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order our first first part of our meeting we have a work

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session with two

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items scheduled item number a is to receive a report hold a

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discussion give

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staff direction regarding the resource planning and power

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supply strategy

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prepared by Enterprise Risk Consulting and Brian if you'll

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do the introductions

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please yes sir good morning Brian Langley deputy city

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manager today we have

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with us Enterprise Resource Consulting they're going to be

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presenting to you

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their power supply and power strategy plan that we have

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previously discussed

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with you a few weeks ago we have with us today Larry

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Lawrence and Neil McAndreys

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and so I'm going to turn the presentation over to them to

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get started

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good morning everyone morning I'm glad to be here again

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with you as Brian

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alluded to we've submitted a draft resource plan and this

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is a presentation

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to cover the essential elements of that and the essential

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conclusions of

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recommendations we are gathering some feedback and we'll be

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taking into

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account some of that feedback and then providing a final

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version of that

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excuse me let me get the keyboard ready to go here so the

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presentation outline

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we're going to cover five main things we're going to look

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at the planning

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goals the goals that we use to develop the plan the data

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and data sources that

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we used in the planning process in the various evaluation

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factors that we took

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into account to develop the recommendations for the plan

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very briefly

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we're going to go over the the inputs to the portfolio

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modeling process that we

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use to develop what we are going to recommend is the best

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fit assets for the

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portfolio we're going to go through some of the conclusions

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from the analysis and

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then provide some specific recommendations just to let you

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know as

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well there are a few open issues some open questions that

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need to be

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determined so there are a few decisions that we're going to

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list at the end of

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the presentation once we get those specific answers to

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those questions then

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we'll be able to come up with a more specific best fit

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instead of

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recommendations for the plan so the objectives that we have

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for the planning

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goals here are five we want to achieve a least cost supply

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you'll see a slide

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here in a little bit that shows you specifically how we

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define least cost

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supply we'll give you some cost comparisons so that you can

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understand

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where we're coming from in terms of our recommendations for

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least cost assets we

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want to make sure that the recommended supply plan reduces

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your uncertainty and

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those can be listed in several ways a we want to very

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effectively match supply

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assets with your load so that you have a very efficient

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supply portfolio that

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includes diversifying your supply resources that's another

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subject that we

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will address in just a little bit in the presentation we

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want to reduce regulatory

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risk technological risk we'll talk about those as we go

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through the presentation

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and your economic risk so we want to make sure that you

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have a portfolio that

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performs efficiently in terms of its production and

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performs efficiently in

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terms of economics in terms of sustainability that covers

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two specific

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areas one of which is environmental sustainability one

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thing that often gets

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overlooked and is an important aspect when you add renew

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ables to a portfolio

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is the fact that it reduces water usage we think that's a

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very important aspect

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that often gets sort of overlooked and so that's one of the

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additional

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sustainable advantages of a renewable asset portfolio also

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from the

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sustainability aspect is renewable resources are often more

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simple from a

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technological standpoint there's less things to break so

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and there's less to

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overhaul over time so just from a physical performance

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stability standpoint

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there also they tend to be more sustainable than some other

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types of

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generation resources in terms of competitiveness this is

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something that we

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haven't discussed too much here but we are of the opinion

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that even though you

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are a non-optent entity it's important to make sure that

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your rates are

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reasonably competitive because you may have people moving

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in and out of the

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territory that are comparing you to other areas where there

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is competition

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and we are fully supportive of municipals remaining as non-

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optent

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entities but we think it's a good idea to be in a position

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to carry out policies

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that can avoid criticism or avoid some pressure from the

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outside to try to

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change that status as a non-optent entity and then lastly

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we want to take into

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account the the operational process is going to be

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necessary to operate a

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renewable resource portfolio so these are the the

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objectives that we kept in mind

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in devising this portfolio and resource plan so the next

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thing we're going to

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cover are some of the data sources and the evaluation

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factors we took into

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account in developing the resource plan some of these

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slides I'm going to go

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through quickly because we do have a lot of slides and I

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know we want to be as

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concise time wise as possible so I'll just mention a few

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things here and then

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move on so we got some information from Denton in terms of

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your load current

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supply resources and some performance data on the deck we

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relied on ERCOT data

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for a lot of the information we used in devising the plan

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prices from ERCOT

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historical heat rates some recent modeling for market

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dispatch from ERCOT

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resource adequacy studies and some of the some of the

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proposed improvements

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and changes to ERCOT that may come down the line pretty

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soon some other sources

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we looked at information from the US Energy Information

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Agency the Texas

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Public Utility Commission and we use market prices from

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things like NYMEX and

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other price sources this is a recent set of data from ERCOT

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that was I was

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presented at a board meeting just a few months ago and this

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is something that I

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think is very important to keep in mind when we're modeling

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the deck what I'm

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we're gonna do here in this section is just give you some

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some highlights of

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the data and data sources that we used in devising the

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resource plan and then

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we'll get into these specific evaluation factors so these

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graphs show the ERCOT

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resource stack at two different natural gas prices the one

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on the left is the

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bid stack in ERCOT with natural gas prices at $2.50 per MM

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BTU and the

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right-hand graph is a 450 per MMBTU this is a standard two-

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dimensional graph the

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the horizontal scale is the load of ERCOT going up to the

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right let me get see if

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I can get the pointer oriented here so this is the load of

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ERCOT going up to

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the right and then the vertical scale is the dispatch cost

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of all the resources

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that ERCOT uses to meet the load demand so we've done an

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approximation here

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these lines on the PowerPoint are not perfect fits but we

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're using an estimate

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of the deck dispatch at around 10 heat rate that includes

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the variable cost on

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top of the actual operating heat rate of the deck so you

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can see here that in a

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250 market the deck would be at around a $25 cost and you

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can see where it fits

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into the ERCOT stack so we would be dispatched earlier but

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there's not a lot

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of margin in here is one of the takeaways from this if we

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go over to the 450 graph

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then the deck would be dispatching around $45 and it would

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dispatch much

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higher into the queue there would be less competition at

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that point but the

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the frequency or the likelihood of the dispatch would be

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lower so one of the

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takeaways here that's going to be a common theme you'll

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hear throughout the

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presentation is all these projections are very much

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dependent upon the price

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of gas they're hugely dependent on the price of gas how

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often the deck is going

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to run depends on the price of gas and none of us here can

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perfectly predict

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what the price of gas so a lot of the decision-making the

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modeling the

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expectations of the deck are mainly dependent upon what the

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view is of the

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price of gas and you'll see that again and that's a theme

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that you will see

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again and again throughout the presentation something that

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we you may

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get tired of us saying that but it's so important and we'll

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give you some other

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examples of that as we go through the presentation just

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another quick look at

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some other ERCOT data we base the modeling on ERCOT's

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historical heat

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rates and as you can see that's a pretty stable curve here

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it stays pretty stable

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across time and that shape of the curve is something that

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we used in terms of

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modeling the potential dispatch of the deck on the right

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hand side this is just

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a picture from ERCOT of its long-term system assessment the

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ERCOT is

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continually doing studies to determine what changes may

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need to be made to the

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market and so the key takeaways here that we wanted to just

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mention here today

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are that a ERCOT's expecting to continue to load growth in

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seven of the eight

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scenarios they considered for the long-term assessment they

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're expecting

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continued load growth and all of the scenarios showed

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significant amount of

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solar generation additions and the retirement of coal and

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natural gas so

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these are our expectations of ERCOT going forward more

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renewables coming in

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the retirement of coal and natural gas and so these are

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other factors that we

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took into account in developing the resource plan this

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slide just shows some

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examples of market data that we used again we've got a lot

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of slides to go

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through so I just want to give you a flavor and a sense of

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the inputs that we

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used in developing the resource plan the graph in the upper

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left hand corner just

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shows 12 month moving averages these are 12 month annual

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prices so they're annual

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prices for gas and power going forward so these are market

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prices that we used

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in the consideration of the development of the resource

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plan the lower left hand

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side is EIA's forecast of natural gas prices with a

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confidence interval here

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in the the envelope with the green let me get the pointer

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working here in this

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green envelope this is a confidence interval of where they

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think gas prices

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could be in the near term in the right hand side this is a

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historical graph of

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the Henry Hub spot price with the best fit trend line and

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one of the things the

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main takeaways to there is notice that natural gas prices

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as many other

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commodity markets do tend to revert to the mean so that's

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something else that

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we've taken into account in our expectations for natural

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gas because we

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also needed to have an expectation of where gas prices

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might go so some of the

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modeling that we've done has taken into account what we

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think are some reasons

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for a reasonable forecast for where natural gas goes and

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that is a

275
00:11:23,720 --> 00:11:27,120
determinant of the outcome of the findings and the

276
00:11:27,120 --> 00:11:28,519
recommendations in the

277
00:11:28,519 --> 00:11:31,700
report so speaking of those price projections this is a

278
00:11:31,700 --> 00:11:33,120
graph of those

279
00:11:33,120 --> 00:11:37,440
we've also taken into account what brattle used when they

280
00:11:37,440 --> 00:11:38,200
had done a

281
00:11:38,200 --> 00:11:44,240
previous study for you so what we found was the brattle

282
00:11:44,240 --> 00:11:45,799
base case you can see

283
00:11:45,799 --> 00:11:51,570
goes quite high over time and that's something that we

284
00:11:51,570 --> 00:11:52,919
incorporated that into

285
00:11:52,919 --> 00:11:56,490
the numbers but that's something that we think is less

286
00:11:56,490 --> 00:11:58,919
likely for a couple of

287
00:11:58,919 --> 00:12:04,570
reasons one is that whenever we think it's important when

288
00:12:04,570 --> 00:12:04,919
somebody is

289
00:12:04,919 --> 00:12:08,509
projecting prices forward market information is very

290
00:12:08,509 --> 00:12:09,919
important and useful

291
00:12:09,919 --> 00:12:12,960
and the highest probability of where price is going to be

292
00:12:12,960 --> 00:12:14,000
tomorrow is where

293
00:12:14,000 --> 00:12:17,470
it is today so there's a lower probability of prices either

294
00:12:17,470 --> 00:12:17,960
rising or

295
00:12:17,960 --> 00:12:21,370
falling so a we think it's important when using price

296
00:12:21,370 --> 00:12:22,879
projections to use what

297
00:12:22,879 --> 00:12:26,080
the market is telling us as an expectation of where the

298
00:12:26,080 --> 00:12:26,879
market is going

299
00:12:26,879 --> 00:12:31,289
to go forward so we've incorporated that into the base case

300
00:12:31,289 --> 00:12:32,279
that's the red line

301
00:12:32,279 --> 00:12:36,450
here that's our base case gas is essentially where the

302
00:12:36,450 --> 00:12:37,919
market is trading

303
00:12:37,919 --> 00:12:42,899
now for going forward in the time the blue line is our high

304
00:12:42,899 --> 00:12:44,360
gas case and you

305
00:12:44,360 --> 00:12:50,070
notice we had a question yes yes but as more and more coal

306
00:12:50,070 --> 00:12:50,960
comes off and we

307
00:12:50,960 --> 00:12:55,009
start using more and more natural gas for generation don't

308
00:12:55,009 --> 00:12:55,759
you believe that

309
00:12:55,759 --> 00:13:00,330
those prices will start increasing that is reflected in our

310
00:13:00,330 --> 00:13:01,759
blue line okay and

311
00:13:01,759 --> 00:13:04,940
so there are two factors in that one is there are other

312
00:13:04,940 --> 00:13:06,360
factors in addition to

313
00:13:06,360 --> 00:13:10,679
what you mentioned LNG exports are going to pick up we're

314
00:13:10,679 --> 00:13:11,879
seeing lower drilling

315
00:13:11,879 --> 00:13:18,240
rigs so commodity markets go through these cycles of excess

316
00:13:18,240 --> 00:13:19,000
production and

317
00:13:19,000 --> 00:13:22,179
shortages of production natural gas is set up for a

318
00:13:22,179 --> 00:13:24,039
shortage we haven't seen a

319
00:13:24,039 --> 00:13:27,970
tremendous price rise yet but yes if you get retirements of

320
00:13:27,970 --> 00:13:29,279
coal additional

321
00:13:29,279 --> 00:13:33,230
demand for gas from for generation additional demand from

322
00:13:33,230 --> 00:13:34,120
gas from LNG

323
00:13:34,120 --> 00:13:39,059
that's what we've modeled in this blue curve here the thing

