Oct 23, 2017 Public Utilities Board on 2017-10-23 9:00 AM

order our first first part of our meeting we have a work session with two items scheduled item number a is to receive a report hold a discussion give staff direction regarding the resource planning and power supply strategy prepared by Enterprise Risk Consulting and Brian if you'll do the introductions please yes sir good morning Brian Langley deputy city manager today we have with us Enterprise Resource Consulting they're going to be presenting to you their power supply and power strategy plan that we have previously discussed with you a few weeks ago we have with us today Larry Lawrence and Neil McAndreys and so I'm going to turn the presentation over to them to get started good morning everyone morning I'm glad to be here again with you as Brian alluded to we've submitted a draft resource plan and this is a presentation to cover the essential elements of that and the essential conclusions of recommendations we are gathering some feedback and we'll be taking into account some of that feedback and then providing a final version of that excuse me let me get the keyboard ready to go here so the presentation outline we're going to cover five main things we're going to look at the planning goals the goals that we use to develop the plan the data and data sources that we used in the planning process in the various evaluation factors that we took into account to develop the recommendations for the plan very briefly we're going to go over the the inputs to the portfolio modeling process that we use to develop what we are going to recommend is the best fit assets for the portfolio we're going to go through some of the conclusions from the analysis and then provide some specific recommendations just to let you know as well there are a few open issues some open questions that need to be determined so there are a few decisions that we're going to list at the end of the presentation once we get those specific answers to those questions then we'll be able to come up with a more specific best fit instead of recommendations for the plan so the objectives that we have for the planning goals here are five we want to achieve a least cost supply you'll see a slide here in a little bit that shows you specifically how we define least cost supply we'll give you some cost comparisons so that you can understand where we're coming from in terms of our recommendations for least cost assets we want to make sure that the recommended supply plan reduces your uncertainty and those can be listed in several ways a we want to very effectively match supply assets with your load so that you have a very efficient supply portfolio that includes diversifying your supply resources that's another subject that we will address in just a little bit in the presentation we want to reduce regulatory risk technological risk we'll talk about those as we go through the presentation and your economic risk so we want to make sure that you have a portfolio that performs efficiently in terms of its production and performs efficiently in terms of economics in terms of sustainability that covers two specific areas one of which is environmental sustainability one thing that often gets overlooked and is an important aspect when you add renew ables to a portfolio is the fact that it reduces water usage we think that's a very important aspect that often gets sort of overlooked and so that's one of the additional sustainable advantages of a renewable asset portfolio also from the sustainability aspect is renewable resources are often more simple from a technological standpoint there's less things to break so and there's less to overhaul over time so just from a physical performance stability standpoint there also they tend to be more sustainable than some other types of generation resources in terms of competitiveness this is something that we haven't discussed too much here but we are of the opinion that even though you are a non-optent entity it's important to make sure that your rates are reasonably competitive because you may have people moving in and out of the territory that are comparing you to other areas where there is competition and we are fully supportive of municipals remaining as non- optent entities but we think it's a good idea to be in a position to carry out policies that can avoid criticism or avoid some pressure from the outside to try to change that status as a non-optent entity and then lastly we want to take into account the the operational process is going to be necessary to operate a renewable resource portfolio so these are the the objectives that we kept in mind in devising this portfolio and resource plan so the next thing we're going to cover are some of the data sources and the evaluation factors we took into account in developing the resource plan some of these slides I'm going to go through quickly because we do have a lot of slides and I know we want to be as concise time wise as possible so I'll just mention a few things here and then move on so we got some information from Denton in terms of your load current supply resources and some performance data on the deck we relied on ERCOT data for a lot of the information we used in devising the plan prices from ERCOT historical heat rates some recent modeling for market dispatch from ERCOT resource adequacy studies and some of the some of the proposed improvements and changes to ERCOT that may come down the line pretty soon some other sources we looked at information from the US Energy Information Agency the Texas Public Utility Commission and we use market prices from things like NYMEX and other price sources this is a recent set of data from ERCOT that was I was presented at a board meeting just a few months ago and this is something that I think is very important to keep in mind when we're modeling the deck what I'm we're gonna do here in this section is just give you some some highlights of the data and data sources that we used in devising the resource plan and then we'll get into these specific evaluation factors so these graphs show the ERCOT resource stack at two different natural gas prices the one on the left is the bid stack in ERCOT with natural gas prices at $2.50 per MM BTU and the right-hand graph is a 450 per MMBTU this is a standard two- dimensional graph the the horizontal scale is the load of ERCOT going up to the right let me get see if I can get the pointer oriented here so this is the load of ERCOT going up to the right and then the vertical scale is the dispatch cost of all the resources that ERCOT uses to meet the load demand so we've done an approximation here these lines on the PowerPoint are not perfect fits but we 're using an estimate of the deck dispatch at around 10 heat rate that includes the variable cost on top of the actual operating heat rate of the deck so you can see here that in a 250 market the deck would be at around a $25 cost and you can see where it fits into the ERCOT stack so we would be dispatched earlier but there's not a lot of margin in here is one of the takeaways from this if we go over to the 450 graph then the deck would be dispatching around $45 and it would dispatch much higher into the queue there would be less competition at that point but the the frequency or the likelihood of the dispatch would be lower so one of the takeaways here that's going to be a common theme you'll hear throughout the presentation is all these projections are very much dependent upon the price of gas they're hugely dependent on the price of gas how often the deck is going to run depends on the price of gas and none of us here can perfectly predict what the price of gas so a lot of the decision-making the modeling the expectations of the deck are mainly dependent upon what the view is of the price of gas and you'll see that again and that's a theme that you will see again and again throughout the presentation something that we you may get tired of us saying that but it's so important and we'll give you some other examples of that as we go through the presentation just another quick look at some other ERCOT data we base the modeling on ERCOT's historical heat rates and as you can see that's a pretty stable curve here it stays pretty stable across time and that shape of the curve is something that we used in terms of modeling the potential dispatch of the deck on the right hand side this is just a picture from ERCOT of its long-term system assessment the ERCOT is continually doing studies to determine what changes may need to be made to the market and so the key takeaways here that we wanted to just mention here today are that a ERCOT's expecting to continue to load growth in seven of the eight scenarios they considered for the long-term assessment they 're expecting continued load growth and all of the scenarios showed significant amount of solar generation additions and the retirement of coal and natural gas so these are our expectations of ERCOT going forward more renewables coming in the retirement of coal and natural gas and so these are other factors that we took into account in developing the resource plan this slide just shows some examples of market data that we used again we've got a lot of slides to go through so I just want to give you a flavor and a sense of the inputs that we used in developing the resource plan the graph in the upper left hand corner just shows 12 month moving averages these are 12 month annual prices so they're annual prices for gas and power going forward so these are market prices that we used in the consideration of the development of the resource plan the lower left hand side is EIA's forecast of natural gas prices with a confidence interval here in the the envelope with the green let me get the pointer working here in this green envelope this is a confidence interval of where they think gas prices could be in the near term in the right hand side this is a historical graph of the Henry Hub spot price with the best fit trend line and one of the things the main takeaways to there is notice that natural gas prices as many other commodity markets do tend to revert to the mean so that's something else that we've taken into account in our expectations for natural gas because we also needed to have an expectation of where gas prices might go so some of the modeling that we've done has taken into account what we think are some reasons for a reasonable forecast for where natural gas goes and that is a determinant of the outcome of the findings and the recommendations in the report so speaking of those price projections this is a graph of those we've also taken into account what brattle used when they had done a previous study for you so what we found was the brattle base case you can see goes quite high over time and that's something that we incorporated that into the numbers but that's something that we think is less likely for a couple of reasons one is that whenever we think it's important when somebody is projecting prices forward market information is very important and useful and the highest probability of where price is going to be tomorrow is where it is today so there's a lower probability of prices either rising or falling so a we think it's important when using price projections to use what the market is telling us as an expectation of where the market is going to go forward so we've incorporated that into the base case that's the red line here that's our base case gas is essentially where the market is trading now for going forward in the time the blue line is our high gas case and you notice we had a question yes yes but as more and more coal comes off and we start using more and more natural gas for generation don't you believe that those prices will start increasing that is reflected in our blue line okay and so there are two factors in that one is there are other factors in addition to what you mentioned LNG exports are going to pick up we're seeing lower drilling rigs so commodity markets go through these cycles of excess production and shortages of production natural gas is set up for a shortage we haven't seen a tremendous price rise yet but yes if you get retirements of coal additional demand for gas from for generation additional demand from gas from LNG that's what we've modeled in this blue curve here the thing is the the world changed in 2008 2009 with shale so there's a tremendous overhang of potential production the cost of drilling has gone down so there's a substantial overhang of potential production so if you do get a a short spike and what I mean by short might be a couple of years you're going to attract huge amounts of additional gas production this is not unlike what we saw let me go back here if you look over here that we've kind of modeled this on what history has done before back in the 2000 time frame when you got a tremendous amount of additional demand and lowered supply you got a few year substantial bump in gas but what did it do it tended to the go back and revert back to the we've taken that into account thank you that's a that was a good question that set up what I was going to describe on that yes yeah let me just add one thing if you'll notice that the last two years the average price has been two dollars and fifty cents so all these show higher expectations right right yes so I just wanted to comment that the difference is striking between your projections and the battle projections I know you can't speak for a bridle but it seemed that based on what you said and it makes sense to me that braddle somehow didn't seem to have fact ored in the market so I know you can't speak for them but what since since you seem to be making that assumption about what about them what do you think you know how how do you explain that disparity on their end not speaking for them I don't know what in the world could they have been yeah I don't know there there are others that could have similar projections there are I would say this anybody that is forecasting the price of gas has a very high likelihood of being wrong so it's just a hard thing to do and we've seen optimistic forecast from oil from others as well that don't come true this just that's a difficult thing to do now if you notice that their low case which is the more purple line is much closer to where the market is right now so just from our perspective we think that's pretty reasonable and we did factor in what could be a rise in natural gas but given just the revolutionary nature of shale as a potential production source we just didn't see that being sustainable and given the the characteristics of the commodity over decades that tends to revert to the mean we assumed it was a safer course of action to assume revert to the mean and the importance of this is these forecasts are so much of a driver of what the decks gonna do if you change your forecast you change the deck out there's just no way around absolutely thank you that makes a lot of sense on your blue line then you're projecting it going up and then you see a change in going back to the median and that's why you're above br attle but then you come back down because as time has shown yeah you go up and you come back to median I want to make sure I understood that yeah thank you so these are the forecasts that we used in the modeling for the process now I will say this you'll see this in just a moment renewables offer of a cost advantage right now in almost any gas case you'd have to have gas prices be a lot lower than they are now to even make renewables be sort of a 50/ 50 proposition so the gas price is not going to those projections none of those projections would affect what we're going to recommend in terms of the additions and the best fit assets for your to meet your renewal goals so turning to the evaluation factors the two main evaluation factors the two main objectives that we used in developing this were to achieve a least cost supply and to reduce these risk factors so again we wanted to match resource production profiles to your daily load and seasonal load profiles taking into account the assets that you already have for example you've got Santa Rita wind coming in that has a very particular West Texas type of profile so we wanted to find resources that were good fits and offsets to divers ify your portfolio we wanted to balance the need for selling excess supply and then purchasing shortages as much as possible and we took into account the quality of each resources production because different renewable resources have different quality factors and you'll see that in just a moment access to transmission air connections were important and then minimizing transmission issues with a particular focus on avoiding congestion costs so that will factor into the citing recommendations and the location recommendations that we have and then one more data input these are the dental load scenarios that we took into account in the modeling and the planning a slightly negative growth rate a mean annual growth of 1.6 percent and a high annual growth case of 3 percent then we perform the supply gap analysis we need to figure out first what do you need what do you have what's your load and then what do you need just as a reminder here that first sentence on the slide when we talk about renewable percentages the way we define that because there are different ways to define that the way we define that is we just we think an annual time frame is the best measurement period because then that doesn't get colored by seasonality so if we take annual load and then we take measured by megawatt hours and we take the total megawatt hours of resources that's what we're matching up and we're talking about 70% 100% those are the figures in the frame of reference we're using for that so this the next part of the slide shows your current supply portfolio you've got a little bit of landfill generation Santa Rita wind coming next year bluebell solar and then whitetail we'll talk about wh itetail in just a moment but you're gonna see some annual production figures and just for you all to know if some of you are familiar with this this annual production figure has been adjusted a lot of the a lot of the production values that a developer will tell you tend to be overstated that's just a natural aspect we we we use the analogy of when you go into the showroom buy a car the MPG that's on the stickers never the MPG you get an actual driving so there are various factors that can cause developers to sort of cherry pick and spin so we've taken into account our experience with the actual