:10.840 --> 01:19:13.109 performance of the model we found no significant 01:19:13.109 --> 01:19:14.439 differences or errors in 01:19:14.439 --> 01:19:18.479 calculation in peeling back the assumptions and 01:19:18.479 --> 01:19:19.239 understanding what's 01:19:19.239 --> 01:19:23.739 driving the cost savings the two main drivers are I guess 01:19:23.739 --> 01:19:24.399 two of the main 01:19:24.399 --> 01:19:28.210 elements one is determining what's the in fact the 01:19:28.210 --> 01:19:29.479 appropriate heat rate we 01:19:29.479 --> 01:19:32.039 would suggest that an on-peak heat rate is probably too 01:19:32.039 --> 01:19:32.800 high to use as a 01:19:32.800 --> 01:19:36.739 benchmark and looking at something more around the clock or 01:19:36.739 --> 01:19:37.640 maybe closer to the 01:19:37.640 --> 01:19:41.449 load pattern that you're actually using and then 01:19:41.449 --> 01:19:43.079 determining that through a 01:19:43.079 --> 01:19:46.890 historical analysis rather than a point-in-time quote doing 01:19:46.890 --> 01:19:47.720 those things we 01:19:47.720 --> 01:19:50.670 think could set the bet the heat rate benchmark for future 01:19:50.670 --> 01:19:51.880 savings calculations 01:19:51.880 --> 01:19:54.590 and and and just basically provide more clarity as to how 01:19:54.590 --> 01:19:55.439 those are being 01:19:55.439 --> 01:19:58.229 derived and what's what's driving the savings and then the 01:19:58.229 --> 01:19:59.119 second takeaway 01:19:59.119 --> 01:20:02.140 from that part of the assessment was that ancillary 01:20:02.140 --> 01:20:03.920 services and queasy costs 01:20:03.920 --> 01:20:07.199 bringing those in-house management of that in-house 01:20:07.199 --> 01:20:08.439 resulted in significant 01:20:08.439 --> 01:20:13.470 savings and then going forward we would recommend an effort 01:20:13.470 --> 01:20:14.760 to ensure that 01:20:14.760 --> 01:20:17.420 appropriate governance and oversight and those costs are 01:20:17.420 --> 01:20:18.560 being included in on the 01:20:18.560 --> 01:20:21.569 cost side of the equation including determining whether or 01:20:21.569 --> 01:20:22.079 not you've got 01:20:22.079 --> 01:20:26.350 the right dispersion or allotment I would say of 01:20:26.350 --> 01:20:28.000 professionals across the 01:20:28.000 --> 01:20:31.319 front the middle and the back office 01:20:33.960 --> 01:20:37.770 okay so in terms of next steps and we've been working with 01:20:37.770 --> 01:20:38.640 Brian and his 01:20:38.640 --> 01:20:42.449 staff on a couple of these items number one we would 01:20:42.449 --> 01:20:44.520 suggest is establishing the 01:20:44.520 --> 01:20:49.210 benchmark for fiscal 17 as we've discussed the elements of 01:20:49.210 --> 01:20:50.359 that can drive 01:20:50.359 --> 01:20:54.449 the resulting cost savings in one direction significantly 01:20:54.449 --> 01:20:55.479 or the other so 01:20:55.479 --> 01:20:58.170 establishing a clear model and agreement on the underlying 01:20:58.170 --> 01:20:59.079 components of that 01:20:59.079 --> 01:21:03.079 model we think would be a reasonable next step prior to 01:21:03.079 --> 01:21:04.479 calculating that 01:21:04.479 --> 01:21:09.479 benchmark savings Brian has also asked us and we've talked 01:21:09.479 --> 01:21:11.439 to the organization 01:21:11.439 --> 01:21:15.729 about understanding perhaps are there other risks that have 01:21:15.729 --> 01:21:17.119 been introduced to 01:21:17.119 --> 01:21:21.819 the organization by establishing the EMO like any hedge you 01:21:21.819 --> 01:21:22.800 often trade one risk 01:21:22.800 --> 01:21:27.069 for the other and then along with that an assessment of the 01:21:27.069 --> 01:21:27.920 EMOs capabilities 01:21:27.920 --> 01:21:30.029 and make sure that all of those front middle and back 01:21:30.029 --> 01:21:31.119 office capabilities are 01:21:31.119 --> 01:21:34.930 in place sufficiently to reflect the level and the type of 01:21:34.930 --> 01:21:35.520 transacting that's 01:21:35.520 --> 01:21:40.930 happening in that organization and that's the end of my 01:21:40.930 --> 01:21:42.640 prepared remarks so 01:21:42.640 --> 01:21:50.600 I'm happy to take questions so the heat rate is that 01:21:50.600 --> 01:21:52.199 something that we guess at 01:21:52.199 --> 01:21:56.100 like it's a we guess what it's going to be the next day or 01:21:56.100 --> 01:21:57.560 is it something that 01:21:57.560 --> 01:22:01.960 set that we know or you only know a historical reference in 01:22:01.960 --> 01:22:04.600 hindsight you 01:22:04.600 --> 01:22:07.130 only really know what the heat rate was from a historical 01:22:07.130 --> 01:22:08.119 when you're talking 01:22:08.119 --> 01:22:12.390 about you know in this case calculating the cost of energy 01:22:12.390 --> 01:22:13.399 we know it by looking 01:22:13.399 --> 01:22:17.670 at the historical prices so going into the contract you 01:22:17.670 --> 01:22:18.680 know there was some 01:22:18.680 --> 01:22:21.750 analysis that was done to say we can go out and we can look 01:22:21.750 --> 01:22:23.199 at today what the 01:22:23.199 --> 01:22:26.380 heat rate might be for some future period of time if we 01:22:26.380 --> 01:22:27.640 bought power today 01:22:27.640 --> 01:22:30.279 and so you know any counterparty would go out and they 01:22:30.279 --> 01:22:31.479 would look at that they 01:22:31.479 --> 01:22:34.210 would consider internal factors that they have they would 01:22:34.210 --> 01:22:35.359 factor in risk and 01:22:35.359 --> 01:22:39.170 profit margin and so that's how they probably got to the 15 01:22:39.170 --> 01:22:40.159 75 they started 01:22:40.159 --> 01:22:43.119 with the on peak heat rate and factored in all those other 01:22:43.119 --> 01:22:44.520 considerations now 01:22:44.520 --> 01:22:46.340 after the fact we can go back and we can look at a lot of 01:22:46.340 --> 01:22:47.079 different things 01:22:47.079 --> 01:22:49.979 because now we have a lot more data we've got the forward 01:22:49.979 --> 01:22:50.880 prices you know we 01:22:50.880 --> 01:22:53.630 talked earlier about day ahead prices now we also know what 01:22:53.630 --> 01:22:54.560 the day ahead price 01:22:54.560 --> 01:22:57.750 was for a particular day and so that's why in terms of 01:22:57.750 --> 01:22:59.079 looking at it from an 01:22:59.079 --> 01:23:03.000 FY 17 perspective there's probably and you know the Emo I 01:23:03.000 --> 01:23:03.479 think has already 01:23:03.479 --> 01:23:06.109 looked at some of these a number of different ways in which 01:23:06.109 --> 01:23:06.880 an analysis you 01:23:06.880 --> 01:23:10.789 could do to inform what that benchmark should be now that 01:23:10.789 --> 01:23:11.960 you've got a lot more 01:23:11.960 --> 01:23:14.560 historical data after the fact you know but at the time 01:23:14.560 --> 01:23:16.199 they had you know a 01:23:16.199 --> 01:23:20.500 limited amount of data to do that analysis looking forward 01:23:20.500 --> 01:23:21.520 and does this 01:23:21.520 --> 01:23:25.329 does this heat rate and these calculations do these only 01:23:25.329 --> 01:23:25.399 affect 01:23:25.399 --> 01:23:29.319 purchases that we're making off the market or do they also 01:23:29.319 --> 01:23:30.279 impact our 01:23:30.279 --> 01:23:34.090 contracts that we signed for wind and solar they did not 01:23:34.090 --> 01:23:35.640 they only impacted 01:23:35.640 --> 01:23:38.520 the incremental energy that you needed once you factored in 01:23:38.520 --> 01:23:39.399 the contract you 01:23:39.399 --> 01:23:42.489 already had in place that we go out and buy off the market 01:23:42.489 --> 01:23:43.640 so was it an April 01:23:43.640 --> 01:23:48.340 month that showed us 28% off the market it was in your 01:23:48.340 --> 01:23:50.119 presentation sorry and 01:23:50.119 --> 01:23:56.479 then an August month there was none so we're still paying 01:23:56.479 --> 01:23:58.359 the Emo what are they 01:23:58.359 --> 01:24:01.000 doing on those days when we're not making any market 01:24:01.000 --> 01:24:01.920 purchases just out of 01:24:01.920 --> 01:24:03.829 curiosity yeah well I think that's a different situation I 01:24:03.829 --> 01:24:04.560 mean there I think 01:24:04.560 --> 01:24:08.369 that was a looking forward if you have more wind and you 01:24:08.369 --> 01:24:09.439 have more solar well 01:24:09.439 --> 01:24:11.260 that's where we're head yeah so I was just trying to get 01:24:11.260 --> 01:24:12.359 right my idea around 01:24:12.359 --> 01:24:16.630 what the emo is doing if we're not purchasing anything off 01:24:16.630 --> 01:24:17.720 the market well 01:24:17.720 --> 01:24:19.750 I think to the point that they made earlier there's still 01:24:19.750 --> 01:24:20.439 the forecasting 01:24:20.439 --> 01:24:24.250 there's the there's the managing the load and supply 01:24:24.250 --> 01:24:26.159 imbalance so like 01:24:26.159 --> 01:24:31.329 they're not doing anything they're just doing different 01:24:31.329 --> 01:24:31.760 things they're not 01:24:31.760 --> 01:24:34.260 making incremental market purchases maybe they're making 01:24:34.260 --> 01:24:35.079 incremental sales 01:24:35.079 --> 01:24:41.170 could be market sales okay and so when we outsource it it 01:24:41.170 --> 01:24:42.680 or in the past when 01:24:42.680 --> 01:24:45.300 we outsource it we were still paying those people the same 01:24:45.300 --> 01:24:46.119 rate even if they 01:24:46.119 --> 01:24:50.539 weren't making purchases for us you're only paying you're 01:24:50.539 --> 01:24:50.800 only paying that 01:24:50.800 --> 01:24:53.439 you're talking about the counterparty yes we hired somebody 01:24:53.439 --> 01:24:54.079 to do it are we 01:24:54.079 --> 01:24:58.079 paying them all the time or only when they make purchases 01:24:58.079 --> 01:24:59.439 only when they make 01:24:59.439 --> 01:25:03.960 purchases but our emo operates and we pay them 100% of the 01:25:03.960 --> 01:25:04.520 time but they're 01:25:04.520 --> 01:25:08.329 not always making purchases true okay well so that's a 01:25:08.329 --> 01:25:09.399 difference that's not 01:25:09.399 --> 01:25:16.800 apples and apples that's that's different right the 01:25:16.800 --> 01:25:19.000 calculation of the benchmark 01:25:19.000 --> 01:25:22.989 I think the calculation the benchmark savings takes all of 01:25:22.989 --> 01:25:23.760 that into account 01:25:23.760 --> 01:25:29.640 so it's the cost of operating the EM and maintaining the 01:25:29.640 --> 01:25:30.640 capabilities of the emo 01:25:30.640 --> 01:25:34.449 in-house over that period of time versus the what you spent 01:25:34.449 --> 01:25:35.279 on that incremental 01:25:35.279 --> 01:25:41.359 power with the counterparty so it does bring it together I 01:25:41.359 --> 01:25:43.399 understand why they 01:25:43.399 --> 01:25:47.670 probably use the 1575 because that's what they thought that 01:25:47.670 --> 01:25:48.039 was what was 01:25:48.039 --> 01:25:52.720 quoted correct but I do think it has to be around the clock 01:25:52.720 --> 01:25:54.359 to determine that 01:25:54.359 --> 01:25:56.710 heat rate and I'm the one who has to leave so I want to get 01:25:56.710 --> 01:25:57.439 my opinion out 01:25:57.439 --> 01:26:01.250 there that I really think that's where the benchmark needs 01:26:01.250 --> 01:26:02.520 to be is around the 01:26:02.520 --> 01:26:05.600 clock and then add the little bit of profit margin for the 01:26:05.600 --> 01:26:07.239 benchmarking but 01:26:07.239 --> 01:26:11.649 and I do agree with these other doing an emo risk 01:26:11.649 --> 01:26:14.279 assessment and make sure we're 01:26:14.279 --> 01:26:20.239 doing okay all we can do thank you anybody else yeah I I 01:26:20.239 --> 01:26:22.640 agree I'm I'm 01:26:22.640 --> 01:26:26.449 convinced that the around the clock is the more 01:26:26.449 --> 01:26:27.800 historically accurate more 01:26:27.800 --> 01:26:32.399 useful benchmark it's interesting to see what peak rate is 01:26:32.399 --> 01:26:34.000 but that's a very 01:26:34.000 --> 01:26:39.579 myopic slice of time point of view that doesn't give us the 01:26:39.579 --> 01:26:40.760 big picture that we 01:26:40.760 --> 01:26:45.130 want when doing this kind of work I would suggest that the 01:26:45.130 --> 01:26:46.960 heat rate reflect 01:26:46.960 --> 01:26:51.340 the actual needs right so what and so I think we can look 01:26:51.340 --> 01:26:52.840 at how much was around 01:26:52.840 --> 01:26:55.340 the clock versus how much was on peak and if if there's it 01:26:55.340 --> 01:26:56.199 might be kind of a 01:26:56.199 --> 01:26:59.960 weighted average kind of a approach so I don't think it's 01:26:59.960 --> 01:27:01.000 at one pole or the 01:27:01.000 --> 01:27:04.000 either the answer is probably so absolutely which is why 01:27:04.000 --> 01:27:05.119 which is why I 01:27:05.119 --> 01:27:07.460 made a point of saying it's interesting to see and 01:27:07.460 --> 01:27:08.760 important to see what peak 01:27:08.760 --> 01:27:11.470 rate is you want to know what the peak rate is yeah but is 01:27:11.470 --> 01:27:12.319 this the one you 01:27:12.319 --> 01:27:16.130 know the benchmark that you're gonna use so anyway I do 01:27:16.130 --> 01:27:17.319 agree with that 01:27:17.319 --> 01:27:22.840 recommendation and I would I was just curious to know so we 01:27:22.840 --> 01:27:25.720 got this on well 01:27:25.720 --> 01:27:29.609 PPU got this presentation the same time the public did that 01:27:29.609 --> 01:27:30.880 was which was Friday 01:27:30.880 --> 01:27:33.579 so we've had just the weekend to you know read up and 01:27:33.579 --> 01:27:34.720 research on all this 01:27:34.720 --> 01:27:40.239 but in my very preliminary over the weekend research it 01:27:40.239 --> 01:27:42.439 looks like most other 01:27:42.439 --> 01:27:45.520 EMOs and please correct me if I'm if I'm wrong this is a 01:27:45.520 --> 01:27:46.720 question more than a 01:27:46.720 --> 01:27:51.970 statement but it looked to me that most other groups that 01:27:51.970 --> 01:27:53.840 do this kind of work 01:27:53.840 --> 01:28:00.199 this this work use the historical but a historical 01:28:00.199 --> 01:28:01.880 perspective as a benchmark 01:28:01.880 --> 01:28:07.130 that what we've got here is kind of more of an anomaly is 01:28:07.130 --> 01:28:09.640 that correct I want to 01:28:09.640 --> 01:28:11.779 know the truth it doesn't matter to me because this is just 01:28:11.779 --> 01:28:12.680 preliminary looking 01:28:12.680 --> 01:28:15.819 around because all because these terms these terms are new 01:28:15.819 --> 01:28:16.520 to me so I was 01:28:16.520 --> 01:28:18.659 really giving myself a crash course in this over the 01:28:18.659 --> 01:28:20.560 weekend I don't know if I 01:28:20.560 --> 01:28:23.659 can comment on kind of general trends or most I think it's 01:28:23.659 --> 01:28:24.800 very common to see a 01:28:24.800 --> 01:28:28.609 product that would be quoted that would be very closely 01:28:28.609 --> 01:28:29.640 reflective of the 01:28:29.640 --> 01:28:31.520 incremental energy needs that you would have for that 01:28:31.520 --> 01:28:32.359 period of time so we would 01:28:32.359 --> 01:28:37.079 recommend matching them essentially whether everyone does I 01:28:37.079 --> 01:28:37.800 can't comment 01:28:37.800 --> 01:28:42.609 more or I mean or even so but so you don't have a sense off 01:28:42.609 --> 01:28:44.039 hand of this is 01:28:44.039 --> 01:28:47.140 the way most people do it well I remember what we're trying 01:28:47.140 --> 01:28:48.000 to do is is 01:28:48.000 --> 01:28:51.930 validate or understand a calculation that was done to 01:28:51.930 --> 01:28:54.079 understand what for the 01:28:54.079 --> 01:28:56.649 organization did we in fact say of course so there was a 01:28:56.649 --> 01:28:57.199 little bit unique 01:28:57.199 --> 01:29:00.640 to what we have of course of course yes no they had this 01:29:00.640 --> 01:29:01.680 yeah I and I appreciate 01:29:01.680 --> 01:29:03.710 that you went about this the right way I was just cute 01:29:03.710 --> 01:29:04.479 though this was a 01:29:04.479 --> 01:29:07.460 curiosity a question I tried to answer myself I wasn't 01:29:07.460 --> 01:29:08.319 satisfied with my 01:29:08.319 --> 01:29:10.489 ability to answer yeah maybe a better answer for that 01:29:10.489 --> 01:29:12.119 question come if we do 01:29:12.119 --> 01:29:16.149 the FY 17 set up of the new yes mark yes that would I would 01:29:16.149 --> 01:29:17.319 think be part of that 01:29:17.319 --> 01:29:20.010 to see are there you know leading practices that we could 01:29:20.010 --> 01:29:20.800 that we can lean 01:29:20.800 --> 01:29:22.949 on from from other organizations that are doing something 01:29:22.949 --> 01:29:23.880 excellent thank you 01:29:23.880 --> 01:29:34.920 yeah questions no okay yeah I think I like to recommend 01:29:34.920 --> 01:29:35.840 next steps I think 01:29:35.840 --> 01:29:42.479 that's especially one of the risk assessment to me it's 01:29:42.479 --> 01:29:43.800 about risk and 01:29:43.800 --> 01:29:46.569 risk reward you know I know there's savings there's 01:29:46.569 --> 01:29:48.199 obviously savings there I 01:29:48.199 --> 01:29:52.180 mean anytime there's a profit margin that you're taking out 01:29:52.180 --> 01:29:53.319 of something that 01:29:53.319 --> 01:29:56.439 I mean if nothing else it's a profit margin right on what 01:29:56.439 --> 01:29:58.359 the cost is but is 01:29:58.359 --> 01:30:05.399 that absorbing that profit margin worth the risk absolutely 01:30:05.399 --> 01:30:07.439 okay all right thank 01:30:07.439 --> 01:30:10.640 you again thank you appreciate it 01:30:14.600 --> 01:30:17.000 just one final item on this I did want to mention just like 01:30:17.000 --> 01:30:19.159 the enterprise risk 01:30:19.159 --> 01:30:21.680 consulting we do have a second phase that's mentioned here 01:30:21.680 --> 01:30:22.119 staff does 01:30:22.119 --> 01:30:24.310 recommend that we proceed with that so we'll be bringing 01:30:24.310 --> 01:30:25.239 forward a contract to 01:30:25.239 --> 01:30:27.810 you for your consideration to recommend to counsel okay do 01:30:27.810 --> 01:30:29.159 that shortly all 01:30:29.159 --> 01:30:37.060 right thank all right thank you okay next we have sorry can 01:30:37.060 --> 01:30:38.239 I just sure so 01:30:38.239 --> 01:30:42.880 where we and sorry this is my first meeting yeah so are we 01:30:42.880 --> 01:30:44.199 giving staff 01:30:44.199 --> 01:30:50.439 directive now to go ahead with the round-the-clock yeah I 01:30:50.439 --> 01:30:52.279 don't think it's 01:30:52.279 --> 01:30:55.550 not a formal vote just kind of a recommendation yeah direct 01:30:55.550 --> 01:30:56.439 yeah direct 01:30:56.439 --> 01:30:59.609 okay yeah yeah so and I so I just wanted to I want to add 01:30:59.609 --> 01:31:00.479 to that that I also 01:31:00.479 --> 01:31:04.289 since just because they raised these issues as well in the 01:31:04.289 --> 01:31:06.000 report that I like 01:31:06.000 --> 01:31:09.810 I really like the idea of doing a benchmark and now the 01:31:09.810 --> 01:31:10.319 benchmark analysis 01:31:10.319 --> 01:31:14.590 risk profile and head strategy assessment and Emo risk 01:31:14.590 --> 01:31:15.479 assessment 01:31:15.479 --> 01:31:19.750 because it I mean clearly we're still saving by doing this 01:31:19.750 --> 01:31:20.840 in-house not as 01:31:20.840 --> 01:31:23.960 much as we thought about 50% less than we thought but we're 01:31:23.960 --> 01:31:25.279 still saving so I 01:31:25.279 --> 01:31:30.000 think that's great but if we're only looking at the savings 01:31:30.000 --> 01:31:31.199 right now then I 01:31:31.199 --> 01:31:34.439 feel like we're making that same mistake of a you know my 01:31:34.439 --> 01:31:35.720 opic slice-in-time 01:31:35.720 --> 01:31:41.760 perspective and not looking at the big picture of potential 01:31:41.760 --> 01:31:42.680 risks in 01:31:42.680 --> 01:31:47.279 historic you know historically and moving forward so I 01:31:47.279 --> 01:31:48.199 really like this 01:31:48.199 --> 01:31:52.010 idea I think in terms of our obligation to ratepayers I 01:31:52.010 --> 01:31:53.479 like this idea of doing 01:31:53.479 --> 01:31:58.649 the risk analysis as well just to make to make sure and and 01:31:58.649 --> 01:32:00.680 yeah that is that 01:32:00.680 --> 01:32:03.380 that's what I wanted to add to that I don't know if now if 01:32:03.380 --> 01:32:04.319 now is the time to 01:32:04.319 --> 01:32:07.319 get others points of view on that or did you want that to 01:32:07.319 --> 01:32:08.479 wait till later but 01:32:08.479 --> 01:32:11.109 only because they mentioned it up and we've got them here I 01:32:11.109 --> 01:32:12.720 was that's what I 01:32:12.720 --> 01:32:17.319 was talking about risk reward is okay here's the risk the 01:32:17.319 --> 01:32:18.260 reward worth the 01:32:18.260 --> 01:32:22.069 risk yes what I want to know yes and that's exactly what 01:32:22.069 --> 01:32:22.560 what they're 01:32:22.560 --> 01:32:26.829 recommending yes okay excellent yeah I didn't say it is the 01:32:26.829 --> 01:32:27.439 way same way you 01:32:27.439 --> 01:32:31.710 did oh no no that's it I just wanted to be clear I didn't 01:32:31.710 --> 01:32:32.279 miss that opportunity 01:32:32.279 --> 01:32:38.029 thank you okay any other comments before we move on all 01:32:38.029 --> 01:32:43.920 right okay first on our 01:32:43.920 --> 01:32:49.920 our next on our agenda we have the consent agenda we have 01:32:49.920 --> 01:32:53.319 three items there 01:32:53.319 --> 01:32:58.489 when any any member like to pull any of those consent 01:32:58.489 --> 01:33:00.119 agenda items for 01:33:00.119 --> 01:33:05.359 individual consideration I'd like to pull a and see a and 01:33:05.359 --> 01:33:07.199 see me too that's 01:33:07.199 --> 01:33:12.949 exactly what I was gonna recommend all right we have item a 01:33:12.949 --> 01:33:14.399 and C we're gonna 01:33:14.399 --> 01:33:19.239 pull from consent is there a motion then to approve the 01:33:19.239 --> 01:33:21.039 consent agenda item with 01:33:21.039 --> 01:33:31.189 item B motion second any discussion all in favor say aye 01:33:31.189 --> 01:33:32.600 any opposed same sign 01:33:32.600 --> 01:33:37.399 okay okay item number a 01:33:43.640 --> 01:33:47.909 good morning board members and I don't have a formal 01:33:47.909 --> 01:33:49.600 presentation on either one 01:33:49.600 --> 01:33:51.939 of those items a or C they're both me but I'm happy to 01:33:51.939 --> 01:33:53.079 answer any questions 01:33:53.079 --> 01:33:55.640 that you have and sorry I introduced myself I'm Jessica 01:33:55.640 --> 01:33:56.340 Rogers I'm the 01:33:56.340 --> 01:33:59.279 energy services manager I know we've met before many times 01:33:59.279 --> 01:34:00.199 so I'm great to see 01:34:00.199 --> 01:34:04.470 you again but any any questions so basically this is the 01:34:04.470 --> 01:34:06.279 item a here is a 01:34:06.279 --> 01:34:10.090 is this the ordinance that we're putting in place for 01:34:10.090 --> 01:34:11.199 commercial for larger 01:34:11.199 --> 01:34:15.470 commercial solar installations and then that kind of just 01:34:15.470 --> 01:34:16.520 and we didn't have a 01:34:16.520 --> 01:34:19.479 ordinance in place so we're not replacing or amending one 01:34:19.479 --> 01:34:20.000 this is a 01:34:20.000 --> 01:34:23.949 brand new ordinance this is yet when we brought that target 01:34:23.949 --> 01:34:25.239 item for you at the 01:34:25.239 --> 01:34:27.840 last pub morning meeting I mentioned I'd come back to you 01:34:27.840 --> 01:34:29.000 because that was the 01:34:29.000 --> 01:34:31.449 first time that we were seeing these systems installed and 01:34:31.449 --> 01:34:32.119 that actually 01:34:32.119 --> 01:34:36.149 exceeded that 50 KW limitation and two systems that have 01:34:36.149 --> 01:34:37.359 active applications 01:34:37.359 --> 01:34:39.920 they've gone and gone through that interconnection process 01:34:39.920 --> 01:34:40.520 and have been 01:34:40.520 --> 01:34:43.670 improved and now we're in the rate setting process for 01:34:43.670 --> 01:34:44.279 those two 01:34:44.279 --> 01:34:48.170 commercial installations so this enables us to enter into a 01:34:48.170 --> 01:34:50.119 rate agreement and 01:34:50.119 --> 01:34:52.649 what we're proposing is that we would be setting them on 01:34:52.649 --> 01:34:53.840 the same distributed 01:34:53.840 --> 01:34:58.239 generation rate and that we use for residential 01:34:58.239 --> 01:35:01.359 installations oh so now my 01:35:01.359 --> 01:35:04.619 impression was that that you're talking about from reading 01:35:04.619 --> 01:35:06.199 the backup that you're 01:35:06.199 --> 01:35:11.380 talking about anything over 50 KW is you're be dealing with 01:35:11.380 --> 01:35:12.680 on a case-by-case 01:35:12.680 --> 01:35:17.159 basis right I'm sorry I was referencing back I apologize 01:35:17.159 --> 01:35:18.159 previously we had a 01:35:18.159 --> 01:35:21.970 very specific presentation about an okay got it yes this 01:35:21.970 --> 01:35:23.279 would be and we would do 01:35:23.279 --> 01:35:26.000 that on any application that comes through we would analyze 01:35:26.000 --> 01:35:26.720 it to make sure 01:35:26.720 --> 01:35:30.300 that it meets those two conditions that are outlined one if 01:35:30.300 --> 01:35:31.520 it's over 50 KW 01:35:31.520 --> 01:35:35.329 that it's not for a primary generate you're not doing it 01:35:35.329 --> 01:35:36.520 you're doing it off 01:35:36.520 --> 