324
00:13:39,059 --> 00:13:40,639
is the the world

325
00:13:40,639 --> 00:13:45,519
changed in 2008 2009 with shale so there's a tremendous

326
00:13:45,519 --> 00:13:46,279
overhang of

327
00:13:46,279 --> 00:13:50,750
potential production the cost of drilling has gone down so

328
00:13:50,750 --> 00:13:51,759
there's a

329
00:13:51,759 --> 00:13:54,940
substantial overhang of potential production so if you do

330
00:13:54,940 --> 00:13:55,759
get a a short

331
00:13:55,759 --> 00:13:59,159
spike and what I mean by short might be a couple of years

332
00:13:59,159 --> 00:14:00,639
you're going to attract

333
00:14:00,639 --> 00:14:03,820
huge amounts of additional gas production this is not

334
00:14:03,820 --> 00:14:04,600
unlike what we

335
00:14:04,600 --> 00:14:08,860
saw let me go back here if you look over here that we've

336
00:14:08,860 --> 00:14:10,639
kind of modeled this on

337
00:14:10,639 --> 00:14:14,799
what history has done before back in the 2000 time frame

338
00:14:14,799 --> 00:14:15,720
when you got a

339
00:14:15,720 --> 00:14:19,120
tremendous amount of additional demand and lowered supply

340
00:14:19,120 --> 00:14:21,080
you got a few year

341
00:14:21,080 --> 00:14:24,379
substantial bump in gas but what did it do it tended to the

342
00:14:24,379 --> 00:14:25,360
go back and revert

343
00:14:25,360 --> 00:14:28,940
back to the we've taken that into account thank you that's

344
00:14:28,940 --> 00:14:29,320
a that was a

345
00:14:29,320 --> 00:14:32,320
good question that set up what I was going to describe on

346
00:14:32,320 --> 00:14:33,600
that yes yeah let

347
00:14:33,600 --> 00:14:36,639
me just add one thing if you'll notice that the last two

348
00:14:36,639 --> 00:14:37,559
years the average

349
00:14:37,559 --> 00:14:40,960
price has been two dollars and fifty cents so all these

350
00:14:40,960 --> 00:14:42,440
show higher

351
00:14:42,440 --> 00:14:49,000
expectations right right yes so I just wanted to comment

352
00:14:49,000 --> 00:14:49,919
that the difference is

353
00:14:49,919 --> 00:14:56,679
striking between your projections and the battle

354
00:14:56,679 --> 00:14:58,840
projections I know you can't

355
00:14:58,840 --> 00:15:02,669
speak for a bridle but it seemed that based on what you

356
00:15:02,669 --> 00:15:04,320
said and it makes

357
00:15:04,320 --> 00:15:08,330
sense to me that braddle somehow didn't seem to have fact

358
00:15:08,330 --> 00:15:10,840
ored in the market so I

359
00:15:10,840 --> 00:15:14,480
know you can't speak for them but what since since you seem

360
00:15:14,480 --> 00:15:15,639
to be making that

361
00:15:15,639 --> 00:15:21,399
assumption about what about them what do you think you know

362
00:15:21,399 --> 00:15:22,720
how how do you

363
00:15:22,720 --> 00:15:27,379
explain that disparity on their end not speaking for them I

364
00:15:27,379 --> 00:15:27,799
don't know what in

365
00:15:27,799 --> 00:15:30,720
the world could they have been yeah I don't know there

366
00:15:30,720 --> 00:15:31,720
there are others that

367
00:15:31,720 --> 00:15:36,039
could have similar projections there are I would say this

368
00:15:36,039 --> 00:15:37,480
anybody that is

369
00:15:37,480 --> 00:15:40,399
forecasting the price of gas has a very high likelihood of

370
00:15:40,399 --> 00:15:42,159
being wrong so it's

371
00:15:42,159 --> 00:15:45,539
just a hard thing to do and we've seen optimistic forecast

372
00:15:45,539 --> 00:15:46,679
from oil from others

373
00:15:46,679 --> 00:15:51,340
as well that don't come true this just that's a difficult

374
00:15:51,340 --> 00:15:52,200
thing to do now if

375
00:15:52,200 --> 00:15:56,070
you notice that their low case which is the more purple

376
00:15:56,070 --> 00:15:57,679
line is much closer to

377
00:15:57,679 --> 00:16:01,600
where the market is right now so just from our perspective

378
00:16:01,600 --> 00:16:02,399
we think that's

379
00:16:02,399 --> 00:16:05,779
pretty reasonable and we did factor in what could be a rise

380
00:16:05,779 --> 00:16:07,039
in natural gas but

381
00:16:07,039 --> 00:16:10,840
given just the revolutionary nature of shale as a potential

382
00:16:10,840 --> 00:16:12,120
production source

383
00:16:12,120 --> 00:16:16,519
we just didn't see that being sustainable and given the the

384
00:16:16,519 --> 00:16:19,720
characteristics of the commodity over decades that tends to

385
00:16:19,720 --> 00:16:20,679
revert to the mean

386
00:16:20,679 --> 00:16:25,039
we assumed it was a safer course of action to assume revert

387
00:16:25,039 --> 00:16:25,559
to the mean and

388
00:16:25,559 --> 00:16:29,789
the importance of this is these forecasts are so much of a

389
00:16:29,789 --> 00:16:30,559
driver of

390
00:16:30,559 --> 00:16:33,259
what the decks gonna do if you change your forecast you

391
00:16:33,259 --> 00:16:34,279
change the deck out

392
00:16:34,279 --> 00:16:37,049
there's just no way around absolutely thank you that makes

393
00:16:37,049 --> 00:16:37,879
a lot of sense on

394
00:16:37,879 --> 00:16:42,539
your blue line then you're projecting it going up and then

395
00:16:42,539 --> 00:16:44,320
you see a change in

396
00:16:44,320 --> 00:16:47,330
going back to the median and that's why you're above br

397
00:16:47,330 --> 00:16:48,679
attle but then you come

398
00:16:48,679 --> 00:16:52,379
back down because as time has shown yeah you go up and you

399
00:16:52,379 --> 00:16:53,399
come back to median

400
00:16:53,399 --> 00:16:57,059
I want to make sure I understood that yeah thank you so

401
00:16:57,059 --> 00:16:57,679
these are the

402
00:16:57,679 --> 00:17:03,029
forecasts that we used in the modeling for the process now

403
00:17:03,029 --> 00:17:04,279
I will say this

404
00:17:04,279 --> 00:17:08,990
you'll see this in just a moment renewables offer of a cost

405
00:17:08,990 --> 00:17:09,960
advantage

406
00:17:09,960 --> 00:17:14,039
right now in almost any gas case you'd have to have gas

407
00:17:14,039 --> 00:17:15,599
prices be a lot lower

408
00:17:15,599 --> 00:17:18,779
than they are now to even make renewables be sort of a 50/

409
00:17:18,779 --> 00:17:19,799
50 proposition

410
00:17:19,799 --> 00:17:24,309
so the gas price is not going to those projections none of

411
00:17:24,309 --> 00:17:25,440
those projections

412
00:17:25,440 --> 00:17:27,619
would affect what we're going to recommend in terms of the

413
00:17:27,619 --> 00:17:28,240
additions and

414
00:17:28,240 --> 00:17:33,319
the best fit assets for your to meet your renewal goals so

415
00:17:33,319 --> 00:17:34,319
turning to the

416
00:17:34,319 --> 00:17:38,009
evaluation factors the two main evaluation factors the two

417
00:17:38,009 --> 00:17:38,359
main

418
00:17:38,359 --> 00:17:41,400
objectives that we used in developing this were to achieve

419
00:17:41,400 --> 00:17:42,480
a least cost supply

420
00:17:42,480 --> 00:17:45,769
and to reduce these risk factors so again we wanted to

421
00:17:45,769 --> 00:17:46,799
match resource

422
00:17:46,799 --> 00:17:50,390
production profiles to your daily load and seasonal load

423
00:17:50,390 --> 00:17:51,799
profiles taking into

424
00:17:51,799 --> 00:17:55,099
account the assets that you already have for example you've

425
00:17:55,099 --> 00:17:56,039
got Santa Rita wind

426
00:17:56,039 --> 00:17:59,440
coming in that has a very particular West Texas type of

427
00:17:59,440 --> 00:18:00,720
profile so we wanted

428
00:18:00,720 --> 00:18:05,220
to find resources that were good fits and offsets to divers

429
00:18:05,220 --> 00:18:06,400
ify your portfolio

430
00:18:06,400 --> 00:18:09,670
we wanted to balance the need for selling excess supply and

431
00:18:09,670 --> 00:18:10,480
then purchasing

432
00:18:10,480 --> 00:18:13,730
shortages as much as possible and we took into account the

433
00:18:13,730 --> 00:18:14,559
quality of each

434
00:18:14,559 --> 00:18:17,740
resources production because different renewable resources

435
00:18:17,740 --> 00:18:18,519
have different

436
00:18:18,519 --> 00:18:22,269
quality factors and you'll see that in just a moment access

437
00:18:22,269 --> 00:18:23,319
to transmission air

438
00:18:23,319 --> 00:18:26,299
connections were important and then minimizing transmission

439
00:18:26,299 --> 00:18:26,960
issues with a

440
00:18:26,960 --> 00:18:30,339
particular focus on avoiding congestion costs so that will

441
00:18:30,339 --> 00:18:31,559
factor into the

442
00:18:31,559 --> 00:18:34,200
citing recommendations and the location recommendations

443
00:18:34,200 --> 00:18:35,880
that we have and then

444
00:18:35,880 --> 00:18:38,599
one more data input these are the dental load scenarios

445
00:18:38,599 --> 00:18:39,839
that we took into account

446
00:18:39,839 --> 00:18:42,759
in the modeling and the planning a slightly negative growth

447
00:18:42,759 --> 00:18:43,480
rate a mean

448
00:18:43,480 --> 00:18:46,660
annual growth of 1.6 percent and a high annual growth case

449
00:18:46,660 --> 00:18:50,680
of 3 percent then we

450
00:18:50,680 --> 00:18:53,140
perform the supply gap analysis we need to figure out first

451
00:18:53,140 --> 00:18:53,799
what do you need

452
00:18:53,799 --> 00:18:57,400
what do you have what's your load and then what do you need

453
00:18:57,400 --> 00:18:59,440
just as a reminder

454
00:18:59,440 --> 00:19:02,910
here that first sentence on the slide when we talk about

455
00:19:02,910 --> 00:19:04,319
renewable percentages

456
00:19:04,319 --> 00:19:06,609
the way we define that because there are different ways to

457
00:19:06,609 --> 00:19:07,720
define that the way we

458
00:19:07,720 --> 00:19:12,049
define that is we just we think an annual time frame is the

459
00:19:12,049 --> 00:19:13,519
best measurement

460
00:19:13,519 --> 00:19:18,869
period because then that doesn't get colored by seasonality

461
00:19:18,869 --> 00:19:19,359
so if we take

462
00:19:19,359 --> 00:19:23,289
annual load and then we take measured by megawatt hours and

463
00:19:23,289 --> 00:19:24,240
we take the total

464
00:19:24,240 --> 00:19:27,539
megawatt hours of resources that's what we're matching up

465
00:19:27,539 --> 00:19:28,279
and we're talking

466
00:19:28,279 --> 00:19:32,230
about 70% 100% those are the figures in the frame of

467
00:19:32,230 --> 00:19:34,079
reference we're using for

468
00:19:34,079 --> 00:19:37,720
that so this the next part of the slide shows your current

469
00:19:37,720 --> 00:19:38,960
supply portfolio

470
00:19:38,960 --> 00:19:43,309
you've got a little bit of landfill generation Santa Rita

471
00:19:43,309 --> 00:19:45,279
wind coming next

472
00:19:45,279 --> 00:19:50,009
year bluebell solar and then whitetail we'll talk about wh

473
00:19:50,009 --> 00:19:50,640
itetail in just a

474
00:19:50,640 --> 00:19:53,819
moment but you're gonna see some annual production figures

475
00:19:53,819 --> 00:19:54,880
and just for you all

476
00:19:54,880 --> 00:19:57,519
to know if some of you are familiar with this this annual

477
00:19:57,519 --> 00:19:58,839
production figure has

478
00:19:58,839 --> 00:20:04,609
been adjusted a lot of the a lot of the production values