production of say wind resources versus what they've been offered at and we've done a reduction here in the annual production of megawatt hours for Santa Rita so just to conclude on this slide Denton's annual load for 2019 is one and a half million megawatt hours to give you a sense of the total that's the target we're looking at for 2019 in terms of our 70 to 100 percent goal counting whitetails a renewable resource leaves dent in at approximately 61 percent renewable without counting it it results in approximately 44 percent renewable and why is this important well it determines how you want to count that this is one of the decisions that needs to be made how you're going to count that to decide how much renewable assets you need and just as a reminder whitetail from what we the information we were given was originally a win deal it was converted at some point into a 30 megawatt around-the-clock deal with Rex added given that the wreck market in Texas is really not that viable anymore because it was designed as an incentive for additional renewable production and those standards were far exceeded simply just through market forces there really is no residual value to those so we would just our recommendation would be would not to count that as renewable but that's a decision that the city needs to make that we can't make on your behalf so last bullet depending upon the classification of white pale of white tail didn't needs between 9 and 26 percent in additional renewable resources to meet the minimum goal 70% or between 39% and 56% to meet the target of 100% so here is a summary high-level summary of some of the resource prices and delivery points that have been offered to you in your recent RFP so you've got some RFP results back in early October and this gives you a sense of the pricing so we just group these at a high level the bidders are confidential you'll see some more specific offers in one of the last slides when we really start honing in on some specifics that we think are attractive for additions to your portfolio but this just gives you a sense of location and type so solar you're getting prices at the delivery node versus prices at the North Hub West Texas coastal wind North Texas South Texas and panhandle wind are all there you can see these prices are quite attractive you got some wind prices below $20 solar prices in the mid-20s so these prices were used to estimate the cost of supply in our portfolio modeling and these have been further adjusted to the production profiles to calculate effective costs so the second bullet there explains that to an extent what we mean by effective cost is this your if you purchase a renewable resource you need to know the production profile and you need to know which hours of the day or which times of use that asset is actually producing so to compare it to a an on-pe ak offer from the market or a round-the-clock offer from the market those profiles don't always match up so we have to make an economic adjustment because a renewable resource may not be completely comparable to a market purchase because it's not going to produce all day at the same rate so a renewable resource may be cheaper but you might have to make up for those hours when it's not producing so we've done an economic adjustment to sort of put it on a kind of an apples to apples basis I call it green apples versus red apples and so forth so is an example there solar producers during the higher priced on peak hours when wind production typically drops off this a buyer would need at least a 20% lower price for West Texas wind to compete with a solar resource so these prices have been adjusted to calculate effective costs also in terms of our assembly of the recommendations for your resource plan we've also had to take into account that certain resources need to be placed in your portfolio to diversify against your load shape so for example dent will start receiving a large West Texas wind supply in the spring of 2018 and a solar resource in 2019 so we don't want to recommend additional West Texas wind because that could put you with too much of that particular profile in your portfolio so let's talk now about least cost we've done a couple of approaches here the upper table I'll go through the columns the left-hand column shows you approximate annual prices right now in Urquhart about $31 for megawatt hour on peak and $27 around the clock representative offers from your RFP show that solar could save you about $8 a megawatt hour on peak and wind around five and a half dollars per megawatt hour so this gives us a renewable equivalent price of $23 and 21 50 correspondingly for those assets if we look at the market heat rates for on peak periods and the market heat rates for around the clock and then we convert those into their natural gas equivalent we get an approximate price or a value of around $2.20 per MVTU so what this is saying is that we look at the discount that those renewable assets offer versus the market and we look at the market heat rate and convert that into what the equivalent gas price would be to get that same value then we're looking at a $2.20 per MVTU gas price equivalent excuse me for these renewable assets with a gas price in the market a little under three dollars now so this is just one perspective one way to look at what least cost means these renewable assets are offering values that are below the price of market power and it's important to remember that gas is the price setter in ERCOT gas is frequently on the margin so we were always oriented around gas when we're thinking about the price of the power in ERCOT thus we can calculate these natural gas equivalency so that gives you a sense when we say least cost they are least cost it's as if you're able to buy a gas deal below the market the lower table gives you a little bit of a different perspective it just shows you how the market is so sensitive to gas and how the potential benefits of Denton adding renewable assets to your portfolio is dependent upon the price of gas if the price of gas goes a lot higher say to five dollars to the lowest row on the table you're gonna have power prices in the upper forty dollar range and that would give you a benefit of over $25 a megawatt hour so in other words if you add renewable resources to your portfolio and gas prices rise you're gonna have a portfolio cost it's much lower than the market because of the lower cost of renewables that you added but if gas prices fall to two dollars that's going to be above the price of your equivalent purchase and your purchase would be above the market so again as we said before it's so dependent upon where gases are going to go what your outlook for gas is and the outcome of natural gas in the market to determine what market prices are yes if you notice this is the same sort of methodology that Bradley used in their report basically if you have higher gas prices and the attendant heat rates they're produced at you you go to the right column you produce more return or more margin but notice this at three dollars the margin is 835 at five dollars which is an increase of what 67 percent or something like that the margin is almost 26 which is 300 percent right so it's levered in other words the higher the gas price much more you know much more return from the fixed price renewables and that's good if gas prices go up everything's great for Denton on a high renewable but what if they don't go up so much and what if they go down if they go down actually you see the return that's two dollar gas but that's kind of remote but things can go down just as well as they can go up and you know you're just flat but that's also a good thing you know your return is negative one dollar but that's pretty small loss but that's a loss but it's a small loss so you know under this plan higher gas prices equate with a better performance that's also true for the deck but it's particularly true because almost all your return under this plan and under Brattle and both ours it depends on the renewables making return not the deck I won't spend too much time on this you've already seen this I think the last time we were here but just to make a few key points this is an ERCOT graph of the production profile of various renewable resources the red is coastal wind the purple is solar the blue wave-shaped line at the top is typical load and so this shows you say for a summer day what the type of production profiles you get versus the load profile so this is one of the key drivers of the resource plan is selecting assets of the right type and with the right quantity to achieve a diversified consistent production from your resource portfolio so West Texas wind is the worst match against load solar and coastal offer the best on-peak match against load and that also offers an advantage because it can displace purchases that you need to make to supplement your on-peak requirements during those most expensive hours coastal wind is at a low point doing a lower price a low production amount during lower priced hours so that's offers a benefit of producing less when the market value isn't there and so coastal wind and solar just in summary those are very attractive they offer low prices the production profiles are a better fit for Denton's load and they're a better complement to Denton's existing renewable resources such as Santa Rita so that's foreshadowing of where we're going to go in terms of the recommendations here you've also seen this chart in the next one just a couple of points we want to make and not spend too much time on this graph when we were here before just as a reminder what you're looking at the horizontal scale is the 24 hours across the day the vertical scale is is in megawatts the wave shape line across the top is load and then we have various types of assets that are filling the portfolio so this shows green and solar which would be producing during the middle of the day we've got wind which would be producing at higher and off peak hours and lower going on peak hours the purple bars here represent market purchases that would be necessary to fill the gaps to balance your supply requirements and then the blue bars are representative of when the deck would run so as you can see there are times of day here where there's excess production say from the deck this can be sold into the market to produce revenue there are times of day where market purchases are necessary to balance the portfolio so the takeaways here are seasonally low wind output would necessitate market purchases during off-peak hours and the combination of solar production and deck production could cause an excess supply and that would necessitate market sales during those higher priced hours if we then look at another period of the year this is a seasonal spring period you've got a different view here you've got a high wind season you can see that the wind at times is producing more than the load so there would be sales of excess wind capacity the deck is less likely to run your solar output would be not necessarily minimal but it wouldn't be nearly as much as you would have during the summer so you get a different profile so the takeaways from this are that part of the best fit in terms of the type of renewable asset and the quantity of that asset is to give you a portfolio that minimizes the amount of excess and minimizes the amount of market purchases it's impossible to eliminate those but we want to strike a reasonable balance in terms of your ongoing management of the portfolio to make it as efficient as possible to balance out those amounts another consideration we took into is wind location so wind is not wind you've seen the different production profiles from West Texas versus coastal those are starkly different there are also different factors in terms of the quality of wind at a specific location so there are six different wind regions in ERCOT they're not well correlated because of the distance between them and because Denton already owns a large resource in West Texas other regions will need to be considered and those are what we're going to offer both panhandle and coastal resources are not well correlated with system wide output that's a good thing because we want to add resources that are not necessarily correlated with what you've got that gives you a better fit in terms of diversification of the portfolio coastal wind is superior to other types of wind due to the higher capacity factor and the greater production during valuable on peak hours so as you can see here these are dispersion graphs that show the the output of the various wind resources at wind speeds which you would like to see is a tighter pattern and a more consistent pattern here and you're seeing three examples you're seeing wind resources from North Texas Texas Oklahoma border Abilene and then coastal wind and the main takeaway here without belaboring the slides you notice that there's a tighter diffusion pattern on the coastal wind resource that's indicative of more consistent and higher quality production that's something that is advantageous and one of the factors that we take into account in the resources that we recommend the reason for that is the coastal wind is produced by being on the coast it's the coastal land effect that every day in the summer and in particular as the the ground the surface of behind the wind heats up and creates a low pressure system whereas the water doesn't heat up as quickly as a result you get this low pressure high pressure situation and it's the that you get winds produced in the afternoon you know offshore winds and then it reverses at night but since it's the predominant wind direction is from the south those are diminished you can see that they're they're almost symmetrical but the neat thing about coastal it's not caused by sort of the geographic average wind over Texas it's cause it brings its own wind with it basically which is kind of an interesting concept and that's one of the reasons why it's valuable it also counts for capacity or cut counts it at about 56 percent of its installed capacity on peak during the summer whereas West Texas wind it's 18 percent and that's because of that same effect in terms of solar location solar radiance is the main is the main factor here you want to maximize the radiance which is going to maximize output so it's impacted by long itude and latitude essentially the location of it also the potential for cloud cover and temperature factors so for optimal radiance the best location in Texas would be all the way west to El Paso but El Paso is in an Urquhart but it's also not quite that simple yes you'd like to go as far west as you can to maximize your radiance but if you go too far west you get into an area that has substantial transmission congestion so then there's too much out there without sufficient transmission so the optimal location is as far west as you can go to maximize your radiance but to be within that border so we can minimize congestion there's still congestion out there but that can be managed but we don't want to go too far out where you're into an area that's going to subject you to too much congestion so the optimal balance the optimal location is going to be somewhere say close to Midland or a little bit east of there to give you the optimal location for radiance and avoiding or minimizing congestion a couple of other location considerations this graph on the left with the multicolored dots this came out recently from one of Urqu hart's long-term system assessment studies and this is essentially projecting where the additions of generation will be and the retirements of generation so the yellow and orange red dots that's where they're expecting additional generation to come in the blue dots are where they're expecting retirements you can see the additions are going to be out in the west and the retire ments are going to be mainly in the east well this is going to exacerbate some of the transmission problems in Urquhart from the west to east flows so if possible it would be good to locate new generation in the areas where the retirement is going to be that's really not that feasible in terms of solar but it is feasible in terms of wind so in terms of locations for wind coastal is going to be on the coast which is in the area with load growth because of say for example LNG exports and so forth there's load growth expected there and you're going to get some retirement so coastal also fits this location optimization from the generation retirement in additions portfolio and then lastly you want to have a renewable resource with a transmission interconnect ion that is on the correct side of the pricing clusters so we took into account where some of these other interconnections are and that's something that will be part of the RFP evaluation when you finally decide specific resources and offers you want to take into the transmission connection the optimal location for those all right this is just one single slide and we'll move on we don't want to belabor this just to give you a sense of all the various factors that we took into account of the portfolio model and we clearly look at natural gas prices because they're the main driver of how the portfolio would be would perform power prices heat rates the deck heats heat rate plus estimate or variable cost your load growth the various production profiles of renewable resources the prices of those CRR costs and prices and basis costs in ERCOT potential regulation changes things like marginal losses local reserves we're going to talk about the potential solar tariff in a little bit because that's one of the decisions that Denton's going to need to make the reducing in the the tax federal tax credits that are going away plant retire ments renewable saturation certain regions proposed new resources and the Lubbock ERCOT integration all of these things we took into account qualitatively and quantitatively in modeling the Denton portfolio so let's talk about some of the sort of conclusions that we came to in the in the in the plan here first we need to just talk about the concept of firming before we've been talking about the role of the deck in the role of market purchases and firming so using a specific power plant to firm in a written intermittent resources is necessary in a bilateral market where utility is responsible for reliability in its own control area but ERCOT is not a bilateral market the ERCOT market is designed as a power pool so it's managed as a single control area so the ERCOT market is designed for