01:35:40.539 set your demand not to just generate yes so we do review on 01:35:40.539 --> 01:35:41.600 a case-by-case basis 01:35:41.600 --> 01:35:45.439 I apologize oh no no no my bad I think we're just giving 01:35:45.439 --> 01:35:46.840 authority to the city 01:35:46.840 --> 01:35:56.359 manager and or designate and so I'm I'm gonna have to vote 01:35:56.359 --> 01:35:58.479 no to a and I but I 01:35:58.479 --> 01:36:03.659 want to explain why I I like the idea of doing on a case-by 01:36:03.659 --> 01:36:05.859 -case basis for for 50 01:36:05.859 --> 01:36:13.350 KW and above so that that makes sense to me whereas for 01:36:13.350 --> 01:36:16.479 under 50 having a just 01:36:16.479 --> 01:36:21.369 something regular in place what I don't like about it is I 01:36:21.369 --> 01:36:23.039 don't like the idea 01:36:23.039 --> 01:36:32.479 of the city manager having the full authority on that 01:36:32.479 --> 01:36:33.800 without it going 01:36:33.800 --> 01:36:37.789 through council and that's in no disrespect you know I love 01:36:37.789 --> 01:36:39.359 you Todd but 01:36:39.359 --> 01:36:43.279 you know I'm thinking not just about you but whoever future 01:36:43.279 --> 01:36:44.439 city managers and 01:36:44.439 --> 01:36:48.479 also you know even if we had all perfect city managers who 01:36:48.479 --> 01:36:50.119 always made the right 01:36:50.119 --> 01:36:54.119 decisions just in terms of accountability to the public and 01:36:54.119 --> 01:36:54.380 the 01:36:54.380 --> 01:36:59.250 ratepayer and checks and balances I want to see the bigger 01:36:59.250 --> 01:37:00.760 contracts that are 01:37:00.760 --> 01:37:03.239 done on a case-by-case basis which I like I want to see 01:37:03.239 --> 01:37:04.239 that go to council 01:37:04.239 --> 01:37:07.939 sure and I think that one thing that I would be comfortable 01:37:07.939 --> 01:37:08.880 with is anytime we 01:37:08.880 --> 01:37:12.840 would deviate from the norm that we would most likely bring 01:37:12.840 --> 01:37:13.840 that back from 01:37:13.840 --> 01:37:17.699 you and in the two instances that we have in front of us we 01:37:17.699 --> 01:37:18.039 would be 01:37:18.039 --> 01:37:20.829 recommending them put on the same rate that already exists 01:37:20.829 --> 01:37:21.720 so if we were gonna 01:37:21.720 --> 01:37:23.850 deviate from that in any way we would certainly want to 01:37:23.850 --> 01:37:24.800 bring that back yes 01:37:24.800 --> 01:37:33.609 yes thank you thank you any other comments questions I 01:37:33.609 --> 01:37:34.680 personally I like 01:37:34.680 --> 01:37:42.829 the the the ability to make a make a more a quicker answer 01:37:42.829 --> 01:37:43.840 as long as we have 01:37:43.840 --> 01:37:49.949 a set of standards established and that's kind of because 01:37:49.949 --> 01:37:51.319 you want to I 01:37:51.319 --> 01:37:56.289 want to encourage people to do this I want to encourage 01:37:56.289 --> 01:38:00.560 large-scale commercial 01:38:01.880 --> 01:38:08.039 distributed generation and so I like the person I like I 01:38:08.039 --> 01:38:10.199 like the fact that it's 01:38:10.199 --> 01:38:13.279 going to be a streamlined and you don't have to wait around 01:38:13.279 --> 01:38:14.800 for because I don't 01:38:14.800 --> 01:38:18.079 know I think the target even the target deal came to us 01:38:18.079 --> 01:38:19.359 kind of they kind of 01:38:19.359 --> 01:38:23.369 moved forward and it came to this last minute like we were 01:38:23.369 --> 01:38:24.279 trying to help them 01:38:24.279 --> 01:38:28.090 get their permit yeah it was kind of a last afterthought 01:38:28.090 --> 01:38:29.239 time deal so anyway 01:38:29.239 --> 01:38:35.479 it's my opinion all right any other discussion on that is 01:38:35.479 --> 01:38:36.039 there a motion 01:38:36.039 --> 01:38:41.210 move approval most approved excuse me item a and a second 01:38:41.210 --> 01:38:44.920 second from Alan 01:38:44.920 --> 01:38:52.159 discussion all in favor say aye aye any opposed no I say 01:38:52.159 --> 01:38:53.600 nay for opposed nay 01:38:53.600 --> 01:39:02.800 nay thank you that's good okay item a passes all right item 01:39:02.800 --> 01:39:04.319 number C which was 01:39:04.319 --> 01:39:10.319 pulled as well are there any specific questions about now 01:39:10.319 --> 01:39:11.319 this is just part of 01:39:11.319 --> 01:39:14.260 the same component to make this process a little more fluid 01:39:14.260 --> 01:39:15.840 this is existing yeah 01:39:15.840 --> 01:39:20.399 and in this particular process and one of the things we we 01:39:20.399 --> 01:39:22.840 talked about oh sorry 01:39:22.840 --> 01:39:24.560 maybe I talked about it with the committee on the 01:39:24.560 --> 01:39:25.399 environment as we're 01:39:25.399 --> 01:39:28.989 working towards getting a solar friendly designation and 01:39:28.989 --> 01:39:31.680 one of the sort of areas 01:39:31.680 --> 01:39:34.539 you can get points is the efficiency in which you're able 01:39:34.539 --> 01:39:35.159 to process 01:39:35.159 --> 01:39:38.439 applications for interconnection so by having an 01:39:38.439 --> 01:39:39.840 administrative process within 01:39:39.840 --> 01:39:44.109 we can help facilitate that efficiency okay and ordinarily 01:39:44.109 --> 01:39:44.720 they would have come 01:39:44.720 --> 01:39:48.050 through us and then to City Council we brought the target 01:39:48.050 --> 01:39:49.260 one forward we had a 01:39:49.260 --> 01:39:52.220 change in process and to bring that that one forward and 01:39:52.220 --> 01:39:53.399 that like I said that 01:39:53.399 --> 01:39:55.829 one was just special that it happened to be the largest one 01:39:55.829 --> 01:39:56.600 we ever had that 01:39:56.600 --> 01:39:59.380 brought forward and then we we kind of took a harder look 01:39:59.380 --> 01:40:00.359 at and we realized 01:40:00.359 --> 01:40:03.060 that we get about what we had 45 applications come this 01:40:03.060 --> 01:40:03.960 year that would be 01:40:03.960 --> 01:40:07.770 45 individual actions for this body in the City Council and 01:40:07.770 --> 01:40:08.640 it would have to 01:40:08.640 --> 01:40:13.840 meet those schedules on top of that we we've seen a really 01:40:13.840 --> 01:40:14.920 exponential growth 01:40:14.920 --> 01:40:19.380 in application so my estimate would be 45 plus for next 01:40:19.380 --> 01:40:20.960 year and this was really 01:40:20.960 --> 01:40:23.779 just to make that process a little bit more efficient and 01:40:23.779 --> 01:40:24.880 customers won't have 01:40:24.880 --> 01:40:28.180 to meet that schedule where PB is not meeting this month 01:40:28.180 --> 01:40:29.239 and then they're 01:40:29.239 --> 01:40:32.260 offset with council which could delay it by a month to get 01:40:32.260 --> 01:40:32.640 their 01:40:32.640 --> 01:40:35.130 interconnection application approved that could delay their 01:40:35.130 --> 01:40:36.439 permit process we 01:40:36.439 --> 01:40:39.510 really want to be customer friendly on this interconnection 01:40:39.510 --> 01:40:40.479 side so that's why 01:40:40.479 --> 01:40:44.289 we were asking to approve these administratively thank you 01:40:44.289 --> 01:40:46.840 okay so my 01:40:46.840 --> 01:40:51.279 objection to see doesn't have to do with the streamlining 01:40:51.279 --> 01:40:52.960 in this case I really I 01:40:52.960 --> 01:40:58.770 think it makes absolute sense to give the city manager or 01:40:58.770 --> 01:41:00.159 his designee 01:41:00.159 --> 01:41:05.600 unilateral authority to decide because we've got a system 01:41:05.600 --> 01:41:06.399 in place not just a 01:41:06.399 --> 01:41:09.449 norm but an actual you know but from which you can deviate 01:41:09.449 --> 01:41:10.279 but just a system 01:41:10.279 --> 01:41:14.090 where you just plug in the numbers and there you go so it 01:41:14.090 --> 01:41:16.000 for see I approve of 01:41:16.000 --> 01:41:18.829 the part of this of course there are many parts to this but 01:41:18.829 --> 01:41:20.039 I approve of the 01:41:20.039 --> 01:41:25.210 part that is about streamlining it here's what I don't like 01:41:25.210 --> 01:41:26.920 I don't like 01:41:26.920 --> 01:41:32.090 that it's tied that the language in in the ordinance is 01:41:32.090 --> 01:41:34.319 tied to the tariffs and 01:41:34.319 --> 01:41:36.729 mentions the tariff which is something we're going to be 01:41:36.729 --> 01:41:37.720 discussing later on 01:41:37.720 --> 01:41:44.840 for the in that individual item I think item D maybe for 01:41:44.840 --> 01:41:45.760 individual 01:41:45.760 --> 01:41:54.239 consideration and that's all let's see on page four it says 01:41:54.239 --> 01:41:55.840 page four of the 01:41:55.840 --> 01:42:00.130 backup is there a way to show it so that I don't know the 01:42:00.130 --> 01:42:01.159 public can see 01:42:01.159 --> 01:42:03.819 maybe get that to come up which one if it would take too 01:42:03.819 --> 01:42:05.119 much time so this is 01:42:05.119 --> 01:42:10.869 the let me see what's the title it's just the agreement for 01:42:10.869 --> 01:42:11.760 interconnection and 01:42:11.760 --> 01:42:14.789 parallel operation of distributed generation this is 01:42:14.789 --> 01:42:15.840 exhibit that 01:42:15.840 --> 01:42:20.739 consent agenda see exhibit to I can do it page well thank 01:42:20.739 --> 01:42:21.560 you so much 01:42:21.560 --> 01:42:29.079 legislature should and please if anything I'm saying is 01:42:29.079 --> 01:42:31.920 wrong please let me know 01:42:31.920 --> 01:42:35.729 and don't hesitate to cut me off if I'm going off on 01:42:35.729 --> 01:42:35.960 something that's 01:42:35.960 --> 01:42:43.560 happy to answer any questions so yeah so see consent agenda 01:42:43.560 --> 01:42:44.840 you time at the 01:42:44.840 --> 01:42:51.050 actual ordinance see yeah and it's a big yeah and the 01:42:51.050 --> 01:42:54.359 agenda it's okay yes yes so 01:42:54.359 --> 01:42:59.529 on page four so this is the eight page document right on 01:42:59.529 --> 01:43:02.479 page four item number 01:43:02.479 --> 01:43:08.199 11 a mm-hmm has a word says the city's authority the city 01:43:08.199 --> 01:43:08.680 shall not be 01:43:08.680 --> 01:43:12.380 obligated to accept or pay for produced energy from 01:43:12.380 --> 01:43:14.399 generating unit larger than 01:43:14.399 --> 01:43:18.210 50k W separate agreements that are the next sentence for 01:43:18.210 --> 01:43:18.960 generating units from 01:43:18.960 --> 01:43:23.229 a renewable source not more than 50k W city electric tariff 01:43:23.229 --> 01:43:25.159 schedule shall 01:43:25.159 --> 01:43:28.970 apply so it's got that language about the tariff in there 01:43:28.970 --> 01:43:30.640 that's for am I you're 01:43:30.640 --> 01:43:33.909 right it's it's actually referring to schedule DGRs are 01:43:33.909 --> 01:43:34.840 distributed generation 01:43:34.840 --> 01:43:38.680 credit rates so that sets what the payback is what we're 01:43:38.680 --> 01:43:39.640 gonna credit the 01:43:39.640 --> 01:43:43.449 customer for their general yes yes so what I'm what I'm 01:43:43.449 --> 01:43:47.079 nervous about is and 01:43:47.079 --> 01:43:53.770 is because I have objections to moving from net metering to 01:43:53.770 --> 01:43:56.720 the tariff which is 01:43:56.720 --> 01:44:00.100 something we're gonna get to an item D I believe dearie oh 01:44:00.100 --> 01:44:00.560 we're not proposing 01:44:00.560 --> 01:44:05.729 any changes to no no not not here not not not in this but I 01:44:05.729 --> 01:44:07.279 'm in this is 01:44:07.279 --> 01:44:11.090 further on today right that's also me or individual okay 01:44:11.090 --> 01:44:12.079 that that presentation 01:44:12.079 --> 01:44:17.250 that's coming up won't actually affect the DGR except for 01:44:17.250 --> 01:44:19.359 what the ECA and RCA 01:44:19.359 --> 01:44:22.949 are since they're variable so in the ECA side the customer 01:44:22.949 --> 01:44:24.039 will be paying less 01:44:24.039 --> 01:44:26.340 when they're buying energy from us and they'll see the 01:44:26.340 --> 01:44:27.520 corresponding decrease 01:44:27.520 --> 01:44:32.689 on the credit back it'll net it it'll net the same okay so 01:44:32.689 --> 01:44:33.399 they're paying less 01:44:33.399 --> 01:44:35.729 okay they're getting a little bit less back but the the 01:44:35.729 --> 01:44:37.119 rate of changes is the 01:44:37.119 --> 01:44:40.930 same on both sides of the equation okay the customer okay 01:44:40.930 --> 01:44:41.840 so this is different 01:44:41.840 --> 01:44:46.109 than what's being referred to here yes tariff schedule DGR 01:44:46.109 --> 01:44:47.439 is different than 01:44:47.439 --> 01:44:51.680 the tariff schedule yes the ones that will be yes the ones 01:44:51.680 --> 01:44:52.159 we'll be talking 01:44:52.159 --> 01:44:56.020 about later are the ECA RCA and TCRF it's a lot of acronyms 01:44:56.020 --> 01:44:57.279 I apologize thank 01:44:57.279 --> 01:45:01.090 you thank you and again so apologies we just had no that 01:45:01.090 --> 01:45:03.600 Friday you know Friday 01:45:03.600 --> 01:45:07.359 after work till today so excellent okay so that removes one 01:45:07.359 --> 01:45:09.800 of my and there was 01:45:09.800 --> 01:45:19.119 the one more objection that I had is the part on page six 01:45:19.119 --> 01:45:24.079 which is item 14 and 15 01:45:25.119 --> 01:45:38.260 in in the same document so and I realized that this is the 01:45:38.260 --> 01:45:39.520 part about 01:45:39.520 --> 01:45:45.630 right of access and removal and inspection and disconnect 01:45:45.630 --> 01:45:46.680 ion and I do 01:45:46.680 --> 01:45:52.180 realize that this is tied into existing law can I call upon 01:45:52.180 --> 01:45:54.079 order here yeah we 01:45:54.079 --> 01:45:59.079 were talking about item three on the consent agenda right 01:45:59.079 --> 01:46:00.600 and we're 01:46:00.600 --> 01:46:06.750 discussing an exhibit that we haven't seen yet it just 01:46:06.750 --> 01:46:09.399 seems like we're 01:46:09.399 --> 01:46:13.239 straying from the topic that's actually the exhibit and 01:46:13.239 --> 01:46:15.920 item B that's okay it's 01:46:15.920 --> 01:46:23.869 all right yeah so but but this this part right here 14 and 01:46:23.869 --> 01:46:26.920 15 is referring to a 01:46:26.920 --> 01:46:30.369 law that we is referring to ordinance that we already have 01:46:30.369 --> 01:46:31.560 on the books about 01:46:31.560 --> 01:46:38.460 right of access is that correct I don't think it says upon 01:46:38.460 --> 01:46:39.520 reasonable notice the 01:46:39.520 --> 01:46:44.069 city may send qualified representatives to the premises the 01:46:44.069 --> 01:46:45.880 city may send an 01:46:45.880 --> 01:46:48.369 employee to the premises of reasonable hours or any time 01:46:48.369 --> 01:46:50.560 without notice and the 01:46:50.560 --> 01:46:53.970 event of an emergency or hazardous condition as determined 01:46:53.970 --> 01:46:55.640 by the city the 01:46:55.640 --> 01:46:58.140 city shall have access to customers premises for any 01:46:58.140 --> 01:46:59.319 reasonable purpose and 01:46:59.319 --> 01:47:05.409 connection or or inspection and then the next part is about 01:47:05.409 --> 01:47:07.199 the city can terminate 01:47:07.199 --> 01:47:13.159 this agreement at will and without cause just with 30 days 01:47:13.159 --> 01:47:15.119 prior notice and it's 01:47:15.119 --> 01:47:18.430 my understanding and correct me if I'm wrong that this is 01:47:18.430 --> 01:47:19.199 just kind of 01:47:19.199 --> 01:47:21.899 replicating what we already have written into that the the 01:47:21.899 --> 01:47:23.760 ordinance 20 2010 - 01:47:23.760 --> 01:47:28.439 92 it is slightly different in this case and this is an 01:47:28.439 --> 01:47:30.720 actual that references I 01:47:30.720 --> 01:47:34.529 believe to metering yes and the service connection this is 01:47:34.529 --> 01:47:35.880 an actual generating 01:47:35.880 --> 01:47:39.880 device oh of course that has certain hazards and safety 01:47:39.880 --> 01:47:40.960 hazards that it can 01:47:40.960 --> 01:47:45.760 create and so I don't know if Brent wants to add anything 01:47:45.760 --> 01:47:46.439 from an 01:47:46.439 --> 01:47:49.659 engineering perspective but when we have a generating 01:47:49.659 --> 01:47:51.119 device on a line and we may 01:47:51.119 --> 01:47:54.890 have workers in the area you may not be at home we may need 01:47:54.890 --> 01:47:55.439 to enter your 01:47:55.439 --> 01:47:59.250 premises to make sure that that generation device is 01:47:59.250 --> 01:47:59.920 disconnected and 01:47:59.920 --> 01:48:03.729 not pushing back in that would endanger the lives of any 01:48:03.729 --> 01:48:04.600 line workers that may 01:48:04.600 --> 01:48:09.300 be working in that area so that that's why those clauses 01:48:09.300 --> 01:48:10.479 are in there and then 01:48:10.479 --> 01:48:13.300 the terminations of the agreements it just lays out some 01:48:13.300 --> 01:48:14.239 conditions under 01:48:14.239 --> 01:48:18.050 which we're not arbitrarily deciding to terminate 01:48:18.050 --> 01:48:19.800 agreements and it just lays 01:48:19.800 --> 01:48:22.880 out a couple conditions that need to be met but then but it 01:48:22.880 --> 01:48:23.600 's the part of it 01:48:23.600 --> 01:48:28.800 without cause that it gives me pause that that makes me 01:48:28.800 --> 01:48:30.159 nervous that at will 01:48:30.159 --> 01:48:34.460 or without cause I mean why why put that in if there's if 01:48:34.460 --> 01:48:35.760 there if it's never 01:48:35.760 --> 01:48:38.369 going to be done arbitrarily then why put that is there a 01:48:38.369 --> 01:48:39.159 way that could be 01:48:39.159 --> 01:48:43.229 deleted pretty much legal phrase I don't know if our 01:48:43.229 --> 01:48:44.359 attorney would if that could 01:48:44.359 --> 01:48:49.069 be if that could be struck if you if you had in there that 01:48:49.069 --> 01:48:50.199 you had to have cause 01:48:50.199 --> 01:48:54.869 and what is cause and that that deletes that argument from 01:48:54.869 --> 01:48:56.279 any kind of legal 01:48:56.279 --> 01:49:02.199 liability I mean that's kind of standard it's it's not it 01:49:02.199 --> 01:49:03.760 doesn't say you can 01:49:03.760 --> 01:49:07.600 just go for no reason well but no that's not what it means 01:49:07.600 --> 01:49:09.039 what it means is we 01:49:09.039 --> 01:49:17.079 have no obligation to to establish that that we have to 01:49:17.079 --> 01:49:20.279 that and Larry may be 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 01:49:24.090 --> 01:49:25.279 legal yeah it's a 01:49:25.279 --> 01:49:30.989 legal standard I guess if you will that we a hurdle that we 01:49:30.989 --> 01:49:32.359 don't have to meet 01:49:32.359 --> 01:49:36.630 if we feel like we needed to do it and again this is we're 01:49:36.630 --> 01:49:37.640 not talking about 01:49:37.640 --> 01:49:39.970 disconnecting somebody's power we're talking about 01:49:39.970 --> 01:49:40.800 disconnecting the 01:49:40.800 --> 01:49:45.399 devices that generate into our system so we we need to have 01:49:45.399 --> 01:49:46.640 the ability to go in 01:49:46.640 --> 01:49:50.130 and do it and terminate it yeah I'm just asking I just want 01:49:50.130 --> 01:49:51.600 to be sure and again 01:49:51.600 --> 01:49:55.479 this is not not just for my benefit but for for people who 01:49:55.479 --> 01:49:57.760 are considering so 01:49:57.760 --> 01:50:00.869 are yeah exactly solar generation and people who already 01:50:00.869 --> 01:50:01.880 have it I'm just 01:50:01.880 --> 01:50:04.939 concerned about that you know we very much we can modify 01:50:04.939 --> 01:50:06.199 this however the the 01:50:06.199 --> 01:50:10.010 board sees fit this was the direction we were given from a 01:50:10.010 --> 01:50:11.319 policy point purview 01:50:11.319 --> 01:50:17.909 from DMA mm-hmm and I'm not exactly certain what that you 01:50:17.909 --> 01:50:18.279 know what they 01:50:18.279 --> 01:50:26.560 base their policy decision on on that so you know I would 01:50:26.560 --> 01:50:27.199 expect there's a 01:50:27.199 --> 01:50:30.159 similar clause for just having utilities connected to the 01:50:30.159 --> 01:50:31.720 outside of your house 01:50:31.720 --> 01:50:37.000 that you can that they can come and if your house if the 01:50:37.000 --> 01:50:38.960 meter is causing some 01:50:38.960 --> 01:50:41.390 kind of issue or you're having some kind of back load that 01:50:41.390 --> 01:50:42.560 they can come without 01:50:42.560 --> 01:50:46.369 cause and stop it from happening well I want to make sure I 01:50:46.369 --> 01:50:47.520 understand your 01:50:47.520 --> 01:50:51.789 point on this is I think your concern is that the city at 01:50:51.789 --> 01:50:53.239 some point can just 01:50:53.239 --> 01:50:57.510 unhook somebody that has put the solar unit on their house 01:50:57.510 --> 01:50:58.600 for no reason yeah 01:50:58.600 --> 01:51:02.869 yeah it's just arbitrary it's just arbitrary yeah and I don 01:51:02.869 --> 01:51:03.319 't think you know 01:51:03.319 --> 01:51:08.359 again I'm Brent you're walking out here I'm not sure 01:51:09.960 --> 01:51:13.229 Brent Heath executive manager for energy delivery this is 01:51:13.229 --> 01:51:14.479 an interesting question 01:51:14.479 --> 01:51:18.289 actually case in point a couple years ago we were looking 01:51:18.289 --> 01:51:18.920 through some 01:51:18.920 --> 01:51:21.729 information that we were reading and there was one 01:51:21.729 --> 01:51:23.199 installation that had been 01:51:23.199 --> 01:51:27.470 known to cause problems a photovoltaics system it was one 01:51:27.470 --> 01:51:28.279 single element 01:51:28.279 --> 01:51:32.090 within the inverter and so we went to look to see did we 01:51:32.090 --> 01:51:33.520 have any of those on 01:51:33.520 --> 01:51:37.329 our system as lo and behold we did so we contacted the home 01:51:37.329 --> 01:51:38.359 owner they didn't know 01:51:38.359 --> 01:51:41.279 anything about it we contacted the installer they didn't 01:51:41.279 --> 01:51:41.960 know anything about 01:51:41.960 --> 01:51:45.770 it so for safety reasons we went ahead and padlocked it 01:51:45.770 --> 01:51:46.960 disconnected it until 01:51:46.960 --> 01:51:49.579 we could make sure that it wouldn't have made issue yes 01:51:49.579 --> 01:51:50.560 okay so thank you yeah 01:51:50.560 --> 01:51:53.760 and so I like that because I like that you went and the 01:51:53.760 --> 01:51:55.279 first thing you did was 01:51:55.279 --> 01:51:58.560 you contacted the owner and then you contact the installer 01:51:58.560 --> 01:52:00.039 so I approve of 01:52:00.039 --> 01:52:02.699 that and I understand that there's need for that what I'm 01:52:02.699 --> 01:52:04.800 nervous about having 01:52:04.800 --> 01:52:13.630 on the books is you know if it is this possibility of you 01:52:13.630 --> 01:52:16.159 know doing it with 01:52:16.159 --> 01:52:21.039 without cause whatever that means legally why put that in 01:52:21.039 --> 01:52:22.119 there if there's 01:52:22.119 --> 01:52:25.930 never going to be an arbitrary I mean because I can't that 01:52:25.930 --> 01:52:26.760 's what I'm not 01:52:26.760 --> 01:52:30.560 understanding so maybe so if it is a legal something legal 01:52:30.560 --> 01:52:31.479 that illegal term 01:52:31.479 --> 01:52:35.289 I'm not understanding then I want to know but if there's if 01:52:35.289 --> 01:52:36.319 there's no good 01:52:36.319 --> 01:52:43.239 reason for that then for the sake of the rights of people 01:52:43.239 --> 01:52:45.319 who are currently have 01:52:45.319 --> 01:52:48.810 have distributed generation and considering it I would like 01:52:48.810 --> 01:52:49.319 to see that 01:52:49.319 --> 01:52:53.170 part about with that cause struck all right that was just a 01:52:53.170 --> 01:52:54.560 suspicion that we 01:52:54.560 --> 01:52:56.819 had from reading the information so we want to make sure it 01:52:56.819 --> 01:52:57.600 was safe contact 01:52:57.600 --> 01:53:00.600 the homeowner notify them contact the installer and make it 01:53:00.600 --> 01:53:01.079 safe for 01:53:01.079 --> 01:53:04.930 everybody yes determine yes it was an issue or not and they 01:53:04.930 --> 01:53:05.640 did go ahead and 01:53:05.640 --> 01:53:08.220 replace that that piece yes and that and I love and it's 01:53:08.220 --> 01:53:09.399 extremely important 01:53:09.399 --> 01:53:11.979 thank you yeah that's extremely important so it's just it's 01:53:11.979 --> 01:53:12.520 a little 01:53:12.520 --> 01:53:17.880 detail of it and sorry to hold up the proceedings with it 01:53:17.880 --> 01:53:19.600 but it seems well I 01:53:19.600 --> 01:53:22.310 think what you need to do you need to read that sentence in 01:53:22.310 --> 01:53:23.479 in context with 01:53:23.479 --> 01:53:27.289 our paragraph is when you go into the next part provided 01:53:27.289 --> 01:53:27.720 however this 01:53:27.720 --> 01:53:31.720 agreement shall not automatically terminate upon the 01:53:31.720 --> 01:53:32.359 disconnection of 01:53:32.359 --> 01:53:35.109 electric electric service to the house because they're del 01:53:35.109 --> 01:53:36.439 inquent the closing 01:53:36.439 --> 01:53:40.710 of their account a change in ownership it goes on that 01:53:40.710 --> 01:53:42.680 impacts what that first 01:53:42.680 --> 01:53:48.430 sentence says first since gives a ride to the utility to go 01:53:48.430 --> 01:53:49.920 in there by giving 01:53:49.920 --> 01:53:54.250 written notice about what they're going to do and I think 01:53:54.250 --> 01:53:55.880 mr. Heath explained 01:53:55.880 --> 01:53:58.800 that perfectly adequately about how why they're doing that 01:53:58.800 --> 01:54:00.359 and that's there's a 01:54:00.359 --> 01:54:02.970 caveat on that that's remainder of the paragraph yeah and 01:54:02.970 --> 01:54:04.159 you know the last 01:54:04.159 --> 01:54:06.880 caveat though is just kind of the failure to comply with 01:54:06.880 --> 01:54:07.520 all terms of 01:54:07.520 --> 01:54:10.539 this agreement and there are so many terms and then a 01:54:10.539 --> 01:54:13.520 number 14 it says the 01:54:13.520 --> 01:54:16.630 city may send an employee to the premises at any time 01:54:16.630 --> 01:54:18.680 without notice now 01:54:18.680 --> 01:54:21.010 of course it says in the event of emergency or hazardous 01:54:21.010 --> 01:54:21.800 condition is 01:54:21.800 --> 01:54:26.970 determined by the city so but you know so on the one hand 01:54:26.970 --> 01:54:27.920 we're saying without 01:54:27.920 --> 01:54:31.729 notice on the other hand we're saying notice is given it's 01:54:31.729 --> 01:54:33.159 those parts so I 01:54:33.159 --> 01:54:36.100 hope I'm making this clear for me it's just the privacy 01:54:36.100 --> 01:54:37.439 privacy rights issue I 01:54:37.439 --> 01:54:40.739 completely understand and agree that it's important to have 01:54:40.739 --> 01:54:41.560 for the city to 01:54:41.560 --> 01:54:45.439 have control this is our it's feeding into our system and 01:54:45.439 --> 01:54:46.199 we want to make sure 01:54:46.199 --> 01:54:51.369 it's safe for everybody and for the linemen but in terms of 01:54:51.369 --> 01:54:53.680 the owners rights 01:54:53.680 --> 01:54:59.220 I'm just not comfortable with that come entering their 01:54:59.220 --> 01:55:01.359 private citizens premises 01:55:01.359 --> 01:55:05.420 without notice and the part about without cause and having 01:55:05.420 --> 01:55:06.199 the term so 01:55:06.199 --> 01:55:09.359 loose is to be you know that the failure to comply with all 01:55:09.359 --> 01:55:10.439 the terms of this 01:55:10.439 --> 01:55:14.710 agreement well I think staff has given an adequate 01:55:14.710 --> 01:55:15.800 explanation but you have 01:55:15.800 --> 01:55:18.800 emergencies come up you have an energy producing device 01:55:18.800 --> 01:55:19.800 that's placed on a 01:55:19.800 --> 01:55:25.529 house that's pushing energy back in to DME's grid and I 01:55:25.529 --> 01:55:27.560 think both mr. Heath 01:55:27.560 --> 01:55:29.539 and miss Rogers has explained you're gonna have it you're 01:55:29.539 --> 01:55:30.479 gonna have employees 01:55:30.479 --> 01:55:33.500 out there working is on a regular basis just doing their 01:55:33.500 --> 01:55:34.680 work or an emergency 01:55:34.680 --> 01:55:37.500 basis that they have to get back there the homeowners not 01:55:37.500 --> 01:55:38.520 there that needs to 01:55:38.520 --> 01:55:40.819 be turned off they don't want to get out there and get lit 01:55:40.819 --> 01:55:42.119 up yes when they're 01:55:42.119 --> 01:55:48.350 because you know that privacy concern is it becomes a lot 01:55:48.350 --> 01:55:50.000 less yeah I mean this 01:55:50.000 --> 01:55:53.270 is oh yeah they're coming into this and it's same thing 01:55:53.270 --> 01:55:54.840 with the metering and so 01:55:54.840 --> 01:55:57.750 you've got a balancing there and there is not going in 01:55:57.750 --> 01:55:58.880 there at will oh yeah 01:55:58.880 --> 01:56:03.479 whenever they want yeah I think we've I think we all 01:56:03.479 --> 01:56:05.600 understand the risk and the 01:56:05.600 --> 01:56:10.310 positions that everybody's having here what I'd like to do 01:56:10.310 --> 01:56:11.520 is either move move 01:56:11.520 --> 01:56:17.229 this forward with a motion either way thank you I've moved 01:56:17.229 --> 01:56:18.520 that we approve as 01:56:18.520 --> 01:56:24.039 presented okay is there a second second any other 01:56:24.039 --> 01:56:27.840 discussion all in favor say I 01:56:27.840 --> 01:56:35.840 aye any opposed nay just because of that with one night 01:56:35.840 --> 01:56:38.439 that cause sorry Adam see 01:56:38.439 --> 01:56:42.250 passions I think procedurally though what you could have 01:56:42.250 --> 01:56:43.359 done is made a motion 01:56:43.359 --> 01:56:46.600 with the amendments that you would have liked to have seen 01:56:46.600 --> 01:56:48.039 so you could have 01:56:48.039 --> 01:56:52.020 per se I'm saying that you wanted to move that along 01:56:52.020 --> 01:56:52.500 definitely to see if you 01:56:52.500 --> 01:56:56.880 got support for your yeah yeah my sense was it was that 01:56:56.880 --> 01:56:57.720 nobody else had that 01:56:57.720 --> 01:57:01.680 concern which is why I didn't make that that motion so 01:57:01.680 --> 01:57:03.199 thank you everybody for 01:57:03.199 --> 01:57:08.609 individual next we have individual items item number a 01:57:08.609 --> 01:57:12.119 which is the minutes from 01:57:12.119 --> 01:57:16.810 the public utility board meeting of August 14th 2017 these 01:57:16.810 --> 01:57:17.600 have been 01:57:17.600 --> 01:57:25.090 distributed in advance are there any corrections changes 01:57:25.090 --> 01:57:27.399 comments on these 01:57:27.399 --> 01:57:33.810 hearing none those stand approved as presented next item we 01:57:33.810 --> 01:57:35.079 have is item 01:57:35.079 --> 01:57:41.039 number B which is not item B it's not a number to receive 01:57:41.039 --> 01:57:42.680 report hold discussion 01:57:42.680 --> 01:57:46.539 provide recommendation regarding solid waste departments 01:57:46.539 --> 01:57:47.640 landfill mining 01:57:47.640 --> 01:57:56.949 operation good morning morning so we have a presentation to 01:57:56.949 --> 01:57:57.239 give you a little 01:57:57.239 --> 01:57:59.149 bit of an update and seek some direction on our landfill 01:57:59.149 --> 01:58:00.260 mining operation at 01:58:00.260 --> 01:58:03.159 solid waste before I do that I do want to mention that we 01:58:03.159 --> 01:58:03.760 did send out some 01:58:03.760 --> 01:58:06.979 corrections over the weekend I want to apologize for that 01:58:06.979 --> 01:58:07.760 but it felt like 01:58:07.760 --> 01:58:10.300 those changes were significant enough that we needed to get 01:58:10.300 --> 01:58:11.079 that to you ahead 01:58:11.079 --> 01:58:14.119 of today's meeting in addition I realize that there's been 01:58:14.119 --> 01:58:15.479 a newspaper article as 01:58:15.479 --> 01:58:18.350 well as a lot of good discussion of social media over the 01:58:18.350 --> 01:58:19.239 weekend and so I 01:58:19.239 --> 01:58:21.989 feel it's important to mention that you know this is a 01:58:21.989 --> 01:58:23.359 project that has really 01:58:23.359 --> 01:58:25.609 kind of been a passion project for solid waste and a number 01:58:25.609 --> 01:58:26.359 of members in the 01:58:26.359 --> 01:58:30.149 community for a number of years and so really if I do my 01:58:30.149 --> 01:58:31.359 job correctly today 01:58:31.359 --> 01:58:34.680 this is going to be kind of a fair and balanced approach to 01:58:34.680 --> 01:58:35.920 not just looking at 01:58:35.920 --> 01:58:39.729 the benefits of what landfill mining can potentially bring 01:58:39.729 --> 01:58:41.000 but also analyzing the 01:58:41.000 --> 01:58:43.840 risk and some of the challenges that are inherent in a 01:58:43.840 --> 01:58:45.279 project like this as well 01:58:45.279 --> 01:58:48.409 I also mentioned that a number of our staff members have 01:58:48.409 --> 01:58:49.439 worked a lot of long 01:58:49.439 --> 01:58:52.199 hours on this and we also want to thank Weaver and their 01:58:52.199 --> 01:58:53.319 folks for helping us 01:58:53.319 --> 01:58:56.470 out with this analysis Nick Gunson David Duggar here from 01:58:56.470 --> 01:58:57.199 the solid waste 01:58:57.199 --> 01:59:01.840 department today as well lastly before you get started this 01:59:01.840 --> 01:59:02.479 is kind of a 01:59:02.479 --> 01:59:05.800 complex analysis and so out of the interest of time I'm 01:59:05.800 --> 01:59:06.760 going to try to 01:59:06.760 --> 01:59:09.340 keep this at a fairly high level but we'll certainly 01:59:09.340 --> 01:59:10.479 entertain any questions 01:59:10.479 --> 01:59:13.600 that you have there's essentially a couple of key 01:59:13.600 --> 01:59:14.560 assumptions that really 01:59:14.560 --> 01:59:18.369 swing the original analysis to the current analysis and I 01:59:18.369 --> 01:59:19.000 will spend a bit 01:59:19.000 --> 01:59:24.670 more time on that so without further ado a few things 01:59:24.670 --> 01:59:26.520 conceptually that you'll 01:59:26.520 --> 01:59:28.630 really kind of need to wrap your head around as we go 01:59:28.630 --> 01:59:29.279 through this 01:59:29.279 --> 01:59:33.560 presentation is some of the benefits that might be realized 01:59:33.560 --> 01:59:34.300 by doing a 01:59:34.300 --> 01:59:37.279 landfill mining operation first of which is airspace 01:59:37.279 --> 01:59:39.680 recovery and when you own 01:59:39.680 --> 01:59:43.279 and operate a landfill as the city does it's really an 01:59:43.279 --> 01:59:44.479 asset to our ratepayers 01:59:44.479 --> 01:59:48.750 into our community and so making good use of our airspace 01:59:48.750 --> 01:59:49.720 is paramount makes 01:59:49.720 --> 01:59:52.739 basically makes that asset lengthens that life and make 01:59:52.739 --> 01:59:53.880 sure that it's there 01:59:53.880 --> 01:59:56.979 for future generations and in addition you can also put a 01:59:56.979 --> 01:59:58.680 revenue value on that 01:59:58.680 --> 02:00:02.970 airspace essentially that's the backbone how the solid 02:00:02.970 --> 02:00:03.800 waste department generates 02:00:03.800 --> 02:00:07.090 revenue you also have reduced environmental risk when you 02:00:07.090 --> 02:00:08.159 look at a cell 02:00:08.159 --> 02:00:10.409 like the cell that is being contemplated for landfill 02:00:10.409 --> 02:00:11.560 mining that's 02:00:11.560 --> 02:00:14.880 what we call a pre-subtitled D landfill cell which means 02:00:14.880 --> 02:00:16.119 that there's a clay 02:00:16.119 --> 02:00:20.390 liner at the bottom of this cell that is essentially at a 02:00:20.390 --> 02:00:21.960 medium risk for failure 02:00:21.960 --> 02:00:24.539 for groundwater contamination to some other hazards over 02:00:24.539 --> 02:00:25.779 the next 30 to 60 02:00:25.779 --> 02:00:30.380 years and then lastly you also have the recovered material 02:00:30.380 --> 02:00:32.159 revenue and so in 02:00:32.159 --> 02:00:34.630 order to get to your airspace recovery you essentially 02:00:34.630 --> 02:00:35.640 would have to mine up 02:00:35.640 --> 02:00:39.449 this material and divert it versus rebury it to recognize 02:00:39.449 --> 02:00:40.319 those airspace 02:00:40.319 --> 02:00:44.130 savings to do that the the original pro forma assumed that 02:00:44.130 --> 02:00:44.840 we would be 02:00:44.840 --> 02:00:48.239 liquidating that or selling it for a profit and so those 02:00:48.239 --> 02:00:49.720 are really kind of 02:00:49.720 --> 02:00:52.989 the key benefits that you may or may not seen in meetings 02:00:52.989 --> 02:00:54.920 past one thing I will 02:00:54.920 --> 02:00:58.199 mention is that a pro forma was conducted on this 02:00:58.199 --> 02:00:59.520 previously but we don't believe 02:00:59.520 --> 02:01:01.729 that that was presented to the pub or the City Council and 02:01:01.729 --> 02:01:02.399 so I want to make 02:01:02.399 --> 02:01:05.140 that clarification and so as we go through the presentation 02:01:05.140 --> 02:01:05.840 we'll give you 02:01:05.840 --> 02:01:10.140 a look at that original pro forma as well as our updated 02:01:10.140 --> 02:01:12.960 assumptions excuse 02:01:12.960 --> 02:01:15.130 me aside from the benefits you also have a number of 02:01:15.130 --> 02:01:16.359 assumptions or risk factors 02:01:16.359 --> 02:01:20.439 this would be a very risky project if we do take it on and 02:01:20.439 --> 02:01:22.000 we feel like that's 02:01:22.000 --> 02:01:24.750 really important that we acknowledge these and that we talk 02:01:24.750 --> 02:01:25.239 about our 02:01:25.239 --> 02:01:28.510 assumptions as we deal with them first of which is the 02:01:28.510 --> 02:01:29.600 timeline associated with 02:01:29.600 --> 02:01:33.409 the project like this this is not one or two year project 02:01:33.409 --> 02:01:34.680 it potentially will run 02:01:34.680 --> 02:01:39.279 multiple years perhaps even a couple of decades that's 02:01:39.279 --> 02:01:40.319 really a function of our 02:01:40.319 --> 02:01:43.090 processing capacity when I say capacity it's really 02:01:43.090 --> 02:01:44.560 function of how quickly can 02:01:44.560 --> 02:01:48.369 we mine up the old landfill material process it divert it 02:01:48.369 --> 02:01:49.199 get it to its final 02:01:49.199 --> 02:01:53.010 destination that's a component or the components to really 02:01:53.010 --> 02:01:53.819 impact that are 02:01:53.819 --> 02:01:56.199 going to be your workforce how quickly can they process 02:01:56.199 --> 02:01:57.279 that and your equipment 02:01:57.279 --> 02:01:59.880 you also have the composition of what's in the landfill you 02:01:59.880 --> 02:02:00.840 have a little image 02:02:00.840 --> 02:02:04.119 here and you can kind of see there's a variety of waste in 02:02:04.119 --> 02:02:05.159 there we do have 02:02:05.159 --> 02:02:08.039 some good data that we feel like we could work off of UTA 02:02:08.039 --> 02:02:09.039 did a number of 02:02:09.039 --> 02:02:12.850 samples at our site we have some reliable data on that 02:02:12.850 --> 02:02:14.000 front but there 02:02:14.000 --> 02:02:16.899 are also a number of unknowns the core samples that they 02:02:16.899 --> 02:02:18.039 conducted could not 02:02:18.039 --> 02:02:21.020 penetrate all the material found in the land cell and so 02:02:21.020 --> 02:02:22.640 the material that they 02:02:22.640 --> 02:02:25.939 come penetrate our assumptions are that could be metal wood 02:02:25.939 --> 02:02:26.880 large pieces of 02:02:26.880 --> 02:02:29.829 concrete all those are kind of unknown quantities to us as 02:02:29.829 --> 02:02:31.640 we look at this you 02:02:31.640 --> 02:02:34.270 also have the condition of the material and when we talk 02:02:34.270 --> 02:02:35.159 about diverting 02:02:35.159 --> 02:02:38.229 material if we're going to be selling that on the market if 02:02:38.229 --> 02:02:39.119 that materials 02:02:39.119 --> 02:02:42.170 contaminated we need to know that there's material testing 02:02:42.170 --> 02:02:43.039 that may need to 02:02:43.039 --> 02:02:47.460 take place and much like any market the commodities market 02:02:47.460 --> 02:02:48.760 for recyclables they're 02:02:48.760 --> 02:02:50.800 going to be picky about the products that they choose 02:02:50.800 --> 02:02:51.800 contamination is 02:02:51.800 --> 02:02:55.130 something that someone buying these materials are going to 02:02:55.130 --> 02:02:55.920 look at and so 02:02:55.920 --> 02:02:58.420 that does affect your market potential and you're trying to 02:02:58.420 --> 02:02:58.880 sell these 02:02:58.880 --> 02:03:02.800 recyclable materials lastly you have material price 02:03:02.800 --> 02:03:05.439 volatility recyclables 02:03:05.439 --> 02:03:08.199 are a commodity market there's some risk there it's 02:03:08.199 --> 02:03:09.479 something we deal with today 02:03:09.479 --> 02:03:13.800 but you also have to factor in these other risk factors 02:03:13.800 --> 02:03:15.560 before we can even get 02:03:15.560 --> 02:03:19.430 to that so as we go through the next few slides essentially 02:03:19.430 --> 02:03:20.079 what we're going to 02:03:20.079 --> 02:03:23.890 be trying to do is tackling the key risk factors or 02:03:23.890 --> 02:03:25.000 assumptions that were made in 02:03:25.000 --> 02:03:28.810 the original analysis versus our current analysis as we 02:03:28.810 --> 02:03:30.000 work through this we 02:03:30.000 --> 02:03:32.100 found that our assumptions in some cases were very 02:03:32.100 --> 02:03:33.359 different than the original 02:03:33.359 --> 02:03:36.460 analysis and that's really the value of having weaver come 02:03:36.460 --> 02:03:37.640 in and challenge our 02:03:37.640 --> 02:03:39.989 assumptions and really talk us through or us talk them 02:03:39.989 --> 02:03:41.119 through here's what our 02:03:41.119 --> 02:03:44.159 thinking was here's the original thinking you know where's 02:03:44.159 --> 02:03:44.840 your comfort 02:03:44.840 --> 02:03:48.000 level and your confidence level on this so on on each of 02:03:48.000 --> 02:03:49.239 these slides I'm going 02:03:49.239 --> 02:03:51.130 to go through the current assumptions down here and then I 02:03:51.130 --> 02:03:51.760 'll tie it into the 02:03:51.760 --> 02:03:55.569 data that we have up here in the table so the first 02:03:55.569 --> 02:03:56.960 assumption that we have all 02:03:56.960 --> 02:04:00.770 these benefits up here are they're tangible benefits but 02:04:00.770 --> 02:04:01.840 understand that 02:04:01.840 --> 02:04:05.649 that's not necessarily a money coming in annually these are 02:04:05.649 --> 02:04:06.399 benefits that would 02:04:06.399 --> 02:04:09.229 only be recognized if we complete the project in its 02:04:09.229 --> 02:04:10.600 entirety I'll talk a 02:04:10.600 --> 02:04:12.899 little bit more about timelines but you can see some bullet 02:04:12.899 --> 02:04:13.680 points here that 02:04:13.680 --> 02:04:17.489 these numbers are 10-year numbers neither the original 02:04:17.489 --> 02:04:18.479 analysis or the 02:04:18.479 --> 02:04:20.979 current analysis would be complete the project would not be 02:04:20.979 --> 02:04:22.000 completed 10 years 02:04:22.000 --> 02:04:25.600 so our first assumption that we have here is everybody air 02:04:25.600 --> 02:04:26.600 space is a value is 02:04:26.600 --> 02:04:29.710 a function of material diverted and the revenue potential 02:04:29.710 --> 02:04:31.439 of that airspace so 02:04:31.439 --> 02:04:34.260 there's two key assumptions that are there under the 02:04:34.260 --> 02:04:35.560 original analysis the 02:04:35.560 --> 02:04:38.489 first assumption was that we would divert at least 75% of 02:04:38.489 --> 02:04:39.199 the material that 02:04:39.199 --> 02:04:43.010 we mine we feel that that's a little bit optimistic that's 02:04:43.010 --> 02:04:43.600 something that we 02:04:43.600 --> 02:04:47.409 come from conferred with weaver on our analysis was that 02:04:47.409 --> 02:04:48.640 about 50% would be 02:04:48.640 --> 02:04:52.909 diverted about 50% of what's in the landfill right now is 02:04:52.909 --> 02:04:54.199 what's called 02:04:54.199 --> 02:04:57.569 small objects that is your degraded material your soil 02:04:57.569 --> 02:04:58.479 things that are too 02:04:58.479 --> 02:05:01.510 small for us to process and divert through any other means 02:05:01.510 --> 02:05:02.399 if you're going 02:05:02.399 --> 02:05:04.920 to sell that soil like I said it's probably gonna need to 02:05:04.920 --> 02:05:05.720 be tested to some 02:05:05.720 --> 02:05:09.529 degree we just assumed in our analysis that that's probably 02:05:09.529 --> 02:05:10.119 not how we would 02:05:10.119 --> 02:05:14.920 treat that material so as you can see with that that that 02:05:14.920 --> 02:05:17.079 75% to 50% has a 02:05:17.079 --> 02:05:21.399 decidedly decided impact on that the other thing and this 02:05:21.399 --> 02:05:22.039 is the correction 02:05:22.039 --> 02:05:25.340 that you received via email over the weekend when we ever 02:05:25.340 --> 02:05:26.199 looked at this they 02:05:26.199 --> 02:05:29.210 really looked at well how much waste can we fit into a 02:05:29.210 --> 02:05:30.199 cubic yard of airspace 02:05:30.199 --> 02:05:34.010 which is how we value the revenue potential the original 02:05:34.010 --> 02:05:34.960 assumption and 02:05:34.960 --> 02:05:37.550 the assumption that we were operating on up until last week 02:05:37.550 --> 02:05:38.319 was we could fit 02:05:38.319 --> 02:05:42.130 about 1,300 pounds into a cubic yard of airspace recent 02:05:42.130 --> 02:05:43.119 survey data came back 02:05:43.119 --> 02:05:45.270 on our landfill site and said you're really probably going 02:05:45.270 --> 02:05:45.960 to be looking at 02:05:45.960 --> 02:05:49.159 closer to 1,100 so we've recommended that we write that 02:05:49.159 --> 02:05:50.199 down and we made that 02:05:50.199 --> 02:05:53.039 correction and that's kind of the net difference between 02:05:53.039 --> 02:05:54.279 the 14 million that 02:05:54.279 --> 02:05:58.170 was originally in the presentation and the 8.7 that's here 02:05:58.170 --> 02:05:59.640 now the other 02:05:59.640 --> 02:06:03.449 assumptions here land land value is applicable if a land 02:06:03.449 --> 02:06:04.600 purchase is avoided 02:06:04.600 --> 02:06:10.470 so reclaimed airspace or reclaim land value a lot of landf 02:06:10.470 --> 02:06:12.279 ills that pursue 02:06:12.279 --> 02:06:16.090 landfill mining they're landlocked they have no growth 02:06:16.090 --> 02:06:16.960 potential in the out 02:06:16.960 --> 02:06:19.789 years they're basically up against a wall if they want to 02:06:19.789 --> 02:06:20.560 continue to 02:06:20.560 --> 02:06:24.369 operate and so land reclaim land value is very important 02:06:24.369 --> 02:06:24.800 for them because 02:06:24.800 --> 02:06:28.159 otherwise they're gonna have to go purchase land and do a 02:06:28.159 --> 02:06:28.680 green field 02:06:28.680 --> 02:06:32.380 a green field investment in that that's not really the case 02:06:32.380 --> 02:06:33.039 with us we have 02:06:33.039 --> 02:06:36.159 about 17 to 20 more years of life potentially in our 02:06:36.159 --> 02:06:37.279 existing development 02:06:37.279 --> 02:06:41.090 and we also have permitted expansion that's going through 02:06:41.090 --> 02:06:42.000 the TCEQ right now 02:06:42.000 --> 02:06:46.270 so we didn't feel like that was worth realizing as a 02:06:46.270 --> 02:06:48.279 benefit lastly on this 02:06:48.279 --> 02:06:52.880 slide you have avoided post closure enclosure a quick word 02:06:52.880 --> 02:06:54.359 on that closure 02:06:54.359 --> 02:06:57.640 and post closures really like a retirement fund for your 02:06:57.640 --> 02:06:58.920 landfill and a 02:06:58.920 --> 02:07:02.729 lot of privately owned landfills and see will file 02:07:02.729 --> 02:07:04.119 bankruptcy and walk away and 02:07:04.119 --> 02:07:07.930 leave it as a liability for the community to deal with we 02:07:07.930 --> 02:07:08.760 can't be that 02:07:08.760 --> 02:07:11.920 irresponsible we must have funds available to close our 02:07:11.920 --> 02:07:12.560 landfill site 02:07:12.560 --> 02:07:15.260 whenever we're finished filling it with waste and so we 02:07:15.260 --> 02:07:17.199 must recognize that we 02:07:17.199 --> 02:07:21.079 must put those funds back the original analysis assumed 02:07:21.079 --> 02:07:23.600 that these values were 02:07:23.600 --> 02:07:26.869 not just for the cell that we would be mining but for the 02:07:26.869 --> 02:07:27.800 entire site to 02:07:27.800 --> 02:07:31.659 recognize that as a benefit you would essentially have to 02:07:31.659 --> 02:07:32.760 never close the 02:07:32.760 --> 02:07:36.569 entire side to do that you would be mining perpetually not 02:07:36.569 --> 02:07:37.800 just the cell but 02:07:37.800 --> 02:07:41.579 all the other cells in the side we felt strongly that that 02:07:41.579 --> 02:07:42.439 is not a benefit 02:07:42.439 --> 02:07:46.250 that we could recognize in fact we had another consultant 02:07:46.250 --> 02:07:47.159 run a post closure 02:07:47.159 --> 02:07:50.159 analysis they felt like there's actually a net liability 02:07:50.159 --> 02:07:51.159 for mining this 02:07:51.159 --> 02:07:54.520 particular cell if we were to do it and so we feel strongly 02:07:54.520 --> 02:07:55.760 that that should be 02:07:55.760 --> 02:07:58.729 removed we had weaver look at it they felt the same way so 02:07:58.729 --> 02:07:59.880 that is not 02:07:59.880 --> 02:08:05.970 recognized in our current analysis so as you take all that 02:08:05.970 --> 02:08:07.119 in consideration the 02:08:07.119 --> 02:08:10.289 the benefits which again would be recognized at the end of 02:08:10.289 --> 02:08:12.039 the process has 02:08:12.039 --> 02:08:14.920 been written down pretty dramatically from the original 02:08:14.920 --> 02:08:15.720 analysis to our 02:08:15.720 --> 02:08:20.319 current review of the benefits and that takes us next to 02:08:20.319 --> 02:08:21.960 our material sales 02:08:21.960 --> 02:08:26.000 analysis which is another area where our assumptions differ 02:08:26.000 --> 02:08:26.600 ed quite 02:08:26.600 --> 02:08:30.409 substantially from the original pro forma I'll just run 02:08:30.409 --> 02:08:31.399 through quickly our 02:08:31.399 --> 02:08:33.750 assumptions down here and then I'll walk you through all 02:08:33.750 --> 02:08:34.840 this data that's up here 02:08:34.840 --> 02:08:37.399 in this table all the data on this slide is from the 02:08:37.399 --> 02:08:39.079 original analysis and so I 02:08:39.079 --> 02:08:41.770 want to make sure that a spend a little bit of time talking 02:08:41.770 --> 02:08:42.680 about why we felt 02:08:42.680 --> 02:08:45.619 our assumptions were different our current assumption is 02:08:45.619 --> 02:08:46.520 that the UTA 02:08:46.520 --> 02:08:51.369 landfill composition research is reliable UTA did a number 02:08:51.369 --> 02:08:52.520 of borings and 02:08:52.520 --> 