479
00:20:04,609 --> 00:20:06,680
that a developer will

480
00:20:06,680 --> 00:20:11,769
tell you tend to be overstated that's just a natural aspect

481
00:20:11,769 --> 00:20:13,339
we we we use the

482
00:20:13,339 --> 00:20:16,259
analogy of when you go into the showroom buy a car the MPG

483
00:20:16,259 --> 00:20:16,900
that's on the

484
00:20:16,900 --> 00:20:19,650
stickers never the MPG you get an actual driving so there

485
00:20:19,650 --> 00:20:20,799
are various factors

486
00:20:20,799 --> 00:20:25,559
that can cause developers to sort of cherry pick and spin

487
00:20:25,559 --> 00:20:26,400
so we've taken

488
00:20:26,400 --> 00:20:29,990
into account our experience with the actual production of

489
00:20:29,990 --> 00:20:31,079
say wind resources

490
00:20:31,079 --> 00:20:33,660
versus what they've been offered at and we've done a

491
00:20:33,660 --> 00:20:34,759
reduction here in the

492
00:20:34,759 --> 00:20:38,230
annual production of megawatt hours for Santa Rita so just

493
00:20:38,230 --> 00:20:39,759
to conclude on this

494
00:20:39,759 --> 00:20:42,730
slide Denton's annual load for 2019 is one and a half

495
00:20:42,730 --> 00:20:43,799
million megawatt hours to

496
00:20:43,799 --> 00:20:46,380
give you a sense of the total that's the target we're

497
00:20:46,380 --> 00:20:48,000
looking at for 2019 in

498
00:20:48,000 --> 00:20:51,720
terms of our 70 to 100 percent goal counting whitetails a

499
00:20:51,720 --> 00:20:52,480
renewable resource

500
00:20:52,480 --> 00:20:55,230
leaves dent in at approximately 61 percent renewable

501
00:20:55,230 --> 00:20:56,920
without counting it it

502
00:20:56,920 --> 00:20:59,839
results in approximately 44 percent renewable and why is

503
00:20:59,839 --> 00:21:00,640
this important well

504
00:21:00,640 --> 00:21:03,259
it determines how you want to count that this is one of the

505
00:21:03,259 --> 00:21:04,240
decisions that needs

506
00:21:04,240 --> 00:21:06,740
to be made how you're going to count that to decide how

507
00:21:06,740 --> 00:21:08,319
much renewable assets

508
00:21:08,319 --> 00:21:13,269
you need and just as a reminder whitetail from what we the

509
00:21:13,269 --> 00:21:13,799
information we

510
00:21:13,799 --> 00:21:17,180
were given was originally a win deal it was converted at

511
00:21:17,180 --> 00:21:18,759
some point into a 30

512
00:21:18,759 --> 00:21:24,799
megawatt around-the-clock deal with Rex added given that

513
00:21:24,799 --> 00:21:26,960
the wreck market in

514
00:21:26,960 --> 00:21:30,259
Texas is really not that viable anymore because it was

515
00:21:30,259 --> 00:21:31,880
designed as an incentive

516
00:21:31,880 --> 00:21:34,369
for additional renewable production and those standards

517
00:21:34,369 --> 00:21:35,200
were far exceeded

518
00:21:35,200 --> 00:21:38,130
simply just through market forces there really is no

519
00:21:38,130 --> 00:21:39,759
residual value to those so

520
00:21:39,759 --> 00:21:42,509
we would just our recommendation would be would not to

521
00:21:42,509 --> 00:21:43,759
count that as renewable

522
00:21:43,759 --> 00:21:47,059
but that's a decision that the city needs to make that we

523
00:21:47,059 --> 00:21:47,960
can't make on your

524
00:21:47,960 --> 00:21:51,559
behalf so last bullet depending upon the classification of

525
00:21:51,559 --> 00:21:52,440
white pale of white

526
00:21:52,440 --> 00:21:55,359
tail didn't needs between 9 and 26 percent in additional

527
00:21:55,359 --> 00:21:55,640
renewable

528
00:21:55,640 --> 00:21:59,799
resources to meet the minimum goal 70% or between 39% and

529
00:21:59,799 --> 00:22:02,200
56% to meet the

530
00:22:02,200 --> 00:22:08,630
target of 100% so here is a summary high-level summary of

531
00:22:08,630 --> 00:22:09,359
some of the

532
00:22:09,359 --> 00:22:12,539
resource prices and delivery points that have been offered

533
00:22:12,539 --> 00:22:13,640
to you in your recent

534
00:22:13,640 --> 00:22:17,490
RFP so you've got some RFP results back in early October

535
00:22:17,490 --> 00:22:18,680
and this gives you a

536
00:22:18,680 --> 00:22:22,160
sense of the pricing so we just group these at a high level

537
00:22:22,160 --> 00:22:23,160
the bidders are

538
00:22:23,160 --> 00:22:26,549
confidential you'll see some more specific offers in one of

539
00:22:26,549 --> 00:22:26,839
the last

540
00:22:26,839 --> 00:22:30,130
slides when we really start honing in on some specifics

541
00:22:30,130 --> 00:22:31,200
that we think are

542
00:22:31,200 --> 00:22:34,759
attractive for additions to your portfolio but this just

543
00:22:34,759 --> 00:22:35,440
gives you a sense

544
00:22:35,440 --> 00:22:39,819
of location and type so solar you're getting prices at the

545
00:22:39,819 --> 00:22:40,599
delivery node

546
00:22:40,599 --> 00:22:43,869
versus prices at the North Hub West Texas coastal wind

547
00:22:43,869 --> 00:22:45,759
North Texas South Texas and

548
00:22:45,759 --> 00:22:49,700
panhandle wind are all there you can see these prices are

549
00:22:49,700 --> 00:22:50,980
quite attractive you

550
00:22:50,980 --> 00:22:55,720
got some wind prices below $20 solar prices in the mid-20s

551
00:22:55,720 --> 00:22:57,359
so these prices

552
00:22:57,359 --> 00:23:00,289
were used to estimate the cost of supply in our portfolio

553
00:23:00,289 --> 00:23:02,119
modeling and these have

554
00:23:02,119 --> 00:23:04,680
been further adjusted to the production profiles to

555
00:23:04,680 --> 00:23:06,640
calculate effective costs so

556
00:23:06,640 --> 00:23:09,819
the second bullet there explains that to an extent what we

557
00:23:09,819 --> 00:23:11,160
mean by effective cost

558
00:23:11,160 --> 00:23:16,869
is this your if you purchase a renewable resource you need

559
00:23:16,869 --> 00:23:18,079
to know the production

560
00:23:18,079 --> 00:23:21,619
profile and you need to know which hours of the day or

561
00:23:21,619 --> 00:23:23,279
which times of use that

562
00:23:23,279 --> 00:23:30,329
asset is actually producing so to compare it to a an on-pe

563
00:23:30,329 --> 00:23:31,680
ak offer from

564
00:23:31,680 --> 00:23:35,019
the market or a round-the-clock offer from the market those

565
00:23:35,019 --> 00:23:35,920
profiles don't

566
00:23:35,920 --> 00:23:39,599
always match up so we have to make an economic adjustment

567
00:23:39,599 --> 00:23:40,839
because a renewable

568
00:23:40,839 --> 00:23:44,500
resource may not be completely comparable to a market

569
00:23:44,500 --> 00:23:45,640
purchase because

570
00:23:45,640 --> 00:23:48,569
it's not going to produce all day at the same rate so a

571
00:23:48,569 --> 00:23:50,480
renewable resource may be

572
00:23:50,480 --> 00:23:53,400
cheaper but you might have to make up for those hours when

573
00:23:53,400 --> 00:23:54,400
it's not producing

574
00:23:54,400 --> 00:23:57,799
so we've done an economic adjustment to sort of put it on a

575
00:23:57,799 --> 00:23:59,079
kind of an apples to

576
00:23:59,079 --> 00:24:02,000
apples basis I call it green apples versus red apples and

577
00:24:02,000 --> 00:24:03,279
so forth so is an

578
00:24:03,279 --> 00:24:06,619
example there solar producers during the higher priced on

579
00:24:06,619 --> 00:24:07,799
peak hours when wind

580
00:24:07,799 --> 00:24:10,720
production typically drops off this a buyer would need at

581
00:24:10,720 --> 00:24:11,859
least a 20% lower

582
00:24:11,859 --> 00:24:16,119
price for West Texas wind to compete with a solar resource

583
00:24:16,119 --> 00:24:18,039
so these prices have

584
00:24:18,039 --> 00:24:23,089
been adjusted to calculate effective costs also in terms of

585
00:24:23,089 --> 00:24:25,000
our assembly of

586
00:24:25,000 --> 00:24:27,630
the recommendations for your resource plan we've also had

587
00:24:27,630 --> 00:24:28,559
to take into account

588
00:24:28,559 --> 00:24:32,529
that certain resources need to be placed in your portfolio

589
00:24:32,529 --> 00:24:34,079
to diversify against

590
00:24:34,079 --> 00:24:37,059
your load shape so for example dent will start receiving a

591
00:24:37,059 --> 00:24:38,279
large West Texas wind

592
00:24:38,279 --> 00:24:42,559
supply in the spring of 2018 and a solar resource in 2019

593
00:24:42,559 --> 00:24:44,400
so we don't want to

594
00:24:44,400 --> 00:24:47,319
recommend additional West Texas wind because that could put

595
00:24:47,319 --> 00:24:48,079
you with too much

596
00:24:48,079 --> 00:24:52,740
of that particular profile in your portfolio so let's talk

597
00:24:52,740 --> 00:24:53,839
now about least

598
00:24:53,839 --> 00:25:00,319
cost we've done a couple of approaches here the upper table

599
00:25:00,319 --> 00:25:01,599
I'll go through the

600
00:25:01,599 --> 00:25:06,009
columns the left-hand column shows you approximate annual

601
00:25:06,009 --> 00:25:07,019
prices right now in

602
00:25:07,019 --> 00:25:10,799
Urquhart about $31 for megawatt hour on peak and $27 around

603
00:25:10,799 --> 00:25:12,400
the clock

604
00:25:12,400 --> 00:25:16,430
representative offers from your RFP show that solar could

605
00:25:16,430 --> 00:25:18,119
save you about $8 a

606
00:25:18,119 --> 00:25:21,319
megawatt hour on peak and wind around five and a half

607
00:25:21,319 --> 00:25:22,599
dollars per megawatt hour

608
00:25:22,599 --> 00:25:28,369
so this gives us a renewable equivalent price of $23 and 21

609
00:25:28,369 --> 00:25:28,920
50

610
00:25:28,920 --> 00:25:33,670
correspondingly for those assets if we look at the market

611
00:25:33,670 --> 00:25:35,039
heat rates for on

612
00:25:35,039 --> 00:25:38,220
peak periods and the market heat rates for around the clock

613
00:25:38,220 --> 00:25:40,880
and then we convert

614
00:25:40,880 --> 00:25:43,920
those into their natural gas equivalent we get an

615
00:25:43,920 --> 00:25:45,720
approximate price or a value

616
00:25:45,720 --> 00:25:50,630
of around $2.20 per MVTU so what this is saying is that we

617
00:25:50,630 --> 00:25:51,480
look at the

618
00:25:51,480 --> 00:25:55,039
discount that those renewable assets offer versus the

619
00:25:55,039 --> 00:25:56,400
market and we look at

620
00:25:56,400 --> 00:25:58,619
the market heat rate and convert that into what the

621
00:25:58,619 --> 00:25:59,839
equivalent gas price would

622
00:25:59,839 --> 00:26:06,509
be to get that same value then we're looking at a $2.20 per

623
00:26:06,509 --> 00:26:07,519
MVTU

624
00:26:07,519 --> 00:26:11,200
gas price equivalent excuse me for these renewable assets

625
00:26:11,200 --> 00:26:12,319
with a gas price in the

626
00:26:12,319 --> 00:26:16,509
market a little under three dollars now so this is just one

627
00:26:16,509 --> 00:26:18,240
perspective one way

628
00:26:18,240 --> 00:26:21,930
to look at what least cost means these renewable assets are

629
00:26:21,930 --> 00:26:23,039
offering values

630
00:26:23,039 --> 00:26:26,769
that are below the price of market power and it's important

631
00:26:26,769 --> 00:26:28,880
to remember that gas

632
00:26:28,880 --> 00:26:32,599
is the price setter in ERCOT gas is frequently on the