to use market resources from the pool for supply balancing or firming it's not necessary to have a specific power plant to do that so the primary issue here though with using those market purchases is how much is it going to cost it's really a cost issue what's your least cost way to balance your portfolio and to form those intermittent resources and a portfolio with 70 to 100 percent renewable resources will require a lot of firming so this was one of our main missions and the resource plan is here how to develop a resource plan and the associated portfolio management operational process necessary for optimal firming from a cost efficiency basis so the deck will clearly play a role in the renewable resource portfolio was a cost edge during really high priced hours but from the majority of time it'll be less risky and more cost efficient to use market purchases for firming so we've used an August day as an example to illustrate this concept so on this graph once again we have a 24-hour scale the 24 hours in a day and then we have costs market costs for power on the vertical the three different colors indicate here where in the green this is when you would use the market use the day ahead market to firm or to balance the portfolio the areas without the green this is when the deck would likely run and you're seeing examples of what real-time prices and day ahead prices are in here so I'll point out one factor here notice that during these off-peak hours you're really not getting much of a difference or a premium in the day ahead versus the real time that really shows up during the middle of the day and this is when the deck would be most valuable and would be quite a resource to be able to cover these hours so based on the modeling that we've done the deck using that as a sole hedge or a source for firming is not the least cost or lowest risk option the deck is going to run but most of the time per over 75% of the hours it's going to be cheaper to firm the renewable resource portfolio using market purchases than with a deck so the low heat rate associated with most of those hours in the dam will allow the firming using market purchases and at a lower cost than the deck while also avoiding congestion and price risk so to summarize some of the takeaways here on the deck looking at the advantages and the disadvantage of the plant the deck is a heat rate hedge so it will be very useful when you get times where the heat rate rises in the market that's the greatest value that it's going to add to your portfolio it 'll also provide a long-term hedge benefit in the event of accelerated retirement of conventional generation resources and we're seeing that just recently we 've seen some announcements of additional coal generation resource retire ments the disadvantages are that is a higher heat rate generators generator so it offers no pricing power no real competitive advantage ERCOT manages the system so that heat rates don't vary much you saw earlier that heat rate curve from ERCOT that showed that heat rates were very stable so you need some unusual market drivers to raise the heat rate to really make the deck to be the most valuable resources can be so our runtime estimation based on the natural gas price projections that you saw and you'll see those again is that the deck would be projected to run between 12 and 20 percent of the time which would be the equivalent in any year of 13 to 1700 hours per year that would be based on those high and low gas cases that we used in the analysis but there are some additional ways to get value from the deck so we think that Denton should be prepared to sell deck output forward winter if there's a spike in natural gas prices or a spike in heat rates those are times where that does occasionally happen in the forward market and there would be an advantageous time to take advantage of that and sell deck output in the forward market if didn't has an excess supply say for example if you've got a summer day with high coastal or solar output during the day then the deck can be sold into the day ahead market to produce revenue during higher priced hours the deck can also be used to sell firming services to other organizations looking to add renewable resources we are aware of some organizations that may be looking for those sorts of opportunities so it is an opportunity out there to to monetize the deck and it may also be beneficial to sell excess renewable power during periods of excess supply and then you could use the deck to firm the transaction now that doesn't mean the deck would necessarily always be needed to firm the transaction because if you for example sell excess renewables and you sell them on a firm basis it's up to your operators to then determine what the least cost at the time is to firm it it still might be cheaper to use the market to firm that power but the deck is always there as a resource so from a firming standpoint you've really got a two-part process here you always want to look to the market to see what the cost of the market is most of the time the market's going to be cheaper for firming the deck will be a valuable resource though in those higher priced hours to add to reduce your firming costs just to add to this even though you sell the deck as a firming resource doesn't mean it runs anymore it runs every year ERCOT determines how much it runs that's kind of a fixed thing that's outside of your control and so what you're doing is just selling a piece of your expected value out there in a financial sense so it doesn't actually use consume fuel for this it's just you're selling the the fact that you have this firming resource out so it's kind of a virtual resource would you can you go back a slide to this one or I'm sorry go forward go to the the advantages disadvantages slide there we go it would you say that from a fiscally conservative point of view and from a risk management point of view the disadvantages are greater than the advantages of the deck that all depends on what the price of gas is yeah well yes and and so there is no concrete answer to that question but I'm saying and that's why I mentioned risk management because risk management takes into account that yeah you see what I'm saying I do and I would also say this we have a variety of clients that we've worked with over the years and one of the chief challenges we have in working with those clients is to determine what their risk tolerance is I would term it risk intolerance but nobody asked me they coined the phrase before I came around we call it in risk intolerance you'll have very conservative organizations and organizations that are willing to take more risks and so it really depends on that value set as to what they feel more comfortable in terms of reducing their risks yes so there's a spectrum there of choices yes yeah and it's it's what is clear to me from from this presentation is that the renewable dentin plan was and the purchase of the Denton Energy Center was built on a very high risk tolerant very risk friendly philosophy and there's nothing that we can do about that now but I appreciate your focus on risk management and fiscal conserv ativism because we work we have not yet seen that we didn't see that in the past in presentations on this subject so thank you you're welcome my guess is that we were not privy to the thought process behind that other than you know like reading the Brattle report I would just estimate that that anybody who wanted that probably felt comfortable with a physical asset in order to do that and there are people that feel that way and that's just that's just a preference and that's just a preference is Denton a load-serving entity and what are the requirements under FERC and NERC if they are that you are a load-serving entity and isn't it better to have a physical asset because of the penalties that you could have in the future from FERC and NERC if there was something to go wrong we're in ERCOT we are not really regulated by FERC right we are ERCOT you know we don't have essentially interstate trade and electricity so what so you're a load-serving entity from ERCOT ERCOT is an energy only market and they score you on how how well you schedule energy or resources against your load and so as long as you do that you get a score of a hundred percent right where does physical resources add into them well they could be they can be resources at time but if they don't have the deck doesn't have any energy associated with it it has a heat rate so you can't really use that as an energy only resource in ERCOT to serve your load-serving obligations is that clear kind of sort of most of the market just I mean all the retail without physical assets behind ERCOT how are they going to firm anything ERC OT it's a it's all been socialized it's all been pooled you may have a resource but ERCOT really is the one who operates it and I remember a while ago that they were very concerned they didn't have enough capacity to be able to serve taxes that's always the story almost universally all over the country and they they all have a reserve margin and so that's that's true that's always an issue but you can always if you go out and buy your own resources a wind resource will fill your needs over the long term I understand and for the record I'm very even favorable of a lot of renewables no but but and so you can just simply you know solar plus wind that's just as as a matter of fact that will serve your load in terms of an expected value better than the deck will because the deck doesn't have any energy associated with it it's a heat rate call now it's good if you think that the will run out of capacity but let's say if you run out of capacity this the deck doesn't really serve Denton it serves I know so we're all in the same boat right and no small entity like Denton building resources is going to fix that it's a comprehensive big thing so this is where some people make mistakes they think that somehow by building a physical you know steel on the ground that that helps them and you're better off potentially buying natural gas because that's where all the risk is the actual if you go look at what Larry had this the dispatch heat rates don't vary very much in right cut that's because all these units that we built we have this huge unit build out and they're fixed and they keep operating day after day after day and what they're concerned is they're getting crowded out by renewables so ERCOT is incredibly safe you know this is the thing if you're worried about becoming short you shouldn't unless things change dramatically then they have a process to keep units from being retired and that's what Vistra just announced it's going to retire for instance a sandow plants Monticello and and Big Brown what ERCOT may came in and say no you're not going to you're required to keep these on RMR status that means reliable reliability must run because if you do this you're going to create local congestion and we there's a you know safety aspect to it so they won't let them retire and that process so think about it we you know if you retire coal units at some point they just say stop don't retire those units so it's there's a safety factor in that a lot of people don 't consider and then what they do is they say here's an RMR you get all your costs are are you know included plus a return so people say well great now I have a asset that was losing money now it makes money so people will turn those into RMR status so just sort of conclude to some of the questions in here we have a particular expectation of where gas prices may go others have a different expectation and the relative weight of these advantages and disadvantages tilts depending upon where gas prices go and that's something that is just a preference to whoever thinks about where gas prices are going to go gives you the the relative weight of those advantages or disadvantages so speaking of that this is just yes question just just following up on what you were just saying would you would you say that the renewable dentin plan as it was previously imagined mis represented how ERCOT works I don't know if it misrepresented it it depends on how people felt that the way that the market would work so it could be in a view on that we haven't really dealt deeply it's a lot of what we 've seen in terms of the dentin renewable resource plan were some PowerPoint slides that gave some expectations of what the portfolio yeah and that's as I understand it that's pretty much so we didn't really see a lot of detail in there that could really put that together yeah and and and there wasn't the I'll just just in terms of me communicating to the public who's watching and trying to piece together right because I think people are trying to piece together what we're hearing now versus what we heard in the past you know what we heard in the past was that ERCOT needs this this this gas plant and that without the gas plant dentin is in danger of not being reliable and ERCOT itself the grid is and what I hear what you're saying is that ERCOT takes care ERCOT takes care of it ERCOT is is in no risk of you know running out of power and if they and and we would know and and and we'll know if we're needed to to build a gas plant for them yes one thing that I think that's very important as we go forward and the PUC is talking about this right now and that is this as we go forward there's a huge ERCOT and the PUC have been focused basically on building assets all the assets they see all the resources that you see in the in the but that's all on the supply side they have not been focusing on the demand side and efficient market design requires that you focus on both sides so there is a price that I would and most people would if you saw prices too high and you were your rates reflected that you turn off your load and that hasn't been integrated in the market but it could be in the near future so this is one of the things about how the market is designed as you go forward this demand side resources and management is so important and so this is one of the risks I think about going out and committing anything to building physical resources what if everybody has an app on their phone it's connected to their smart thermostat and you start cycling air conditioner or there's a lot more work on commercial and industrial loads to do the same thing we see a lot of that activity in the market now where people are trying to do something called Lars load acting as resources and other programs which will lower the demand and we and that's one thing I don't think really was discussed that much in the Brattle report but it 's something that's coming we just don't we had discussions about my inside management we did a lot of commercial businesses the experience that I have had they're not going to shift their production and do all kinds of changes to meet some of that we tried very aggressively where I came from and it just didn't happen on the industrial side it happened on the residential side because that was a little bit easier to manage but we just couldn't get some of the industrials to do it and it depends on the nature of your customer base and and so I do you do have some large loads and this may be something that develops in the future we did address this in the written report we don't have a slide on this we think there are a lot of advantages to pursuing demand response and demand side management programs in terms of where we saw the media priorities are you've got renewable resources coming online in a few months you've got an accelerated goal to reach 70% so we saw that just we've referred to in the report from the 80/20 rule we had that we had to really take the big pieces immediately which is really addressing how you fill out the supply portfolio from a renewable perspective then your timeline to go on to a hundred percent during that I think that would be where you would really deserve a greater focus because it's gonna take a longer lead time to plan some of those demand side resources you 've got to really integrate that into your rate incentives and that's not something that you can make immediate decision on we've seen utilities out there act too early in some of these areas and really spend a lot of money so it's always good to sort of wait for some of these technologies to come into play and maybe a second generation gives you a much better cost efficiency there so we would we would just caution that that would be something to plan out I think it could make a really important contribution to how you get up to your 100 % goal but that's going to require a longer lead time a longer planning and a longer deployment for those types of resources whereas here you know to get to 70% even to a hundred percent immediately we were really focusing on the big immediate things that can be done to fill out the portfolio and if I remember Brian weren't we going to be able to go to like 88% because of the price change that had occurred between what we thought five months ago to today yes I think that was the the figures that we used back a few months ago we came back to and we're in just a moment you're gonna see some slides on what we suggest as an adoption path for this and we don't see any reason for you to hold back I think you can really accelerate what you're doing here because of the advantages and there are some arguments for accelerating it because of some changes that may be coming down pretty soon we're gonna we're gonna especially the tariffs on solar yes we're gonna cover those here very very soon excuse me yes can you go to slide 15 the the seasonal summer this one and yes yes so the blue is the Denton Energy Center so yes the vertical bars why do we turn it on then you want to turn it on to maximize this slide why do we turn it on you don't turn it on okay so here's the dispatch because the at that time the whatever you've been in it let's say you let's see what's the price there the price is let's say $35 and that means it's more than a 10 heat break that's why they turn it on is because that meets you 've been in a curve essentially and and during this this was a really high priced August day August is okay prices okay and so those things may have been so can you go back to your disadvantages advantages slide sure so then in those situations it does offer some kind of pricing power and competitive absolutely at those hours yes it does so then actually for the 12% to 20% of the time that you estimate that it is running or will run it will be offering pricing power and competitive yes at