02:08:55.329 core samples at our side essentially picking spots out 02:08:55.329 --> 02:08:56.439 around the location 02:08:56.439 --> 02:08:59.180 drilling down and analyzing okay what kind of material are 02:08:59.180 --> 02:08:59.960 we dealing with 02:08:59.960 --> 02:09:03.520 right here what's the condition of that material so one of 02:09:03.520 --> 02:09:04.119 the things that you 02:09:04.119 --> 02:09:06.420 would see when you go through the UTA research there's a 02:09:06.420 --> 02:09:07.279 phrase that pops up 02:09:07.279 --> 02:09:10.279 again and again and it's waste is heterogeneous which 02:09:10.279 --> 02:09:12.079 basically is another 02:09:12.079 --> 02:09:15.069 way of saying that no two bags of waste are the same the 02:09:15.069 --> 02:09:15.880 components and the 02:09:15.880 --> 02:09:18.420 contents are very different and that really plays out when 02:09:18.420 --> 02:09:19.199 you look at those 02:09:19.199 --> 02:09:22.680 core samples from UTA that being said we still feel like 02:09:22.680 --> 02:09:23.399 their research is 02:09:23.399 --> 02:09:27.210 valuable because we feel like over time if we mined the 02:09:27.210 --> 02:09:28.119 entire location we 02:09:28.119 --> 02:09:30.750 would probably get pretty close to the figures that they 02:09:30.750 --> 02:09:31.640 gave us we thought 02:09:31.640 --> 02:09:34.750 they gave us a representative sample our next assumption 02:09:34.750 --> 02:09:35.800 was that the market 02:09:35.800 --> 02:09:40.539 wants clean material a lot more recycling material is made 02:09:40.539 --> 02:09:40.640 available 02:09:40.640 --> 02:09:44.960 today cardboard paper we do a much better job as a society 02:09:44.960 --> 02:09:46.159 today of recycling 02:09:46.159 --> 02:09:49.119 material than we did back when this landfill was being 02:09:49.119 --> 02:09:50.279 filled up this site 02:09:50.279 --> 02:09:54.250 closed in 2000 except to waste well back into the 80s and 02:09:54.250 --> 02:09:56.239 so understand that when 02:09:56.239 --> 02:10:00.979 we bring this material to market some recycling vendors 02:10:00.979 --> 02:10:02.479 they struggle with the 02:10:02.479 --> 02:10:05.189 contamination that's in your blue cart today they may not 02:10:05.189 --> 02:10:06.020 accept all that 02:10:06.020 --> 02:10:08.720 material and so what we're going to be bringing to market 02:10:08.720 --> 02:10:09.760 will be inferior to 02:10:09.760 --> 02:10:12.890 even the contamination that they're used to seeing in 02:10:12.890 --> 02:10:14.479 addition about 30 to 50 02:10:14.479 --> 02:10:17.250 percent of the material be degraded or those small objects 02:10:17.250 --> 02:10:18.239 like I talked about 02:10:18.239 --> 02:10:22.920 a little bit earlier soil coming old with decomposed waste 02:10:22.920 --> 02:10:24.520 we also have an 02:10:24.520 --> 02:10:27.069 assumption that the tetrapack and bulky materials I'll talk 02:10:27.069 --> 02:10:27.840 more about those in 02:10:27.840 --> 02:10:31.180 just a second are complete unknowns this is material that 02:10:31.180 --> 02:10:32.399 the boring could not 02:10:32.399 --> 02:10:35.859 get down and penetrate and so we know something's there but 02:10:35.859 --> 02:10:36.560 we don't know 02:10:36.560 --> 02:10:40.880 exactly what it is the volume or the composition or the 02:10:40.880 --> 02:10:41.720 condition of it and 02:10:41.720 --> 02:10:45.550 so those are really complete unknowns for us and highly 02:10:45.550 --> 02:10:47.079 speculative if we move 02:10:47.079 --> 02:10:51.960 forward with this lastly and I'll tie this into the the 02:10:51.960 --> 02:10:53.479 table above the 02:10:53.479 --> 02:10:56.569 original pro forma have banked on revenue for the liquid 02:10:56.569 --> 02:10:57.479 ation or sell of 02:10:57.479 --> 02:11:01.789 recyclable commodities to be about $44 per ton understand 02:11:01.789 --> 02:11:02.760 that today on 02:11:02.760 --> 02:11:05.489 relatively clean material that we get out of our building 02:11:05.489 --> 02:11:06.520 materials recovery 02:11:06.520 --> 02:11:10.329 operation as well as the cart material that we divert to Pr 02:11:10.329 --> 02:11:11.439 att we get on average 02:11:11.439 --> 02:11:16.199 about $22 per ton so essentially for the original pro forma 02:11:16.199 --> 02:11:16.800 revenues to be 02:11:16.800 --> 02:11:20.680 realized we would have to get twice what we're getting for 02:11:20.680 --> 02:11:21.359 relatively clean 02:11:21.359 --> 02:11:25.170 material now we don't believe that's achievable so I'll go 02:11:25.170 --> 02:11:25.800 through real 02:11:25.800 --> 02:11:29.800 quickly on this table the commodity assumptions up here are 02:11:29.800 --> 02:11:30.439 essentially what 02:11:30.439 --> 02:11:33.359 I've just talked through this is original pro forma data 02:11:33.359 --> 02:11:34.100 these are the 02:11:34.100 --> 02:11:38.020 materials that were assumed to be in the landfill I 02:11:38.020 --> 02:11:39.279 mentioned that we felt like 02:11:39.279 --> 02:11:43.090 the UTA assumptions could be or the UT findings could be 02:11:43.090 --> 02:11:43.680 counted on the 02:11:43.680 --> 02:11:46.479 problem with the composition numbers here these percentages 02:11:46.479 --> 02:11:47.239 and why they're 02:11:47.239 --> 02:11:50.399 in red is these are not representative of what we saw in 02:11:50.399 --> 02:11:52.560 the UTA reports doesn't 02:11:52.560 --> 02:11:54.670 mean that there's not data to support these assumptions we 02:11:54.670 --> 02:11:55.439 've just been unable 02:11:55.439 --> 02:11:59.039 to locate it had conversations with the UTA professor and 02:11:59.039 --> 02:11:59.899 it's really 02:11:59.899 --> 02:12:03.710 speculation on our part on where these numbers came from 02:12:03.710 --> 02:12:05.000 down below these you 02:12:05.000 --> 02:12:08.229 see the Tetra pack and the recoverable materials and these 02:12:08.229 --> 02:12:09.000 are blank and 02:12:09.000 --> 02:12:12.779 highlighted in blue the reason why is like I said earlier 02:12:12.779 --> 02:12:13.640 we have no idea 02:12:13.640 --> 02:12:17.619 what's in there from a composition standpoint a little bit 02:12:17.619 --> 02:12:18.560 more information 02:12:18.560 --> 02:12:20.710 on the Tetra pack we believe that there's a substantial 02:12:20.710 --> 02:12:21.520 quantity of that 02:12:21.520 --> 02:12:25.560 material in there from a bulky recoverable materials 02:12:25.560 --> 02:12:26.520 standpoint the 02:12:26.520 --> 02:12:30.409 definition of that is that could be old brush it could be 02:12:30.409 --> 02:12:32.000 big pieces of metal or 02:12:32.000 --> 02:12:36.270 concrete it could be old furniture refrigerators cars you 02:12:36.270 --> 02:12:37.680 name it it's it's 02:12:37.680 --> 02:12:41.489 kind of a mixed bag and so trying to tie down composition 02:12:41.489 --> 02:12:42.479 on that is is really 02:12:42.479 --> 02:12:46.289 going to be a big gamble and that takes us over to sellable 02:12:46.289 --> 02:12:46.760 material which is 02:12:46.760 --> 02:12:50.170 really you know out of this material that we recover how 02:12:50.170 --> 02:12:50.880 much of that is 02:12:50.880 --> 02:12:53.970 going to be marketable that we think we can sell on the 02:12:53.970 --> 02:12:55.340 open market to our 02:12:55.340 --> 02:12:58.710 knowledge based on what I've seen there's really not been 02:12:58.710 --> 02:12:59.560 any thorough 02:12:59.560 --> 02:13:02.520 analysis done on this the reason why I feel like these are 02:13:02.520 --> 02:13:03.920 complete unknowns is 02:13:03.920 --> 02:13:06.560 we don't have any contracts with any vendors to purchase 02:13:06.560 --> 02:13:08.399 this material and so 02:13:08.399 --> 02:13:11.140 we are again going to be taking what we believe to be an 02:13:11.140 --> 02:13:12.319 inferior product to 02:13:12.319 --> 02:13:16.130 market and then trying to get it liquidated offside the 02:13:16.130 --> 02:13:17.479 numbers over here 02:13:17.479 --> 02:13:19.800 in the far right column these are the original pro forma 02:13:19.800 --> 02:13:20.880 total revenue figures 02:13:20.880 --> 02:13:27.880 I think some of these are probably within a reason I will 02:13:27.880 --> 02:13:29.079 say this that 02:13:29.079 --> 02:13:31.760 there's a lot of research out there that says when you do a 02:13:31.760 --> 02:13:32.680 landfill mining 02:13:32.680 --> 02:13:36.090 project do not count on the revenues to really the float 02:13:36.090 --> 02:13:37.640 the project most of 02:13:37.640 --> 02:13:40.319 your gains is going to be an airspace that's really why you 02:13:40.319 --> 02:13:41.600 do this or is to 02:13:41.600 --> 02:13:43.550 address some of those environmental concerns like we 02:13:43.550 --> 02:13:44.220 mentioned at the 02:13:44.220 --> 02:13:48.029 outset understand that on this pro forma that there's a 02:13:48.029 --> 02:13:49.159 substantial amount of 02:13:49.159 --> 02:13:52.970 revenue that's counted on here and the concerning factor or 02:13:52.970 --> 02:13:53.800 the concerning part 02:13:53.800 --> 02:13:57.659 for us in our analysis was that the lion's share of this 02:13:57.659 --> 02:13:59.279 revenue about 60 to 02:13:59.279 --> 02:14:03.090 70 percent was in the areas that we felt were most 02:14:03.090 --> 02:14:05.359 speculative and so these areas 02:14:05.359 --> 02:14:08.319 right here the Tetra Pak the bulky recoverable materials 02:14:08.319 --> 02:14:09.680 there are huge 02:14:09.680 --> 02:14:12.199 quantities assumed for this and it's also assumed that we 02:14:12.199 --> 02:14:12.960 're going to be able 02:14:12.960 --> 02:14:15.930 to get a certain dollar amount for that we don't feel any 02:14:15.930 --> 02:14:17.119 level of confidence 02:14:17.119 --> 02:14:21.060 in these numbers here today and so we wrote those down as 02:14:21.060 --> 02:14:23.720 part of our analysis 02:14:23.720 --> 02:14:28.279 I'm going too fast you have questions please stop me all 02:14:28.279 --> 02:14:29.520 right so this is 02:14:29.520 --> 02:14:31.960 essentially the final pro forma this is kind of the before 02:14:31.960 --> 02:14:32.600 and after the 02:14:32.600 --> 02:14:36.090 original analysis versus our current analysis real quickly 02:14:36.090 --> 02:14:36.840 I want to remind 02:14:36.840 --> 02:14:39.449 everyone that this is 10 year total so this is an apples-to 02:14:39.449 --> 02:14:41.520 -apples comparison I 02:14:41.520 --> 02:14:45.329 mentioned the time factor on this project is this is not a 02:14:45.329 --> 02:14:46.079 quick project 02:14:46.079 --> 02:14:49.890 to undertake it's multi-year but the original analysis 02:14:49.890 --> 02:14:50.760 assumed that we'd be 02:14:50.760 --> 02:14:53.939 processing it much faster than our current analysis and you 02:14:53.939 --> 02:14:54.720 see down here 02:14:54.720 --> 02:14:58.600 that the original had us about 69 percent complete after 10 02:14:58.600 --> 02:14:59.960 years the 02:14:59.960 --> 02:15:03.079 project would be done in about 14 was that that analysis 02:15:03.079 --> 02:15:05.079 ours is a little bit 02:15:05.079 --> 02:15:08.890 less optimistic we'd be about 52 percent complete at the 10 02:15:08.890 --> 02:15:10.279 -year mark we think 02:15:10.279 --> 02:15:13.979 it's going to take at least 19 years to do this I'll talk 02:15:13.979 --> 02:15:15.239 about more operational 02:15:15.239 --> 02:15:18.350 challenges on the next slide even when we were looked at 02:15:18.350 --> 02:15:19.439 this they felt like 02:15:19.439 --> 02:15:21.930 this was was very optimistic that there's a number of 02:15:21.930 --> 02:15:22.960 challenges that we're 02:15:22.960 --> 02:15:25.479 going to have to contend with as we get into it so you can 02:15:25.479 --> 02:15:26.600 see the benefits 02:15:26.600 --> 02:15:28.520 which we've just walked through there's a sizable 02:15:28.520 --> 02:15:29.640 difference in the original 02:15:29.640 --> 02:15:33.640 analysis versus ours we did strip out a number of 02:15:33.640 --> 02:15:34.920 expenditures trying to reach 02:15:34.920 --> 02:15:39.520 break even on this so we eliminated some overhead we didn't 02:15:39.520 --> 02:15:40.199 purchase some pieces 02:15:40.199 --> 02:15:43.800 of equipment so that has some reductions and impact them a 02:15:43.800 --> 02:15:44.680 lot of these numbers 02:15:44.680 --> 02:15:48.489 throughout unfortunately we still could not approach a 02:15:48.489 --> 02:15:49.399 break even on this at a 02:15:49.399 --> 02:15:53.210 10-year period so this is really the the original analysis 02:15:53.210 --> 02:15:54.199 and this is what we 02:15:54.199 --> 02:15:58.010 believe we'd be looking at after 10 years on this again I 02:15:58.010 --> 02:15:59.159 'll re-emphasize 02:15:59.159 --> 02:16:02.970 that you only recognize the airspace and benefits value 02:16:02.970 --> 02:16:04.439 once you complete the 02:16:04.439 --> 02:16:08.250 project and so this is not cash flow coming in you'd 02:16:08.250 --> 02:16:09.600 essentially be operating 02:16:09.600 --> 02:16:13.569 this project at a loss for a 10-year period before you 02:16:13.569 --> 02:16:15.239 start realizing any of 02:16:15.239 --> 02:16:21.000 that benefit in our analysis about a 19-year period some 02:16:21.000 --> 02:16:23.119 additional risk and 02:16:23.119 --> 02:16:25.420 challenges that I want to point these out because these 02:16:25.420 --> 02:16:26.279 were not a component 02:16:26.279 --> 02:16:30.090 of either of the pro formas essentially we got to some of 02:16:30.090 --> 02:16:30.560 this and we can 02:16:30.560 --> 02:16:34.370 tighten some of these up but especially from a financial 02:16:34.370 --> 02:16:35.200 perspective of where 02:16:35.200 --> 02:16:37.299 this is right now we really didn't see the value and 02:16:37.299 --> 02:16:38.319 continuing to do that 02:16:38.319 --> 02:16:42.129 until we had some type of policy discussion with the PUB 02:16:42.129 --> 02:16:43.200 and the council 02:16:43.200 --> 02:16:46.340 number one is equipment failure and replacement we have a 02:16:46.340 --> 02:16:47.200 number of pieces 02:16:47.200 --> 02:16:50.270 of equipment that are going to be critical components of 02:16:50.270 --> 02:16:52.040 this project we 02:16:52.040 --> 02:16:55.840 must count on some of those being down at some point of 02:16:55.840 --> 02:16:56.959 time even if we have 02:16:56.959 --> 02:17:00.239 five pieces of equipment they're down 1% independent of one 02:17:00.239 --> 02:17:01.659 another then we're at 02:17:01.659 --> 02:17:05.930 95% of our production capacity right off the job this is a 02:17:05.930 --> 02:17:06.719 very rugged 02:17:06.719 --> 02:17:09.680 environment this equipment is only warrantied for about one 02:17:09.680 --> 02:17:10.159 year or a 02:17:10.159 --> 02:17:12.850 thousand hours so even the manufacturers look at this and 02:17:12.850 --> 02:17:13.479 say that you're gonna 02:17:13.479 --> 02:17:16.110 have some challenges dealing with what you you're cont 02:17:16.110 --> 02:17:18.200 ending with out there at 02:17:18.200 --> 02:17:20.709 ten years I would assess that we probably have to replace a 02:17:20.709 --> 02:17:21.200 couple of 02:17:21.200 --> 02:17:24.129 pieces of equipment at least at 19 to 20 years you're 02:17:24.129 --> 02:17:25.299 probably gonna have to 02:17:25.299 --> 02:17:29.110 replace all of it at some point that's not been factored in 02:17:29.110 --> 02:17:29.659 there's some 02:17:29.659 --> 02:17:32.799 environmental risks that we have not put a dollar amount on 02:17:32.799 --> 02:17:34.079 yes we could address 02:17:34.079 --> 02:17:37.889 the clay liner but there's also some some methane gas in 02:17:37.889 --> 02:17:38.879 this that has not 02:17:38.879 --> 02:17:41.430 been pulled out yet and so as we get in there start digging 02:17:41.430 --> 02:17:42.360 some of that will be 02:17:42.360 --> 02:17:45.340 released and we'll have to contend with that some way you 02:17:45.340 --> 02:17:46.319 also have the 02:17:46.319 --> 02:17:50.129 potential of running into some toxic materials some 02:17:50.129 --> 02:17:51.040 contaminated materials as 02:17:51.040 --> 02:17:54.360 well that kind of ties into the next item which is the 02:17:54.360 --> 02:17:55.079 health and safety of 02:17:55.079 --> 02:18:00.250 our workers out there we have a lot of cost or expense tied 02:18:00.250 --> 02:18:02.000 into this for safety 02:18:02.000 --> 02:18:05.809 equipment but again we solid waste is a hazardous 02:18:05.809 --> 02:18:07.600 profession as is this 02:18:07.600 --> 02:18:11.409 would increase that a little bit and we need to look at it 02:18:11.409 --> 02:18:11.959 workforce loss is 02:18:11.959 --> 02:18:15.219 really something that is is a component of what happens 02:18:15.219 --> 02:18:16.360 when someone when 02:18:16.360 --> 02:18:18.879 attrition happens when someone leaves how long does it take 02:18:18.879 --> 02:18:19.559 us to fill that 02:18:19.559 --> 02:18:22.299 position do we want to give people breaks and lunches do we 02:18:22.299 --> 02:18:22.760 want to give 02:18:22.760 --> 02:18:27.159 them second vacation time in an operation sense if you don 02:18:27.159 --> 02:18:27.840 't account for 02:18:27.840 --> 02:18:30.479 those things one of two things will happen your 02:18:30.479 --> 02:18:32.120 productivity is going to go 02:18:32.120 --> 02:18:34.920 way down or your expense is going to go way up as you try 02:18:34.920 --> 02:18:36.079 to compensate for it 02:18:36.079 --> 02:18:39.889 understand that it has not been built into this model yet 02:18:39.889 --> 02:18:40.680 lastly you have 02:18:40.680 --> 02:18:43.229 material testing and storage we do have some storage 02:18:43.229 --> 02:18:44.559 contemplated but what we 02:18:44.559 --> 02:18:46.920 see in another landfill mining operations is this is a 02:18:46.920 --> 02:18:47.840 challenge that a 02:18:47.840 --> 02:18:51.649 lot of them contend with and then there's inventory and 02:18:51.649 --> 02:18:52.520 logistics assuming 02:18:52.520 --> 02:18:56.600 that we are able to sell these materials on the market we 02:18:56.600 --> 02:18:57.920 need to devise an 02:18:57.920 --> 02:19:01.040 inventory system for that we need to be able to account for 02:19:01.040 --> 02:19:02.639 it effectively the 02:19:02.639 --> 02:19:06.239 biggest challenge that we will run into from a financial 02:19:06.239 --> 02:19:07.079 standpoint is if we are 02:19:07.079 --> 02:19:09.809 shipping this to someone there will be a logistics expense 02:19:09.809 --> 02:19:11.000 for us if we're asking 02:19:11.000 --> 02:19:14.399 someone to come pick it up off site then they were going to 02:19:14.399 --> 02:19:15.559 pay us less than they 02:19:15.559 --> 02:19:18.959 would on the open market so with all these what I would say 02:19:18.959 --> 02:19:19.760 is kind of a 02:19:19.760 --> 02:19:22.809 blanket statement is this has not been factored into the 02:19:22.809 --> 02:19:23.799 pro forma when we 02:19:23.799 --> 02:19:26.799 talked with Weaver about this information essentially the 02:19:26.799 --> 02:19:27.360 way that we 02:19:27.360 --> 02:19:31.170 view this and they agree is our current analysis from an 02:19:31.170 --> 02:19:31.920 expenditure standpoint 02:19:31.920 --> 02:19:35.729 maybe even from a benefit standpoint is is a bit too 02:19:35.729 --> 02:19:37.079 optimistic and that it may 02:19:37.079 --> 02:19:41.350 need to be written down if we get serious about pursuing 02:19:41.350 --> 02:19:43.159 this project so 02:19:43.159 --> 02:19:46.079 that brings us to options or recommendations you know one 02:19:46.079 --> 02:19:46.440 of the 02:19:46.440 --> 02:19:50.020 things I will say is I realized that landfill mining it has 02:19:50.020 --> 02:19:50.920 a number of good 02:19:50.920 --> 02:19:54.459 benefits it's a passion project for a number of people in 02:19:54.459 --> 02:19:55.200 the organization 02:19:55.200 --> 02:19:57.829 there's folks in the community they're very passionate 02:19:57.829 --> 02:19:59.159 about that you know we 02:19:59.159 --> 02:20:02.170 didn't take this process lightly I know staff spent a lot 02:20:02.170 --> 02:20:03.879 of hours on it Weaver 02:20:03.879 --> 02:20:06.840 took it very seriously as well so when we looked at our 02:20:06.840 --> 02:20:08.440 options here we really 02:20:08.440 --> 02:20:12.250 balanced what are the benefits with the potential risks the 02:20:12.250 --> 02:20:13.399 hazards the cost and 02:20:13.399 --> 02:20:16.040 really where we stand to staff today is is we would 02:20:16.040 --> 02:20:17.399 recommend option one which 02:20:17.399 --> 02:20:20.399 would be eliminate the operation doesn't mean that we step 02:20:20.399 --> 02:20:21.639 away from exploring 02:20:21.639 --> 02:20:25.959 some of the benefits that our possibilities out there if we 02:20:25.959 --> 02:20:26.479 want to 02:20:26.479 --> 02:20:29.829 address that liner we can certainly go do some research and 02:20:29.829 --> 02:20:30.879 see what are some 02:20:30.879 --> 02:20:33.530 better ways that we can go about doing that if we do 02:20:33.530 --> 02:20:35.680 eliminate the operation we 02:20:35.680 --> 02:20:38.260 have kind of prepared for this moment a little bit 02:20:38.260 --> 02:20:39.879 internally already we've 02:20:39.879 --> 02:20:42.700 stopped some orders for equipment we've been diverting 02:20:42.700 --> 02:20:44.159 staff to other operations 02:20:44.159 --> 02:20:48.520 as vacancies come up we think that if we stop today on the 02:20:48.520 --> 02:20:49.440 operation there would 02:20:49.440 --> 02:20:52.680 be about a 1.4 million dollar write-down on revenues we don 02:20:52.680 --> 02:20:53.440 't think we would 02:20:53.440 --> 02:20:56.409 realize that anyhow but we also think that day zero we 02:20:56.409 --> 02:20:57.639 could probably reduce 02:20:57.639 --> 02:21:01.559 expenditures by about 2 million and the vast majority of 02:21:01.559 --> 02:21:02.360 our own M could be 02:21:02.360 --> 02:21:04.969 reduced within about a six-month period the one exception 02:21:04.969 --> 02:21:05.879 of that would be the 02:21:05.879 --> 02:21:08.079 debt service on the equipment that we've already purchased 02:21:08.079 --> 02:21:08.600 I believe in your 02:21:08.600 --> 02:21:12.409 backup that's about 3.5 million dollars for that equipment 02:21:12.409 --> 02:21:13.319 the good news is it 02:21:13.319 --> 02:21:16.690 does have some utility in our other operations at the site 02:21:16.690 --> 02:21:17.600 and so it's not 02:21:17.600 --> 02:21:20.840 really a strained asset we wouldn't be forced into liquid 02:21:20.840 --> 02:21:21.840 ating that we can 02:21:21.840 --> 02:21:25.709 certainly put that to use in other operations if we do that 02:21:25.709 --> 02:21:26.719 then what we 02:21:26.719 --> 02:21:29.629 recommend what we're what is currently underway as we're 02:21:29.629 --> 02:21:30.959 doing a department 02:21:30.959 --> 02:21:34.770 wide equipment analysis and where there's redundancy or not 02:21:34.770 --> 02:21:35.639 enough utility 02:21:35.639 --> 02:21:38.790 to justify the expense we'll be salvaging some of that 02:21:38.790 --> 02:21:39.600 other equipment 02:21:39.600 --> 02:21:42.280 as well so over the next 8 to 12 months we think that there 02:21:42.280 --> 02:21:42.760 will be an 02:21:42.760 --> 02:21:46.569 equipment reduction site wide option 2 is obviously to 02:21:46.569 --> 02:21:47.639 proceed with landfill 02:21:47.639 --> 02:21:51.510 mining and it's something that we understand the benefits 02:21:51.510 --> 02:21:52.280 to this project 02:21:52.280 --> 02:21:56.090 but we also make sure that if we proceed with that that 02:21:56.090 --> 02:21:56.959 both the board the 02:21:56.959 --> 02:22:00.000 council all of us go in with eyes wide open and understand 02:22:00.000 --> 02:22:01.280 that we have a number 02:22:01.280 --> 02:22:03.860 of risk challenges and financial issues that we would need 02:22:03.860 --> 02:22:04.879 to deal with if we go 02:22:04.879 --> 02:22:08.579 that route so I know I blew through this very quickly there 02:22:08.579 --> 02:22:09.200 's a lot to unpack 02:22:09.200 --> 02:22:13.840 here I'm happy to stand for any questions that you might 02:22:13.840 --> 02:22:14.479 have 02:22:14.760 --> 02:22:21.760 questions first one concerns the previous pro forma when 02:22:21.760 --> 02:22:23.879 was it prepared 02:22:23.879 --> 02:22:29.239 and who put it together for us I'm not exactly sure on on 02:22:29.239 --> 02:22:31.000 the who I've talked 02:22:31.000 --> 02:22:34.030 with staff I know that the previous director had a hand in 02:22:34.030 --> 02:22:34.840 that I know there 02:22:34.840 --> 02:22:38.649 was some input from UTA we've had a number of internal 02:22:38.649 --> 02:22:39.239 discussions as we go 02:22:39.239 --> 02:22:41.530 through that and we've really had some challenges as staff 02:22:41.530 --> 02:22:42.319 understanding where 02:22:42.319 --> 02:22:46.129 some of those assumptions came from so it's to be honest it 02:22:46.129 --> 02:22:46.760 's a bit of a 02:22:46.760 --> 02:22:49.750 clouded picture on that there were a number of different 02:22:49.750 --> 02:22:50.719 versions of that 02:22:50.719 --> 02:22:56.239 pro forma the one that I've represented here was dated 2017 02:22:56.239 --> 02:22:56.920 I believe was March 02:22:56.920 --> 02:23:01.610 April timeframe so it was being updated up until this last 02:23:01.610 --> 02:23:03.879 spring as I visited 02:23:03.879 --> 02:23:06.520 with staff on this I think there's been a number of 02:23:06.520 --> 02:23:07.440 