633
00:26:32,599 --> 00:26:34,119
margin so we were

634
00:26:34,119 --> 00:26:37,299
always oriented around gas when we're thinking about the

635
00:26:37,299 --> 00:26:38,599
price of the power in

636
00:26:38,599 --> 00:26:43,039
ERCOT thus we can calculate these natural gas equivalency

637
00:26:43,039 --> 00:26:43,480
so that gives

638
00:26:43,480 --> 00:26:46,220
you a sense when we say least cost they are least cost it's

639
00:26:46,220 --> 00:26:47,599
as if you're able to

640
00:26:47,599 --> 00:26:51,829
buy a gas deal below the market the lower table gives you a

641
00:26:51,829 --> 00:26:52,960
little bit of a

642
00:26:52,960 --> 00:26:56,130
different perspective it just shows you how the market is

643
00:26:56,130 --> 00:26:57,200
so sensitive to gas

644
00:26:57,200 --> 00:27:01,400
and how the potential benefits of Denton adding renewable

645
00:27:01,400 --> 00:27:03,079
assets to your portfolio

646
00:27:03,079 --> 00:27:06,430
is dependent upon the price of gas if the price of gas goes

647
00:27:06,430 --> 00:27:07,440
a lot higher say

648
00:27:07,440 --> 00:27:11,650
to five dollars to the lowest row on the table you're gonna

649
00:27:11,650 --> 00:27:13,680
have power prices in

650
00:27:13,680 --> 00:27:17,529
the upper forty dollar range and that would give you a

651
00:27:17,529 --> 00:27:19,599
benefit of over $25 a

652
00:27:19,599 --> 00:27:22,920
megawatt hour so in other words if you add renewable

653
00:27:22,920 --> 00:27:24,160
resources to your portfolio

654
00:27:24,160 --> 00:27:27,099
and gas prices rise you're gonna have a portfolio cost it's

655
00:27:27,099 --> 00:27:28,079
much lower than the

656
00:27:28,079 --> 00:27:31,119
market because of the lower cost of renewables that you

657
00:27:31,119 --> 00:27:32,200
added but if gas

658
00:27:32,200 --> 00:27:35,480
prices fall to two dollars that's going to be above the

659
00:27:35,480 --> 00:27:36,640
price of your equivalent

660
00:27:36,640 --> 00:27:39,819
purchase and your purchase would be above the market so

661
00:27:39,819 --> 00:27:41,220
again as we said

662
00:27:41,220 --> 00:27:44,140
before it's so dependent upon where gases are going to go

663
00:27:44,140 --> 00:27:45,000
what your outlook

664
00:27:45,000 --> 00:27:48,250
for gas is and the outcome of natural gas in the market to

665
00:27:48,250 --> 00:27:49,279
determine what

666
00:27:49,279 --> 00:27:54,240
market prices are yes if you notice this is the same sort

667
00:27:54,240 --> 00:27:55,599
of methodology that

668
00:27:55,599 --> 00:27:59,440
Bradley used in their report basically if you have higher

669
00:27:59,440 --> 00:28:01,279
gas prices and the

670
00:28:01,279 --> 00:28:06,599
attendant heat rates they're produced at you you go to the

671
00:28:06,599 --> 00:28:08,319
right column you

672
00:28:08,319 --> 00:28:14,079
produce more return or more margin but notice this at three

673
00:28:14,079 --> 00:28:15,440
dollars the margin

674
00:28:15,440 --> 00:28:23,059
is 835 at five dollars which is an increase of what 67

675
00:28:23,059 --> 00:28:24,160
percent or something

676
00:28:24,160 --> 00:28:30,680
like that the margin is almost 26 which is 300 percent

677
00:28:30,680 --> 00:28:33,079
right so it's levered in

678
00:28:33,079 --> 00:28:38,019
other words the higher the gas price much more you know

679
00:28:38,019 --> 00:28:40,119
much more return from

680
00:28:40,119 --> 00:28:45,490
the fixed price renewables and that's good if gas prices go

681
00:28:45,490 --> 00:28:46,240
up everything's

682
00:28:46,240 --> 00:28:50,710
great for Denton on a high renewable but what if they don't

683
00:28:50,710 --> 00:28:52,039
go up so much and

684
00:28:52,039 --> 00:28:54,750
what if they go down if they go down actually you see the

685
00:28:54,750 --> 00:28:55,799
return that's two

686
00:28:55,799 --> 00:28:59,289
dollar gas but that's kind of remote but things can go down

687
00:28:59,289 --> 00:29:00,440
just as well as they

688
00:29:00,440 --> 00:29:04,339
can go up and you know you're just flat but that's also a

689
00:29:04,339 --> 00:29:05,680
good thing you know

690
00:29:05,680 --> 00:29:09,200
your return is negative one dollar but that's pretty small

691
00:29:09,200 --> 00:29:10,880
loss but that's a

692
00:29:10,880 --> 00:29:15,680
loss but it's a small loss so you know under this plan

693
00:29:15,680 --> 00:29:18,279
higher gas prices equate

694
00:29:18,279 --> 00:29:21,720
with a better performance that's also true for the deck but

695
00:29:21,720 --> 00:29:22,519
it's particularly

696
00:29:22,519 --> 00:29:25,740
true because almost all your return under this plan and

697
00:29:25,740 --> 00:29:26,880
under Brattle and

698
00:29:26,880 --> 00:29:32,720
both ours it depends on the renewables making return not

699
00:29:32,720 --> 00:29:34,680
the deck

700
00:29:38,319 --> 00:29:40,000
I won't spend too much time on this you've already seen

701
00:29:40,000 --> 00:29:41,640
this I think the

702
00:29:41,640 --> 00:29:44,569
last time we were here but just to make a few key points

703
00:29:44,569 --> 00:29:46,640
this is an ERCOT graph

704
00:29:46,640 --> 00:29:50,589
of the production profile of various renewable resources

705
00:29:50,589 --> 00:29:52,200
the red is coastal

706
00:29:52,200 --> 00:29:57,259
wind the purple is solar the blue wave-shaped line at the

707
00:29:57,259 --> 00:29:58,680
top is typical

708
00:29:58,680 --> 00:30:04,089
load and so this shows you say for a summer day what the

709
00:30:04,089 --> 00:30:06,000
type of production

710
00:30:06,000 --> 00:30:09,319
profiles you get versus the load profile so this is one of

711
00:30:09,319 --> 00:30:10,720
the key drivers of the

712
00:30:10,720 --> 00:30:15,460
resource plan is selecting assets of the right type and

713
00:30:15,460 --> 00:30:17,480
with the right quantity

714
00:30:17,480 --> 00:30:22,269
to achieve a diversified consistent production from your

715
00:30:22,269 --> 00:30:23,680
resource portfolio

716
00:30:23,680 --> 00:30:27,609
so West Texas wind is the worst match against load solar

717
00:30:27,609 --> 00:30:29,000
and coastal offer the

718
00:30:29,000 --> 00:30:32,529
best on-peak match against load and that also offers an

719
00:30:32,529 --> 00:30:34,160
advantage because it can

720
00:30:34,160 --> 00:30:37,700
displace purchases that you need to make to supplement your

721
00:30:37,700 --> 00:30:38,279
on-peak

722
00:30:38,279 --> 00:30:42,329
requirements during those most expensive hours coastal wind

723
00:30:42,329 --> 00:30:42,960
is at a low point

724
00:30:42,960 --> 00:30:46,650
doing a lower price a low production amount during lower

725
00:30:46,650 --> 00:30:47,799
priced hours so

726
00:30:47,799 --> 00:30:51,289
that's offers a benefit of producing less when the market

727
00:30:51,289 --> 00:30:52,440
value isn't there

728
00:30:52,440 --> 00:30:55,930
and so coastal wind and solar just in summary those are

729
00:30:55,930 --> 00:30:57,240
very attractive they

730
00:30:57,240 --> 00:31:00,420
offer low prices the production profiles are a better fit

731
00:31:00,420 --> 00:31:01,599
for Denton's load and

732
00:31:01,599 --> 00:31:05,200
they're a better complement to Denton's existing renewable

733
00:31:05,200 --> 00:31:06,559
resources such as

734
00:31:06,559 --> 00:31:10,819
Santa Rita so that's foreshadowing of where we're going to

735
00:31:10,819 --> 00:31:11,720
go in terms of the

736
00:31:11,720 --> 00:31:15,670
recommendations here you've also seen this chart in the

737
00:31:15,670 --> 00:31:17,799
next one just a couple

738
00:31:17,799 --> 00:31:20,980
of points we want to make and not spend too much time on

739
00:31:20,980 --> 00:31:22,960
this graph when we were

740
00:31:22,960 --> 00:31:26,519
here before just as a reminder what you're looking at the

741
00:31:26,519 --> 00:31:27,640
horizontal scale

742
00:31:27,640 --> 00:31:33,680
is the 24 hours across the day the vertical scale is is in

743
00:31:33,680 --> 00:31:36,359
megawatts the

744
00:31:36,359 --> 00:31:40,519
wave shape line across the top is load and then we have

745
00:31:40,519 --> 00:31:42,480
various types of assets

746
00:31:42,480 --> 00:31:47,670
that are filling the portfolio so this shows green and

747
00:31:47,670 --> 00:31:48,880
solar which would be

748
00:31:48,880 --> 00:31:53,160
producing during the middle of the day we've got wind which

749
00:31:53,160 --> 00:31:54,359
would be producing

750
00:31:54,359 --> 00:31:58,079
at higher and off peak hours and lower going on peak hours

751
00:31:58,079 --> 00:32:00,119
the purple bars here

752
00:32:00,119 --> 00:32:03,720
represent market purchases that would be necessary to fill

753
00:32:03,720 --> 00:32:04,839
the gaps to balance

754
00:32:04,839 --> 00:32:09,049
your supply requirements and then the blue bars are

755
00:32:09,049 --> 00:32:10,839
representative of when the

756
00:32:10,839 --> 00:32:14,019
deck would run so as you can see there are times of day

757
00:32:14,019 --> 00:32:15,119
here where there's

758
00:32:15,119 --> 00:32:18,039
excess production say from the deck this can be sold into

759
00:32:18,039 --> 00:32:19,200
the market to produce

760
00:32:19,200 --> 00:32:23,849
revenue there are times of day where market purchases are

761
00:32:23,849 --> 00:32:24,960
necessary to

762
00:32:24,960 --> 00:32:28,859
balance the portfolio so the takeaways here are seasonally

763
00:32:28,859 --> 00:32:30,000
low wind output would

764
00:32:30,000 --> 00:32:33,380
necessitate market purchases during off-peak hours and the

765
00:32:33,380 --> 00:32:34,319
combination of

766
00:32:34,319 --> 00:32:37,599
solar production and deck production could cause an excess

767
00:32:37,599 --> 00:32:39,279
supply and that

768
00:32:39,279 --> 00:32:42,779
would necessitate market sales during those higher priced

769
00:32:42,779 --> 00:32:44,160
hours if we then

770
00:32:44,160 --> 00:32:47,160
look at another period of the year this is a seasonal

771
00:32:47,160 --> 00:32:49,119
spring period you've got a

772
00:32:49,119 --> 00:32:52,579
different view here you've got a high wind season you can

773
00:32:52,579 --> 00:32:54,119
see that the wind at

774
00:32:54,119 --> 00:32:57,160
times is producing more than the load so there would be

775
00:32:57,160 --> 00:32:58,440
sales of excess wind

776
00:32:58,440 --> 00:33:04,170
capacity the deck is less likely to run your solar output

777
00:33:04,170 --> 00:33:05,160
would be not

778
00:33:05,160 --> 00:33:07,769
necessarily minimal but it wouldn't be nearly as much as

779
00:33:07,769 --> 00:33:08,839
you would have during

780
00:33:08,839 --> 00:33:12,509
the summer so you get a different profile so the takeaways

781
00:33:12,509 --> 00:33:13,400
from this are

782
00:33:13,400 --> 00:33:18,430
that part of the best fit in terms of the type of renewable

783
00:33:18,430 --> 00:33:19,680
asset and the

784
00:33:19,680 --> 00:33:23,640
quantity of that asset is to give you a portfolio that

785
00:33:23,640 --> 00:33:25,519
minimizes the amount of

786
00:33:25,519 --> 00:33:28,150
excess and minimizes the amount of market purchases it's

787
00:33:28,150 --> 00:33:28,880
impossible to

788
00:33:28,880 --> 00:33:31,589
eliminate those but we want to strike a reasonable balance