those that actually for nearly possibly 25% of the time a quarter of the time it will be that will be an advantage not a disadvantage correct absolutely and I'm not sure that's far different in percentages from what we were told no if I'm not mistaken I think it's pretty close said 17 17 so yeah it all depends on the gas price right sure so you so you've actually nearly said the same exact thing we were told in the renewable debt and project and technically then ERCOT is depending on us to firm up their entire system some granular data we haven't been given before yes but the 12 to 15 12 to 20% I mean that's not far off from 17 and I would think you would find in just a moment we're gonna show you some projections of what we think the value of the portfolio is going forward with the renewables and I think a lot of that modeling very much lines up with what brattle it is just a different gas price assumption the whole different whole difference is just the gas price assumption yeah absolutely and and just to amplify what you were asking about just on this graph here that shows in the white during this particular day that is when the deck is the least cost firming resource rather than the market that's when it offers an advantage to you and so just go ahead you make your point and then I'll but annually that will still represent that 12 to 20% this is just kind of a quibble it actually doesn't give you a power price it gives you a heat rate and what's the difference in that time put my mind around heat rate I think professionals do that right yeah it means your margin basically yeah if I get just if the price is a hundred dollars for the deck and the markets 110 you get a $10 you know you don't get a hundred dollars and so that's one of the things about that's how the price has slipped is a hundred dollars a good hedge we would say if our average price is 25 not really that's where we're saying this is a little bit you have to think about this and and that's how it works and then just what I was going to conclude there and say is that you know we say we see our mission and what we've done in the resource plan here is how does the deck fit into the portfolio you know we're not sitting here making any decisions about the deck it's how do you best optimize it how do we maximize the value of that how does it best serve Denton going forward given you're committed to it and so it's just that balance of market purchases versus the deck which is the least cost alternative at the time you need it for that but simultaneously when it is in excess you need to be whoops I'm going the wrong way you need to be maximizing sorry I'm off here 15 what you need to be maximizing the revenue opportunities for this even if it 's in excess it's it's the sort of thing where when the when the the opportunities there you're taking it full advantage of that opportunity so that's to maximize the value just one question and it if you go back to that slide I'm sorry this one yeah that's perfect just as so we're saying okay we this is during the blue period there is when the deck deck is engaged yes and then that is a that's a one-day sample now annually we're talking again what 15 20 percent or 20 percent of the time runtime so I guess the question is if we look at it if we 're looking at it as number of hours as a percentage of number of hours in a day or a year or whatever it is versus a percentage of what is the actual load that we're using or having the purchase or for the for the didn't load you got the didn't load so the load in August for instance would be a lot more than the load in April yes so can we can we look at from an annual basis just I'd just like to see the percentage of our annual power purchases of how it breaks out I think we're looking at the run hours and we've got that but I'm more interested in what the percentage of the load we're using yeah and that would be then a function of what renewable resources what the type you put in the portfolio and the quantity so that once we get a little closer to getting a specific recommendation fit we can run those so we could say okay a you're producing this much for your resources be this many hours or market purchases see this many hours are deck we can come up with that once we get a particular portfolio and actually maybe even reflected in megawatt hours absolutely that's how we count that you're doing yeah yeah but it's far smaller than 15 percent maybe 5 percent or something yeah 7 percent okay and that's because a lot of it's so a lot of it sold as you can see below there right yeah even though those August days but I think I'm still I'd still think that's an interesting thing we need to look at it are these all these projections based on current population current demand current load or do they project an increase you know the city of Denton most cities spend a lot of time trying to promote industry promote jobs so people have more income you got to have the resources and you need the diversification and be able to provide the energy and I like the word hedge because my world hedges a lot which is finance you need to be able to have the different resources you have the hedge and you have a city trying to bring in more people more industry create more jobs the more you can offer and assure them of all the different resources including the plant to me that makes a positive impact it's not just about tunnel vision here we hedge we do this we have a ton of options and but it would seem to me that these numbers are going to change if you said in 20 years the city didn't is going to be 30% 40 50 percent larger or some major industries come in here and that load changes and and the cost of doing it then under crisis is a lot more than spending the money up front today well as of inflation because of the cost of putting in equipment prices are going to go up yeah you're at your average annual growth rate for let's say the last ten years about 1.6 percent and that that's our base case as we go through it is 1.6 percent one of the things and the other thing is in terms of economic development ours is at least cost solution and in our experience in attracting economic development stuff and that sort of thing they look at your rate and your cost if it's the lowest they like that then that a secondary consideration is how green are you and Georgetown can tell you that they have a branding of being 100% green and that has helped them with economic development tremendously so your your point is well taken I think that in terms of our modeling we have to model what your typical growth rate has been you can always incorporate a scenario higher load growth but I don't know if that would be enough to change the resource quantity right now but it's a it's a good thing to consider for the future and that is a scenario because if your load growth starts to increase then the plan has to be adapted. All right the reason this slide here is repeated is that it's going to reference this next slide here for the benefits of the renewable portfolio and we want to be careful with our words here you know these are benefits I'm always hesitant when you're talking about a hedging entity a load serving entity when you start using the words losses and profits and returns and so forth you know the for-profit entity you're trying to manage to serve your load on a least cost basis so when we are using the word benefit we're using the word benefits of the portfolios as designed here versus the alternatives there from the marketplace so this slide just shows four different scenarios which are based on these four different natural gas forecasts so we've got the high gas case that we have again just to remind that that just models in an expectation of a rise in natural gas prices and then a reversion to the long-term mean our as the high gas case our low gas case is essentially a projection based on current market prices and then we incorporated the brattle low case and the brattle base case into these projections as well so the top two areas that the upper half of the tornado diagram here are using those different gas cases to project the potential benefits of the deck using the brattle gas cases and our gas cases and the bottom half is the total system benefits through the additions of the renewable resources that are proposed for the system you want to speak to that anymore just in the sense of the portfolio makeup so the for ours what we did is we took a hundred percent goal and that was achieved in 2024 so you went to a 70% in 19 per year renewable portfolio standard and then as soon as the white tail fell falls off it falls off in that year we will replace it with the renewables and that puts you at a hundred percent in between your year in the 80s and so that's a little bit different than what happened with a br attle but it and what it does is it allows you to get because they're lower cost you get a better more benefits earlier on in the planning horizon now if you notice if we used our model and used brattles total system benefits that come out to be look pretty darn close right so we given those gas prices we would calculate almost the same benefits what the main thing that we did is and this is also true for the deck to there we have these benefits for the deck the top thing and it's not too far off from the bridle deck now one thing I want to note if you go look at their things we put this all in 2008 and 18 real dollars or constant dollars dollars of the day they use nominal dollars inflated dollars and if you don't know the inflation rates you don't really know what the price is so this is something that we kind of corrected and we think so now this is all on apples to apples comparison thank you so let's get down to some of the considerations for selecting renewable resources and our recommendations for those so didn't can reach its 70% goal with additional renewable resources from the current RFP submissions there are very attractive offers for power in the current RFP the additional energy to reach the goal ranges from approximately 9% to 27% as we stated earlier this depends on whether or not why a tail is designated as a renewable resource the current portfolio as it stands now falls far short of a balanced and diversified portfolio because solar is over only 30 megawatts and you've got a large chunk of West Texas wind in there so those things need to be balanced out the the deck is a heat rate resource and therefore doesn't contribute an energy hedge during peak hours it's a heat rate hedge only until the price of gas is known for that this leaves Denton with a on peak energy supply gap so a minimum of 90 120 meg awatts of solar would help balance the portfolio so that's going to be the one of the chief recommendations we're gonna make to reach the 70% goal in a minimum another 70 megawatts of solar should be considered as an addition to the portfolio if white tail is not counted then another 120 meg awatts of solar should be considered with rent representing the balance of energy to reach the 70% goal. What's important about this if you think about the solar on peak that's what's completing the energy hedge that is missing with the deck so that's why you would purchase it and you say well why should we purchase this don't are we covered with the deck well this has a price associated with it the price is $2.20 natural gas equival ency that's incredibly cheap this is a discount you can't get in the market only and it's a renewable that follows our load profile yeah yeah and so we see this as a it's kind of a belt and suspenders kind of thing but the solar is certainly the belt and deck is the suspenders in this case. Now one consideration here is a potential solar tariff and I'll let Neil speak to that in just a moment but there are several things to consider that you might be able to do because of that one is that you might just take an approach that in your contract and you're not going to accept any tariff risk there is there's not enough that's concrete yet about the potential tariff there is the opportunity chance that it may be somewhat retroactive which is a little bit tricky you do have some solar suppliers that have stockpiled cells so they may be able to either designate that or if they're really that confident in when the timing of those souls are cells are if you can get them contractually to commit to that that would be a recommendation on our part so this is a bit of a cloud overhanging the the potential acquisition there an alternative we would be to acquire more coastal wind as you saw coastal wind has an on-peak profile doesn't perfectly match solar but it would be a reasonable offset yes I think I saw come back to the tariff do we know approximately what we think that would increase yes the cost yes we don't know exactly because it's a tariff and there's quotas and it's just as complicated as can be but I've heard it increases the price from say $25 delivered to the hub north to 40 so what does that convert back to the gas price of gas it makes it it makes it more expensive yeah it's over doing the math in my head okay yeah but it would make it non-compute would make it that attractive at that okay yeah it's still you'd be paying a premium yeah to add that in to reach your goals so all the more reason to it's not our risk is yours correct so coastal does have some of the characteristics of summer wind so you can increase the coastal and not do as much solar or solar at all if that is a important risk consideration for Denton you could consider utility scale wind resources with a storage component that could also add a lot of cost though and that's something that storage is intriguing this is the next massive revolution in this business but you're just now in the cusp of it so once again we've got that where's the price factor you know we're not in the second-gen generation yet where this becomes price competitive or didn 't could wait after reaching the 70% goal it's tariff prices and supplies read just to marketing conditions or the tariff is no longer an issue so that's just one other consideration here you get to 70% you wait see what happens to the solar and then you could add more solar later once you get from want to go from the 70 to 100% level not exactly a risk but other factors like this that could be potential purchase accelerators are the retirement of conventional fossil fuel generation if enough of that's retired that reduces the resource base and the cost base and could raise overall prices and because renewable developers are in there right now well we'll look at the second bullet there the reduction of the producer tax credit a lot of the developers in a hurry to get in under the the finish line before the tax credits go away there's a lot of competitive offers right now but those might go away after the tax credits go away and if prices are higher because of the retirements of conventional generation renewable prices might be higher so this conceptually could be a really good time to strike because of the timing of these things right now and low natural gas prices if they got your natural gas prices rise then there 's less competition for these renewable resources and then the prices may rise in your RFP so you're seeing very attractive prices now there are a lot of factors here that make this appear to be a good time from a price standpoint so those factors could be potential purchase accelerators one other thing this isn't a major point but I wanted to include this here very briefly we talked a little bit about having to correct for what producers claim to be the output of renewable resources well they may also pick certain years and so forth renewable resources are variable wind speeds do vary this is a graph from ERCOT that's showing the variable variability of winds over the year so you can get amount of wind production varying by as much as 15% so if Denton wants to reach a goal of 70% are you reaching 70% on average and then are you willing to tolerate being less than 70% in a year that the wind doesn't blow as much or do you need to overshoot the goal so that even in a low wind year you're still reaching 70% this is just one of those calibration questions that we can't answer for you this is just a value decision that didn't needs to make you want to ensure you're 70% or you want to get to 70% based on the average profile and then be willing to say well some years a little under 70 some years a little over 70 or whatever the goal tends to be just an additional consideration there in terms of the quantity that you really target when you go after these resources so the next three slides here show some adoption paths we've got graphs here these are graphs the horizontal scale is across years and the vertical scale is in the number of megawatt hours so what the big takeaways here are the red vertical bars represent quantities of renewable purchases that you would make in those years to reach your goals your load is in the light blue shaded area that reflects your load growth as we've used it for the base case here and then you're seeing the additions of renewables what that does to the portfolio and your fixed price exposure where that fixed price exposure can vary from the portfolio is in something like whitetail because if you're not considering it as a renewable resource and if you get to say 70% renewables you really have may have 88% fixed price exposure because of having whitetail in the portfolio in addition to the amount of renewable resources that you add so say that again I can't get my head around it yeah so if you add enough resources to get to 70% in your portfolio and you don't count whitetail as a renewable resource that's additional supply so if you get to 70% renewable but then you also have whitetail in there you may have 88% fixed price exposure even though you're only at 70% is a quantity of renewable resources that reflects the peak that's that gap in the upper left hand corner where your fixed price exposure exceeds the renewable resource amount so this is what we've termed the gradual adoption path this is where you would execute on low-cost alternatives in the present to get to 70% then additional renewable purchases would be made to reach 100% by 2024 and whitetail ends in 2023 so that's when those two lines would resolve and meet and as I said in this example whitetail is not included as a renewable resource and alternative this could be the early adoption path and we like this path because we think the time is right it's a good time to strike so this is