different points of view or 02:23:07.440 --> 02:23:10.159 a number of different opinions on where the data came from 02:23:10.159 --> 02:23:11.680 we struggled with 02:23:11.680 --> 02:23:13.719 some of these assumptions quite frankly and that's why we 02:23:13.719 --> 02:23:14.440 really felt it was 02:23:14.440 --> 02:23:16.899 important especially given the differences between the 02:23:16.899 --> 02:23:17.879 original and the 02:23:17.879 --> 02:23:21.690 current analysis to have weaver help us out with this 02:23:21.690 --> 02:23:23.120 thanks for your question 02:23:23.120 --> 02:23:28.170 yes the second question concerns the clay liner do we have 02:23:28.170 --> 02:23:28.840 environmental 02:23:28.840 --> 02:23:37.250 monitoring in place - we have groundwater wells I'm gonna 02:23:37.250 --> 02:23:38.200 defer to David Dougher 02:23:38.200 --> 02:23:43.159 he's our facility manager to come up and help answer that 02:23:43.159 --> 02:23:43.559 question 02:23:46.719 --> 02:23:56.360 doesn't work my name is David Dougher I'm an MSW facility 02:23:56.360 --> 02:23:57.319 manager from city of 02:23:57.319 --> 02:24:00.020 Denton we do have groundwater wells that are located all 02:24:00.020 --> 02:24:01.520 the way around that site 02:24:01.520 --> 02:24:07.540 basically when we incorporated into our 1590 - a site it 02:24:07.540 --> 02:24:09.399 basically left the line 02:24:09.399 --> 02:24:13.209 of wells on the backside so that side is monitored for 02:24:13.209 --> 02:24:14.079 groundwater after it 02:24:14.079 --> 02:24:18.649 passes by the landfill to be looked at in our every six 02:24:18.649 --> 02:24:20.719 months so but outside of 02:24:20.719 --> 02:24:24.530 that we have methane monitors around it as well but that's 02:24:24.530 --> 02:24:26.799 the extent of that 02:24:26.799 --> 02:24:36.950 monitoring that we have okay so if we don't do the landfill 02:24:36.950 --> 02:24:37.719 mining now is this 02:24:37.719 --> 02:24:40.170 something that we're just delaying and we're gonna have to 02:24:40.170 --> 02:24:42.040 do later on or is 02:24:42.040 --> 02:24:44.989 this something that's just going to be laid to rest forever 02:24:44.989 --> 02:24:46.120 and ever amen I 02:24:46.120 --> 02:24:48.850 wouldn't say that we would lay it to rest and and I think 02:24:48.850 --> 02:24:49.840 part of the benefit 02:24:49.840 --> 02:24:52.790 to having the equipment still on site and use in other 02:24:52.790 --> 02:24:54.000 operations is we may 02:24:54.000 --> 02:24:57.809 have a different way to approach this project that is a 02:24:57.809 --> 02:24:58.840 little bit more 02:24:58.840 --> 02:25:02.809 fiscally responsible and may be able to reduce some of the 02:25:02.809 --> 02:25:03.959 risk a number of 02:25:03.959 --> 02:25:07.770 projects have removed and relocated waste and address the 02:25:07.770 --> 02:25:08.719 liner issues that 02:25:08.719 --> 02:25:11.940 we had talked about that's something that we've talked 02:25:11.940 --> 02:25:12.920 about has some 02:25:12.920 --> 02:25:18.120 cursory discussions about internally the biggest thing that 02:25:18.120 --> 02:25:18.959 we feel is a 02:25:18.959 --> 02:25:21.549 challenge with mining is this currently proposed is the 02:25:21.549 --> 02:25:22.520 timeline that we're 02:25:22.520 --> 02:25:25.850 looking at with any project the longer you go the more risk 02:25:25.850 --> 02:25:26.760 you incur the more 02:25:26.760 --> 02:25:32.680 cost you incur and I think that we also need to recognize 02:25:32.680 --> 02:25:33.319 that we're not going 02:25:33.319 --> 02:25:36.010 to totally eliminate the risk of groundwater contamination 02:25:36.010 --> 02:25:36.600 by putting a 02:25:36.600 --> 02:25:40.420 geosynthetic liner in there we will reduce it we had one of 02:25:40.420 --> 02:25:41.600 our engineers 02:25:41.600 --> 02:25:44.049 look at the potential of groundwater contamination and he 02:25:44.049 --> 02:25:44.920 basically assessed 02:25:44.920 --> 02:25:47.930 this as medium risk which would be you know there's a 02:25:47.930 --> 02:25:49.799 potential that this liner 02:25:49.799 --> 02:25:52.959 could fail in a 30 to 60 year timeline so we think it's 02:25:52.959 --> 02:25:54.239 worth taking a look at 02:25:54.239 --> 02:25:58.200 we don't want to say that this is basically going to be 02:25:58.200 --> 02:25:59.280 shelved and never 02:25:59.280 --> 02:26:02.760 brought back up again we just think that if we are going to 02:26:02.760 --> 02:26:03.959 reintroduce it again 02:26:03.959 --> 02:26:06.860 if that's the direction from the PB and the council that it 02:26:06.860 --> 02:26:08.000 would probably be in 02:26:08.000 --> 02:26:12.979 a different kind of a different design if you will does 02:26:12.979 --> 02:26:13.920 that answer your 02:26:13.920 --> 02:26:17.729 question so you're basically you're just looking for better 02:26:17.729 --> 02:26:18.760 market a better mark 02:26:18.760 --> 02:26:22.569 time when the market is more conducive to doing this so 02:26:22.569 --> 02:26:23.600 what you're saying is 02:26:23.600 --> 02:26:28.200 that at this point in time it's not conducive based on what 02:26:28.200 --> 02:26:28.920 's out there in 02:26:28.920 --> 02:26:32.729 the market as far as what we will be able to get on a 02:26:32.729 --> 02:26:34.000 return at this point in 02:26:34.000 --> 02:26:37.809 time that may be in a couple of years things will change 02:26:37.809 --> 02:26:39.520 other things will get 02:26:39.520 --> 02:26:42.889 invented or whatever to be able to do this a little bit 02:26:42.889 --> 02:26:44.159 more effectively I 02:26:44.159 --> 02:26:46.579 don't know that I would say that that's a function of the 02:26:46.579 --> 02:26:47.520 market I think it's 02:26:47.520 --> 02:26:51.440 really of how the project is conceived is if we conceive 02:26:51.440 --> 02:26:53.040 this project that we're 02:26:53.040 --> 02:26:57.069 going to be relying on you know material sales to bridge 02:26:57.069 --> 02:26:58.639 the financial gap 02:26:58.639 --> 02:27:02.159 I talking to Weaver and some of the discussions and review 02:27:02.159 --> 02:27:03.079 that we've done 02:27:03.079 --> 02:27:06.370 this is probably we really can't bank on the commodities 02:27:06.370 --> 02:27:07.520 market coming back 02:27:07.520 --> 02:27:12.149 around to us on this doesn't mean that it won't like I said 02:27:12.149 --> 02:27:12.680 that mark is 02:27:12.680 --> 02:27:15.389 volatile but understand that especially for a lot of 02:27:15.389 --> 02:27:16.879 recycling vendors they are 02:27:16.879 --> 02:27:20.149 really looking for clean clean product so much so that they 02:27:20.149 --> 02:27:21.159 're contracting 02:27:21.159 --> 02:27:24.250 directly with manufacturers to get it straight out of their 02:27:24.250 --> 02:27:24.920 side versus 02:27:24.920 --> 02:27:29.239 contending with what's coming out of the blue cards and so 02:27:29.239 --> 02:27:31.319 I don't think again 02:27:31.319 --> 02:27:33.659 never say never but I think looking at the recyclable 02:27:33.659 --> 02:27:35.120 commodities I don't think 02:27:35.120 --> 02:27:36.850 that that's something that we're holding our breath that 02:27:36.850 --> 02:27:37.520 that will come back 02:27:37.520 --> 02:27:40.840 around to us that being said if we can find a way to reduce 02:27:40.840 --> 02:27:41.719 the expense on this 02:27:41.719 --> 02:27:44.299 and address the environmental concerns and I think that's 02:27:44.299 --> 02:27:44.920 something we 02:27:44.920 --> 02:27:48.280 definitely are open to that makes sense yeah and because 02:27:48.280 --> 02:27:49.719 that's that's basically 02:27:49.719 --> 02:27:55.690 my concern is the environmental concerns of waiting on you 02:27:55.690 --> 02:27:56.879 know for a little bit 02:27:56.879 --> 02:28:02.049 later but you were saying medium concerns on the failure of 02:28:02.049 --> 02:28:03.360 this right 02:28:03.360 --> 02:28:10.809 this is that I mean medium concerns just sounds really yeah 02:28:10.809 --> 02:28:12.040 and I don't want to 02:28:12.040 --> 02:28:15.850 it doesn't sound good I don't want to assume how medium is 02:28:15.850 --> 02:28:17.040 defined by our 02:28:17.040 --> 02:28:20.850 engineer what I will say is this is one of probably 02:28:20.850 --> 02:28:22.000 hundreds maybe even 02:28:22.000 --> 02:28:25.700 thousands of pre-subtitled D landfills and not only Texas 02:28:25.700 --> 02:28:26.879 but around the nation 02:28:26.879 --> 02:28:30.690 and so we're not the only one faced with these types of 02:28:30.690 --> 02:28:31.920 issues there are 02:28:31.920 --> 02:28:35.379 remediation strategies if we run into issues I mean all 02:28:35.379 --> 02:28:36.959 those incur a cost and 02:28:36.959 --> 02:28:40.770 an expense I will also say that there are probably other 02:28:40.770 --> 02:28:41.479 ways for us to tackle 02:28:41.479 --> 02:28:45.290 addressing that installing a new line or if that's what we 02:28:45.290 --> 02:28:46.559 decide to do to be 02:28:46.559 --> 02:28:48.600 honest we haven't done a lot of due diligence on that but 02:28:48.600 --> 02:28:49.319 that's something 02:28:49.319 --> 02:28:55.239 that we do intend to take some action on following this 02:28:55.239 --> 02:28:55.399 okay one other question 02:28:55.399 --> 02:28:59.670 as far as the methane mining is that continuing at this 02:28:59.670 --> 02:29:02.000 point we will we this 02:29:02.000 --> 02:29:05.809 cell notwithstanding the remainder of ourselves are 02:29:05.809 --> 02:29:06.479 enhanced leachate 02:29:06.479 --> 02:29:10.239 recirculation cells ELR which those are basically designed 02:29:10.239 --> 02:29:11.159 to increase the 02:29:11.159 --> 02:29:14.370 production of methane gas so we continue to draw off of 02:29:14.370 --> 02:29:15.280 that there is some 02:29:15.280 --> 02:29:18.030 electricity that's generated as a result and the remainder 02:29:18.030 --> 02:29:19.959 is flared the methane 02:29:19.959 --> 02:29:22.420 output on this is much reduced because a lot of the 02:29:22.420 --> 02:29:24.799 materials already decomposed 02:29:24.799 --> 02:29:28.389 to my knowledge and David I'm kind of looking for you over 02:29:28.389 --> 02:29:29.079 there we're not 02:29:29.079 --> 02:29:34.360 doing any active pull of methane off of this site currently 02:29:34.360 --> 02:29:39.840 is that correct we 02:29:39.840 --> 02:29:42.959 have several groundwater I mean methane wells on top that 02:29:42.959 --> 02:29:44.040 are that we're drawing 02:29:44.040 --> 02:29:47.850 off of in some of the preparation that Ethan mentioned 02:29:47.850 --> 02:29:49.440 about the mining we did 02:29:49.440 --> 02:29:52.829 take some of those offline which we would add back on back 02:29:52.829 --> 02:29:54.379 on to the methane 02:29:54.379 --> 02:29:59.920 system so it is active it has because of the age of the 02:29:59.920 --> 02:30:02.920 site it has peaks and 02:30:02.920 --> 02:30:06.719 valleys so they can draw methane off of it for a while and 02:30:06.719 --> 02:30:07.479 then it will the 02:30:07.479 --> 02:30:10.190 methane will fall off and then they'll let it build and 02:30:10.190 --> 02:30:11.319 then they'll pull it 02:30:11.319 --> 02:30:16.100 again so it's somewhat active back and forth with those 02:30:16.100 --> 02:30:22.200 guys so if we if we do 02:30:22.200 --> 02:30:26.500 nothing let's say we do nothing and it comes time to decomm 02:30:26.500 --> 02:30:27.760 ission our current 02:30:27.760 --> 02:30:33.399 landfill can we leave this cell the way it is certainly 02:30:33.399 --> 02:30:34.319 there there's a subtitle 02:30:34.319 --> 02:30:38.129 D sites that are closed permanently that they go through 02:30:38.129 --> 02:30:38.719 the closure and 02:30:38.719 --> 02:30:42.530 post closure protocol that's certainly an option here the 02:30:42.530 --> 02:30:43.079 one thing that's in 02:30:43.079 --> 02:30:47.149 our site plan is that we would put waste on top of this if 02:30:47.149 --> 02:30:48.719 we were to do that we 02:30:48.719 --> 02:30:51.149 would need to put an intermediate liner between this cell 02:30:51.149 --> 02:30:52.100 in any waste that was 02:30:52.100 --> 02:30:55.229 up above it and again that's something that before we get 02:30:55.229 --> 02:30:56.120 to that point we feel 02:30:56.120 --> 02:30:58.940 like we really need to evaluate do we need to address that 02:30:58.940 --> 02:30:59.639 liner before 02:30:59.639 --> 02:31:02.920 moving in that direction to us that's probably a cost-bene 02:31:02.920 --> 02:31:04.120 fit analysis that we 02:31:04.120 --> 02:31:06.319 would prepare assuming we hadn't addressed it before that 02:31:06.319 --> 02:31:06.680 but you 02:31:06.680 --> 02:31:09.719 believe we could leave it with the clay liner and decomm 02:31:09.719 --> 02:31:10.639 ission it right if we 02:31:10.639 --> 02:31:13.920 were closing yeah does that cost more money to decommission 02:31:13.920 --> 02:31:15.020 a cell compared 02:31:15.020 --> 02:31:18.129 to ones that have the other liner we actually just finished 02:31:18.129 --> 02:31:18.799 a study on on 02:31:18.799 --> 02:31:21.190 closure post closure with a consultant and they actually 02:31:21.190 --> 02:31:22.120 believe the cost would 02:31:22.120 --> 02:31:25.510 be higher for dealing with the mined cell versus the un min 02:31:25.510 --> 02:31:27.079 ed cell okay okay 02:31:27.079 --> 02:31:34.579 and one more question so part of this is a was a miscalcul 02:31:34.579 --> 02:31:36.159 ation of how much waste 02:31:36.159 --> 02:31:40.430 fits in airspace so how does this impact our regular 02:31:40.430 --> 02:31:41.799 operations I mean it seems 02:31:41.799 --> 02:31:45.610 like we should have a calculation that we're using already 02:31:45.610 --> 02:31:46.139 absolutely have we 02:31:46.139 --> 02:31:49.739 been using the wrong calculation all along or not one that 02:31:49.739 --> 02:31:50.680 was in line with 02:31:50.680 --> 02:31:54.489 our consultants so so the the not a waste that you can 02:31:54.489 --> 02:31:55.600 compact into a cubic 02:31:55.600 --> 02:31:59.409 yard especially for both the original and the current 02:31:59.409 --> 02:31:59.840 analysis is not 02:31:59.840 --> 02:32:02.340 necessarily what's in the ground now what's our compaction 02:32:02.340 --> 02:32:03.000 rate going to be 02:32:03.000 --> 02:32:06.809 when we're putting waste back into the landfill the 02:32:06.809 --> 02:32:07.600 original assumption was 02:32:07.600 --> 02:32:11.409 that we'd be about 1,300 pounds per cubic yard we felt like 02:32:11.409 --> 02:32:12.159 that was too high 02:32:12.159 --> 02:32:16.430 simply because our target internally is about 1,200 you can 02:32:16.430 --> 02:32:17.319 certainly get much 02:32:17.319 --> 02:32:19.719 more compression on that depending on the type of landfill 02:32:19.719 --> 02:32:20.520 site that you run 02:32:20.520 --> 02:32:25.350 ours like we mentioned is really designed to recirculate 02:32:25.350 --> 02:32:26.799 liquids within 02:32:26.799 --> 02:32:30.610 the cell decompose that faster generate gas get compression 02:32:30.610 --> 02:32:32.000 that way as a result 02:32:32.000 --> 02:32:35.809 our goal is right around 1,200 cubic yards we recently had 02:32:35.809 --> 02:32:37.040 a site survey that 02:32:37.040 --> 02:32:41.360 was in the 1,100 to 1,200 range to be conservative we've 02:32:41.360 --> 02:32:41.879 overlooked at this 02:32:41.879 --> 02:32:44.829 and said don't use the 1,300 that was originally conceived 02:32:44.829 --> 02:32:45.719 you need to adjust 02:32:45.719 --> 02:32:49.750 this back to the 1,100 to be consistent with that other 02:32:49.750 --> 02:32:52.799 study okay okay any other 02:32:52.799 --> 02:32:59.879 questions yeah I had two questions one about the concern 02:32:59.879 --> 02:33:00.799 about safety to 02:33:00.799 --> 02:33:06.579 workers this was so recently you and Charlie and I we went 02:33:06.579 --> 02:33:08.280 on a tour of the 02:33:08.280 --> 02:33:13.829 facilities and there were some workers that that we saw who 02:33:13.829 --> 02:33:15.959 were going through 02:33:15.959 --> 02:33:21.680 materials and picking things out right where were they 02:33:21.680 --> 02:33:24.520 doing landfill mining I 02:33:24.520 --> 02:33:26.790 mean because of the impression I get here is that that hasn 02:33:26.790 --> 02:33:27.799 't started yet so 02:33:27.799 --> 02:33:31.610 okay yeah they were actually working our building materials 02:33:31.610 --> 02:33:32.319 recovery operation 02:33:32.319 --> 02:33:36.219 okay which is probably a good kind of visual comparison for 02:33:36.219 --> 02:33:37.159 what would be done on 02:33:37.159 --> 02:33:39.540 this I think the big difference between the building 02:33:39.540 --> 02:33:40.399 materials recovery and 02:33:40.399 --> 02:33:45.569 mining is that the BMR folks are using or basically dealing 02:33:45.569 --> 02:33:46.680 with fresh material 02:33:46.680 --> 02:33:49.260 that hasn't been impacted with a lot of the waste in the 02:33:49.260 --> 02:33:50.719 site so typically what 02:33:50.719 --> 02:33:53.360 we would probably equip these folks with would be some 02:33:53.360 --> 02:33:54.680 stuff that kind of knocks 02:33:54.680 --> 02:33:57.329 down some of the odors some of the gas some of the other 02:33:57.329 --> 02:33:58.319 things that they might 02:33:58.319 --> 02:34:01.139 be exposed to so you'd have a little bit higher level of 02:34:01.139 --> 02:34:02.319 materials to kind of 02:34:02.319 --> 02:34:05.360 knock down that risk yeah so there's less of a has because 02:34:05.360 --> 02:34:05.959 I immediately 02:34:05.959 --> 02:34:08.290 thought of the you know those people and I'm trying to 02:34:08.290 --> 02:34:09.360 remember if they were 02:34:09.360 --> 02:34:13.959 wearing you know protective you know if they had a master 02:34:13.959 --> 02:34:15.040 anything we definitely 02:34:15.040 --> 02:34:17.129 have to have that in this operation would be our so it's 02:34:17.129 --> 02:34:17.760 gonna be a very 02:34:17.760 --> 02:34:21.569 dusty environment at the very least yeah yeah and the other 02:34:21.569 --> 02:34:23.520 question that I had 02:34:23.520 --> 02:34:27.329 you had said that weaver and correct me if I heard this 02:34:27.329 --> 02:34:28.680 wrong we that weaver 02:34:28.680 --> 02:34:32.489 said that if you were gonna do this this wouldn't be the 02:34:32.489 --> 02:34:34.079 cell to do it on did 02:34:34.079 --> 02:34:37.209 they have a suggestion for did they say it would be better 02:34:37.209 --> 02:34:38.079 to do it on this 02:34:38.079 --> 02:34:41.790 other cell or if you did want to do landfill mining it 02:34:41.790 --> 02:34:42.719 would be better to 02:34:42.719 --> 02:34:46.239 do it over here no that this is probably the only cell that 02:34:46.239 --> 02:34:46.719 's really a 02:34:46.719 --> 02:34:50.600 candidate for landfill mining this is what a dry cell which 02:34:50.600 --> 02:34:51.540 does not have the 02:34:51.540 --> 02:34:55.129 liquid component in it this preserves some of the materials 02:34:55.129 --> 02:34:55.600 that are in there 02:34:55.600 --> 02:34:58.639 so there's a higher opportunity to divert it you get into 02:34:58.639 --> 02:34:59.559 any LR cell water 02:34:59.559 --> 02:35:03.590 that's gonna be really wet and so I think again that's that 02:35:03.590 --> 02:35:04.500 's one of the 02:35:04.500 --> 02:35:06.930 things that when we looked at is this is not something that 02:35:06.930 --> 02:35:07.819 we're going to mine 02:35:07.819 --> 02:35:10.549 every side on the landfill it's just really this cell that 02:35:10.549 --> 02:35:11.559 would be the best 02:35:11.559 --> 02:35:19.680 candidate for it yeah thank you okay there's no other 02:35:19.680 --> 02:35:20.440 questions is there a 02:35:20.440 --> 02:35:26.979 motion either way on this it's kind of a rough one because 02:35:26.979 --> 02:35:28.319 I like the idea of 02:35:28.319 --> 02:35:33.239 landfill mining understand but it doesn't really seem like 02:35:33.239 --> 02:35:34.760 it doesn't seem 02:35:34.760 --> 02:35:37.790 like it's worth the money to do it you know I mean it's 02:35:37.790 --> 02:35:39.319 hard to say that really 02:35:39.319 --> 02:35:44.799 one way or another but it's kind of a bummer well I think 02:35:44.799 --> 02:35:48.040 the I recall a 02:35:48.040 --> 02:35:51.049 little bit of my thought process when we first talked about 02:35:51.049 --> 02:35:52.120 this peeling thing 02:35:52.120 --> 02:36:02.270 was was the recovery of recovered airspace and I see now 02:36:02.270 --> 02:36:04.559 from 25.3 02:36:04.559 --> 02:36:11.959 million 8.7 difference yes a deal breaker yeah that's kind 02:36:11.959 --> 02:36:14.440 of the the 02:36:14.440 --> 02:36:18.250 mining of them in the resell of the recyclables was one 02:36:18.250 --> 02:36:19.879 thing but it was 02:36:19.879 --> 02:36:25.389 kind of an added benefit I guess if you will so I'll just 02:36:25.389 --> 02:36:27.280 say that I too really 02:36:27.280 --> 02:36:30.579 like the idea of landfill mining and up until before this 02:36:30.579 --> 02:36:31.840 came out it was one of 02:36:31.840 --> 02:36:35.889 the things that I would always brag about that I was really 02:36:35.889 --> 02:36:37.000 excited about 02:36:37.000 --> 02:36:41.430 this project when I heard about it and it's very sad to me 02:36:41.430 --> 02:36:43.559 to hear that this 02:36:43.559 --> 02:36:49.829 came from data that was not substantiated so I had a 02:36:49.829 --> 02:36:51.000 question about 02:36:51.000 --> 02:36:53.829 that in a statement I guess I'll just say the statement 02:36:53.829 --> 02:36:55.000 first just to say you 02:36:55.000 --> 02:36:59.700 know in terms of staff morale that I'm I'm still so I'm so 02:36:59.700 --> 02:37:01.360 happy that people 02:37:01.360 --> 02:37:05.379 work so hard on this and that it's not their fault that 02:37:05.379 --> 02:37:07.399 this was bad data they 02:37:07.399 --> 02:37:11.319 were working on and that regardless of what happens in 02:37:11.319 --> 02:37:12.440 terms of next steps the 02:37:12.440 --> 02:37:18.440 problem that that this is is is solving even though we don 02:37:18.440 --> 02:37:19.760 't have as you say 02:37:19.760 --> 02:37:22.700 there's not we don't have a landlocked issue problem but 02:37:22.700 --> 02:37:23.799 any way to reuse and 02:37:23.799 --> 02:37:26.690 reduce and recycle benefits our environment there are 02:37:26.690 --> 02:37:27.479 people when we 02:37:27.479 --> 02:37:30.559 went and visited the landfill I saw I hadn't quite realized 02:37:30.559 --> 02:37:31.399 even though I've 02:37:31.399 --> 02:37:33.790 been there before I hadn't been up high and I hadn't 02:37:33.790 --> 02:37:35.040 realized that there is a 02:37:35.040 --> 02:37:38.170 trailer park next right next door so people who live right 02:37:38.170 --> 02:37:39.920 there so whatever 02:37:39.920 --> 02:37:44.250 we can do to reduce the waste would would be really good 02:37:44.250 --> 02:37:45.680 and I just want to 02:37:45.680 --> 02:37:49.530 thank everybody who works so hard on it the question that I 02:37:49.530 --> 02:37:50.680 have and this might 02:37:50.680 --> 02:37:56.479 be kind of more a question for legal than for you well so 02:37:56.479 --> 02:37:57.399 first of all I'm 02:37:57.399 --> 02:38:01.209 glad to know in terms of the finance whatever financial 02:38:01.209 --> 02:38:01.920 damage that's been 02:38:01.920 --> 02:38:05.450 done that's irrecoverable I'm glad to know the equipment is 02:38:05.450 --> 02:38:06.000 not stranded 02:38:06.000 --> 02:38:11.649 assets but I'm wondering this UTA professor who gave us 02:38:11.649 --> 02:38:12.680 this data that 02:38:12.680 --> 02:38:16.950 can't be substantiated was there a contract that was 02:38:16.950 --> 02:38:18.120 entered into with this 02:38:18.120 --> 02:38:26.020 professor as a consultant that we can get refunded on and 02:38:26.020 --> 02:38:27.040 were there 02:38:27.040 --> 02:38:30.850 conditions on the sales of any conditions on the sales of 02:38:30.850 --> 02:38:31.479 equipment in 02:38:31.479 --> 02:38:35.500 terms of contracts made on the equipment that were tied 02:38:35.500 --> 02:38:37.040 into this data that now 02:38:37.040 --> 02:38:40.270 turns out to be insubstantiated you can probably see where 02:38:40.270 --> 02:38:41.200 I'm going with that 02:38:41.200 --> 02:38:44.799 question yeah in terms of the equipment there's no direct 02:38:44.799 --> 02:38:47.000 link to the data and 02:38:47.000 --> 02:38:51.319 also say from UTA's perspective the biggest piece of data 02:38:51.319 --> 02:38:52.239 that we received 02:38:52.239 --> 02:38:56.729 from UTA is really your composition information and again 02:38:56.729 --> 02:38:57.440 this is not 02:38:57.440 --> 02:39:00.549 representative of what UTA provided I'll show you kind of 02:39:00.549 --> 02:39:01.639 behind the slide this 02:39:01.639 --> 02:39:05.450 is the boring data collection they provided to us it's a 02:39:05.450 --> 02:39:06.079 bit of an eye 02:39:06.079 --> 02:39:08.600 chart but essentially this is the type of data that we 02:39:08.600 --> 02:39:10.159 looked at and said if we 02:39:10.159 --> 02:39:12.790 were going to proceed with this we feel like this is data 02:39:12.790 --> 02:39:14.600 that we could feel 02:39:14.600 --> 02:39:17.870 confident about in proceeding understand that there's a 02:39:17.870 --> 02:39:18.719 number of other 02:39:18.719 --> 02:39:21.600 assumptions that were made in the original pro forma also 02:39:21.600 --> 02:39:22.399 in our pro