789
00:33:31,589 --> 00:33:32,359
in terms of your

790
00:33:32,359 --> 00:33:35,359
ongoing management of the portfolio to make it as efficient

791
00:33:35,359 --> 00:33:36,500
as possible to

792
00:33:36,500 --> 00:33:41,160
balance out those amounts another consideration we took

793
00:33:41,160 --> 00:33:41,839
into is wind

794
00:33:41,839 --> 00:33:46,359
location so wind is not wind you've seen the different

795
00:33:46,359 --> 00:33:47,519
production profiles from

796
00:33:47,519 --> 00:33:50,940
West Texas versus coastal those are starkly different there

797
00:33:50,940 --> 00:33:51,759
are also

798
00:33:51,759 --> 00:33:54,690
different factors in terms of the quality of wind at a

799
00:33:54,690 --> 00:33:57,039
specific location so there

800
00:33:57,039 --> 00:34:00,480
are six different wind regions in ERCOT they're not well

801
00:34:00,480 --> 00:34:01,559
correlated because of

802
00:34:01,559 --> 00:34:04,799
the distance between them and because Denton already owns a

803
00:34:04,799 --> 00:34:05,640
large resource in

804
00:34:05,640 --> 00:34:08,960
West Texas other regions will need to be considered and

805
00:34:08,960 --> 00:34:09,679
those are what we're going

806
00:34:09,679 --> 00:34:13,760
to offer both panhandle and coastal resources are not well

807
00:34:13,760 --> 00:34:14,480
correlated with

808
00:34:14,480 --> 00:34:17,860
system wide output that's a good thing because we want to

809
00:34:17,860 --> 00:34:19,079
add resources that

810
00:34:19,079 --> 00:34:21,639
are not necessarily correlated with what you've got that

811
00:34:21,639 --> 00:34:22,679
gives you a better fit

812
00:34:22,679 --> 00:34:25,650
in terms of diversification of the portfolio coastal wind

813
00:34:25,650 --> 00:34:26,599
is superior to

814
00:34:26,599 --> 00:34:29,639
other types of wind due to the higher capacity factor and

815
00:34:29,639 --> 00:34:30,320
the greater

816
00:34:30,320 --> 00:34:33,639
production during valuable on peak hours so as you can see

817
00:34:33,639 --> 00:34:35,159
here these are

818
00:34:35,159 --> 00:34:39,829
dispersion graphs that show the the output of the various

819
00:34:39,829 --> 00:34:41,360
wind resources at

820
00:34:41,360 --> 00:34:44,280
wind speeds which you would like to see is a tighter

821
00:34:44,280 --> 00:34:45,199
pattern and a more

822
00:34:45,199 --> 00:34:48,380
consistent pattern here and you're seeing three examples

823
00:34:48,380 --> 00:34:49,480
you're seeing wind

824
00:34:49,480 --> 00:34:52,730
resources from North Texas Texas Oklahoma border Abilene

825
00:34:52,730 --> 00:34:53,679
and then coastal

826
00:34:53,679 --> 00:34:56,900
wind and the main takeaway here without belaboring the

827
00:34:56,900 --> 00:34:58,119
slides you notice that

828
00:34:58,119 --> 00:35:01,300
there's a tighter diffusion pattern on the coastal wind

829
00:35:01,300 --> 00:35:02,320
resource that's

830
00:35:02,320 --> 00:35:06,110
indicative of more consistent and higher quality production

831
00:35:06,110 --> 00:35:07,159
that's something that

832
00:35:07,159 --> 00:35:10,090
is advantageous and one of the factors that we take into

833
00:35:10,090 --> 00:35:10,880
account in the

834
00:35:10,880 --> 00:35:16,650
resources that we recommend the reason for that is the

835
00:35:16,650 --> 00:35:18,719
coastal wind is produced

836
00:35:18,719 --> 00:35:22,639
by being on the coast it's the coastal land effect that

837
00:35:22,639 --> 00:35:24,000
every day in the summer

838
00:35:24,000 --> 00:35:31,889
and in particular as the the ground the surface of behind

839
00:35:31,889 --> 00:35:33,599
the wind heats up and

840
00:35:33,599 --> 00:35:37,860
creates a low pressure system whereas the water doesn't

841
00:35:37,860 --> 00:35:39,199
heat up as quickly as

842
00:35:39,199 --> 00:35:42,889
a result you get this low pressure high pressure situation

843
00:35:42,889 --> 00:35:44,599
and it's the that you

844
00:35:44,599 --> 00:35:49,349
get winds produced in the afternoon you know offshore winds

845
00:35:49,349 --> 00:35:50,719
and then it reverses

846
00:35:50,719 --> 00:35:54,760
at night but since it's the predominant wind direction is

847
00:35:54,760 --> 00:35:56,119
from the south those

848
00:35:56,119 --> 00:35:58,739
are diminished you can see that they're they're almost

849
00:35:58,739 --> 00:36:01,079
symmetrical but the neat

850
00:36:01,079 --> 00:36:04,039
thing about coastal it's not caused by sort of the

851
00:36:04,039 --> 00:36:05,960
geographic average wind over

852
00:36:05,960 --> 00:36:09,269
Texas it's cause it brings its own wind with it basically

853
00:36:09,269 --> 00:36:10,360
which is kind of an

854
00:36:10,360 --> 00:36:13,329
interesting concept and that's one of the reasons why it's

855
00:36:13,329 --> 00:36:14,320
valuable it also

856
00:36:14,320 --> 00:36:19,690
counts for capacity or cut counts it at about 56 percent of

857
00:36:19,690 --> 00:36:21,039
its installed

858
00:36:21,039 --> 00:36:24,570
capacity on peak during the summer whereas West Texas wind

859
00:36:24,570 --> 00:36:25,840
it's 18 percent

860
00:36:25,840 --> 00:36:33,900
and that's because of that same effect in terms of solar

861
00:36:33,900 --> 00:36:36,239
location solar

862
00:36:36,239 --> 00:36:40,309
radiance is the main is the main factor here you want to

863
00:36:40,309 --> 00:36:41,320
maximize the radiance

864
00:36:41,320 --> 00:36:44,559
which is going to maximize output so it's impacted by long

865
00:36:44,559 --> 00:36:45,280
itude and latitude

866
00:36:45,280 --> 00:36:48,460
essentially the location of it also the potential for cloud

867
00:36:48,460 --> 00:36:50,039
cover and temperature

868
00:36:50,039 --> 00:36:53,570
factors so for optimal radiance the best location in Texas

869
00:36:53,570 --> 00:36:54,360
would be all the way

870
00:36:54,360 --> 00:36:58,570
west to El Paso but El Paso is in an Urquhart but it's also

871
00:36:58,570 --> 00:36:59,360
not quite that

872
00:36:59,360 --> 00:37:01,599
simple yes you'd like to go as far west as you can to

873
00:37:01,599 --> 00:37:03,079
maximize your radiance but

874
00:37:03,079 --> 00:37:05,579
if you go too far west you get into an area that has

875
00:37:05,579 --> 00:37:07,159
substantial transmission

876
00:37:07,159 --> 00:37:10,460
congestion so then there's too much out there without

877
00:37:10,460 --> 00:37:12,119
sufficient transmission so

878
00:37:12,119 --> 00:37:15,079
the optimal location is as far west as you can go to

879
00:37:15,079 --> 00:37:16,800
maximize your radiance but

880
00:37:16,800 --> 00:37:20,170
to be within that border so we can minimize congestion

881
00:37:20,170 --> 00:37:21,119
there's still

882
00:37:21,119 --> 00:37:23,679
congestion out there but that can be managed but we don't

883
00:37:23,679 --> 00:37:24,599
want to go too far

884
00:37:24,599 --> 00:37:27,780
out where you're into an area that's going to subject you

885
00:37:27,780 --> 00:37:28,320
to too much

886
00:37:28,320 --> 00:37:31,989
congestion so the optimal balance the optimal location is

887
00:37:31,989 --> 00:37:32,400
going to be

888
00:37:32,400 --> 00:37:35,320
somewhere say close to Midland or a little bit east of

889
00:37:35,320 --> 00:37:36,360
there to give you the

890
00:37:36,360 --> 00:37:40,320
optimal location for radiance and avoiding or minimizing

891
00:37:40,320 --> 00:37:41,360
congestion a

892
00:37:41,360 --> 00:37:45,539
couple of other location considerations this graph on the

893
00:37:45,539 --> 00:37:46,519
left with the

894
00:37:46,519 --> 00:37:49,699
multicolored dots this came out recently from one of Urqu

895
00:37:49,699 --> 00:37:51,000
hart's long-term system

896
00:37:51,000 --> 00:37:55,469
assessment studies and this is essentially projecting where

897
00:37:55,469 --> 00:37:55,760
the

898
00:37:55,760 --> 00:37:58,710
additions of generation will be and the retirements of

899
00:37:58,710 --> 00:38:00,880
generation so the yellow

900
00:38:00,880 --> 00:38:03,159
and orange red dots that's where they're expecting

901
00:38:03,159 --> 00:38:04,519
additional generation to come

902
00:38:04,519 --> 00:38:07,559
in the blue dots are where they're expecting retirements

903
00:38:07,559 --> 00:38:08,480
you can see the

904
00:38:08,480 --> 00:38:11,820
additions are going to be out in the west and the retire

905
00:38:11,820 --> 00:38:13,079
ments are going to be

906
00:38:13,079 --> 00:38:15,539
mainly in the east well this is going to exacerbate some of

907
00:38:15,539 --> 00:38:16,280
the transmission

908
00:38:16,280 --> 00:38:19,659
problems in Urquhart from the west to east flows so if

909
00:38:19,659 --> 00:38:21,079
possible it would be

910
00:38:21,079 --> 00:38:24,119
good to locate new generation in the areas where the

911
00:38:24,119 --> 00:38:25,480
retirement is going to

912
00:38:25,480 --> 00:38:29,159
be that's really not that feasible in terms of solar but it

913
00:38:29,159 --> 00:38:30,159
is feasible in

914
00:38:30,159 --> 00:38:33,699
terms of wind so in terms of locations for wind coastal is

915
00:38:33,699 --> 00:38:34,760
going to be on the

916
00:38:34,760 --> 00:38:39,260
coast which is in the area with load growth because of say

917
00:38:39,260 --> 00:38:40,719
for example LNG

918
00:38:40,719 --> 00:38:43,219
exports and so forth there's load growth expected there and

919
00:38:43,219 --> 00:38:44,000
you're going to get

920
00:38:44,000 --> 00:38:47,690
some retirement so coastal also fits this location

921
00:38:47,690 --> 00:38:49,400
optimization from the

922
00:38:49,400 --> 00:38:52,679
generation retirement in additions portfolio and then

923
00:38:52,679 --> 00:38:54,519
lastly you want to

924
00:38:54,519 --> 00:38:58,030
have a renewable resource with a transmission interconnect

925
00:38:58,030 --> 00:38:59,480
ion that is on

926
00:38:59,480 --> 00:39:02,119
the correct side of the pricing clusters so we took into

927
00:39:02,119 --> 00:39:03,119
account where some of

928
00:39:03,119 --> 00:39:05,670
these other interconnections are and that's something that

929
00:39:05,670 --> 00:39:06,320
will be part of

930
00:39:06,320 --> 00:39:10,079
the RFP evaluation when you finally decide specific

931
00:39:10,079 --> 00:39:11,519
resources and offers you

932
00:39:11,519 --> 00:39:16,400
want to take into the transmission connection the optimal

933
00:39:16,400 --> 00:39:17,119
location for

934
00:39:17,119 --> 00:39:22,539
those all right this is just one single slide and we'll

935
00:39:22,539 --> 00:39:24,039
move on we don't want to

936
00:39:24,039 --> 00:39:26,610
belabor this just to give you a sense of all the various

937
00:39:26,610 --> 00:39:27,719
factors that we took

938
00:39:27,719 --> 00:39:30,329
into account of the portfolio model and we clearly look at

939
00:39:30,329 --> 00:39:31,239
natural gas prices

940
00:39:31,239 --> 00:39:35,599
because they're the main driver of how the portfolio would

941
00:39:35,599 --> 00:39:36,000
be would perform

942
00:39:36,000 --> 00:39:40,679
power prices heat rates the deck heats heat rate plus

943
00:39:40,679 --> 00:39:41,440
estimate or variable

944
00:39:41,440 --> 00:39:44,929
cost your load growth the various production profiles of