something that we would recommend this is when you reach the 100% renewable goal faster by 2020 so this would though result in excess power supply of 18% through from the years 2020 to 2023 again this is not including whitetail as a renewable resource this is getting to 100% renewable faster you're effectively for a few years at 118% but with the addition of enough solar where you would have the excess power would be on peak and that's not a bad time of use to have excess power so then you could sell or monetize that excess power and get revenue for that you want to speak now I think you're on this yeah then just the third alternative is the early adoption counting whitetail if you chose to count whitetail you'll see now that the the line there showing the amount that you have has resolved there so including whitetail as a supply as a renewable resource would also accelerate the number single to 2020 it would require replacement of the whitetail piece in 2024 the principal advantage of this is you don't have that 18% excess of fixed price risk but given what we see in terms of the attractiveness of the prices out there and the various factors to consider this is what we would suggest if you ask us our opinion would be the early adoption path so these are just some alternatives that you all need to take into account in this some other considerations I don't want to belabor this slide they're just just to give you a sense there's some alternative configurations here to reaching some of those megawatt-hour targets here if you go to 100% renewable you could do it by 180 megawatts of solar with 150 of coastal if you chose to emphasize coastal more you could get to the same place with 120 megawatts of solar in 200 megawatts of coastal just some more considerations that we've listed here just wanted to give you a flavor for that so let's now get down to specific recommendations in the decision so we're finally wrapping this up here because of the confidential ity of the RFP process we've just labeled some of these companies bidders one two and three but these are these are some of the biggest suppliers out there these are serious players with those offers so you see some wind resources solar resources prices at the bus bar prices at the North Hub we just to highlight the the sort of craziness and how people will price in congestion notice bidder number two on the second row we got 1335 at the bus bar into $30 at the North Hub that's a substantial amount of congestion that's how they're pricing in if you ask them to take that risk that's how they're going to price it in so one of the key considerations here and one of the things that we 've stressed continually is CRR management is your congestion management because we feel you can do that much more cheaply then they're going to price it in now there may be some cases here where they're doing it at a pretty efficient way and it may be to your benefit to go ahead and take the power of the bus bar and let them take the congestion risk because they've priced it in fairly but if you're getting a huge gap there it would be more efficient for you to take that on yeah so for example what he's saying bidder three and yellow where you've got the price of the bus bar of 2150 that's the solar resource the next to the bottom line and the price of the North Hub of $23 that may be something where it's just to your advantage to take it at the hub because that's something that that that slight price premium in the congestion market might not be worth it so again these are some value considerations that need to be made by Denton to best fit this so just to go over this here so this would entail a purchase of approximately 30 to 40 percent of load in 2019 with additional renewable resources we think the useful portfolio divers ification could be achieved with approximately 75 megawatts to 100 megawatts of coastal and approximately 90 to 120 megawatts of additional solar resources to meet the 70% goal some amount not all but some amount of North Texas one can be substituted for coastal because the two resources are close in cost this is just an adjustment that would need to be made so our preference is 200 megawatts of West Texas solar within a congestion region so you wouldn't be penalized with that and then 150 of wind which could possibly be split between locations depending upon cost equivalency one more thing I want to add here that's not on the slide we've just recently been approached by another municipality that would be willing to go in with you on a solar resource and solar in particular benefits from cost scaling so because of the equipment so there could be somebody that might want to partner with you maybe on a 50/50 basis and this could reduce the cost even further if you're willing to do that that's not reflected in these prices by the way so the optimal solar location was you talked about it'd be close to Midland but east to get into a less congestion pricing region and then Denton is going to need to hedge both its load from the hub north to your load zone and from the resource node to the hub north with CRRs for the upcoming Santa Rita wind as well as your solar farm so those are your recommendations and then just a summary here of decisions and then we're at a close here so some of the decisions are should you count quiet tail as a renewable resource yes or no if not you're gonna have to entail additional fixed price risk some of the answers to this once we get these answers back then we can give you a more concrete specific recommendation for the portfolio makeup well didn't choose to delay solar purchases because of the potential federal solar tariff would you delay them substitute coastal and so forth that's another value decision that the organization needs to make should didn't accelerate renewable purchases especially wind resources because of the attractiveness of the timing you may want to accelerate that that's that's our recommended early adoption path there's no reason to wait at 70% prices look attractive you can go there faster so that also then impacts that last decision should you move for the date of the 100% renewable goal and with that we are at the end of the presentation so any follow-on questions we can answer the 18% risk is there a proximate dollar amount that is all part yes the dollar amount would be 18% of your load your load is 1.5 5 million so whatever that is that's about 300,000 and the current price is $27 so 300,000 that's 7.5 million or something like that so that's roughly the risk out there on the portfolio the fixed price risk but again it depends on the price it depends on the price expectations so if you have that extra fixed price risk and then gas prices go up you're actually getting a benefit to having that extra 18% of gas prices go down you're at risk so it really depends on taking that base value that Neil calculated his head and then saying okay where could gas prices go higher low that gives you the range of potential outcomes some of them could be unintended benefits and going back to your the gas price model it was a blue line in the graph there was a short-term rise and then yes and then a drop yeah right that you yeah so if that happened and that's just a case we use we're not necessarily predicting sure I understand but if that's a case you use that would actually be quite advantageous that would almost perfectly overlap the time that you would have that additional dropped in 2024 okay good pretty good point five here the dollar map no oh he just calculated it would be the the base value to be about seven point five million per year but here's the thing going back to some of those other slides that we had what's gas gonna do if gas prices go up you get a benefit on having an extra 18% of gas prices go down it's gonna be a detriment to that so once again it kind of depends on what that gas price is and the chairman here just said well looking at that high gas case we had where there was the gas price rise for a few years that would ideally overlap with that but that's that's just a scenario that's not sure thank you yeah any other questions yeah this is for clarification for the public so just to be clear so a hundred percent renewable does not refers specifically as you're using that term to Denton's portfolio right meaning that is in use for Denton right how much how much where our power that we're using in Denton to turn on the lights here in Denton is coming from correct that's right so if you've got a certain expectation of megawatt hours of consumption in a year if you buy enough renewable resources with a projected production output of that same number of megawatt hours if those completely match then we would say you would be a hundred percent yes yes so it but that means some days were not and some days were that's right more than that but that's right and that's why we use annual because if you start picking a season you introduce seasonality in the distance too much variability so annual is really the shortest time period you can do that really smooths all that but moment to moment hour to hour season to season you're a lesson hundred percent you'll more than a hundred percent yeah I had a follow-up but really I had it no I was just gonna say that I had read an article not too long ago about Georgetown talking about a hundred percent being a hundred percent renewable and that actually that was more marketing than reality depends on how you define that because I would say right now they may be more than a percent yeah but because of the fact that at times they would have to purchase other in order because of you know the lack of wind or the lack of Sun or whatever that it wasn't always a hundred percent unless you and so that's kind of the scenario that I see for us as well is that we could say we're a hundred percent because we were trying to reach that goal but in reality we we wouldn't be that what we have suggested is the best you can do under the current market structure under which you have to operate and you don't have choice about that the only alternative would be is if you ended up somehow opting out of Urquhart which you couldn't do and then you had enough wind and solar so that at the absolute minimum you had that generator hooked directly into your own unique grid that's the only way you could absolutely ensure that because there will be times where you have to purchase from the market there's just no other way around that regardless of the structure so this is the best you can do given the reality that you operate in. The fact is from their definition they're always a hundred percent renewable because they purchased resources to fully supply their load and they're over a hundred percent so it's not marketing it's in actuality they have a financial position where they bought this stuff they own it it's they're committed there's a real wind farm or there's a real solar farm that they get that output from now this this other thing it's all commingled into the marketplace and that's that's one of the things but in from accounting and business sense they are a hundred percent renewable but no one is can be a hundred percent renewable in the real time in a physical sense that's under Urquhart. Not under Urquhart. Our physics doesn't allow for that. Well politics. So just to be clear for the ratepayers so a hundred percent renewable in 2020 means that we will no longer be using the gas plant for power in Denton it's only for selling after 2020. That's a complicated answer because remember that in Urquhart all the energy goes into the pool and comes out. So yeah it comes back to us because we're under Urquhart. Remember that in any in any hour when your portfolio forecast is not sufficient to meet your load you have to make up the difference and you have alternatives you can just go into the real time you could go into the day ahead but then the question is okay what is that gonna cost versus your resource? Absolutely. When it's cheaper to buy rather than run the deck you buy. When it's cheaper to run the deck than to buy you run the deck anytime you have a shortage. Yes. That 's just however that wants to be portrayed that's just the reality of the least cost supply balancing that needs to occur. Yeah yeah so I'm just so I'm I'm thrilled about the the how soon we can meet our hundred percent renewable goal and I support your all of your recommendations so I don't mean the following to be anti a hundred percent renewable but just in terms of being clear to the public and also finding just getting your your sense of this to confirm for me that we are so we've paid we've taken out this you know 260 million dollar bond for this gas plant that the public was told was needed for reliability in Denton and now it is now finally we have someone standing behind that that podium and saying no you don't need it for reliability ERCOT takes ERC OT takes care of that and we are now it seems paying this 260 million dollar we're 260 million in the hole with with interest for the bonds for essentially you know two for using two years for using this for two years directly to Denton and I do understand that after that sure it comes back to us gets filtered through through ERCOT and and I think the public has a sense of how that how that works but is that would you say that that's inaccurate I would say you're going to use the deck to its best capability as long as the deck can operate unless unless you make a different choice so it's not a two-year horizon it's over the horizon sure sure but it's for these two years that I mean it's after two years assuming that we go with this well remember that you will always have a firming requirement no matter it you would have to probably purchase I don't know if Neil can make an estimate you might have to go 180% or 225% renewable not to have to firm anything so that you would have an excess in every hour but one during the year oh yeah I understand that but it will always be used as a firming resource regardless well but but by ERCOT and as you as you made clear ERCOT takes care of firming for us the firming yeah the issues the cost that that to us and that's the sole thing is how much is it going to cost to make up that portfolio well I think you made the statement earlier in which I completely agree with if it costs less to run deck than it is to purchase in the market we run that right if it costs more we purchase right but there 's always when we say ERCOT takes care of the firming they take care of it but at what price right that's right so we've got to that's how we manage that's right our market purchases and the deck that's right so going back to something we've talked about earlier which is sort of the risk preference or the the risk intolerance there are some people in the marketplace that feel more comfortable having an actual power plant that they can use to dispatch instead of paying the higher cost market purchase and the exposure to risk they yep right it's a cost risk is what it really is you're not going to run out of power just at what price are you gonna have to pay for that so some organizations prefer that because that makes them feel more comfortable others don't need to go there that's simply just a value decision and that is a risk preference of whoever has made that sort of decision that's just a portfolio design aspect we see both out there in our client base so opposed to two years now to the end of time relatively speaking that serves as that word I like hedge against cost always it's a hedge against high heat rates and high gas costs because you have to pair the cost but yes it's a hedge against those higher to the end of time or however long it lasts yeah yeah it really isn't a hedge it's a partial heads or incomplete hedge or an imperfect hedge when people say it hedges this it really you have to be that's where the risk comes in this is this is what happens well it's a diversification in her choice yes your heat rate exposure right so if you if you took for example a year like 2011 which was a really crazily high priced year with high heat rates that's a great year to have that sort of a engine there but that was when the heat rates and it does it's it's really not I would say that you know given up are these distribution of prices that we've seen these profiles as Br attle calls and it it's not necessarily the the value of the deck is the fact that it makes it easy to do a lot of things with renewables it makes it easier so you have purchased that and you can now manage all those renewables most efficiently so it does even even after you know two years even though if we're solar it doesn't have the you know if we can still buy solar inexpensively it it still will act as that but you may get out there with 100% solar and realize that the deck isn't dispatch very much and then you'll have another question to what you want to do with it so to your question slide the last one yeah let's talk about why we wouldn't or would not include whitetail you mentioned 30% of it or something is Rex or something and we're Rex arm it was it's now a 30 megawatt around the clock deal that's firm that has Rex added to it okay so if you go back several years ago you've only find we wrote a paper for the Mitchell Foundation advocating the development of a power product which would be used we call it renew 50 which could be used to take Rex and add that to conventional power to help reduce the emissions exposure but that was when the Rex were a viable instrument that's before you'd gotten so much renewable in the marketplace that's when it had a lot of value so that's really only changed within maybe the last three to five years that's correct that's correct so then somebody's whose head was maybe in the game ten years ago this idea of firming or hedging our own renewable portfolio with our own gas plant that might have actually been something that would have struck as a great idea so I mean since there are other people today that might think since what was being offered at the time was being backed by around the clock anyway right if you're talking about that specific transaction well not that transaction but just the way the market was at the way the market yes and the viability of the Rex and the design of renewable standards and what those were incentivized to do there was definitely a value to that but the marketplace got far ahead of that target so those certificates really don't have much of a value so it's really a matter of perception you know do you believe that that caught the addition of Rex