forma 02:39:22.399 --> 02:39:26.209 that UTA didn't really provide an opinion on and so I don't 02:39:26.209 --> 02:39:27.000 want to assume 02:39:27.000 --> 02:39:31.510 that they they provided bad data I just I'm not sure that 02:39:31.510 --> 02:39:32.760 they were asked to 02:39:32.760 --> 02:39:36.360 look at it to be honest okay so some of these miss the 02:39:36.360 --> 02:39:38.079 errors were likely made 02:39:38.079 --> 02:39:40.709 I mean this was already clear I just wanted to be sure how 02:39:40.709 --> 02:39:41.600 if there were any 02:39:41.600 --> 02:39:46.430 consulting contracts so there were no consulting contracts 02:39:46.430 --> 02:39:48.620 that we paid we do 02:39:48.620 --> 02:39:50.920 have an agreement and Larry I don't know if you want to 02:39:50.920 --> 02:39:52.799 speak to it but we do 02:39:52.799 --> 02:39:54.979 have an agreement with UTA that we're currently part of it 02:39:54.979 --> 02:39:55.680 's a multi-year 02:39:55.680 --> 02:39:57.829 agreement three years we're in the last year of that 02:39:57.829 --> 02:39:59.639 agreement right now we also 02:39:59.639 --> 02:40:06.040 have been in some type of consultant in our local type of 02:40:06.040 --> 02:40:06.879 arrangement with UTA 02:40:06.879 --> 02:40:09.940 for a number of years as well okay yeah thank you and just 02:40:09.940 --> 02:40:10.559 to be clear I'm not 02:40:10.559 --> 02:40:13.459 looking to point fingers whose fault is it but to say 02:40:13.459 --> 02:40:15.040 mistakes were made is there 02:40:15.040 --> 02:40:21.280 any way to get to get money back Ethan I think it's 02:40:21.280 --> 02:40:23.360 important to share with the 02:40:23.360 --> 02:40:28.200 PUB regarding some interest question I mean you did meet 02:40:28.200 --> 02:40:30.440 with the UTA professor 02:40:30.440 --> 02:40:33.739 and they in fact disagreed with the assumptions put in that 02:40:33.739 --> 02:40:34.559 they were way 02:40:34.559 --> 02:40:38.649 too aggressive yes so I I don't I wouldn't I don't think we 02:40:38.649 --> 02:40:39.319 can go back and 02:40:39.319 --> 02:40:42.440 blame blame them they're good clearly there was clearly a 02:40:42.440 --> 02:40:44.159 decision made as far 02:40:44.159 --> 02:40:48.430 as how optimistic the assumptions were in order to you know 02:40:48.430 --> 02:40:49.479 and and I think the 02:40:49.479 --> 02:40:52.920 thing both PUB and council have to make the decision on is 02:40:52.920 --> 02:40:54.200 this worth you know a 02:40:54.200 --> 02:40:56.899 million to million and a half dollars a year loss and some 02:40:56.899 --> 02:40:58.040 communities that may 02:40:58.040 --> 02:41:00.639 be fine for the environmental reason that you know 02:41:00.639 --> 02:41:02.840 rationale but we wanted to 02:41:02.840 --> 02:41:05.729 make sure you had the facts he did circle back and speak 02:41:05.729 --> 02:41:07.059 with UTA we did 02:41:07.059 --> 02:41:09.459 bring in an outside accounting firm to make sure that we 02:41:09.459 --> 02:41:10.280 weren't missing 02:41:10.280 --> 02:41:13.299 something and tried to build in as many checks and balances 02:41:13.299 --> 02:41:14.280 for our data to you 02:41:14.280 --> 02:41:17.110 as possible but I just wanted to clear that out that we don 02:41:17.110 --> 02:41:19.280 't believe that the 02:41:19.280 --> 02:41:23.090 UTA professor in any way misled our staff yes thank you and 02:41:23.090 --> 02:41:23.680 if that UTA 02:41:23.680 --> 02:41:31.420 professor is watching maybe the question is and you've read 02:41:31.420 --> 02:41:33.559 so 14 million over 10 02:41:33.559 --> 02:41:37.370 years or a million for let's say that's off and it's 2 02:41:37.370 --> 02:41:40.719 million a year yeah where 02:41:40.719 --> 02:41:44.530 we thought there may be some revenue offsetting of the cost 02:41:44.530 --> 02:41:46.040 there's not and 02:41:46.040 --> 02:41:49.280 so the question is is it worth spending a million four to 02:41:49.280 --> 02:41:51.280 two million for life 02:41:51.280 --> 02:41:59.229 safety and environmental or not right and and and is that a 02:41:59.229 --> 02:42:00.239 risk that needs to 02:42:00.239 --> 02:42:06.040 be addressed or not especially based on a medium I mean a 02:42:06.040 --> 02:42:07.719 medium chance that it 02:42:07.719 --> 02:42:14.639 could well I think the policy question initially was was 02:42:14.639 --> 02:42:15.239 not framed 02:42:15.239 --> 02:42:18.280 in the way that we would frame it today and I think the the 02:42:18.280 --> 02:42:19.520 question is that may 02:42:19.520 --> 02:42:23.329 be an acceptable cost from an environmental perspective a 02:42:23.329 --> 02:42:23.559 philosophical 02:42:23.559 --> 02:42:26.610 perspective for a community that's fine but we wanted to be 02:42:26.610 --> 02:42:27.760 sure before we move 02:42:27.760 --> 02:42:30.930 forward and potentially hit the you know encourage some of 02:42:30.930 --> 02:42:31.959 these losses that 02:42:31.959 --> 02:42:34.659 we're talking about and the impact of the ratepayers that 02:42:34.659 --> 02:42:35.719 you were aware of it 02:42:35.719 --> 02:42:39.510 there's really not a right answer here but we felt like the 02:42:39.510 --> 02:42:40.559 pro forma so off 02:42:40.559 --> 02:42:44.469 that we really knew that you needed the opportunity to 02:42:44.469 --> 02:42:45.680 think about it yeah as far 02:42:45.680 --> 02:42:50.399 as the environmental potential environmental benefits go it 02:42:50.399 --> 02:42:51.639 's as far as 02:42:51.639 --> 02:42:55.450 I'm concerned that you know any situation where there are 02:42:55.450 --> 02:42:55.559 potential 02:42:55.559 --> 02:42:58.600 environment when when potential environmental hazards 02:42:58.600 --> 02:42:59.319 actually I would 02:42:59.319 --> 02:43:03.670 say very real environmental hazards exist as a result of 02:43:03.670 --> 02:43:05.280 doing this business 02:43:05.280 --> 02:43:10.850 that has environmental benefits that is a situation where 02:43:10.850 --> 02:43:12.600 to me the cons would 02:43:12.600 --> 02:43:17.030 outweigh the the pros in terms of both you know the actual 02:43:17.030 --> 02:43:18.360 safe physical safety 02:43:18.360 --> 02:43:23.280 of worker the workers uncovering methane and and toxic 02:43:23.280 --> 02:43:26.159 materials and just having 02:43:26.159 --> 02:43:31.579 all that released into the atmosphere so I want to make you 02:43:31.579 --> 02:43:33.239 know that clear to 02:43:33.239 --> 02:43:35.950 you know people who are watching in the media or whatever 02:43:35.950 --> 02:43:36.959 that that there are 02:43:36.959 --> 02:43:40.770 environmental hazards and I would hope if at some point 02:43:40.770 --> 02:43:42.559 down the line we 02:43:42.559 --> 02:43:48.159 consider doing this in some other way that a that we would 02:43:48.159 --> 02:43:49.760 look into doing 02:43:49.760 --> 02:43:52.159 this you know contracting out and I realize it's for 02:43:52.159 --> 02:43:53.360 another discussion but 02:43:53.360 --> 02:43:56.270 you know contracting out with a company that is well 02:43:56.270 --> 02:43:57.719 trained in dealing with 02:43:57.719 --> 02:44:00.780 these environmental hazards because I wouldn't want to put 02:44:00.780 --> 02:44:01.520 any any of our 02:44:01.520 --> 02:44:03.670 workers at risk but that there are it's not just 02:44:03.670 --> 02:44:05.280 environmental benefits versus 02:44:05.280 --> 02:44:09.290 financial hazards there are environmental hazards too and I 02:44:09.290 --> 02:44:10.280 'm I'm so sorry about 02:44:10.280 --> 02:44:18.350 that okay do we have again I'll ask is there a motion 02:44:18.350 --> 02:44:24.479 either way on this I mean 02:44:24.479 --> 02:44:30.219 for to go with option number one option one okay which is 02:44:30.219 --> 02:44:32.840 to eliminate the 02:44:32.840 --> 02:44:39.760 landfill mining is there a second second in a second any 02:44:39.760 --> 02:44:44.200 further discussion I 02:44:44.200 --> 02:44:50.000 think that when we bring it up in the future maybe we can 02:44:50.000 --> 02:44:52.280 have some some 02:44:52.280 --> 02:44:56.790 additional details of the of what the costs are to manage 02:44:56.790 --> 02:44:58.399 this cell the way it 02:44:58.399 --> 02:45:03.719 is and when we're done with it what the cost will be to dec 02:45:03.719 --> 02:45:04.799 ommission it because 02:45:04.799 --> 02:45:07.010 there's some you know there's lots of unknowns but those 02:45:07.010 --> 02:45:07.920 things it seems like 02:45:07.920 --> 02:45:12.399 we can put you know some kind of detail on certainly I know 02:45:12.399 --> 02:45:13.600 we already have some 02:45:13.600 --> 02:45:19.920 other landfill out in East Ninton that is still our 02:45:19.920 --> 02:45:21.920 environmental responsibility 02:45:21.920 --> 02:45:24.739 that we'd kind of don't know what we're really doing with 02:45:24.739 --> 02:45:25.719 and it would just be 02:45:25.719 --> 02:45:28.739 nice to know that we're doing what we're supposed to be 02:45:28.739 --> 02:45:30.040 doing and knowing how 02:45:30.040 --> 02:45:32.860 much it's gonna cost to do the things that we're supposed 02:45:32.860 --> 02:45:33.600 to do we should 02:45:33.600 --> 02:45:37.309 have most of those figures fairly close at hand we'll check 02:45:37.309 --> 02:45:38.239 with staff and some 02:45:38.239 --> 02:45:40.440 of the consultants I just think that would help weighing 02:45:40.440 --> 02:45:41.000 you know if we 02:45:41.000 --> 02:45:44.110 already know we're gonna spend seven million to dump it 02:45:44.110 --> 02:45:45.280 then we know that we 02:45:45.280 --> 02:45:49.090 need to do something with it we can save some money by 02:45:49.090 --> 02:45:51.719 improving you know what it 02:45:51.719 --> 02:45:54.920 costs to decommission it we'll provide that to the pub okay 02:45:54.920 --> 02:45:57.440 thank you all right 02:45:57.440 --> 02:46:04.600 all in favor say aye any opposed same sign motion passes 02:46:04.600 --> 02:46:05.879 thank you very much 02:46:05.879 --> 02:46:15.540 thank you okay next we have item C which is receive report 02:46:15.540 --> 02:46:18.559 hold a discussion 02:46:21.719 --> 02:46:33.479 we have a we have another okay all right very good I just 02:46:33.479 --> 02:46:33.920 looked at the 02:46:33.920 --> 02:46:37.219 clock and there's another there's another committee meeting 02:46:37.219 --> 02:46:40.360 here at 12 so 02:46:43.879 --> 02:46:48.760 item C receive report hold discussion provide staff 02:46:48.760 --> 02:46:49.920 direction regarding 02:46:49.920 --> 02:46:53.959 municipal electric community sponsorship program well I 02:46:53.959 --> 02:46:55.159 know it is getting late 02:46:55.159 --> 02:46:57.159 and when you've had a lot of discussion today I will go 02:46:57.159 --> 02:46:57.920 through this very 02:46:57.920 --> 02:47:00.920 quickly this just to continue our discussion the community 02:47:00.920 --> 02:47:01.360 sponsorship 02:47:01.360 --> 02:47:04.040 program as a reminder we had a hundred thousand dollars 02:47:04.040 --> 02:47:05.239 budgeted for for these 02:47:05.239 --> 02:47:09.049 and DME these funds had typically been used for nonprofit 02:47:09.049 --> 02:47:10.000 organizations and 02:47:10.000 --> 02:47:13.809 sometimes other city departments is the list in the backup 02:47:13.809 --> 02:47:14.799 shows the purpose of 02:47:14.799 --> 02:47:17.530 these ostensibly was to provide a similar benefit as what 02:47:17.530 --> 02:47:18.239 you'd find an 02:47:18.239 --> 02:47:22.020 investor-owned utilities over the past few years we've 02:47:22.020 --> 02:47:23.440 spent about 42 to 64 02:47:23.440 --> 02:47:26.079 thousand dollars per year again you have that detail in 02:47:26.079 --> 02:47:29.159 your backup other city 02:47:29.159 --> 02:47:32.760 sponsorships do require a City Council approval process 02:47:32.760 --> 02:47:33.799 these sponsorships 02:47:33.799 --> 02:47:36.620 have an application process selection criteria and a formal 02:47:36.620 --> 02:47:37.520 agreement that's 02:47:37.520 --> 02:47:39.709 entered into we did not have that and that's one of the 02:47:39.709 --> 02:47:40.639 reasons that we want 02:47:40.639 --> 02:47:43.799 to bring this forward to you so in August we presented this 02:47:43.799 --> 02:47:44.040 information 02:47:44.040 --> 02:47:47.389 both to the PUB and City Council the direction from both of 02:47:47.389 --> 02:47:48.319 both this board 02:47:48.319 --> 02:47:50.969 and the City Council was that there was an intent to 02:47:50.969 --> 02:47:52.520 continue the program there 02:47:52.520 --> 02:47:55.079 was a need to continue that but the council did request 02:47:55.079 --> 02:47:56.040 that we provide them 02:47:56.040 --> 02:47:59.850 with some information on citywide sponsorships received 02:47:59.850 --> 02:48:00.360 from these 02:48:00.360 --> 02:48:03.629 organizations from other different departments and proposed 02:48:03.629 --> 02:48:04.040 policy 02:48:04.040 --> 02:48:08.360 guidelines so in your backup you have the different 02:48:08.360 --> 02:48:09.239 sponsorships that have 02:48:09.239 --> 02:48:12.040 been received by other different departments so you can see 02:48:12.040 --> 02:48:12.600 that but in 02:48:12.600 --> 02:48:14.920 terms of the sponsorship policy what we're recommending is 02:48:14.920 --> 02:48:15.680 that we reduce the 02:48:15.680 --> 02:48:18.190 budget from a hundred thousand to fifty thousand which 02:48:18.190 --> 02:48:19.040 would most more closely 02:48:19.040 --> 02:48:21.479 align it with what's been spent what's needed to be spent 02:48:21.479 --> 02:48:22.959 in prior years that 02:48:22.959 --> 02:48:26.879 no funding be given to internal departments and the reason 02:48:26.879 --> 02:48:27.639 for this is 02:48:27.639 --> 02:48:30.760 there is a budget process for those internal processes if 02:48:30.760 --> 02:48:32.159 they need funds 02:48:32.159 --> 02:48:33.959 for a particular program then we can bring that forward 02:48:33.959 --> 02:48:34.639 through the budget 02:48:34.639 --> 02:48:37.629 process and asking another City Department to fund that 02:48:37.629 --> 02:48:38.079 really 02:48:38.079 --> 02:48:41.979 complicates that matter the criteria that we would propose 02:48:41.979 --> 02:48:42.840 is that each 02:48:42.840 --> 02:48:46.620 organization would be a non-profit of 501c3 organization 02:48:46.620 --> 02:48:46.799 must be a 02:48:46.799 --> 02:48:51.280 non-discriminatory organization it must the sponsorship 02:48:51.280 --> 02:48:52.559 must further some 02:48:52.559 --> 02:48:55.340 type of charitable cause or public interest in the 02:48:55.340 --> 02:48:56.879 community and that the 02:48:56.879 --> 02:49:00.920 organization will be required to recognize the City of Dinn 02:49:00.920 --> 02:49:01.719 and DME and 02:49:01.719 --> 02:49:03.600 any kind of marketing materials that they have so a lot of 02:49:03.600 --> 02:49:04.319 times you'll find 02:49:04.319 --> 02:49:07.139 these are tables that are purchased for an event to raise 02:49:07.139 --> 02:49:07.760 money for an 02:49:07.760 --> 02:49:10.760 organization and a purpose in the community but this the D 02:49:10.760 --> 02:49:11.719 ME and the City 02:49:11.719 --> 02:49:14.979 of Denton be specifically recognized in that effort we do 02:49:14.979 --> 02:49:16.239 have some other 02:49:16.239 --> 02:49:19.159 industry related organizations such as the Texas Lyman rode 02:49:19.159 --> 02:49:20.000 o the municipal 02:49:20.000 --> 02:49:23.200 safety exchange and etc other other types of organizations 02:49:23.200 --> 02:49:23.879 in DME that we 02:49:23.879 --> 02:49:26.860 think also should be allowed these are sponsorships to 02:49:26.860 --> 02:49:28.100 promote safety in the 02:49:28.100 --> 02:49:31.469 industry and those organizations do that we'd recommend 02:49:31.469 --> 02:49:32.799 that sponsorships over 02:49:32.799 --> 02:49:36.610 $2,500 be presented to PUB and a council for approval 02:49:36.610 --> 02:49:37.680 specifically but anything 02:49:37.680 --> 02:49:40.680 less than that could be approved administratively by staff 02:49:40.680 --> 02:49:41.479 and we'll 02:49:41.479 --> 02:49:43.610 bring forth if this is agreeable to you we bring forward a 02:49:43.610 --> 02:49:44.360 policy that would 02:49:44.360 --> 02:49:47.770 articulate that and that finally the list of organizations 02:49:47.770 --> 02:49:48.680 that receive a 02:49:48.680 --> 02:49:52.379 sponsorship whether they're over $2,500 or less that they 02:49:52.379 --> 02:49:53.440 were reported to the 02:49:53.440 --> 02:49:55.860 PUB and council on a quarterly basis so you'd have a 02:49:55.860 --> 02:49:58.200 running list of what's been 02:49:58.200 --> 02:50:02.010 applied for and what's received an application excuse me a 02:50:02.010 --> 02:50:03.040 sponsorship so 02:50:03.040 --> 02:50:05.840 that's the recommendation if you're in agreement with this 02:50:05.840 --> 02:50:06.639 we'll take this 02:50:06.639 --> 02:50:09.000 forward to council for their concurrence and then bring 02:50:09.000 --> 02:50:10.680 back a formal policy to 02:50:10.680 --> 02:50:16.000 proceed forward questions 02:50:18.239 --> 02:50:26.399 yeah no question I have some comments but I think would 02:50:26.399 --> 02:50:27.879 after a motion be 02:50:27.879 --> 02:50:33.049 better time sure yeah I've got a question Brian on this one 02:50:33.049 --> 02:50:33.760 the dollar 02:50:33.760 --> 02:50:41.940 amount was that from 150 I mean if we spent 60 these 02:50:41.940 --> 02:50:45.200 numbers I don't want to 02:50:45.200 --> 02:50:51.469 split hairs but from 105 to 50 is that kind of based upon 02:50:51.469 --> 02:50:52.600 something that we've 02:50:52.600 --> 02:50:58.200 done in the past taking out the inner department yes sir so 02:50:58.200 --> 02:50:59.079 we've typically 02:50:59.079 --> 02:51:03.120 spent spent less than $50,000 a year for our past year yes 02:51:03.120 --> 02:51:03.719 sir we spent 02:51:03.719 --> 02:51:07.639 64,000 but that included $10,000 going to the CVB which is 02:51:07.639 --> 02:51:08.479 separately funded 02:51:08.479 --> 02:51:12.290 from the city and that some of those interdepartmental 02:51:12.290 --> 02:51:12.719 transfers I was 02:51:12.719 --> 02:51:15.120 talking about okay so that's the number we feel like is 02:51:15.120 --> 02:51:16.239 appropriate given what 02:51:16.239 --> 02:51:18.090 we've been asked to do in the past certainly if we were 02:51:18.090 --> 02:51:18.879 asked to do more we 02:51:18.879 --> 02:51:21.950 could always bring that back and having a discussion about 02:51:21.950 --> 02:51:22.799 that and this this 02:51:22.799 --> 02:51:26.610 program in these programs they're different than the 02:51:26.610 --> 02:51:27.840 program we sponsor to 02:51:27.840 --> 02:51:32.329 assist people to pay their electric yes sir that is that is 02:51:32.329 --> 02:51:32.920 completely separate 02:51:32.920 --> 02:51:37.520 yes sir and you're thinking of the plus one program which 02:51:37.520 --> 02:51:39.520 is for citizens that 02:51:39.520 --> 02:51:41.670 are in need of assistance with the utility bills yes sir 02:51:41.670 --> 02:51:43.200 and do you how do 02:51:43.200 --> 02:51:47.270 you see the council do you see them approving this in a 02:51:47.270 --> 02:51:48.520 closed session an 02:51:48.520 --> 02:51:52.479 open session and sure it'd be certainly be an open session 02:51:52.479 --> 02:51:53.639 item the discussion 02:51:53.639 --> 02:51:56.600 that we've had with PB has also been an open session item 02:51:56.600 --> 02:51:58.120 so there's no reason 02:51:58.120 --> 02:52:00.909 at all to have that as close would that give the public an 02:52:00.909 --> 02:52:02.440 option to discuss it 02:52:02.440 --> 02:52:06.250 because that would kind of almost politicize the decision 02:52:06.250 --> 02:52:06.879 instead of 02:52:06.879 --> 02:52:10.840 making it more of a well at this point it's been a work 02:52:10.840 --> 02:52:11.680 session so it hasn't 02:52:11.680 --> 02:52:14.139 been open to public comment if any kind of action was to 02:52:14.139 --> 02:52:15.159 take place where they 02:52:15.159 --> 02:52:17.659 would formally approve a policy that then certainly citizen 02:52:17.659 --> 02:52:18.520 comments would be 02:52:18.520 --> 02:52:22.860 allowed and accepted on those but that's that's the process 02:52:22.860 --> 02:52:23.879 would be following 02:52:23.879 --> 02:52:26.520 right now okay and I would say also just in addition to 02:52:26.520 --> 02:52:28.159 that council does have 02:52:28.159 --> 02:52:32.430 individual sponsorships that that are put on the consent 02:52:32.430 --> 02:52:33.200 agenda and they're 02:52:33.200 --> 02:52:37.520 out in public as well which has not been an issue and they 02:52:37.520 --> 02:52:38.479 typically do require 02:52:38.479 --> 02:52:43.459 that there be the requisite paperwork in justification sent 02:52:43.459 --> 02:52:44.520 in after the fact to 02:52:44.520 --> 02:52:47.100 justify the payment but it really hasn't been much of an 02:52:47.100 --> 02:52:48.159 issue on the on their 02:52:48.159 --> 02:52:51.969 other issue grants we also have an example parks and 02:52:51.969 --> 02:52:52.799 recreation department 02:52:52.799 --> 02:52:55.329 they do these types of sponsorship agreements and they are 02:52:55.329 --> 02:52:55.799 formally 02:52:55.799 --> 02:52:58.020 approved by the council on the agenda as well as the 02:52:58.020 --> 02:52:59.360 council contingency items 02:52:59.360 --> 02:53:02.799 that Nick Todd was referencing okay thank you okay actually 02:53:02.799 --> 02:53:04.200 I do Brandon's 02:53:04.200 --> 02:53:07.559 question reminded me it made me think of a question that is 02:53:07.559 --> 02:53:08.479 also like that 02:53:08.479 --> 02:53:11.420 question of more of a procedure procedural than as opposed 02:53:11.420 --> 02:53:11.639 to a 02:53:11.639 --> 02:53:19.590 substantive question so I realize that PUB has already 02:53:19.590 --> 02:53:21.559 approved and I believe 02:53:21.559 --> 02:53:26.059 council has to approve to continue this program that has 02:53:26.059 --> 02:53:28.000 already happened so I 02:53:28.000 --> 02:53:34.479 I happen to be I happen to disapprove of this program all 02:53:34.479 --> 02:53:35.600 altogether for 02:53:35.600 --> 02:53:39.870 specific reasons but my sense is that and correct me if I'm 02:53:39.870 --> 02:53:40.719 wrong that it 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 02:53:45.489 --> 02:53:47.079 motion to reduce 02:53:47.079 --> 02:53:50.889 the budget of this program to zero because I object to it 02:53:50.889 --> 02:53:51.600 and see if 02:53:51.600 --> 02:53:54.700 there's a discussion on that right it's too late in the 02:53:54.700 --> 02:53:55.920 game for that is that 02:53:55.920 --> 02:54:00.930 correct I think basically what we're voting on the day is 02:54:00.930 --> 02:54:01.479 kind of a 02:54:01.479 --> 02:54:07.479 procedural how we do this for the budgets already been 02:54:07.479 --> 02:54:08.360 approved recommended 02:54:08.360 --> 02:54:12.170 and approved yes it's there yes yes so yeah thank you for 02:54:12.170 --> 02:54:12.760 clarifying that was 02:54:12.760 --> 02:54:15.379 my understanding in the I guess just to further that to the 02:54:15.379 --> 02:54:16.319 council did want to 02:54:16.319 --> 02:54:20.129 continue the program along with PUB so they just we were 02:54:20.129 --> 02:54:21.079 asked specifically to 02:54:21.079 --> 02:54:24.889 bring back those requirements and how the program would be 02:54:24.889 --> 02:54:25.479 authorized for both 02:54:25.479 --> 02:54:31.319 so that's the action item today so any comments I have 02:54:31.319 --> 02:54:32.879 about this I will save 02:54:32.879 --> 02:54:37.899 it for after but the motion is me thank you okay other 02:54:37.899 --> 02:54:41.959 questions their motion 02:54:41.959 --> 02:54:50.239 motion to prove I'm sure yes second any other discussion 02:54:50.239 --> 02:54:52.559 yeah yeah I just wanted 02:54:52.559 --> 02:54:59.799 to to state the reason why I object to this program even 02:54:59.799 --> 02:55:01.120 though I understand 02:55:01.120 --> 02:55:07.620 council has already approved it and I hope that next time 02:55:07.620 --> 02:55:08.799 this issue comes 02:55:08.799 --> 02:55:16.290 before us that will consider this this question again maybe 02:55:16.290 --> 02:55:17.559 a year from now I 02:55:17.559 --> 02:55:21.860 guess would be the timeline all of these these these 02:55:21.860 --> 02:55:24.040 charities seem like very 02:55:24.040 --> 02:55:27.850 good causes to me so I don't have a problem with that but I 02:55:27.850 --> 02:55:29.879 believe that the 02:55:29.879 --> 02:55:35.049 purpose of pub of any public utility should be local 02:55:35.049 --> 02:55:37.200 control and saving money 02:55:37.200 --> 02:55:42.370 for ratepayers and also the along with the local control 02:55:42.370 --> 02:55:43.559 the environmental 02:55:43.559 --> 02:55:47.370 benefits safety issues and reliability issues that we get 02:55:47.370 --> 02:55:48.440 from having our own 02:55:48.440 --> 02:55:53.899 utility so I have nothing against in fact I'm a proof of 02:55:53.899 --> 02:55:54.879 all these charities 02:55:54.879 --> 02:55:58.690 I would have liked to see them go through council instead 02:55:58.690 --> 02:55:59.360 particularly at 02:55:59.360 --> 02:56:04.530 this time when we've got our this unprecedented debt burden 02:56:04.530 --> 02:56:05.159 that we've got 02:56:05.159 --> 02:56:08.370 with the gas plant