945
00:39:44,929 --> 00:39:45,639
renewable

946
00:39:45,639 --> 00:39:49,690
resources the prices of those CRR costs and prices and

947
00:39:49,690 --> 00:39:51,719
basis costs in ERCOT

948
00:39:51,719 --> 00:39:55,230
potential regulation changes things like marginal losses

949
00:39:55,230 --> 00:39:56,840
local reserves we're

950
00:39:56,840 --> 00:39:59,050
going to talk about the potential solar tariff in a little

951
00:39:59,050 --> 00:39:59,840
bit because that's

952
00:39:59,840 --> 00:40:02,880
one of the decisions that Denton's going to need to make

953
00:40:02,880 --> 00:40:05,239
the reducing in the the

954
00:40:05,239 --> 00:40:09,150
tax federal tax credits that are going away plant retire

955
00:40:09,150 --> 00:40:10,559
ments renewable

956
00:40:10,559 --> 00:40:14,210
saturation certain regions proposed new resources and the

957
00:40:14,210 --> 00:40:15,119
Lubbock ERCOT

958
00:40:15,119 --> 00:40:17,449
integration all of these things we took into account

959
00:40:17,449 --> 00:40:18,360
qualitatively and

960
00:40:18,360 --> 00:40:22,690
quantitatively in modeling the Denton portfolio so let's

961
00:40:22,690 --> 00:40:24,280
talk about some of

962
00:40:24,280 --> 00:40:28,050
the sort of conclusions that we came to in the in the in

963
00:40:28,050 --> 00:40:29,639
the plan here first we

964
00:40:29,639 --> 00:40:31,929
need to just talk about the concept of firming before we've

965
00:40:31,929 --> 00:40:32,760
been talking about

966
00:40:32,760 --> 00:40:36,119
the role of the deck in the role of market purchases and

967
00:40:36,119 --> 00:40:38,599
firming so using a

968
00:40:38,599 --> 00:40:42,030
specific power plant to firm in a written intermittent

969
00:40:42,030 --> 00:40:42,880
resources is

970
00:40:42,880 --> 00:40:46,599
necessary in a bilateral market where utility is

971
00:40:46,599 --> 00:40:48,920
responsible for reliability

972
00:40:48,920 --> 00:40:53,199
in its own control area but ERCOT is not a bilateral market

973
00:40:53,199 --> 00:40:54,199
the ERCOT market is

974
00:40:54,199 --> 00:40:58,079
designed as a power pool so it's managed as a single

975
00:40:58,079 --> 00:41:00,360
control area so the ERCOT

976
00:41:00,360 --> 00:41:04,329
market is designed for to use market resources from the

977
00:41:04,329 --> 00:41:05,360
pool for supply

978
00:41:05,360 --> 00:41:08,570
balancing or firming it's not necessary to have a specific

979
00:41:08,570 --> 00:41:09,880
power plant to do

980
00:41:09,880 --> 00:41:14,429
that so the primary issue here though with using those

981
00:41:14,429 --> 00:41:15,440
market purchases is how

982
00:41:15,440 --> 00:41:18,480
much is it going to cost it's really a cost issue what's

983
00:41:18,480 --> 00:41:20,659
your least cost way to

984
00:41:20,659 --> 00:41:23,119
balance your portfolio and to form those intermittent

985
00:41:23,119 --> 00:41:24,280
resources and a portfolio

986
00:41:24,280 --> 00:41:27,239
with 70 to 100 percent renewable resources will require a

987
00:41:27,239 --> 00:41:27,920
lot of firming

988
00:41:27,920 --> 00:41:31,230
so this was one of our main missions and the resource plan

989
00:41:31,230 --> 00:41:32,400
is here how to develop

990
00:41:32,400 --> 00:41:38,489
a resource plan and the associated portfolio management

991
00:41:38,489 --> 00:41:39,840
operational process

992
00:41:39,840 --> 00:41:44,039
necessary for optimal firming from a cost efficiency basis

993
00:41:44,039 --> 00:41:45,000
so the deck will

994
00:41:45,000 --> 00:41:47,690
clearly play a role in the renewable resource portfolio was

995
00:41:47,690 --> 00:41:48,239
a cost edge

996
00:41:48,239 --> 00:41:51,420
during really high priced hours but from the majority of

997
00:41:51,420 --> 00:41:52,719
time it'll be less risky

998
00:41:52,719 --> 00:41:57,000
and more cost efficient to use market purchases for firming

999
00:41:57,000 --> 00:41:59,599
so we've used an

1000
00:41:59,599 --> 00:42:03,690
August day as an example to illustrate this concept so on

1001
00:42:03,690 --> 00:42:05,400
this graph once again

1002
00:42:05,400 --> 00:42:10,079
we have a 24-hour scale the 24 hours in a day and then we

1003
00:42:10,079 --> 00:42:12,199
have costs market costs

1004
00:42:12,199 --> 00:42:16,860
for power on the vertical the three different colors

1005
00:42:16,860 --> 00:42:19,599
indicate here where in the green this is

1006
00:42:19,599 --> 00:42:24,329
when you would use the market use the day ahead market to

1007
00:42:24,329 --> 00:42:25,559
firm or to balance

1008
00:42:25,559 --> 00:42:29,000
the portfolio the areas without the green this is when the

1009
00:42:29,000 --> 00:42:30,480
deck would likely run

1010
00:42:30,480 --> 00:42:34,130
and you're seeing examples of what real-time prices and day

1011
00:42:34,130 --> 00:42:35,360
ahead prices are

1012
00:42:35,360 --> 00:42:40,260
in here so I'll point out one factor here notice that

1013
00:42:40,260 --> 00:42:42,079
during these off-peak

1014
00:42:42,079 --> 00:42:44,579
hours you're really not getting much of a difference or a

1015
00:42:44,579 --> 00:42:45,480
premium in the day

1016
00:42:45,480 --> 00:42:48,659
ahead versus the real time that really shows up during the

1017
00:42:48,659 --> 00:42:49,599
middle of the day

1018
00:42:49,599 --> 00:42:52,789
and this is when the deck would be most valuable and would

1019
00:42:52,789 --> 00:42:54,000
be quite a resource

1020
00:42:54,000 --> 00:42:57,860
to be able to cover these hours so based on the modeling

1021
00:42:57,860 --> 00:42:59,679
that we've done the deck

1022
00:42:59,679 --> 00:43:02,630
using that as a sole hedge or a source for firming is not

1023
00:43:02,630 --> 00:43:03,679
the least cost or

1024
00:43:03,679 --> 00:43:07,190
lowest risk option the deck is going to run but most of the

1025
00:43:07,190 --> 00:43:08,920
time per over 75% of

1026
00:43:08,920 --> 00:43:11,960
the hours it's going to be cheaper to firm the renewable

1027
00:43:11,960 --> 00:43:13,039
resource portfolio

1028
00:43:13,039 --> 00:43:16,219
using market purchases than with a deck so the low heat

1029
00:43:16,219 --> 00:43:17,840
rate associated with most

1030
00:43:17,840 --> 00:43:21,579
of those hours in the dam will allow the firming using

1031
00:43:21,579 --> 00:43:23,599
market purchases and

1032
00:43:23,599 --> 00:43:27,570
at a lower cost than the deck while also avoiding

1033
00:43:27,570 --> 00:43:31,320
congestion and price risk so to

1034
00:43:31,320 --> 00:43:34,500
summarize some of the takeaways here on the deck looking at

1035
00:43:34,500 --> 00:43:35,519
the advantages and

1036
00:43:35,519 --> 00:43:38,739
the disadvantage of the plant the deck is a heat rate hedge

1037
00:43:38,739 --> 00:43:39,639
so it will be very

1038
00:43:39,639 --> 00:43:42,559
useful when you get times where the heat rate rises in the

1039
00:43:42,559 --> 00:43:43,559
market that's the

1040
00:43:43,559 --> 00:43:47,489
greatest value that it's going to add to your portfolio it

1041
00:43:47,489 --> 00:43:48,519
'll also provide a

1042
00:43:48,519 --> 00:43:51,050
long-term hedge benefit in the event of accelerated

1043
00:43:51,050 --> 00:43:52,320
retirement of conventional

1044
00:43:52,320 --> 00:43:54,780
generation resources and we're seeing that just recently we

1045
00:43:54,780 --> 00:43:55,280
've seen some

1046
00:43:55,280 --> 00:43:59,639
announcements of additional coal generation resource retire

1047
00:43:59,639 --> 00:44:00,679
ments the

1048
00:44:00,679 --> 00:44:03,610
disadvantages are that is a higher heat rate generators

1049
00:44:03,610 --> 00:44:04,719
generator so it offers

1050
00:44:04,719 --> 00:44:08,420
no pricing power no real competitive advantage ERCOT

1051
00:44:08,420 --> 00:44:10,079
manages the system so

1052
00:44:10,079 --> 00:44:13,760
that heat rates don't vary much you saw earlier that heat

1053
00:44:13,760 --> 00:44:15,039
rate curve from ERCOT

1054
00:44:15,039 --> 00:44:18,610
that showed that heat rates were very stable so you need

1055
00:44:18,610 --> 00:44:20,880
some unusual market

1056
00:44:20,880 --> 00:44:24,670
drivers to raise the heat rate to really make the deck to

1057
00:44:24,670 --> 00:44:26,159
be the most valuable

1058
00:44:26,159 --> 00:44:29,440
resources can be so our runtime estimation based on the

1059
00:44:29,440 --> 00:44:30,559
natural gas price

1060
00:44:30,559 --> 00:44:33,480
projections that you saw and you'll see those again is that

1061
00:44:33,480 --> 00:44:34,360
the deck would be

1062
00:44:34,360 --> 00:44:36,849
projected to run between 12 and 20 percent of the time

1063
00:44:36,849 --> 00:44:37,599
which would be the

1064
00:44:37,599 --> 00:44:40,880
equivalent in any year of 13 to 1700 hours per year that

1065
00:44:40,880 --> 00:44:42,000
would be based on

1066
00:44:42,000 --> 00:44:46,670
those high and low gas cases that we used in the analysis

1067
00:44:46,670 --> 00:44:48,280
but there are some

1068
00:44:48,280 --> 00:44:51,639
additional ways to get value from the deck so we think that

1069
00:44:51,639 --> 00:44:52,639
Denton should be

1070
00:44:52,639 --> 00:44:55,820
prepared to sell deck output forward winter if there's a

1071
00:44:55,820 --> 00:44:56,960
spike in natural gas

1072
00:44:56,960 --> 00:45:00,449
prices or a spike in heat rates those are times where that

1073
00:45:00,449 --> 00:45:01,360
does occasionally

1074
00:45:01,360 --> 00:45:03,460
happen in the forward market and there would be an

1075
00:45:03,460 --> 00:45:04,639
advantageous time to take

1076
00:45:04,639 --> 00:45:07,820
advantage of that and sell deck output in the forward

1077
00:45:07,820 --> 00:45:10,000
market if didn't has an

1078
00:45:10,000 --> 00:45:13,599
excess supply say for example if you've got a summer day

1079
00:45:13,599 --> 00:45:15,079
with high coastal or

1080
00:45:15,079 --> 00:45:18,769
solar output during the day then the deck can be sold into

1081
00:45:18,769 --> 00:45:19,719
the day ahead

1082
00:45:19,719 --> 00:45:24,400
market to produce revenue during higher priced hours the

1083
00:45:24,400 --> 00:45:26,000
deck can also be used

1084
00:45:26,000 --> 00:45:28,500
to sell firming services to other organizations looking to

1085
00:45:28,500 --> 00:45:29,119
add renewable

1086
00:45:29,119 --> 00:45:33,539
resources we are aware of some organizations that may be

1087
00:45:33,539 --> 00:45:34,440
looking for

1088
00:45:34,440 --> 00:45:37,090
those sorts of opportunities so it is an opportunity out

1089
00:45:37,090 --> 00:45:39,519
there to to monetize the

1090
00:45:39,519 --> 00:45:42,440
deck and it may also be beneficial to sell excess renewable

1091
00:45:42,440 --> 00:45:43,039
power during

1092
00:45:43,039 --> 00:45:45,730
periods of excess supply and then you could use the deck to

1093
00:45:45,730 --> 00:45:46,159
firm the

1094
00:45:46,159 --> 00:45:48,860
transaction now that doesn't mean the deck would