to that specific resource makes it renewable or not some people would say yes some people would say no in terms of us as professionals and risk professionals we would say that could entail a potential reputation risk so we would not recommend going there but you still could okay well that's why our relations did not count white tail or the we would we call ourselves 70% or 100% that's what it needs to be not some concept of okay we 're really only that's our recommendation yes that's I don't want to mislead that we're something that we're not right so then if that if that's the case then the question is okay how fast you want to get to a hundred are willing to go 118 % right from a from a cost exposure standpoint for a few years to get to a hundred percent faster or not if you're telling us gas is gonna go up you know if I could tell you that wouldn't be sent here the podium I'd be some boat in the Caribbean and a trading account I'm not so sure our community would think that white tail is truly a renewable resource and that's our recommendation is not to count it that way I just think that's a lower risk position going that's a value question and the council's gonna have to chime in on that even the Brattle report I mean in a number of ways this presentation diverges from the Brattle report but as Brandon was saying and as you yourself said I mean there's so much that is that is the same it's just kind of your projections are more conservative and and conclusions somewhat somewhat different but even the Brattle report didn't count you know Rex as renewables which is why the Br attle report ended up changing the way we as a community talked about our portfolio I have a question about divesting engines specifically do we need all 12 engines and 250 megawatts to take advantage of the deck in the way that you're talking about taking advantage I've had a number of people tell me that they were shocked to see you know 250 megawatts for a load of this size how many engines would we need and do we need all do we need all 12 and if not then how many do we need and by how many do we need what I mean is in order to take advantage of the deck the way that you're talking about it so we can use it for this small period of time each year yeah it it depends on the hour but if someone brought us in and said you know design a help us figure out what sort of a firming plant we might need for that sort of thing we probably wouldn't recommend that size it is large on a proportional basis so to me the question is all right you're committed to it now what's the best way to monetize this thing going forward through all the different options and if you could sell the engines at a way that would be higher value than what you might project it would run over several years and sell the excess power that's it's really just that's a sales decision optimizing the value so how many megawatts do would do we need I'll let you speak I'll just say again that's a cost thing because you know you don't technically need any it's just a matter of the deck is yeah cost I know but when I say need I mean need defined as in order to take advantage of it in the way that you say it depends how much what's your ratio to solar to wind is as you saw that wind can have you know 15 percent year-over-year but it also can you know depending on how many wind resources you have if you had wind in North Texas and West Texas in South Texas and in the coastal and that that would provide diversification so you wouldn't need as much you'd have a steady flow most of the time and which but it's discounted and then how much solar is on top of that and that also you know depends on cloudiness and stuff like that but if you put that together in your load it's probably something between 50 megawatts and well all right 50 to 150 megawatts something like that somewhere's in that range the the actual installed I believe is 225 megawatts not 250 but so what we're looking when we were looking at this we could say look there's a piece of this that you could one of the things you could do is go to other munis and say we can help you firm your renewables for a price and then you make sure that the price that that is a nice price and what their advantage is they don't get any debt services service and so it could be a just a two or three year arrangement and you could sell off this excess and then you know and what you're doing is your your risk has just been divers ified for that. So that would be another strong recommendation we would have if you get to that because there are muni municipalities out there looking to increase their renewable resources and they realize they're going to be in a similar circumstance with a more variable production output with more need for firming so that could be a valuable service you could provide to other municipalities to help them increase their renewable resources and increase the overall renewable content of ERCOT. Well sure and I think that my sense is that that was the goal from the beginning to sell power elsewhere it's yeah you know there are obvious you know negative consequences for people who are breathing in those emissions but that's I know that's a whole other whole other story but I do understand that and that was the intention from the beginning to sell. Remember when you sell it you don't increase the dispatch you don't increase the emissions that's that's the goal we hope so so you're not you know not worse off doing that. I mean worse off than not having it at all. Yeah and so there are ways to generate revenue from it without it running. Yeah well like he's saying you could sell firming services and then you could buy market purchases you could sell firming services to get revenue off the deck and then when you have to actually deliver the power to somebody you just buy it from the market if it's cheaper than running the deck or if the deck that this is a higher level of sophistication but there are organizations out there would take a plant like that and if the heat rates rise in the Ford markets they could sell against that when the heat rates fall they buy it back and that's it and you're actually that's called asset optimization you're trading in the market against an asset that never runs but yet you're producing revenue. I understand so just to clarify for the public and also for myself so when we're selling power you know and an electron is an electron doesn't matter from what kind of source it's coming from so as long as we provide the kind of as long as we provide the amount of power. As long as you said if you've contractually arranged for a hundred percent or 70 whatever your goal is that's the best you can do in this market setup to meet that goal. Yeah so it doesn't matter to the buyer where that's coming from just as it doesn't matter to ERCOT. That's right. Thank you . A couple more. When do we think that the federal solar tariff discussion will conclude? What is your recommendation on that? When is the wall gonna be built? You know I don't know it's all that stuff you know so that's a great question. That's a great question with a really difficult answer. The actual hearings are in place now and they started in June and they 're winding up basically so it's it's gonna be fairly soon and let's say sometime this quarter next quarter. Okay. I have a question about so we're talking about how our portfolio might look you've mentioned Georgetown's portfolio and how they made their purchases and then we talk about ERCOT and how they have how they dispatch everybody's generating sources or resources so do they does ERCOT look at what percentage of generating resources have to be something that can they can turn on and it will always work ? I mean because like as we're adding renewable resources obviously ERCOT's not gonna let 100% of the generations of resources be renewable because we've just discussed that you can't always do that you gotta buy power from the market so where do they see or do they have some kind of overall plan about how they're looking at how renewables are keeping going? They have a plan for every minute. So spend just a minute explaining that. I'm just trying to think about how that impacts you know when you when you build something that might last 20 or 30 years you really have to think 20 or 30 years out. Well yes they have that and they have a great thing that discusses this in depth it's called a long-term assessment you saw that those red and blue that's an excerpt from it it's really well written and what they did is they they're talking about market forces and how you know coal units are retiring but at the same time natural gas units are being built they're kind of replacing each other and at the same time there's more renewables being brought on particularly solar. Solar is one that is particularly desirable now in a relative pricing thing and so that's what they look at and then they run models to make sure everything is secure all the time and and so it works it works you know the the security is really high all the time and that's what their job is and that's so they go out to 20 35 and they make sure that every hour you are secured no matter what the renewable portfolio percentage is and they're they're saying I'm trying to think right now they still have coal out there you know but I think it's about eight to ten thousand has been retired by something like 20 21 and that will leave probably about half to 60 percent still operating and then at the end of the term even more retirements occur so it's a gradual thing on both the integration of the renewables and the solar and the natural gas and and they do it under different gas prices so just one more thing on that Urquhart is an energy only market so it's designed that that market signal is all it is needed to signal to the market when additional generation is there that's the only incentive to bring generation so they don't always they're they're trying to project what the portfolio might be in the future but what Neil alluded to what they're really concerned about is operational reliability so they don't necessarily have a cap or a target on how many renewables that come in but they're going to really make sure that there are certain units that are designated must run to alleviate congestion and to manage the the market efficiently until having a sufficient reserve margin one of the things though that's interesting is there have been predictions for years that you're going to see more instability in markets as more renewable resources come in and ironically that hasn't happened yet we were just discussing this the other day it may be just because you're getting enough solar in here solar is a beautiful offset to wind and it only leaves a little bit on the margin that needs to be filled in so if enough solar comes in and a natural balance to win it's a really nice setup for stability going forward and maybe more answer that you want so on this August day that you have the graph for where we're dispatched where ERCOT is dispatching the deck the heat index has risen and made the deck a viable option for the market essentially so are all the get are all the coal plants run in full tilt at this time okay so the their gas the the coal plants are running full tilt and then these the gas plants would be dispatched because it becomes marketable basically so we were talking about renewables and which really the thrust is the environment for that but we really haven't talked much about the environment in these discussions so so from the standpoint of emissions so on that hot August day turning on the gas plants really doesn't do much for emissions because all the coal plants are already running right so as coal plants are decomm issioned as the older coal plants are decommissioned and something like the deck then it seems like then its viability or marketability comes on sooner it also burns cleaner than a 30 year old coal plant that we're using is that not correct that's correct yeah yeah so if coal gets retired and the deck runs sooner because of its relative advantage at that time because of the way the resource stack looks it's replaced something that is bigger polluters and the water use and the water use yes yes and that's right that's not to be overlooked that often gets overlooked that's important aspect and so one of the things that we keep talking about is the dollar value and within our community and within the ratepayers and just the general public there are some people that would pay more for cleaner energy that the cost doesn't really matter to them if you could say that you're reducing instances of asthma or hospital visits for you know for whatever so I just I guess I just wanted to say that yeah it's interesting that if you look at the retail market in the past few years when retailers have actually offered a green premium product people don't go for it they say they want it but when it comes to paying for it the track record isn't there yeah I do I do I just wanted to go back because I hate to quote articles and say I read this article without knowing it and I found it it's from UT News and this is in July 2017 so it's fairly recent but I wanted to read just one paragraph and then the ending paragraph and it says for Georgetown and Aspen 100% renewable means that those cities purchase as much renewable electricity as they can get it does not mean that all the power they consume comes from renewable sources however that's because there are times when renewable power isn't available on windless nights for example when that happens both cities consume non-renewable power from the regional grid and that's where I was getting the it's kind of marketing that's a hundred percent renewable but then it goes on and at the very end it says for the time being it's much cheaper to back up renewable power with natural gas or other forms of non-renewable generation perhaps by 2045 that no longer will be true so 2045 is when they're saying that and that's kind of the lights probably when batteries storage will be really great right right right yeah so that's where okay so I just wanted to yeah so I just think you have to you know be careful how you represent that absolutely you know but if you clear with the goal I think right right and I'm and I just for the record I would love to be at a hundred percent renewable and but and I know that it's it's a path that we're going to but I want to do it you know economically feasible in a cost-effective manner well what a Georgetown and Aspen didn't buy as much as they could they could have bought a lot more but they bought what they felt was the lower you know least cost so they only bought to their needs and that that was a little bit different from what that article said and so that the the other thing is these prices that you see there aren 't any cheaper prices out there there isn't anything that competes with this no for anything for a nuke for coal for a combined cycle for peaking plant for the deck it's all cheaper lots cheaper right and so that's what you need to keep in mind so if going to 70% is like saying you know you have to consider going to a hundred percent is less expensive or a lower rate than a 70% rate so if you're interested in lowering your cost to your customers that's something you may consider now it has an attendant risks within but it's the cheapest alternative so do you need these decisions today to finish your report is that no no no yes and they're gonna be asked to mark the city council but you know sooner rather than later would be good because the RFP is there the results are in so sooner rather than later yes right I just want I just want to make a couple comments about that it's a great question we are presenting this I don't think I mentioned this we're presenting the same presentation to council tomorrow to get their feedback this has been a very good discussion to get your feedback and then we want to come back to you at some point once we have some of this input once we have had more of an opportunity to look at the RFPs and bringing back a plan that both the PB and the City Council could formally approve so we'll be working on that and bringing something back to you in the next couple of months with that information I just have one point the key point you just brought up was the fact that the rate payer is who we need to look out for and I think we would like to see the impact of going to a hundred percent sooner and not counting white tails renewable on the rates at that during that gap time because this might be the least cost but what does that mean to the rates okay okay well hopefully you've taken from our comments some some getting some feedback from it I mean any while the father here any other questions I'm sure we'll get to see them again at some point all right very good okay thank you thank you very much and I'll also say before we end the discussion I support the early adoption path just based on what I what I see here but I do I appreciate your I think that's a good question about rates I would like to see that too but it seems to be definitely the financially responsible thing for us and also I found it very interesting what you had to say about a city offering solar to go into us on a solar project recent recently yeah is that I see no I haven't any of those specific conversations we'll follow up with enterprise risk and and see what those possibilities are and bring back that for this yeah because that's really exciting and that's also something that could really save us it would save us money and be good for our environment too okay very good well that took up we're only on our second item now okay item B in the work session is to receive report hold discussion and provide staff direction regarding the solid waste department and watershed protection divisions community sponsorship program well good morning my name is Ethan Cox I'm the director of solid waste I have a very brief presentation for you this morning to talk about sponsorship programs for both the solid waste department as well as the watershed division in addition to myself the assistant director of environmental services Deborah Vera is here I'll do my best to kind of get through the presentation but both she and I are available for questions if you have any so as we go through this at this presentation looks very familiar it's probably because this is almost an exact carbon copy of the one that you received from Denton municipal electric a few weeks ago I just refresh your memory both the PB and the City