regardless of whether you're for or 02:56:08.370 --> 02:56:09.559 against the gas plant we 02:56:09.559 --> 02:56:13.350 still have this debt burden and so I don't like the message 02:56:13.350 --> 02:56:14.120 that it sends to 02:56:14.120 --> 02:56:20.000 ratepayers who are struggling to residential ratepayers 02:56:20.000 --> 02:56:22.520 struggling to to 02:56:22.520 --> 02:56:26.790 pay their their utility bills to see that we're giving away 02:56:26.790 --> 02:56:27.440 to other 02:56:27.440 --> 02:56:31.250 charities and we have have people in need you know and I'm 02:56:31.250 --> 02:56:32.159 you know it's like 02:56:32.159 --> 02:56:36.579 this our plus one program help keep the lights on for a 02:56:36.579 --> 02:56:38.479 dent in family in need 02:56:38.479 --> 02:56:42.290 this I feel should be the job of and I realize we do do 02:56:42.290 --> 02:56:43.559 this to a certain 02:56:43.559 --> 02:56:46.299 extent our rates could be higher but if we have extra money 02:56:46.299 --> 02:56:47.280 that where we could 02:56:47.280 --> 02:56:54.180 be using any more 50,000 that's 50,000 more that we can use 02:56:54.180 --> 02:56:56.040 to reduce reduce 02:56:56.040 --> 02:56:59.850 rates and not stick residents who are struggling to pay the 02:56:59.850 --> 02:57:00.959 bills with this 02:57:00.959 --> 02:57:04.000 debt burden so sorry for all that those words but that's my 02:57:04.000 --> 02:57:05.040 way of explaining to 02:57:05.040 --> 02:57:09.920 you all and to the public what my objections are so thank 02:57:09.920 --> 02:57:13.040 you okay all 02:57:13.040 --> 02:57:18.229 right we have a motion and second any other comments all in 02:57:18.229 --> 02:57:19.840 favor say aye aye 02:57:19.840 --> 02:57:32.389 any opposed okay motion carries item number item D is to 02:57:32.389 --> 02:57:33.239 receive report 02:57:33.239 --> 02:57:37.049 hold discussion consider recommending adoption of a 02:57:37.049 --> 02:57:38.239 resolution proving the 02:57:38.239 --> 02:57:44.350 fiscal year 2017-18 green sentence incentive program the 02:57:44.350 --> 02:57:45.159 green sense and 02:57:45.159 --> 02:57:48.510 sort of program manual and distributed generation manual 02:57:48.510 --> 02:57:49.799 yes and board members 02:57:49.799 --> 02:57:53.610 I promise to give you a very short presentation on this be 02:57:53.610 --> 02:57:55.120 respectful of 02:57:55.120 --> 02:57:57.420 your time I know we've been here for a long time but if you 02:57:57.420 --> 02:57:58.239 have any questions 02:57:58.239 --> 02:58:01.360 as I'm going through this please feel free to stop me and 02:58:01.360 --> 02:58:02.719 so we are going to 02:58:02.719 --> 02:58:04.690 be looking at the green sense incentive program and 02:58:04.690 --> 02:58:07.319 distributed generation the 02:58:07.319 --> 02:58:11.129 first thing I'll do is I'll bring Katherine Barnett up here 02:58:11.129 --> 02:58:11.479 sustainability 02:58:11.479 --> 02:58:14.620 is our partner in this program with DME and they actually 02:58:14.620 --> 02:58:15.719 manage the energy 02:58:15.719 --> 02:58:17.860 efficiency side so I'll turn it over her and then I'll come 02:58:17.860 --> 02:58:18.600 back and walk you 02:58:18.600 --> 02:58:22.920 through pretty quickly the proposed changes that we have 02:58:24.280 --> 02:58:29.819 Mike please yeah thank you I was just going to say this 02:58:29.819 --> 02:58:30.680 just explains the 02:58:30.680 --> 02:58:34.610 rebates that were handed out last year so since it applied 02:58:34.610 --> 02:58:36.200 we did 461 rebates 02:58:36.200 --> 02:58:40.010 these are the categories and the dollar amounts if you have 02:58:40.010 --> 02:58:40.639 any questions about 02:58:40.639 --> 02:58:45.620 that I can answer them or we can just move on through and 02:58:45.620 --> 02:58:46.959 you can email me if 02:58:46.959 --> 02:58:55.120 you have any from the backup any questions on any of this 02:58:57.399 --> 02:59:04.299 make sense that HVAC would be 48% in Texas just out of 02:59:04.299 --> 02:59:05.399 curiosity how many 02:59:05.399 --> 02:59:10.159 requests for funding did we not fund like I mean I don't 02:59:10.159 --> 02:59:11.840 know if we know the 02:59:11.840 --> 02:59:14.639 number but we will talk about that okay 02:59:19.639 --> 02:59:21.700 we did quite a bit of advertising that we were getting 02:59:21.700 --> 02:59:24.200 ready to run out of 02:59:24.200 --> 02:59:28.010 funds and the funds were getting short so people weren't 02:59:28.010 --> 02:59:28.959 applying as much as we 02:59:28.959 --> 02:59:34.000 had last year after we ran out so yeah so we didn't have as 02:59:34.000 --> 02:59:35.239 many rejections the 02:59:35.239 --> 02:59:39.180 sheer so I don't really know how many okay okay that just 02:59:39.180 --> 02:59:39.840 be interesting to 02:59:39.840 --> 02:59:46.979 know how many we can't fund okay so switching over to the 02:59:46.979 --> 02:59:47.399 greens and 02:59:47.399 --> 02:59:51.209 incentive program this is just a history I just wanted to 02:59:51.209 --> 02:59:52.040 bring this up because 02:59:52.040 --> 02:59:54.860 the program has existed in its sort of formal capacity 02:59:54.860 --> 02:59:57.000 since 1998 so FY 2018 02:59:57.000 --> 03:00:00.809 will be our 20-year sort of celebration of the program it 03:00:00.809 --> 03:00:01.719 has taken on many 03:00:01.719 --> 03:00:05.510 different iterations over the time and that's that's what 03:00:05.510 --> 03:00:06.600 we want to continue 03:00:06.600 --> 03:00:10.409 to do is be flexible and change as new products come 03:00:10.409 --> 03:00:11.600 available that we can use 03:00:11.600 --> 03:00:14.340 this incentive program to make those available to our 03:00:14.340 --> 03:00:16.239 customers so currently 03:00:16.239 --> 03:00:20.629 the incentive program includes the free home energy audits 03:00:20.629 --> 03:00:22.040 the energy efficiency 03:00:22.040 --> 03:00:25.379 rebates for residential multifamily and small commercial 03:00:25.379 --> 03:00:26.559 are a standard offered 03:00:26.559 --> 03:00:29.139 incentive which is an energy efficiency rebate program for 03:00:29.139 --> 03:00:30.040 our medium and large 03:00:30.040 --> 03:00:33.850 customers our incentive for engineering audits and it 03:00:33.850 --> 03:00:35.280 includes our COTS ERS 03:00:35.280 --> 03:00:37.639 response it also includes our solar program I've separated 03:00:37.639 --> 03:00:38.399 that out because 03:00:38.399 --> 03:00:41.680 we'll talk about it a little a little set up in a little 03:00:41.680 --> 03:00:43.959 bit and so getting 03:00:43.959 --> 03:00:46.819 back to board member Carol's question about how much could 03:00:46.819 --> 03:00:48.079 we have funded if 03:00:48.079 --> 03:00:50.520 we had funded all of the requests we received this year 03:00:50.520 --> 03:00:51.680 that's one of the 03:00:51.680 --> 03:00:55.950 changes we're proposing so we did have about $90,000 worth 03:00:55.950 --> 03:00:57.440 of solar 03:00:57.440 --> 03:01:00.360 installations we weren't able to rebate and we had about $ 03:01:00.360 --> 03:01:01.920 10,000 of energy 03:01:01.920 --> 03:01:05.959 efficiency programs we weren't able to rebate so what we've 03:01:05.959 --> 03:01:07.520 asked asking is to 03:01:07.520 --> 03:01:10.170 increase our budget by a hundred thousand dollars would 03:01:10.170 --> 03:01:10.840 increase the 03:01:10.840 --> 03:01:13.760 solar budget by 90,000 and we'd increase the energy 03:01:13.760 --> 03:01:15.440 efficiency rebate by 10,000 03:01:15.440 --> 03:01:17.739 the good news is that we're going to be able to repurpose 03:01:17.739 --> 03:01:18.479 dollars from an 03:01:18.479 --> 03:01:22.520 existing project within energy services so we don't have to 03:01:22.520 --> 03:01:23.440 actually fund an 03:01:23.440 --> 03:01:26.620 additional hundred thousand dollars so we're really excited 03:01:26.620 --> 03:01:27.520 about that but as 03:01:27.520 --> 03:01:30.209 you can see the budget has grown over time so we're really 03:01:30.209 --> 03:01:31.040 happy that the 03:01:31.040 --> 03:01:37.930 demand has continued to grow yeah I just wanted to to thank 03:01:37.930 --> 03:01:38.799 you guys for putting 03:01:38.799 --> 03:01:41.700 this together it was really exciting to read and see how 03:01:41.700 --> 03:01:43.280 competitive our rebates 03:01:43.280 --> 03:01:48.290 are this is something to be really proud of so I support 03:01:48.290 --> 03:01:50.399 these incentives this is 03:01:50.399 --> 03:01:52.659 a small thing that somebody had mentioned to me I don't 03:01:52.659 --> 03:01:53.399 even know it's a 03:01:53.399 --> 03:01:56.680 good idea but I wanted to just toss it out there the 03:01:56.680 --> 03:01:58.840 electric car oh that's on 03:01:58.840 --> 03:02:02.879 next slide yeah this is this this is part of this right 03:02:02.879 --> 03:02:03.399 this would be the 03:02:03.399 --> 03:02:07.319 time yes so somebody had mentioned to me I don't know if it 03:02:07.319 --> 03:02:10.120 's reasonable but that 03:02:10.120 --> 03:02:13.930 there's some language in there about that says you know you 03:02:13.930 --> 03:02:15.200 get this $300 03:02:15.200 --> 03:02:21.280 rebate if you recharge your car between these certain hours 03:02:21.280 --> 03:02:22.639 and he had 03:02:22.639 --> 03:02:29.610 suggested that it might be fairer or more realistic to 03:02:29.610 --> 03:02:32.360 change that to you know 03:02:32.360 --> 03:02:36.430 customers should try to to do it during those hours so that 03:02:36.430 --> 03:02:38.600 people so anyway you 03:02:38.600 --> 03:02:40.889 can you can see where he was going to me that sounded 03:02:40.889 --> 03:02:42.280 reasonable but I'm just 03:02:42.280 --> 03:02:45.520 wondering what you thought we were asking for a commitment 03:02:45.520 --> 03:02:46.760 and from the 03:02:46.760 --> 03:02:51.030 customer to charge their their the electric vehicles and 03:02:51.030 --> 03:02:53.280 off-peak hours the 03:02:53.280 --> 03:02:57.549 reason for that being is that the more that they populate 03:02:57.549 --> 03:02:58.799 the more cars and 03:02:58.799 --> 03:03:00.909 more people come home from work and they plug it in that's 03:03:00.909 --> 03:03:01.879 in our highest demand 03:03:01.879 --> 03:03:05.469 period of time the higher energy costs at that time which 03:03:05.469 --> 03:03:06.239 could drive rates up 03:03:06.239 --> 03:03:09.219 so we're asking for a commitment from our customers to 03:03:09.219 --> 03:03:10.559 charge during off-peak 03:03:10.559 --> 03:03:14.850 I understand the language concern the reality would be that 03:03:14.850 --> 03:03:16.079 I wouldn't know I 03:03:16.079 --> 03:03:19.049 wouldn't be able to tell that yes that's where that I can 03:03:19.049 --> 03:03:20.040 look at a customer's 03:03:20.040 --> 03:03:22.579 history and if I know that they purchased a car and I see 03:03:22.579 --> 03:03:23.280 that spike at 03:03:23.280 --> 03:03:28.040 that time I have a pretty good indication so it is more of 03:03:28.040 --> 03:03:29.000 a commitment 03:03:29.000 --> 03:03:31.719 just from that that's that sounds reasonable to me thank 03:03:31.719 --> 03:03:33.319 you sure and so 03:03:33.319 --> 03:03:37.129 back on the three changes that we're proposing the first 03:03:37.129 --> 03:03:38.000 will be the HVAC 03:03:38.000 --> 03:03:41.809 rebate we're moving to we'd like to move to a graduated 03:03:41.809 --> 03:03:43.159 structure where smaller 03:03:43.159 --> 03:03:47.020 HVAC units get a smaller rebate as opposed to the larger HV 03:03:47.020 --> 03:03:48.120 AC units this 03:03:48.120 --> 03:03:50.620 will enable more customers to qualify for the rebate it 03:03:50.620 --> 03:03:51.399 allows for more 03:03:51.399 --> 03:03:53.690 impactful rebates for the larger units and the smaller 03:03:53.690 --> 03:03:54.680 units make them kind of 03:03:54.680 --> 03:03:58.489 fit the rebate fit the size of the HVAC again the electric 03:03:58.489 --> 03:03:59.399 vehicle rebate 03:03:59.399 --> 03:04:03.319 addition we're proposing $300 the reason for that number 03:04:03.319 --> 03:04:04.719 the research we did it 03:04:04.719 --> 03:04:08.010 takes about three dollars to charge an electric vehicle 03:04:08.010 --> 03:04:09.200 that gets a 70 mile 03:04:09.200 --> 03:04:12.010 radius that's pretty typical so that's about the first 03:04:12.010 --> 03:04:13.280 hundred charges of that 03:04:13.280 --> 03:04:17.319 vehicle so about three months of that vehicle and and one 03:04:17.319 --> 03:04:18.559 thing we are looking 03:04:18.559 --> 03:04:21.379 at with those is to sort of grandfather in existing 03:04:21.379 --> 03:04:23.040 vehicles to have a 30-day 03:04:23.040 --> 03:04:25.889 window that someone who had already owns that vehicle could 03:04:25.889 --> 03:04:26.760 qualify for the 03:04:26.760 --> 03:04:30.569 rebate and then we're looking at removing and two of our 03:04:30.569 --> 03:04:31.360 demand response 03:04:31.360 --> 03:04:34.059 programs that we have our for CP in our spot price program 03:04:34.059 --> 03:04:34.639 we have no 03:04:34.639 --> 03:04:38.610 participation in these programs and we really don't have 03:04:38.610 --> 03:04:39.760 any interest in 03:04:39.760 --> 03:04:42.860 participation in these programs the reason being is that 03:04:42.860 --> 03:04:43.600 these are for 03:04:43.600 --> 03:04:46.479 larger scale customers they do cost benefit analysis and 03:04:46.479 --> 03:04:47.379 right now the way 03:04:47.379 --> 03:04:50.600 the programs are structured they they just don't make sense 03:04:50.600 --> 03:04:51.479 so we want to take 03:04:51.479 --> 03:04:55.290 them down sort of put them to the side and spend the next 03:04:55.290 --> 03:04:56.399 year and as part of 03:04:56.399 --> 03:04:58.989 our cost of service study as part of our ongoing energy 03:04:58.989 --> 03:05:00.399 service efforts to really 03:05:00.399 --> 03:05:04.469 examine a way to make demand response work in Denton so any 03:05:04.469 --> 03:05:06.200 questions on those 03:05:06.200 --> 03:05:10.010 okay and the last thing that I'll talk about will be a 03:05:10.010 --> 03:05:11.159 distributed generation 03:05:11.159 --> 03:05:14.969 and when we talk about distributed generation we're talking 03:05:14.969 --> 03:05:15.559 about any 03:05:15.559 --> 03:05:18.729 electrical generating facility on the customer side of the 03:05:18.729 --> 03:05:20.120 meter most 03:05:20.120 --> 03:05:22.229 commonly we're going to be talking about solar 03:05:22.229 --> 03:05:23.639 installations when we're talking 03:05:23.639 --> 03:05:28.389 about so who this impact this manual is going to impact the 03:05:28.389 --> 03:05:30.040 most but I will tell 03:05:30.040 --> 03:05:34.010 you that all distributed generation solar wind storage and 03:05:34.010 --> 03:05:35.239 generate you know 03:05:35.239 --> 03:05:37.950 natural guest owners they all need to go through the same 03:05:37.950 --> 03:05:39.840 process so this is 03:05:39.840 --> 03:05:43.649 currently what the process looks like today it's pretty 03:05:43.649 --> 03:05:44.200 complicated and you 03:05:44.200 --> 03:05:47.440 deal with about four or five different departments at any 03:05:47.440 --> 03:05:48.799 given time we want to 03:05:48.799 --> 03:05:51.299 make that process again back to the earlier discussion we 03:05:51.299 --> 03:05:52.159 had as efficient as 03:05:52.159 --> 03:05:56.430 possible so what we're proposing to do is separate out 03:05:56.430 --> 03:05:57.520 distributed generation to 03:05:57.520 --> 03:06:01.590 its own manual customers get to file one application gets 03:06:01.590 --> 03:06:02.579 to talk to one 03:06:02.579 --> 03:06:05.129 department and we'll walk them through the entire process 03:06:05.129 --> 03:06:06.200 hopefully speeding up 03:06:06.200 --> 03:06:08.930 their ability to get through their permitting an 03:06:08.930 --> 03:06:10.200 application to their 03:06:10.200 --> 03:06:16.250 installation much faster oh wrong way as I said again I 03:06:16.250 --> 03:06:17.360 said this is kind of our 03:06:17.360 --> 03:06:20.559 motto in this one document one location customer friendly 03:06:20.559 --> 03:06:22.360 let's get these solar 03:06:22.360 --> 03:06:25.610 installations installed and help our customers as fast as 03:06:25.610 --> 03:06:27.200 we can so we're 03:06:27.200 --> 03:06:29.350 really excited and we think this will help streamline the 03:06:29.350 --> 03:06:30.040 process both on 03:06:30.040 --> 03:06:34.329 staffs in and for the customer this is important for our 03:06:34.329 --> 03:06:35.799 soul smart designation 03:06:35.799 --> 03:06:39.610 we're seeking a bronze designation by having a separate 03:06:39.610 --> 03:06:40.600 distributed generation 03:06:40.600 --> 03:06:43.579 manual we'll be able to achieve that bronze designation and 03:06:43.579 --> 03:06:44.360 then we'll start 03:06:44.360 --> 03:06:46.760 working towards that silver designation after that but all 03:06:46.760 --> 03:06:47.799 of these efficiencies 03:06:47.799 --> 03:06:52.579 that we're putting in place will help us get there and I 03:06:52.579 --> 03:06:55.280 think that's it 03:06:55.280 --> 03:06:59.180 question questions I don't know of any indent and yet but I 03:06:59.180 --> 03:07:00.440 know a handful of 03:07:00.440 --> 03:07:05.889 people that are looking at the solar city roof tiles do you 03:07:05.889 --> 03:07:06.920 suppose that 03:07:06.920 --> 03:07:10.889 those will fit into this manual that you just presented to 03:07:10.889 --> 03:07:11.920 us they would they 03:07:11.920 --> 03:07:14.930 would be just as any other solar products that we'd have 03:07:14.930 --> 03:07:15.840 they would work 03:07:15.840 --> 03:07:20.110 through the distributed generation mean so everybody's all 03:07:20.110 --> 03:07:21.200 ready to evaluate 03:07:21.200 --> 03:07:23.620 those and let people start putting them on their roofs I 03:07:23.620 --> 03:07:24.399 won't speak for 03:07:24.399 --> 03:07:28.000 engineering all I'll make sure since they have to do that 03:07:28.000 --> 03:07:29.280 my I mean what I 03:07:29.280 --> 03:07:33.600 mean I'm not sure how they're technically different than a 03:07:33.600 --> 03:07:34.639 standard 03:07:34.639 --> 03:07:37.760 panel other than they're going to look different I'm not 03:07:37.760 --> 03:07:38.520 sure on the 03:07:38.520 --> 03:07:43.010 engineering side what changes that may cause but there 03:07:43.010 --> 03:07:44.920 there would be the same 03:07:44.920 --> 03:07:48.350 and that there'd be a panel and an inverter and they would 03:07:48.350 --> 03:07:49.479 be installed I'm 03:07:49.479 --> 03:07:53.290 again I'm not sure how that would look for designing on the 03:07:53.290 --> 03:07:53.920 engineering side 03:07:53.920 --> 03:07:56.870 but from for the program perspective they'd be treated the 03:07:56.870 --> 03:07:57.639 same and so are 03:07:57.639 --> 03:08:03.840 we ready for them sorry I don't mean to make you get up we 03:08:03.840 --> 03:08:05.159 need a 03:08:06.680 --> 03:08:10.139 no Brandon that's a very good question now we are ready for 03:08:10.139 --> 03:08:10.920 the program we're 03:08:10.920 --> 03:08:13.819 also ready to start investigating the products Tesla has 03:08:13.819 --> 03:08:14.799 come out with some 03:08:14.799 --> 03:08:16.899 that you may be familiar with along with some other 03:08:16.899 --> 03:08:18.600 companies as well so yes we're 03:08:18.600 --> 03:08:20.319 very interested in trying to get some folks that are 03:08:20.319 --> 03:08:21.120 interested in putting 03:08:21.120 --> 03:08:23.610 those on give us the specifics and we will take a look at 03:08:23.610 --> 03:08:24.239 that from an 03:08:24.239 --> 03:08:26.719 engineering perspective make sure that the inverters 03:08:26.719 --> 03:08:28.000 whether they be a single 03:08:28.000 --> 03:08:30.579 inverter or micro inverters that they all will work 03:08:30.579 --> 03:08:31.639 together and meet the 03:08:31.639 --> 03:08:37.290 IEEE 1547 and the UL 1741 codes can it can anybody speak to 03:08:37.290 --> 03:08:38.639 permitting building 03:08:38.639 --> 03:08:43.000 permitting any of those code enforcement are those 03:08:43.000 --> 03:08:44.760 departments ready for them to 03:08:44.760 --> 03:08:49.969 be installed okay that's fine we would help them do that 03:08:49.969 --> 03:08:50.440 process 03:08:50.440 --> 03:08:54.250 good question yeah they do we do assist building 03:08:54.250 --> 03:08:55.319 inspections and permitting 03:08:55.319 --> 03:08:59.129 whenever any of the current any standard sort of solar perm 03:08:59.129 --> 03:09:00.000 itting goes on so do 03:09:00.000 --> 03:09:03.709 they evaluate the load of the panels and get some kind of 03:09:03.709 --> 03:09:04.399 engineering sign off 03:09:04.399 --> 03:09:08.209 they have engineering stamp designs yes and our engineering 03:09:08.209 --> 03:09:08.319 department 03:09:08.319 --> 03:09:13.319 absolutely approves all of them okay thanks okay other 03:09:13.319 --> 03:09:16.000 questions yes so 03:09:16.000 --> 03:09:21.770 there's a really big issue a really big change being 03:09:21.770 --> 03:09:24.559 proposed in the distributed 03:09:24.559 --> 03:09:28.159 generation manual that if I heard correctly didn't seem to 03:09:28.159 --> 03:09:29.239 be addressed in 03:09:29.239 --> 03:09:31.829 that the presentation and it's something I'm concerned 03:09:31.829 --> 03:09:33.200 about and that is the move 03:09:33.200 --> 03:09:41.879 for distributed generation under 50 kW to from a net met 03:09:41.879 --> 03:09:45.319 ering system to a tariff 03:09:45.319 --> 03:09:50.489 system is that is I understood it that that's part of the 03:09:50.489 --> 03:09:51.159 that's not a change 03:09:51.159 --> 03:09:54.250 that's current that that's the rule today and that's the 03:09:54.250 --> 03:09:55.399 rule moving forward 03:09:55.399 --> 03:09:59.360 is that just that 50 kW systems need a special agreement oh 03:09:59.360 --> 03:10:03.000 yes yes so so but 03:10:03.000 --> 03:10:07.270 the net metering I mean it looked to me so and correct me 03:10:07.270 --> 03:10:08.719 if I'm wrong that we 03:10:08.719 --> 03:10:14.100 are moving away that what's being proposed in that green 03:10:14.100 --> 03:10:15.399 sense manual 03:10:15.399 --> 03:10:24.309 redline for and the earth the proposed distribution the 03:10:24.309 --> 03:10:25.360 distributed generation 03:10:25.360 --> 03:10:31.459 manual is to do away with the it is to impose this tariff 03:10:31.459 --> 03:10:33.639 by which if you 03:10:33.639 --> 03:10:38.569 produce over a certain amount will only pay you this much 03:10:38.569 --> 03:10:40.399 no what we're proposing 03:10:40.399 --> 03:10:46.110 and what current schedule DGR set it just says that if you 03:10:46.110 --> 03:10:47.559 are system sized 03:10:47.559 --> 03:10:50.940 over 50 kW that we're gonna look we're gonna take a harder 03:10:50.940 --> 03:10:51.479 look at it you're 03:10:51.479 --> 03:10:53.700 not automatically going to be put on the same rate as a 03:10:53.700 --> 03:10:54.639 residential system 03:10:54.639 --> 03:10:56.840 doesn't mean that you won't be put on that rate it just 03:10:56.840 --> 03:10:57.840 means we have to look 03:10:57.840 --> 03:11:00.850 at it a little bit further and then we'll put you on that 03:11:00.850 --> 03:11:01.719 same rate if we 03:11:01.719 --> 03:11:07.200 deem it necessary okay so there's no there's no change so 03:11:07.200 --> 03:11:07.879 all this stuff 03:11:07.879 --> 03:11:14.879 about let's see on that and I'm just taking the time to do 03:11:14.879 --> 03:11:15.319 this because I 03:11:15.319 --> 03:11:20.840 ran this by some people I know who have solar generation 03:11:20.840 --> 03:11:23.399 the business about let's 03:11:23.399 --> 03:11:29.729 see where do they have it where we're reducing the if 03:11:29.729 --> 03:11:32.440 somebody can help me out 03:11:32.440 --> 03:11:41.540 there what page is the tariff on the red line the greens 03:11:41.540 --> 03:11:43.239 and since in a program 03:11:43.239 --> 03:11:47.309 manual doesn't actually set the rate the rate book sets the 03:11:47.309 --> 03:11:48.280 distributed 03:11:48.280 --> 03:11:54.719 generation rate where's the tariff set it's set in our I 03:11:54.719 --> 03:11:55.879 have my handy dandy 03:11:55.879 --> 03:11:59.790 rate book up here and thank you sorry there was some so 03:11:59.790 --> 03:12:00.760 that's part of the 03:12:00.760 --> 03:12:06.040 right ordinance in this right yeah yes this is yeah oh yes 03:12:06.040 --> 03:12:07.959 yes okay and so the 03:12:07.959 --> 03:12:12.700 tariff it's just a credit and it's just a credit rate it's 03:12:12.700 --> 03:12:13.959 not actually any 03:12:13.959 --> 03:12:16.920 additional cost to the customer it's simply what they're 03:12:16.920 --> 03:12:17.680 paid back for 03:12:17.680 --> 03:12:22.079 generation and any system under 50 KW defaults to this any 03:12:22.079 --> 03:12:23.760 system over 50 KW 03:12:23.760 --> 03:12:27.569 we're gonna evaluate and make sure that it meets conditions 03:12:27.569 --> 03:12:28.520 that yes those 03:12:28.520 --> 03:12:32.319 conditions and if it does we would recommend at this time 03:12:32.319 --> 03:12:32.799 we would 03:12:32.799 --> 03:12:36.610 recommend them going on the same rate okay yes okay they 03:12:36.610 --> 03:12:37.600 just the the way it's 03:12:37.600 --> 03:12:39.409 currently written is we have to we have to do that 03:12:39.409 --> 03:12:40.600 separately because we need to 03:12:40.600 --> 03:12:43.020 