1095
00:45:48,860 --> 00:45:50,599
necessarily always be needed

1096
00:45:50,599 --> 00:45:53,519
to firm the transaction because if you for example sell

1097
00:45:53,519 --> 00:45:54,599
excess renewables and

1098
00:45:54,599 --> 00:45:59,059
you sell them on a firm basis it's up to your operators to

1099
00:45:59,059 --> 00:46:00,119
then determine what

1100
00:46:00,119 --> 00:46:02,820
the least cost at the time is to firm it it still might be

1101
00:46:02,820 --> 00:46:03,820
cheaper to use the

1102
00:46:03,820 --> 00:46:07,849
market to firm that power but the deck is always there as a

1103
00:46:07,849 --> 00:46:09,159
resource so from

1104
00:46:09,159 --> 00:46:12,630
a firming standpoint you've really got a two-part process

1105
00:46:12,630 --> 00:46:13,800
here you always want to

1106
00:46:13,800 --> 00:46:16,119
look to the market to see what the cost of the market is

1107
00:46:16,119 --> 00:46:17,280
most of the time the

1108
00:46:17,280 --> 00:46:19,949
market's going to be cheaper for firming the deck will be a

1109
00:46:19,949 --> 00:46:20,880
valuable resource

1110
00:46:20,880 --> 00:46:24,400
though in those higher priced hours to add to reduce your

1111
00:46:24,400 --> 00:46:25,880
firming costs just to

1112
00:46:25,880 --> 00:46:29,920
add to this even though you sell the deck as a firming

1113
00:46:29,920 --> 00:46:30,760
resource doesn't mean

1114
00:46:30,760 --> 00:46:35,420
it runs anymore it runs every year ERCOT determines how

1115
00:46:35,420 --> 00:46:36,460
much it runs that's kind

1116
00:46:36,460 --> 00:46:40,150
of a fixed thing that's outside of your control and so what

1117
00:46:40,150 --> 00:46:41,440
you're doing is just

1118
00:46:41,440 --> 00:46:44,369
selling a piece of your expected value out there in a

1119
00:46:44,369 --> 00:46:45,800
financial sense so it

1120
00:46:45,800 --> 00:46:50,780
doesn't actually use consume fuel for this it's just you're

1121
00:46:50,780 --> 00:46:52,239
selling the the

1122
00:46:52,239 --> 00:46:55,789
fact that you have this firming resource out so it's kind

1123
00:46:55,789 --> 00:46:59,079
of a virtual resource

1124
00:47:01,199 --> 00:47:05,250
would you can you go back a slide to this one or I'm sorry

1125
00:47:05,250 --> 00:47:06,760
go forward go to the

1126
00:47:06,760 --> 00:47:11,599
the advantages disadvantages slide there we go

1127
00:47:11,599 --> 00:47:16,920
it would you say that from a fiscally conservative point of

1128
00:47:16,920 --> 00:47:18,760
view and from a

1129
00:47:18,760 --> 00:47:24,880
risk management point of view the disadvantages are greater

1130
00:47:24,880 --> 00:47:25,760
than the

1131
00:47:25,760 --> 00:47:29,539
advantages of the deck that all depends on what the price

1132
00:47:29,539 --> 00:47:30,960
of gas is yeah well

1133
00:47:30,960 --> 00:47:35,280
yes and and so there is no concrete answer to that question

1134
00:47:35,280 --> 00:47:36,719
but I'm saying

1135
00:47:36,719 --> 00:47:39,900
and that's why I mentioned risk management because risk

1136
00:47:39,900 --> 00:47:40,840
management takes

1137
00:47:40,840 --> 00:47:46,360
into account that yeah you see what I'm saying I do and I

1138
00:47:46,360 --> 00:47:47,960
would also say this we

1139
00:47:47,960 --> 00:47:50,519
have a variety of clients that we've worked with over the

1140
00:47:50,519 --> 00:47:52,760
years and one of

1141
00:47:52,760 --> 00:47:56,030
the chief challenges we have in working with those clients

1142
00:47:56,030 --> 00:47:57,239
is to determine what

1143
00:47:57,239 --> 00:48:01,480
their risk tolerance is I would term it risk intolerance

1144
00:48:01,480 --> 00:48:02,400
but nobody asked me

1145
00:48:02,400 --> 00:48:05,820
they coined the phrase before I came around we call it in

1146
00:48:05,820 --> 00:48:07,199
risk intolerance

1147
00:48:07,199 --> 00:48:09,849
you'll have very conservative organizations and

1148
00:48:09,849 --> 00:48:10,960
organizations that

1149
00:48:10,960 --> 00:48:14,989
are willing to take more risks and so it really depends on

1150
00:48:14,989 --> 00:48:17,699
that value set as to

1151
00:48:17,699 --> 00:48:21,369
what they feel more comfortable in terms of reducing their

1152
00:48:21,369 --> 00:48:23,000
risks yes so there's a

1153
00:48:23,000 --> 00:48:27,909
spectrum there of choices yes yeah and it's it's what is

1154
00:48:27,909 --> 00:48:30,119
clear to me from from

1155
00:48:30,119 --> 00:48:36,239
this presentation is that the renewable dentin plan was and

1156
00:48:36,239 --> 00:48:37,679
the purchase of the

1157
00:48:37,679 --> 00:48:43,329
Denton Energy Center was built on a very high risk tolerant

1158
00:48:43,329 --> 00:48:45,400
very risk friendly

1159
00:48:45,400 --> 00:48:50,639
philosophy and there's nothing that we can do about that

1160
00:48:50,639 --> 00:48:52,599
now but I

1161
00:48:52,599 --> 00:49:01,599
appreciate your focus on risk management and fiscal conserv

1162
00:49:01,599 --> 00:49:03,440
ativism because we

1163
00:49:03,440 --> 00:49:07,059
work we have not yet seen that we didn't see that in the

1164
00:49:07,059 --> 00:49:07,480
past in

1165
00:49:07,480 --> 00:49:10,480
presentations on this subject so thank you you're welcome

1166
00:49:10,480 --> 00:49:15,440
my guess is that we

1167
00:49:15,440 --> 00:49:18,920
were not privy to the thought process behind that other

1168
00:49:18,920 --> 00:49:19,679
than you know like

1169
00:49:19,679 --> 00:49:24,679
reading the Brattle report I would just estimate that that

1170
00:49:24,679 --> 00:49:26,039
anybody who wanted

1171
00:49:26,039 --> 00:49:28,969
that probably felt comfortable with a physical asset in

1172
00:49:28,969 --> 00:49:30,039
order to do that and

1173
00:49:30,039 --> 00:49:32,289
there are people that feel that way and that's just that's

1174
00:49:32,289 --> 00:49:33,480
just a preference and

1175
00:49:33,480 --> 00:49:39,190
that's just a preference is Denton a load-serving entity

1176
00:49:39,190 --> 00:49:39,760
and what are the

1177
00:49:39,760 --> 00:49:43,039
requirements under FERC and NERC if they are that you are a

1178
00:49:43,039 --> 00:49:44,360
load-serving entity

1179
00:49:44,360 --> 00:49:50,159
and isn't it better to have a physical asset because of the

1180
00:49:50,159 --> 00:49:51,079
penalties that you

1181
00:49:51,079 --> 00:49:54,119
could have in the future from FERC and NERC if there was

1182
00:49:54,119 --> 00:49:55,639
something to go wrong

1183
00:49:55,639 --> 00:50:02,320
we're in ERCOT we are not really regulated by FERC right we

1184
00:50:02,320 --> 00:50:03,519
are ERCOT you

1185
00:50:03,519 --> 00:50:06,699
know we don't have essentially interstate trade and

1186
00:50:06,699 --> 00:50:09,239
electricity so what

1187
00:50:09,239 --> 00:50:14,000
so you're a load-serving entity from ERCOT ERCOT is an

1188
00:50:14,000 --> 00:50:15,800
energy only market

1189
00:50:15,800 --> 00:50:23,420
and they score you on how how well you schedule energy or

1190
00:50:23,420 --> 00:50:24,480
resources against your

1191
00:50:24,480 --> 00:50:27,840
load and so as long as you do that you get a score of a

1192
00:50:27,840 --> 00:50:29,280
hundred percent right

1193
00:50:29,280 --> 00:50:33,510
where does physical resources add into them well they could

1194
00:50:33,510 --> 00:50:34,480
be they can be

1195
00:50:34,480 --> 00:50:38,559
resources at time but if they don't have the deck doesn't

1196
00:50:38,559 --> 00:50:39,760
have any energy

1197
00:50:39,760 --> 00:50:43,469
associated with it it has a heat rate so you can't really

1198
00:50:43,469 --> 00:50:45,559
use that as an energy

1199
00:50:45,559 --> 00:50:51,300
only resource in ERCOT to serve your load-serving

1200
00:50:51,300 --> 00:50:54,880
obligations is that clear

1201
00:50:54,880 --> 00:51:00,650
kind of sort of most of the market just I mean all the

1202
00:51:00,650 --> 00:51:02,159
retail without physical

1203
00:51:02,159 --> 00:51:05,730
assets behind ERCOT how are they going to firm anything ERC

1204
00:51:05,730 --> 00:51:07,440
OT it's a it's all

1205
00:51:07,440 --> 00:51:10,190
been socialized it's all been pooled you may have a

1206
00:51:10,190 --> 00:51:11,760
resource but ERCOT really is

1207
00:51:11,760 --> 00:51:14,800
the one who operates it and I remember a while ago that

1208
00:51:14,800 --> 00:51:16,000
they were very concerned

1209
00:51:16,000 --> 00:51:19,599
they didn't have enough capacity to be able to serve taxes

1210
00:51:19,599 --> 00:51:21,039
that's always the

1211
00:51:21,039 --> 00:51:24,659
story almost universally all over the country and they they

1212
00:51:24,659 --> 00:51:25,679
all have a reserve

1213
00:51:25,679 --> 00:51:30,739
margin and so that's that's true that's always an issue but

1214
00:51:30,739 --> 00:51:31,760
you can always

1215
00:51:31,760 --> 00:51:36,599
if you go out and buy your own resources a wind resource

1216
00:51:36,599 --> 00:51:38,039
will fill your needs

1217
00:51:38,039 --> 00:51:42,599
over the long term I understand and for the record I'm very

1218
00:51:42,599 --> 00:51:43,639
even favorable of a

1219
00:51:43,639 --> 00:51:48,989
lot of renewables no but but and so you can just simply you

1220
00:51:48,989 --> 00:51:50,079
know solar plus wind

1221
00:51:50,079 --> 00:51:53,730
that's just as as a matter of fact that will serve your

1222
00:51:53,730 --> 00:51:54,960
load in terms of an

1223
00:51:54,960 --> 00:51:58,340
expected value better than the deck will because the deck

1224
00:51:58,340 --> 00:51:59,880
doesn't have any energy

1225
00:51:59,880 --> 00:52:03,269
associated with it it's a heat rate call now it's good if

1226
00:52:03,269 --> 00:52:06,239
you think that the will

1227
00:52:06,239 --> 00:52:10,039
run out of capacity but let's say if you run out of

1228
00:52:10,039 --> 00:52:11,679
capacity this the deck

1229
00:52:11,679 --> 00:52:15,869
doesn't really serve Denton it serves I know so we're all

1230
00:52:15,869 --> 00:52:16,840
in the same boat right

1231
00:52:16,840 --> 00:52:21,809
and no small entity like Denton building resources is going

1232
00:52:21,809 --> 00:52:23,440
to fix that it's a

1233
00:52:23,440 --> 00:52:27,329
comprehensive big thing so this is where some people make

1234
00:52:27,329 --> 00:52:28,639
mistakes they think

1235
00:52:28,639 --> 00:52:33,480
that somehow by building a physical you know steel on the

1236
00:52:33,480 --> 00:52:35,000
ground that that helps

1237
00:52:35,000 --> 00:52:40,769
them and you're better off potentially buying natural gas

1238
00:52:40,769 --> 00:52:41,840
because that's where

1239
00:52:41,840 --> 00:52:47,550
all the risk is the actual if you go look at what Larry had

1240
00:52:47,550 --> 00:52:49,159
this the dispatch

1241
00:52:49,159 --> 00:52:53,030
heat rates don't vary very much in right cut that's because

1242
00:52:53,030 --> 00:52:54,559
all these units that

1243
00:52:54,559 --> 00:52:58,480
we built we have this huge unit build out and they're fixed