Council received or provided direction to DME that we wanted the program to continue but at the same time that DME was going to reduce their budget in terms of the sponsorships that they were supporting in addition to that there was also specific criteria and also an approval process that was presented and approved by the PUB or it's up for approval by PUB today and council tomorrow I believe similarly solid waste our sponsorship budget is a little bit lower than the DME's but the principles are the same it is there to promote recycling responsible waste practices what you see typically is we have a number of nonprofits that we support there's some community events that I'll talk about in a few moments and there's also some industry sponsorships that we do as well in the solid waste industry watershed sponsorships are very similar that's to promote the pollution prevention storm water water quality awareness it's also to meet the city's MS4 permit requirements and the two budgets you can see there solid waste over the last couple years we've ranged between twenty to thirty thousand dollars each year and watershed is about half of that one of the similarities between the solid waste sponsorships and watershed sponsorships is keep them beautiful plays an important role in both keep them beautiful also knows KDB is a 501 c3 meaning it's a nonprofit they do a lot of work that really has some synergies with both solid waste as well as watershed actually within the KDB contract with the city the solid waste department is to provide or is obligated to provide a ten thousand dollar sponsorship directly to KDB each and every year that goes toward their program of services in addition to that both solid waste and the watershed division we provide financial aid to some of the sponsorship events like red bud festival the great American cleanup and also the environmental education program so that makes up the lion's share of both of our sponsorship programs in addition to that in solid waste we do have a number of community events I believe an exhibit to in your backup we kind of give you a breakdown of what we sponsored in the past what I would say to that is some of those events I don't know know that they necessarily lived up to this is a something that we feel like there's some synergies there for solid waste and so we are going to reevaluate those I think two or three within that list really meet that level they are 501 c3 is there about renewable resources and things of that nature so to that end we are going to be reducing our budget and solid waste next year to about fifteen thousand dollars we feel like that provides adequate coverage for some of those events that we want to sponsor in addition to that on the community events side one of the things that I would say is solid waste focus instead of sponsorships will be how can we make sure that we have adequate resources there for those events that the waste is being disposed correctly and so as we see those opportunities we definitely want to jump on that it may not be a sponsorship that may just be something that we choose to participate operationally and to help that event out we do have some industry organizations in there as well much like DME and so as those come up what we would recommend is that we follow the exact same guidelines that you've seen a couple of times now that is sponsorships over twenty five hundred dollars would come to the PB and Council for approval and then you have the qualifying criteria which we've talked a little bit about that we also have a quarterly report that we have provided the PB and Council if and when those sponsorships do arise so I said this is going to be a short presentation I'm trying to live up to my promise I recommendations today is this solid waste not in this budget year but on the the next proposed budget we are going to reduce from twenty two thousand to fifteen thousand that allow us to cover the KDB sponsors hips as well as a few others that we feel are important we want to maintain the watershed sponsorships again those are almost exclusively a hundred percent keep it in beautiful programs like I said that there's there is some synergies there that we feel are important and we'll also adhere to the proposed policy and criteria that you've seen previously with that next steps unless there's any questions or concerns alternative direction we're going to take this to council next week have them review this and then we will circle back with the resolution for both PB and council to approve so with that I'll stand for any questions questions you know one thing we we wanted to do was the statements we made is let's be consistent the way we do things and I think this kind of follows that pattern we need to be consistent throughout the city on these type of things so not making any judgment on who to give money to or who not just be consistent that makes me feel better about copying bronze presentation greatest form of flattering right yeah that's right still shamelessly I do thank you I appreciate your you know looking at this list towards trying to in the future focus more on entities that specifically have to do with solid waste I when I saw that list I was surprised to find only well three total and two current entities on that list that have directly to do with recycling or just solid waste in general so you know I appreciate that that this is something that staff already saw and in terms of what we're spending now out of that $22,000 we're only spending about 6,000 on on entities that specifically have to do with solid waste so this is a program that I believe is really in need of reform so I support you on that and I had a question about the the keep dent and beautiful ordinance that was attached and and I'm asking this really because I I don't know the I don't know the answer why does keep why it is is keep dent and why does keep dent and beautiful need money from solid waste and the watershed fund instead of all from the general fund does this have something to do with them being a nonprofit and how does that work if you could just accept yeah and hopefully I don 't butcher this I've fairly new at our relationship with Katie B however my understanding is a lot of the keep America beautiful foundations which keep dent and beautiful as a part of they can be independent 100 % probably funded or they can be kind of a private public partnership which is what we have here years ago keep them beautiful was in the general fund under the parks department I believe I can't remember exactly when that change occurred but we made a transition over to solid waste and you know looking back at that just my personal opinion is there are some synergies with solid waste I think we have essentially the same goals in mind is we want to make sure that we're managing our waste responsibly and we want a beautiful community and so with that the arrangement that we have between solid waste and keep dent and beautiful is we support the operations and then the board and the foundation actually support the program of services and so as you look at sponsorships that is the one area where we somewhat jump across those lines and say in addition to that this particular program or this particular activity has some synergies with our department and what we intend to do and so we feel like a sponsorship is appropriate you know we will certainly take pub and council direction if that's something that we wish to reevaluate or discontin ue we feel like it's it's something that the Red Bud Festival did the great American cleanup those are things that support our purpose as well and so that's where it makes sense to us and and I myself I'm a big supporter of the great American cleanup and have participated in that with my children's school and food keep them beautiful and it does a really good job on a number of levels so I I do appreciate that I didn't mean to suggest that I wanted to you know I that was just a genuine question about you know whether there was a need for that or not the the funding to come from solid waste as opposed to general fund thanks well and to follow up on that I believe that these are activities or events that are funded by not just ourselves the watershed department I believe Denton municipal electric is supported some of those as well and so it isn't just solid waste that's footing the bill for that I believe that there are contributions across the organization in some cases okay other questions no thank you very good thank you thank you okay that's the that's the end of our work session we okay everybody okay to move straight into regular meeting okay just push forward all right so the regular meeting side we have first our consent agenda two items on the consent agenda is there any member who would like to have one or both or or none of these taken out and considered on an individual basis I'd like to have none that's not really an option I just you said I would try to use it let me rephrase that or the reading items that anybody wants to take out a consider individually I would like be taken out but not because I don't need any more I don't think more explanation on that is needed we've been over that but just because I had planned to vote no on that for reasons I've stated on other occasions okay so item B is taken out for individual and in in that case is there a motion on item a most approval motion to approve item a is there a second second seconded pick any discussion no all in favor say aye aye any opposed same sign okay item a passes item B which is to consider recommending approval of a resolution of the city of Denton Texas appro ving the Denton Municipal Electric sponsorship program guidelines and application process this is the item that we had talked to you on a couple of different occasions about we had a couple of work session or two about it and it was there was only four members that were here at the last meeting so it only received three affirmative votes we wanted to bring it back to the full board four votes are required to pass the item be happy to answer any questions okay seeing that this was bringing every them into consistency with the rest of the city I move approval okay okay we have a motion and a second for approval any discussion hearing none we'll go to the vote all in favor say aye aye any opposed nay one nay six ayes one nay motion passes okay going into the second part of the agenda first item we have is to receive nominations and elect a secretary for the public utilities board somebody want to explain what what those duties are the secretary position is a charter required position we do have someone who takes minutes here can make and takes those so there's no minutes that are required but it's a position required in the charter it doesn't serve as the third level in the event that the chair and vice chair are missing that they that's correct yes yeah it is that stated in the Charter or is that just assumed I'm not sure we can look and see fine assumption yeah I think that's very good we came to the last time we went through this yeah yeah you guys should all read it though if you haven't read it's only it's only happened once that I could ever remember with the secretary I think I was secretary at the time so okay but anyway that 's you were absent the other time is Barbara the chair meeting oh they see okay okay anybody other than Randy and myself and Susan correct right so there's nobody absent that we can know nobody's absent so we'll solicit nominations for to a secretary of the board no I nominate Brendan okay we have a nomination and a second for Brendan Carroll or their other nominations somebody want to second that I second that and second it very good okay so we have one nominee for secretary of the book of utility board that being Brendan Carroll any discussion on that all in favor say aye any opposed none opposed so congratulations mr. secretary we'll try to try to make sure that my services are never needed that's a harsh way of saying it okay next item we have were the to consider approval of the public utility board meeting minutes of October the 9th 2017 are there any changes corrections comments I have a comment I just want to say that Kim I've just been so impressed by the minutes that you take and how detailed they are and I really appreciate that and I hope that members of the public you know in addition to going back and looking at the videos go and read the minutes because it really it does not simply read like the agenda well and this very very good and that's not easy to do I could not do them the minutes of our meeting also go into the workbook for the City Council yes so I really appreciate that and that is not easy to do yeah I agree I have one question which I guess if I'd taken Brendan's chart and followed read the charter the answered the two items that were failed on the 3o vote is that in the charter that requires the quorum is for and I think after research if there is a if there is less than four votes there's some other recuses themselves or abstains that does not count as a vote my understanding no that's my understanding as well it requires a majority of the full board so if there's seven members you have to have four votes to pass an item for affirmative for affirmative or for negative votes correct okay I would like to see the record reflect that there was abstention on those two yeah because just you abstained you didn't say no yeah as opposed to saying yeah maybe only three people here right right okay we can make that change okay any other comments changes I guess since we're making changes to the minutes we need a motion to approve those as corrected move approval as corrected second and a second any discussion yes how will you denote an abstention she sits behind you do a verbal thing how will she know who abstained future if we're gonna say that we're gonna record abstentions which is fine with me I don 't care I'm just saying that if you don't have a verb some way to any abst ention you know if you don't have a way to do that she's not gonna know who how to yeah I think it's I think it's a requirement or if it's Robert's rule of order if he's abstaining it needs to be record you need to note yourself you need to declare that yeah it's just like a recusal sure okay okay okay that's a good idea okay any other discussion all in favor of the minutes as as changed say aye aye any opposed okay thank you okay item C is to receive report hold discussion and provide staff with direction concerning the approval of contract for the supply of water treatment chemicals for the city didn't water production and water reclamation departments in the amount not to excuse me for each item in the four-year not to exceed amount of seven million twenty six thousand one hundred dollars good morning my name is Tim Fisher I'm director of water utilities we use water treatment chemicals at both the water treatment plants and then also in the water reclamation plant though these are routine budget items annual chemical budgets and the actual purchases vary from year to year there's three variables that kind of affect that treated water volumes vary because of seasonality and weather patterns chemical dosages can also change because water quality changes and so the biggest impact that we have on treatment chemicals are the coagul ants that we use so when the turbidity is high due to runoff we'd have higher doses some of the other chemicals are less variable as far as our doses and then we do see price fluctuations with chemicals we didn't see them post Katrina and read reach some highs but then they stabilized and came back down we basically did production and reclamation division chemicals was one package water production represents about 70% of the total purchases of the water treatment process is a little bit more intensive that way and then the treatment chemicals have to be NSF 60 certified to comply with state and federal so as an additive to your drinking water they have to be NSF certified we do this is a good competitively bid process qualified low bidders are awarded the contract we've been doing multiple year contracts where each year we use the same bed there's a modest cost inflation embedded in that bid process this for references we bid back in 2012 and 2015 and so this is a 2017 bid and then they're both both all these purchases are done through purchase orders and they're funded through the annual budgets we have a exhibit one in your backup that is a summary we actually did 15 chemicals and had 19 vendors and that was pretty big big bid spread so exhibit one kind of shows the low bidder in every case the only exception of that was potassium permanganate which did not meet our specification so anyway staff recommends approval of the bid and I'll have any questions I'll try to answer can you go back to the prior just the one just before well now it was a purchase chemical purchase by year pardon there was one that said chemical purchase by year I think there was a graph in there I just saw oh there there you go come to cost that's that's just a history for production of what I just sent each year I just wanted to see that as a comparison and it just shows the variability that we have and then also you know the primary coagulant of which iron is one of the major ones that has probably the bigger dosage fluctuation year to year and the caustic is the one where we see probably a much bigger price fluctuation historically cost of cost it fluctuates quite a bit no we just issue purchase orders typically annually and then at the beginning of the fiscal year will reissue those through purchase orders and then we also monitor what the market is with other water treatment plants in the area in the Metroplex as far as what they use and if we see that it's advantageous then we'll go out to b ids again and it's really locking in the unit cost pardon it's really locking in the unit's cost per chemical what we're gonna pay per unit for the chemical versus overall yeah yeah we're not we're just making it because you don't know how much you're gonna need yeah we're gonna make an estimate on the purchase orders and if at the end of the fiscal year we don't spend it we don't buy it if we have to increase that amount we have the flexibility under this approval process to do that we're just curious because that if we spent roughly 750 is it seven hundred fifty thousand dollars in chemical costs for 2017 in a four-year not to exceed of seven million okay this is just the water production piece of it so