take a little bit harder look at that system to make sure 03:12:43.020 --> 03:12:43.920 that they're meeting 03:12:43.920 --> 03:12:48.260 those conditions a system that's 50 KW on a thousand square 03:12:48.260 --> 03:12:49.559 foot house probably 03:12:49.559 --> 03:12:52.430 isn't gonna meet those conditions yeah oh yeah and that 03:12:52.430 --> 03:12:53.639 that all makes perfect 03:12:53.639 --> 03:12:58.559 sense to me okay so did I miss read I guess I'm kind of 03:12:58.559 --> 03:12:59.100 looking at there's 03:12:59.100 --> 03:13:04.270 some people here who have anybody else who has solar who 03:13:04.270 --> 03:13:06.440 noticed this tariff 03:13:06.440 --> 03:13:08.920 that was that was just something that I had planned to ask 03:13:08.920 --> 03:13:09.879 about that concerned 03:13:09.879 --> 03:13:13.690 me but okay so I'm very glad sorry for taking the time for 03:13:13.690 --> 03:13:14.879 that but that's okay 03:13:14.879 --> 03:13:20.670 I'm very glad to learn that there's no not a change from no 03:13:20.670 --> 03:13:21.639 we're not net 03:13:21.639 --> 03:13:25.579 metering no okay and we actually have what's called you net 03:13:25.579 --> 03:13:26.979 billing does the 03:13:26.979 --> 03:13:29.780 term that we use is net billing net billing yes but we're 03:13:29.780 --> 03:13:30.579 not proposing a 03:13:30.579 --> 03:13:33.479 change at this time okay no thank you it will be treated 03:13:33.479 --> 03:13:34.159 exactly the same thank 03:13:34.159 --> 03:13:37.360 you very very much sir and thank you for taking the time 03:13:37.360 --> 03:13:38.520 for that that's that's a 03:13:38.520 --> 03:13:44.280 big relief thank you okay is there a motion then on this 03:13:44.280 --> 03:13:46.399 item 03:13:51.440 --> 03:13:58.399 don't ever make it worn out yet yeah we recommend the 03:13:58.399 --> 03:13:59.719 adoption of this 03:13:59.719 --> 03:14:07.059 resolution okay and second second second any further 03:14:07.059 --> 03:14:10.360 discussion all in favor say 03:14:10.360 --> 03:14:21.440 aye any opposed same sign motion passes item number item e 03:14:21.440 --> 03:14:23.040 is to consider 03:14:23.040 --> 03:14:28.629 recommending approval of the fiscal year 2017-18 energy 03:14:28.629 --> 03:14:31.079 cost adjustment renewal 03:14:31.079 --> 03:14:36.799 cost adjustment and transmission cost recovery factor yes 03:14:36.799 --> 03:14:38.360 board members I have 03:14:38.360 --> 03:14:40.329 good news this will be a very quick presentation this is 03:14:40.329 --> 03:14:41.040 all information 03:14:41.040 --> 03:14:45.309 that you've seen before we stated what these rates were 03:14:45.309 --> 03:14:45.840 going to be proposed 03:14:45.840 --> 03:14:47.969 that when we did the ratebook adoption this is just the 03:14:47.969 --> 03:14:49.040 formal recommendation 03:14:49.040 --> 03:14:52.340 of these rates to council so I'll just go back over those 03:14:52.340 --> 03:14:54.600 pretty quickly for you 03:14:54.600 --> 03:14:59.110 and just a reminder of what each component is ECA are the 03:14:59.110 --> 03:15:00.000 energy cost 03:15:00.000 --> 03:15:02.479 adjustment is the portion of the rate in which we recover 03:15:02.479 --> 03:15:03.799 our actual energy costs 03:15:03.799 --> 03:15:09.399 RCA is our debt it's ECA plus the adder to recover the 03:15:09.399 --> 03:15:11.239 variable rent costs and 03:15:11.239 --> 03:15:14.280 our transmission cost recovery factors the portion of the 03:15:14.280 --> 03:15:15.159 rate in which we 03:15:15.159 --> 03:15:18.969 recover our transmission costs that's the portion of the 03:15:18.969 --> 03:15:20.440 transmission cost in 03:15:20.440 --> 03:15:24.250 which we expend not our investment in our own in our own 03:15:24.250 --> 03:15:25.000 transmission but when 03:15:25.000 --> 03:15:28.809 we have to pay into ERCOT to pay for our portion of t-costs 03:15:28.809 --> 03:15:30.399 so and we do 03:15:30.399 --> 03:15:34.209 review these monthly and quarterly and that's not actually 03:15:34.209 --> 03:15:34.719 accurate and we 03:15:34.719 --> 03:15:37.860 review these pretty much all the time and to make sure that 03:15:37.860 --> 03:15:38.920 we're meeting the 03:15:38.920 --> 03:15:42.280 financial conditions that are set in the rate writers and 03:15:42.280 --> 03:15:43.440 then when we meet those 03:15:43.440 --> 03:15:46.100 conditions we obviously need to come back to you guys and 03:15:46.100 --> 03:15:46.440 make a 03:15:46.440 --> 03:15:50.250 recommendation quarterly and if we don't come back with a 03:15:50.250 --> 03:15:51.280 recommendation then 03:15:51.280 --> 03:15:55.090 it's because we want to hold that rate steady and as we 03:15:55.090 --> 03:15:56.520 proposed previously 03:15:56.520 --> 03:16:00.329 we're looking at reductions in both the ECA and the RCA 03:16:00.329 --> 03:16:02.840 from 361 to 341 and then 03:16:02.840 --> 03:16:09.959 from 4.01 to 3.81 and then the TCRF does vary by class we 03:16:09.959 --> 03:16:10.639 went over a few of 03:16:10.639 --> 03:16:13.049 those big classes before but this is just to give you a 03:16:13.049 --> 03:16:13.920 breakdown of how 03:16:13.920 --> 03:16:17.729 detailed we get in dividing that cost fairly among our 03:16:17.729 --> 03:16:19.040 different rate classes 03:16:19.040 --> 03:16:21.829 so we do get in very much in the weeds in this so we wanted 03:16:21.829 --> 03:16:22.799 to make you guys 03:16:22.799 --> 03:16:24.969 aware that sometimes you just see the residential rate or a 03:16:24.969 --> 03:16:26.540 commercial rate we 03:16:26.540 --> 03:16:29.049 go through and we break it down break down that cost by 03:16:29.049 --> 03:16:30.159 rate class and we do 03:16:30.159 --> 03:16:34.430 break it down also by the billing unit under which a rate a 03:16:34.430 --> 03:16:35.120 customer would fall 03:16:35.120 --> 03:16:38.930 so a residential customers build on KWH a larger commercial 03:16:38.930 --> 03:16:39.680 customer is going to 03:16:39.680 --> 03:16:44.680 be built on KW or KVA and the next steps will we'll be 03:16:44.680 --> 03:16:45.639 taking these forward to 03:16:45.639 --> 03:16:48.639 City Council on September 19th with the full rate book and 03:16:48.639 --> 03:16:49.760 to seek approval and 03:16:49.760 --> 03:16:52.930 then we'll come back in the first quarter of 2018 to have a 03:16:52.930 --> 03:16:53.520 more full 03:16:53.520 --> 03:16:56.239 discussion about the over and under collection of the 03:16:56.239 --> 03:16:57.319 balancing accounts 03:16:57.319 --> 03:17:04.079 and with that I recommend approval and stand for questions 03:17:04.639 --> 03:17:08.909 I got a question over over and under collection is that 03:17:08.909 --> 03:17:10.000 will that discussion 03:17:10.000 --> 03:17:15.000 be at what point does it trigger coming back automatically 03:17:15.000 --> 03:17:17.040 or just a report it 03:17:17.040 --> 03:17:20.850 will it'll come back for a discussion we we do have some 03:17:20.850 --> 03:17:21.879 some kind of some of 03:17:21.879 --> 03:17:24.030 those conditions that we needed to come back we wanted to 03:17:24.030 --> 03:17:25.239 finish the fiscal year 03:17:25.239 --> 03:17:29.049 summer being the the most expensive period of time so we 03:17:29.049 --> 03:17:29.920 wanted to make sure 03:17:29.920 --> 03:17:32.799 we made it through summer and then we'll bring it back end 03:17:32.799 --> 03:17:33.680 of so end of quarter 03:17:33.680 --> 03:17:39.049 four we'll get the results we'll come back in q1 okay good 03:17:39.049 --> 03:17:40.399 one one question is 03:17:40.399 --> 03:17:43.350 this are these consistent with the figures we saw when we 03:17:43.350 --> 03:17:44.000 were doing the 03:17:44.000 --> 03:17:48.309 budget yes yes these reductions are how we achieved that 1% 03:17:48.309 --> 03:17:49.280 rate reduction 03:17:49.280 --> 03:17:57.219 overall was those decreases in ECA and RCA okay questions 03:17:57.219 --> 03:17:59.040 no is there a motion 03:17:59.040 --> 03:18:03.799 to recommend approval motion to recommend approval is there 03:18:03.799 --> 03:18:04.239 a second 03:18:04.239 --> 03:18:09.829 second and a second any other discussion all in favor say 03:18:09.829 --> 03:18:12.159 aye aye any opposed same 03:18:12.159 --> 03:18:17.680 sign okay motion passes thank you thank you 03:18:18.200 --> 03:18:24.879 item F is to consider recommending adoption of an ordinance 03:18:24.879 --> 03:18:25.159 to approve a 03:18:25.159 --> 03:18:30.329 uniform emergency aid agreement for the provision of aid by 03:18:30.329 --> 03:18:30.680 DIC 03:18:30.680 --> 03:18:34.969 Municipal Electric Brian very timely subject yes sir this 03:18:34.969 --> 03:18:35.479 is my final 03:18:35.479 --> 03:18:37.139 presentation for the day you'll be glad to know I don't 03:18:37.139 --> 03:18:38.200 have any PowerPoint 03:18:38.200 --> 03:18:42.010 slides so I'll make it quick as you know from time to time 03:18:42.010 --> 03:18:43.000 in years past we've 03:18:43.000 --> 03:18:45.319 had storms that have occurred hurricanes like we're going 03:18:45.319 --> 03:18:46.280 through this 03:18:46.280 --> 03:18:49.690 summer we've had to dispatch crews to help repair some of 03:18:49.690 --> 03:18:50.559 that infrastructure 03:18:50.559 --> 03:18:53.799 in other parts of the country we have dispatched two crews 03:18:53.799 --> 03:18:54.559 as I mentioned to 03:18:54.559 --> 03:18:57.979 you last week to go to Florida to respond to Hurricane Irma 03:18:57.979 --> 03:18:58.639 as we were 03:18:58.639 --> 03:19:00.540 going through that process we realized that we had 03:19:00.540 --> 03:19:01.639 agreements in place when we 03:19:01.639 --> 03:19:03.850 did that but it never really been brought through the PUB 03:19:03.850 --> 03:19:04.399 and the City 03:19:04.399 --> 03:19:07.520 Council for approval to authorize the city manager or his 03:19:07.520 --> 03:19:08.719 designee to approve 03:19:08.719 --> 03:19:11.940 those agreements so this is what this is meant to do is to 03:19:11.940 --> 03:19:12.879 formalize that 03:19:12.879 --> 03:19:16.120 arrangement so that in the future in times of emergency 03:19:16.120 --> 03:19:16.719 either the city 03:19:16.719 --> 03:19:20.530 manager or myself as acting general manager of DME could 03:19:20.530 --> 03:19:22.040 authorize these 03:19:22.040 --> 03:19:25.309 services to be performed and to be reimbursed once those 03:19:25.309 --> 03:19:25.920 services are 03:19:25.920 --> 03:19:28.399 performed so that's the purpose of this item and I'll be 03:19:28.399 --> 03:19:29.000 happy to answer any 03:19:29.000 --> 03:19:39.680 questions that you may have questions no are any of these 03:19:39.680 --> 03:19:41.760 agreements reciprocal 03:19:41.760 --> 03:19:46.360 no they don't but they could similarly similarly come back 03:19:46.360 --> 03:19:47.319 and propose to us if 03:19:47.319 --> 03:19:50.280 we ever needed help to propose a very similar agreement to 03:19:50.280 --> 03:19:51.079 us but we don't do 03:19:51.079 --> 03:19:54.159 it on on a reciprocal basis typically what happens is 03:19:54.159 --> 03:19:56.040 through the TPPA or the 03:19:56.040 --> 03:19:59.850 APPA a request goes out for assistance and then through 03:19:59.850 --> 03:20:00.719 that process the cities 03:20:00.719 --> 03:20:03.200 try to work out some arrangements with each other to 03:20:03.200 --> 03:20:04.399 respond but it doesn't 03:20:04.399 --> 03:20:11.670 have a reciprocal feature okay okay then is there a motion 03:20:11.670 --> 03:20:14.280 on this item 03:20:14.280 --> 03:20:20.350 recommend approval second and a second discussion all in 03:20:20.350 --> 03:20:22.760 favor say aye aye any 03:20:22.760 --> 03:20:28.239 opposed same sign thank you thank you motion passes ACM 03:20:28.239 --> 03:20:30.440 update board members 03:20:30.440 --> 03:20:33.090 with the interest of time the five items that you have 03:20:33.090 --> 03:20:34.239 listed here on your agenda 03:20:34.239 --> 03:20:37.120 they're included in your packet if you have any questions 03:20:37.120 --> 03:20:39.040 we have staff here to 03:20:39.040 --> 03:20:41.979 answer any of your questions as you saw there's a news 03:20:41.979 --> 03:20:43.600 article that was forwarded 03:20:43.600 --> 03:20:47.889 by Brian Langley that was sent on by new board member Armit 03:20:47.889 --> 03:20:48.959 ter and then we have 03:20:48.959 --> 03:20:51.819 Jessica Rogers here to answer any questions about the 03:20:51.819 --> 03:20:52.639 wireless node 03:20:52.639 --> 03:20:55.590 electric rates and Chuck Springer here to answer questions 03:20:55.590 --> 03:20:56.719 about the third 03:20:56.719 --> 03:21:03.979 quarter financial report I'll just say that I included that 03:21:03.979 --> 03:21:06.280 article that was 03:21:06.280 --> 03:21:12.700 about gas plants gas power plants are retiring all over the 03:21:12.700 --> 03:21:14.079 country and 03:21:14.079 --> 03:21:18.379 renewables pose zero threat to reliability the reason I 03:21:18.379 --> 03:21:19.479 included dot 03:21:19.479 --> 03:21:23.819 was because it came from a tray I forget the name of it but 03:21:23.819 --> 03:21:25.440 it's a just a 03:21:25.440 --> 03:21:33.909 generic utilities trade news source that has no as far as I 03:21:33.909 --> 03:21:35.280 know anyway no 03:21:35.280 --> 03:21:39.700 particular agenda it's not an environmental group so to me 03:21:39.700 --> 03:21:40.399 that 03:21:40.399 --> 03:21:43.270 causes a concern that just I hope is on our radar with the 03:21:43.270 --> 03:21:45.159 gas plant you know is 03:21:45.159 --> 03:21:49.989 this the best time to build a new gas plant and take on 03:21:49.989 --> 03:21:51.639 this kind of debt 03:21:51.639 --> 03:21:54.530 burden at a time when the trend is that they're retiring 03:21:54.530 --> 03:21:55.680 all over the country 03:21:55.680 --> 03:22:01.319 and considering that so much of the argument on taking on 03:22:01.319 --> 03:22:03.799 this 200 plus 03:22:03.799 --> 03:22:07.389 million dollar burden had to do with the renewables posing 03:22:07.389 --> 03:22:08.120 a threat to 03:22:08.120 --> 03:22:11.930 reliability now it just seems to be kind of standard 03:22:11.930 --> 03:22:14.319 knowledge that they don't so 03:22:14.319 --> 03:22:18.719 I just just wanted people to be aware of that and I hope 03:22:18.719 --> 03:22:20.440 that staff is taking 03:22:20.440 --> 03:22:23.840 that into account as we plan for the future of this gas 03:22:23.840 --> 03:22:24.600 plant and what to do 03:22:24.600 --> 03:22:29.770 about it thank you for including it I'm sure that the 03:22:29.770 --> 03:22:31.079 enterprise risk consulting 03:22:31.079 --> 03:22:35.399 will have that in their recommendations as we go forward 03:22:35.399 --> 03:22:38.719 addressing that okay any 03:22:38.719 --> 03:22:45.620 other questions on any of the any of the five items okay 03:22:45.620 --> 03:22:46.680 hearing none then 03:22:46.680 --> 03:22:53.840 completing items any comments from public utility board 03:22:53.840 --> 03:22:58.120 members or about 03:22:58.120 --> 03:23:01.930 maybe future agenda items or any announcements that need to 03:23:01.930 --> 03:23:02.479 be made at 03:23:02.479 --> 03:23:08.209 this point well I wonder if we might receive I'm sorry I 03:23:08.209 --> 03:23:09.159 always ask you guys 03:23:09.159 --> 03:23:13.860 to bring me some data but about about the the costs that we 03:23:13.860 --> 03:23:15.799 've actually taken 03:23:15.799 --> 03:23:20.709 on with the Denton Energy Center you know back in the day 03:23:20.709 --> 03:23:21.440 we got lots of 03:23:21.440 --> 03:23:26.090 numbers showing us you know how much the ratepayers could 03:23:26.090 --> 03:23:28.040 be expected to pay for 03:23:28.040 --> 03:23:34.559 their utilities if we can move forward at business as usual 03:23:34.559 --> 03:23:35.959 if we did 70% 03:23:35.959 --> 03:23:41.280 renewables if we did 30% renewables and you know if those 03:23:41.280 --> 03:23:42.360 numbers have changed 03:23:42.360 --> 03:23:46.760 it would be nice to know we keep hearing this burden of 03:23:46.760 --> 03:23:48.760 debt and those numbers 03:23:48.760 --> 03:23:52.840 suggested that the financial burden that we were assuming 03:23:52.840 --> 03:23:55.760 was less by the by 03:23:55.760 --> 03:23:58.209 moving with the Denton Energy Center I just want to see 03:23:58.209 --> 03:23:59.239 that those numbers are 03:23:59.239 --> 03:24:05.120 still the same a big part of enterprise risks the scope 03:24:05.120 --> 03:24:06.440 that there for this next 03:24:06.440 --> 03:24:10.409 phase will be in fact to help us double check our pro forma 03:24:10.409 --> 03:24:12.000 as I stated earlier 03:24:12.000 --> 03:24:15.229 we're using the original pro forma that on the deck that 03:24:15.229 --> 03:24:17.239 you've all seen is sort 03:24:17.239 --> 03:24:20.340 of the guidepost and the challenge has been is are there 03:24:20.340 --> 03:24:21.520 ways of through the 03:24:21.520 --> 03:24:25.329 through the strategic plan reducing our costs potentially 03:24:25.329 --> 03:24:26.319 which would mitigate 03:24:26.319 --> 03:24:30.309 that debt payment even more and is there anything that we 03:24:30.309 --> 03:24:31.440 need to be concerned 03:24:31.440 --> 03:24:35.709 about probably the biggest variable in all this was the 03:24:35.709 --> 03:24:37.239 anticipated credit back 03:24:37.239 --> 03:24:41.110 from ERCOT for the peak generation and how that offsets the 03:24:41.110 --> 03:24:41.840 debt service 03:24:41.840 --> 03:24:45.850 payments so that is going to be enterprise risk major 03:24:45.850 --> 03:24:47.000 variable that 03:24:47.000 --> 03:24:49.579 they'll be studying and you'll all get a report back on 03:24:49.579 --> 03:24:50.760 that our second phase 03:24:50.760 --> 03:24:55.930 as we determine how the the Energy Center will be used and 03:24:55.930 --> 03:24:57.000 and how it will 03:24:57.000 --> 03:25:00.000 actually function the ERCOT market there's clearly still a 03:25:00.000 --> 03:25:00.959 lot of confusion 03:25:00.959 --> 03:25:03.450 out there about when the deck would be potentially called 03:25:03.450 --> 03:25:04.360 into service how it 03:25:04.360 --> 03:25:07.350 would be used and and so we've asked them to double check 03:25:07.350 --> 03:25:08.319 the assumptions and 03:25:08.319 --> 03:25:10.959 double check our financial estimates so you will have an 03:25:10.959 --> 03:25:12.120 answer to your question 03:25:12.120 --> 03:25:23.280 okay thank you okay so to two issues one that I would like 03:25:23.280 --> 03:25:26.319 I would like to see a 03:25:26.319 --> 03:25:34.729 staff presentation and discussion on our ordinance 2010-292 03:25:34.729 --> 03:25:39.120 and which includes a 03:25:39.120 --> 03:25:43.079 at the very end of that ordinance there's a right of entry 03:25:43.079 --> 03:25:44.079 clause about 03:25:44.079 --> 03:25:51.610 that DME can has the right to enter the property and shut 03:25:51.610 --> 03:25:54.239 off the power if people 03:25:54.239 --> 03:25:58.049 haven't paid their bill the reason I'm bringing this up is 03:25:58.049 --> 03:25:58.639 is because I know 03:25:58.639 --> 03:26:04.799 that years ago there was a lot of citizen opposition to 03:26:04.799 --> 03:26:06.840 this and concern 03:26:06.840 --> 03:26:11.770 that it was unconstitutional and I'm not a constitutional 03:26:11.770 --> 03:26:14.000 law expert but it seems 03:26:14.000 --> 03:26:19.450 like it's now would be a good time as we're getting a new 03:26:19.450 --> 03:26:22.200 director for DME to 03:26:22.200 --> 03:26:26.520 start really examining this law and to look at every aspect 03:26:26.520 --> 03:26:27.799 of it and to see if 03:26:27.799 --> 03:26:31.129 we want to take to keep it on the books or to change it I 03:26:31.129 --> 03:26:32.520 'll just mention one 03:26:32.520 --> 03:26:36.329 there's a lot of things on in this law but another thing I 03:26:36.329 --> 03:26:37.920 'm concerned about in 03:26:37.920 --> 03:26:40.840 addition to the right of entry clause at the end of the 03:26:40.840 --> 03:26:42.520 ordinance is that there's 03:26:42.520 --> 03:26:48.239 something in there about if you're late on your payment 03:26:48.239 --> 03:26:49.200 there's something like 03:26:49.200 --> 03:26:54.040 you have to pay something like three months of you know 03:26:54.040 --> 03:26:56.120 three months worth of 03:26:56.120 --> 03:26:59.360 payments or you know something like that and I just want 03:26:59.360 --> 03:27:00.639 what we would like to 03:27:00.639 --> 03:27:03.639 see a rundown on that I don't know when's the last time PUB 03:27:03.639 --> 03:27:05.600 has had that but 03:27:05.600 --> 03:27:12.489 that's something I'd like to see and then and then the 03:27:12.489 --> 03:27:13.559 second I'm thinking 03:27:13.559 --> 03:27:18.360 maybe the maybe the I know Ethan was over customer service 03:27:18.360 --> 03:27:19.719 at the time when 03:27:19.719 --> 03:27:25.530 we looked at the that's actually a prepaid account where 03:27:25.530 --> 03:27:27.680 you pay you pay 03:27:27.680 --> 03:27:32.280 your utilities and then yes and then it gets you as it gets 03:27:32.280 --> 03:27:33.719 used it reduces what 03:27:33.719 --> 03:27:36.600 your credit is yeah yeah and we could we could probably get 03:27:36.600 --> 03:27:37.840 it's been a couple 03:27:37.840 --> 03:27:42.110 years since we looked at that yeah thank you yeah that 03:27:42.110 --> 03:27:42.760 would be excellent 03:27:42.760 --> 03:27:46.530 excellent if anything just for you know for clarity and so 03:27:46.530 --> 03:27:47.680 we know what is on 03:27:47.680 --> 03:27:53.049 what's on the books and then the second thing was so it 03:27:53.049 --> 03:27:54.319 sounded like Todd that 03:27:54.319 --> 03:27:58.129 you had mentioned that in the spring is when rates for DME 03:27:58.129 --> 03:27:59.399 will be re-examined 03:27:59.399 --> 03:28:02.620 is that what did I hear you right yeah I think we've got we 03:28:02.620 --> 03:28:03.600 've got a number of 03:28:03.600 --> 03:28:06.649 steps in place over the next few months before we could 03:28:06.649 --> 03:28:07.760 answer the question that 03:28:07.760 --> 03:28:09.909 you brought up earlier and that is to make sure that we get 03:28:09.909 --> 03:28:10.559 our strategic 03:28:10.559 --> 03:28:13.510 strategic plan in place for renewables we've got a couple 03:28:13.510 --> 03:28:14.520 we've got at least 03:28:14.520 --> 03:28:18.329 one RFP out right now that we've asked the group to help us 03:28:18.329 --> 03:28:19.399 with you know as 03:28:19.399 --> 03:28:23.670 you learn today about diversifying your win for instance 03:28:23.670 --> 03:28:24.840 and so once those 03:28:24.840 --> 03:28:27.989 contracts the additional contract is put into place and how 03:28:27.989 --> 03:28:28.799 we're going to 03:28:28.799 --> 03:28:31.489 operate the energy center because that flows right into 03:28:31.489 --> 03:28:32.520 Brendan's question 03:28:32.520 --> 03:28:36.549 regarding the the ERCOT credits we'll be able to revise our 03:28:36.549 --> 03:28:37.360 financial 03:28:37.360 --> 03:28:41.170 assumptions and look for any discrepancies or you know 03:28:41.170 --> 03:28:41.479 either 03:28:41.479 --> 03:28:45.959 improvement or not yeah excellent yeah thank you so one 03:28:45.959 --> 03:28:47.840 issue that I would like 03:28:47.840 --> 03:28:50.229 to be looked into along the way by staff and you know at 03:28:50.229 --> 03:28:51.719 some point us here in 03:28:51.719 --> 03:28:58.680 PUB when the time comes is why our rates for DME are such 03:28:58.680 --> 03:29:01.319 that the discounts go to 03:29:01.319 --> 03:29:08.209 the the bigger users who have the special agreements and 03:29:08.209 --> 03:29:09.959 why the residential 03:29:09.959 --> 03:29:15.700 ratepayers who are a hundred percent of our DME citizen 03:29:15.700 --> 03:29:18.079 owners even though they 03:29:18.079 --> 03:29:21.889 they're just as you know small as smaller percent much 03:29:21.889 --> 03:29:22.680 smaller percentage 03:29:22.680 --> 03:29:26.670 of our energy users and why they have to for the most part 03:29:26.670 --> 03:29:29.120 pay a higher rate and 03:29:29.120 --> 03:29:33.469 I was recently pleased to learn in water or have confirmed 03:29:33.469 --> 03:29:34.840 for me rather by 03:29:34.840 --> 03:29:38.649 looking over the water department's rate structure and by 03:29:38.649 --> 03:29:39.280 touring that 03:29:39.280 --> 03:29:43.090 department that they have kind of a reverse model where to 03:29:43.090 --> 03:29:43.719 encourage 03:29:43.719 --> 03:29:49.989 conservation and also to ease the burden on on you know 03:29:49.989 --> 03:29:51.479 middle-class working class 03:29:51.479 --> 03:29:56.290 and struggling ratepayers they have the bigger users pay 03:29:56.290 --> 03:29:57.760 more what you know why 03:29:57.760 --> 03:30:01.000 we can't do that in DME I'd like that at least to be looked 03:30:01.000 --> 03:30:02.520 into the possibility 03:30:02.520 --> 03:30:06.329 of making the the logic behind that rate those two rate 03:30:06.329 --> 03:30:08.440 structures more uniform 03:30:08.440 --> 03:30:11.739 maybe there's a good reason for it that I don't understand 03:30:11.739 --> 03:30:12.920 but I would at least 03:30:12.920 --> 03:30:19.559 like some consideration of that thanks okay 03:30:22.000 --> 03:30:28.040 anybody else nope we have a motion to adjourn motion that 03:30:28.040 --> 03:30:29.360 we adjourn second 03:30:29.360 --> 03:30:36.000 all in favor say aye aye any opposed thank you