it doesn't reflect the purchases from reclamation okay also this one is only water correct correct the other thing is is the calculation of authorization over the four-year period was based on a preliminary estimate this for the bid purposes and so it probably exceeds what we will actually spend are you seeing any price increases are they fairly stable from what they have been I know this is very good I just want to know if we're spending more we're spending less on chemicals going forward assets well that this would potentially suggest that we're gonna be spending slightly more but the this is a long term history of a grouping of them ferric is one of the bigger players again you can see caustic with the big price fluctuations bike that we have so it's settling down it's up slightly this is another grouping of chemicals the cost of ammonia is actually down a little bit this year we don't use much of that so that kind of goes back to this stack bar chart of all the different components okay okay any other questions I have a motion for item C recommend approval motion to approve approval of item C's or second second second discussion all in favor say aye aye any opposed same sign hearing none item a or excuse me item C passes thank you thank you thanks Tim item D is to receive report holder discussion and provide staff with direction concerning the approval of a public works contract for directional boring services for DME and other utility departments with CNC directional boring LLC I'm assuming this a three-year or five-year it is actually a five-year five-year here in the word yeah wording of it it says three-year and then in the numerical it says five five okay it is actually a five-year so a five- year not to exceed amount of three million dollars that is correct I'm Rowdy Patterson I'm superintendent of distribution for didn't municipal electric didn't municipal electric isn't the only ones that use this boring contract base water and water department also use it but we are the biggest user so we're the ones making the presentation a little bit of background the city has utilized contractors for the installation of underground since 2000 with the rapid growth that we were seeing at the time and the city's desire to install underground utilities we went to a contract for these services we use them to install underground facilities and all new subdivisions no we no longer have any overhead subdivisions that come in that are brand new we also put it in locations that are feasible we did a major underground reconstruction in on the Hickory Street project we're doing some around UNT right now helping with that RFP 6516 includes the labor equipment tools supervision and as well as all administrative and insurance costs incurred by the contractor necessary to complete all these installations they're also they also are are supervised by city staff and I brought one of the guys with me Craig Stastny he is our contractor coordinator over this contract and the one we'll be talking about next. Request for proposals were sent to 464 prospective suppliers of this item in addition specifications were placed on materials management website suppliers could download the advertised we also advertised in the newspaper we only received three proposals which is pretty common for us I mean this is about what we get every time we go out for bid for this they were we we evaluated the proposals based on advertised criteria including price project schedule compliance with specifications and indicators of probable performance best and final offer was made by all three that proposed put in proposals and CNC directional boring was ranked the highest in determined to be the best back value for the city and y'all have an exhibit that shows all of that. Here are some active projects that this contract will be used on as you can see UNT where we do a lot of work with UNT that's one of the major projects there's several 1515 out towards Airport Road we 're looking at taking some stuff underground across the highway there just numerous projects and we also this product this contract will be in conjunction with all of our maintenance boards that we do to replace direct buried cable we no longer utilize direct buried cable in in in our underground system some of y'all are new to the public utilities board so I just wanted to kind of go over what is directional drilling it's commonly it's horizontal directional drilling or HDD and it's a stirruble trenchless method of installing underground pipe condor or cables in a shallow arc a longer prescribed bore path by using a surface launch drilling rig with minimal impact on the surrounding area that's one of the main reasons we use directional drilling is because it going under a roadway we don't have to open cut 380 Carroll Boulevard something like that it helps a lot or if you have a lot of landscaping you don't have to repair the landscaping when you dig through there you can actually go under the pipe that we use can be PVC polyethylene that just talks about the different types of pipe the one misconception is that directional drilling is easier if you the softer the soil is and that's that's incorrect it's actually easier to drill in rock or a harder type of material because as you as you 're drilling you have the the outer wall stays intact where with sand or anything like that that outer wall will fall down and it creates a vacuum and it keeps you from being able to pull your pull your product back this is just a little picture of what you know how directional drilling looks you can actually steer this I mean you can actually it has a pitch and it has a curve and it has a turn so you can actually steer it along the path now you can't make a big sharp turn like that but you can make a wide sweeping arc the head on the on the drilling rigs that are used here in Denton by us they have a paddle on that can help you to steer it that's that's how they steer it they actually just push it and and don't turn it and it guides it in a direction that's just a picture of what one typically looks like going in the ground that's the other thing for it you don't have a lot of open trench you have a receiving pit and a starting pit that's all you have recommendation is the award of a contract to CNC directional drilling in the five-year not to exceed amount of three million dollars which is based on previous spend history over the last contract period this contractor was the lowest cost respond ent who also had the highest evaluated score any questions were they the last contract winner no they were not GTI was our last contract winner and they they were a little bit higher they were a little bit higher I think no actually they were about 19% higher that's why if it would have been close we probably would have liked to have stayed with somebody that we were familiar with but it wasn't even close so we couldn't I couldn't justify considering them okay questions no is there a recommendation or approval motion to approve their second second and a second discussion I do want to ask one thing how you evaluated bringing that service in-house instead of contracting that out we actually did that about 25 years ago and it wasn't a pretty sight it was it was fairly new at the time it's something that you have to continually do it 's kind of like being a lineman you have to continually work on the lines you have to continually do that job and we don't actually do enough of it to keep somebody busy in doing it that much so you kind of lose you know you you lose that edge we after we bought we did actually buy a big machine we brought it in we utilized it after we lost several fifteen thousand dollar boar heads we decided that probably wasn't the best idea so we that's when we decided to contract it out but I guess at some point though like 25 years ago we probably weren't putting that much we were actually doing about as much as we're doing now just for the simple fact that we were just starting to put some of the South Ridge and that top stuff okay and underground okay thank you to go back okay other comments then all in favor of the motion say aye aye any opposed okay motion passes item number E which is a receive report whole discussion provide staff with direction concerning the approval of RP number 65 18 and recommend award of a contract for the purchase of underground electric installation services for DME to FX 5 construction and excavation in a contract that amount not to exceed six million dollars this would be a three-year contract is that correct that's correct again the background is the same for this because it is the underground the only difference is you know when we were talking about the the boring versus open trench there's certain times that boring is not it's it's it won't work for us and I'll show you some pictures here in a minute that will go along with that the wording is pretty much all the same this but this is our fp 65 18 it includes the same type of labor tools equipment and everything to be supplied and also Craig is also our contract coordinator on that request were sent out to 325 prospective suppliers on this one and we only received three again so it's that's kind of I mean we've got and they're not the same three there are three different ones so it's kind of I don't understand that are we just a three strike town or what is it we received best and final offers we clarified some line item pricing there was some there was some large discrepancies between two two separate bidders and we wanted to make sure that like I tell everybody we can get the best price in here but if somebody's low balling us on a price and they can't make money we're not going to need one of us is going to win in the end because they 're not going to be able to fulfill their contract so we had to go back in and kind of meet with those people and talk about that FX five ended up being the high strength and the lowest price again just as CNC was only only first one here 's just a little picture of the Winko distribution center whenever we installed all this and this kind of tells you why we couldn't use a directional drilling you can see this is taken from from the air but you can see the ditch and the piping in there well that that little diagram shows you how many six inch conduits we installed there to get that in in a directional drilling it's almost impossible because of how much dirt you have to displace here's another picture of Winko where we covered this mainline duck with concrete here's a pull box out at the new loves going in off of 35 and 77 with some conduit coming out of it another picture where they're back filling and you can see the pipe sticking up in the foreground that's where we're going to set a piece of switch gear here are forecasted projects for the URD as you can see there's quite a few UNT projects substation feeders coming out of Jim Crystal and Locus several tie feeders and then some apartments Buc-Ease is included and then the most of these are subdivisions that that we have forecasted in the future our recommendation is to ward the contract FX-5 construction in the three-year not to exceed amount of six million dollars which is based again on previous spend history and they were the best value that we had any questions questions I don't really have a question on the contract but how what is our percentage of underground now we have 57% of our our distribution lines are underground we have 800 miles of total distribution and we have about four hundred and fifty nine miles of that 459 of that is actually underground okay very good other questions is there a recommendation motion second of a motion to approve item II in a second further discussion all in favor say aye any opposed same sign thank you thank y'all thank you guys for sticking around to realize you're gonna be yeah that's what I said thank you okay next is item F which is ACM update just a few items for you today we have a couple of articles that we're providing to you item one is a wastewater article that we had on our asset management system we were featured in that particular magazine and just wanted to bring that to your attention we also had a request from member Armantor for the utility dive article so we've included that in your backup for your review and I wanted to point out that we've began to include the future agenda items list for those of you who are familiar with the council agenda we have future items list that we also publish for the council of just kind of what we think is the tentative schedule for some different topics coming forward those items tend to move around sometimes from for different reasons but what we wanted to try to provide you with some type of a schedule of what we think items are going to be over the next few months obviously there will have to be some changes to that but we thought that would be helpful for you as you look at your your work here on the board and then finally we had the new business matrix some of the items that have been requested we've provided a couple of memos in that section with just some answers to some requests for information that you've had over the last few weeks and we'll continue to provide that information as as we get those from the board so that's all I have for you today unless there's any questions question question I assume this is a typo on the new business action items list on number 11 says we'll provide informal staff report to be be on October 17th and that means November 7th so that mean November 7 yes yes you're correct I believe that is a type of October 17th but just wanted to yes I don't believe we've provided that yet okay thank you thank you okay you know the questions about the ACM report oh I'll just say just a comment I just want to say congratulations to Denton Wastewater on that article that was really interesting and I encourage people to read that also great stuff that they're doing over there and yeah thanks yes we'll recognize PS he's in the back there okay conclud ing items if there's any anything to add comments public recognition for going forward future agenda items we'd like to see on there on the agenda now's the time to bring those up I had several um number one I would like us to have a discussion on the possibility of holding our meetings in the evening thank you I was gonna say that oh yeah we can't decide but we'll put it yeah I think the benefits of that are obvious to the public and future members of pub my second thing and these are in no particular order but I'm reading off a list that I made I was wondering if staff if Todd if you or Brian could ask our DM E lineman if they if there's any interest in helping out in Puerto Rico like they did with Houston area many parts of Texas affected by the hurricane and in Florida doesn't that typically that request comes from Puerto Rico that's that's typically how it's done we've gotten requests from different agencies I think there's probably some logistical issues of getting equipment there but we can certainly yeah we couldn't bring our line truck and kind of and a kind of question packed into there was I was also curious if there had been any requests but but even if there hadn't I was wondering if there was and specifically an interest among the linemen just you know just hearing them talk about the work they did it obviously was it was such hard work but it was so really gratifying for them to be able to do that and as one of the presenters said at the council meeting last week that you know when we get someone else's back it also means that they have our back and I know that people are all over Denton are concerned you know many people here have have ties to Puerto Rico or the area so anyway and then the other my other two issues that I would like to see discussed in future both about billing one I was approached by a rate payer about it DME billing issue that I hadn't been aware of and she she told me that that she would prefer in terms of her payment schedule when she gets paid for work versus when her husband paid gets work she would prefer to get get billed at a certain date but when she asked DME can you switch my billing date she was told and I didn't have time to guess for proof of this this was literally in the grocery store but just just yesterday but or the day before yesterday but she was told that if you want to switch your your billing date you'll have to switch your neighborhood that your neighborhood gets built in this date so I know how you know how our customer service is so eager as we saw from the presentation to be flexible I was wondering if this is indeed the policy or if there was some misunderstanding and and if it is indeed the policy if there could be a change where we could have customizable billing due dates so anyway sorry that was so long but but that but that was the issue and I'm just assuming that it doesn't affect this just this one person that it affects more and then the final issues is about about wastewater billing and this is something else that I was not aware of until a rate payer approached me about it apparently because there there's a 30-day grace period whereby you know if you don't pay your bill by a certain amount you get some sort of extra charge and this rate payer had a question that I thought was a good one and I want want to pose that if we could see if there could be a rule put in place whereby wastewater bills would would not exceed water usage so in other words because he missed the 30-day grace period because I think he was out of the country or something like that this had happened to him in the past it happened recently you know he ended up having to pay for water that he didn't use so I was just want just having a some sort of work session on how those how wastewater bills are determined and what the rationale was behind the grace period and how it could end up a situation like that yep it's during the yeah yes do you want it yeah oh yeah that's true that's true nevermind yes if I could clarify there there rules there were several questions that this board had about some of the credit and collections processes we also had a similar discussion with the council there were some questions that they had some of those were about the schedules I'll look at these questions that you've offered here and try to bring all that back and we can have the discussion at one time excellent excellent thank you so much okay all right anything else sir motion to adjourn so moved second second and a second all in favor say aye aye any opposed same sign thank you