1244
00:52:58,480 --> 00:52:59,440
and they keep

1245
00:52:59,440 --> 00:53:02,619
operating day after day after day and what they're

1246
00:53:02,619 --> 00:53:04,000
concerned is they're

1247
00:53:04,000 --> 00:53:09,070
getting crowded out by renewables so ERCOT is incredibly

1248
00:53:09,070 --> 00:53:10,440
safe you know this is

1249
00:53:10,440 --> 00:53:13,369
the thing if you're worried about becoming short you

1250
00:53:13,369 --> 00:53:15,840
shouldn't unless

1251
00:53:15,840 --> 00:53:20,500
things change dramatically then they have a process to keep

1252
00:53:20,500 --> 00:53:21,840
units from being

1253
00:53:21,840 --> 00:53:25,719
retired and that's what Vistra just announced it's going to

1254
00:53:25,719 --> 00:53:26,880
retire for

1255
00:53:26,880 --> 00:53:31,659
instance a sandow plants Monticello and and Big Brown what

1256
00:53:31,659 --> 00:53:33,000
ERCOT may came in and

1257
00:53:33,000 --> 00:53:36,840
say no you're not going to you're required to keep these on

1258
00:53:36,840 --> 00:53:38,440
RMR status

1259
00:53:38,440 --> 00:53:43,280
that means reliable reliability must run because if you do

1260
00:53:43,280 --> 00:53:43,880
this you're going to

1261
00:53:43,880 --> 00:53:48,650
create local congestion and we there's a you know safety

1262
00:53:48,650 --> 00:53:50,360
aspect to it so they

1263
00:53:50,360 --> 00:53:54,300
won't let them retire and that process so think about it we

1264
00:53:54,300 --> 00:53:55,480
you know if you

1265
00:53:55,480 --> 00:53:59,239
retire coal units at some point they just say stop don't

1266
00:53:59,239 --> 00:54:00,440
retire those units

1267
00:54:00,440 --> 00:54:03,730
so it's there's a safety factor in that a lot of people don

1268
00:54:03,730 --> 00:54:05,719
't consider and then

1269
00:54:05,719 --> 00:54:10,190
what they do is they say here's an RMR you get all your

1270
00:54:10,190 --> 00:54:11,159
costs are are you know

1271
00:54:11,159 --> 00:54:15,679
included plus a return so people say well great now I have

1272
00:54:15,679 --> 00:54:16,559
a asset that was

1273
00:54:16,559 --> 00:54:20,719
losing money now it makes money so people will turn those

1274
00:54:20,719 --> 00:54:21,960
into RMR status

1275
00:54:21,960 --> 00:54:26,440
so just sort of conclude to some of the questions in here

1276
00:54:26,440 --> 00:54:30,719
we have a particular

1277
00:54:30,719 --> 00:54:33,309
expectation of where gas prices may go others have a

1278
00:54:33,309 --> 00:54:34,760
different expectation and

1279
00:54:34,760 --> 00:54:38,260
the relative weight of these advantages and disadvantages

1280
00:54:38,260 --> 00:54:39,400
tilts depending upon

1281
00:54:39,400 --> 00:54:43,110
where gas prices go and that's something that is just a

1282
00:54:43,110 --> 00:54:44,480
preference to whoever

1283
00:54:44,480 --> 00:54:49,280
thinks about where gas prices are going to go gives you the

1284
00:54:49,280 --> 00:54:50,760
the relative weight

1285
00:54:50,760 --> 00:54:54,000
of those advantages or disadvantages so speaking of that

1286
00:54:54,000 --> 00:54:56,159
this is just yes question

1287
00:54:56,159 --> 00:55:00,440
just just following up on what you were just saying would

1288
00:55:00,440 --> 00:55:03,039
you would you say that

1289
00:55:03,039 --> 00:55:08,090
the renewable dentin plan as it was previously imagined mis

1290
00:55:08,090 --> 00:55:09,599
represented how

1291
00:55:09,599 --> 00:55:15,730
ERCOT works I don't know if it misrepresented it it depends

1292
00:55:15,730 --> 00:55:16,119
on how

1293
00:55:16,119 --> 00:55:18,820
people felt that the way that the market would work so it

1294
00:55:18,820 --> 00:55:20,400
could be in a view on

1295
00:55:20,400 --> 00:55:25,449
that we haven't really dealt deeply it's a lot of what we

1296
00:55:25,449 --> 00:55:26,280
've seen in terms of

1297
00:55:26,280 --> 00:55:28,920
the dentin renewable resource plan were some PowerPoint

1298
00:55:28,920 --> 00:55:29,880
slides that gave some

1299
00:55:29,880 --> 00:55:32,400
expectations of what the portfolio yeah and that's as I

1300
00:55:32,400 --> 00:55:33,440
understand it that's

1301
00:55:33,440 --> 00:55:36,050
pretty much so we didn't really see a lot of detail in

1302
00:55:36,050 --> 00:55:37,239
there that could really

1303
00:55:37,239 --> 00:55:41,320
put that together yeah and and and there wasn't the I'll

1304
00:55:41,320 --> 00:55:42,239
just just in terms of

1305
00:55:42,239 --> 00:55:44,579
me communicating to the public who's watching and trying to

1306
00:55:44,579 --> 00:55:45,280
piece together

1307
00:55:45,280 --> 00:55:47,639
right because I think people are trying to piece together

1308
00:55:47,639 --> 00:55:48,920
what we're hearing now

1309
00:55:48,920 --> 00:55:53,579
versus what we heard in the past you know what we heard in

1310
00:55:53,579 --> 00:55:55,719
the past was that

1311
00:55:55,719 --> 00:56:01,929
ERCOT needs this this this gas plant and that without the

1312
00:56:01,929 --> 00:56:05,960
gas plant dentin is in

1313
00:56:05,960 --> 00:56:12,079
danger of not being reliable and ERCOT itself the grid is

1314
00:56:12,079 --> 00:56:13,880
and what I hear what

1315
00:56:13,880 --> 00:56:21,199
you're saying is that ERCOT takes care ERCOT takes care of

1316
00:56:21,199 --> 00:56:22,360
it ERCOT is is in

1317
00:56:22,360 --> 00:56:27,389
no risk of you know running out of power and if they and

1318
00:56:27,389 --> 00:56:29,360
and we would know and

1319
00:56:29,360 --> 00:56:36,719
and and we'll know if we're needed to to build a gas plant

1320
00:56:36,719 --> 00:56:39,199
for them yes one

1321
00:56:39,199 --> 00:56:42,969
thing that I think that's very important as we go forward

1322
00:56:42,969 --> 00:56:44,280
and the PUC is talking

1323
00:56:44,280 --> 00:56:47,519
about this right now and that is this as we go forward

1324
00:56:47,519 --> 00:56:50,119
there's a huge ERCOT

1325
00:56:50,119 --> 00:56:56,650
and the PUC have been focused basically on building assets

1326
00:56:56,650 --> 00:56:58,039
all the assets they

1327
00:56:58,039 --> 00:57:01,840
see all the resources that you see in the in the but that's

1328
00:57:01,840 --> 00:57:02,880
all on the supply

1329
00:57:02,880 --> 00:57:06,170
side they have not been focusing on the demand side and

1330
00:57:06,170 --> 00:57:07,920
efficient market design

1331
00:57:07,920 --> 00:57:13,679
requires that you focus on both sides so there is a price

1332
00:57:13,679 --> 00:57:15,360
that I would and most

1333
00:57:15,360 --> 00:57:18,639
people would if you saw prices too high and you were your

1334
00:57:18,639 --> 00:57:20,039
rates reflected that

1335
00:57:20,039 --> 00:57:23,219
you turn off your load and that hasn't been integrated in

1336
00:57:23,219 --> 00:57:24,480
the market but it

1337
00:57:24,480 --> 00:57:28,880
could be in the near future so this is one of the things

1338
00:57:28,880 --> 00:57:30,960
about how the market

1339
00:57:30,960 --> 00:57:35,619
is designed as you go forward this demand side resources

1340
00:57:35,619 --> 00:57:36,920
and management is

1341
00:57:36,920 --> 00:57:41,829
so important and so this is one of the risks I think about

1342
00:57:41,829 --> 00:57:42,880
going out and

1343
00:57:42,880 --> 00:57:46,159
committing anything to building physical resources what if

1344
00:57:46,159 --> 00:57:47,360
everybody has an app

1345
00:57:47,360 --> 00:57:51,570
on their phone it's connected to their smart thermostat and

1346
00:57:51,570 --> 00:57:53,039
you start cycling

1347
00:57:53,039 --> 00:57:58,389
air conditioner or there's a lot more work on commercial

1348
00:57:58,389 --> 00:57:59,519
and industrial loads

1349
00:57:59,519 --> 00:58:02,519
to do the same thing we see a lot of that activity in the

1350
00:58:02,519 --> 00:58:03,639
market now where

1351
00:58:03,639 --> 00:58:07,480
people are trying to do something called Lars load acting

1352
00:58:07,480 --> 00:58:09,199
as resources and other

1353
00:58:09,199 --> 00:58:13,380
programs which will lower the demand and we and that's one

1354
00:58:13,380 --> 00:58:14,679
thing I don't think

1355
00:58:14,679 --> 00:58:17,630
really was discussed that much in the Brattle report but it

1356
00:58:17,630 --> 00:58:18,519
's something that's

1357
00:58:18,519 --> 00:58:22,380
coming we just don't we had discussions about my inside

1358
00:58:22,380 --> 00:58:25,320
management we did a lot

1359
00:58:25,320 --> 00:58:28,800
of commercial businesses the experience that I have had

1360
00:58:28,800 --> 00:58:29,719
they're not going to

1361
00:58:29,719 --> 00:58:34,630
shift their production and do all kinds of changes to meet

1362
00:58:34,630 --> 00:58:36,199
some of that we tried

1363
00:58:36,199 --> 00:58:39,559
very aggressively where I came from and it just didn't

1364
00:58:39,559 --> 00:58:40,960
happen on the industrial

1365
00:58:40,960 --> 00:58:44,139
side it happened on the residential side because that was a

1366
00:58:44,139 --> 00:58:45,440
little bit easier to

1367
00:58:45,440 --> 00:58:48,929
manage but we just couldn't get some of the industrials to

1368
00:58:48,929 --> 00:58:49,920
do it and it depends

1369
00:58:49,920 --> 00:58:53,329
on the nature of your customer base and and so I do you do

1370
00:58:53,329 --> 00:58:54,760
have some large loads

1371
00:58:54,760 --> 00:58:57,679
and this may be something that develops in the future we

1372
00:58:57,679 --> 00:58:59,360
did address this in

1373
00:58:59,360 --> 00:59:02,280
the written report we don't have a slide on this we think

1374
00:59:02,280 --> 00:59:02,960
there are a lot of

1375
00:59:02,960 --> 00:59:06,139
advantages to pursuing demand response and demand side

1376
00:59:06,139 --> 00:59:08,199
management programs in

1377
00:59:08,199 --> 00:59:12,480
terms of where we saw the media priorities are you've got

1378
00:59:12,480 --> 00:59:13,360
renewable

1379
00:59:13,360 --> 00:59:16,539
resources coming online in a few months you've got an

1380
00:59:16,539 --> 00:59:18,159
accelerated goal to reach

1381
00:59:18,159 --> 00:59:22,719
70% so we saw that just we've referred to in the report

1382
00:59:22,719 --> 00:59:24,239
from the 80/20 rule we

1383
00:59:24,239 --> 00:59:26,940
had that we had to really take the big pieces immediately

1384
00:59:26,940 --> 00:59:27,760
which is really

1385
00:59:27,760 --> 00:59:31,409
addressing how you fill out the supply portfolio from a

1386
00:59:31,409 --> 00:59:32,760
renewable perspective

1387
00:59:32,760 --> 00:59:36,960
then your timeline to go on to a hundred percent during

1388
00:59:36,960 --> 00:59:38,099
that I think that would be

1389
00:59:38,099 --> 00:59:41,280
where you would really deserve a greater focus because it's

1390
00:59:41,280 --> 00:59:42,280
gonna take a longer

1391
00:59:42,280 --> 00:59:45,260
lead time to plan some of those demand side resources you

1392
00:59:45,260 --> 00:59:46,239
've got to really

1393
00:59:46,239 --> 00:59:48,400
integrate that into your rate incentives and that's not

1394
00:59:48,400 --> 00:59:49,239
something that you can

1395
00:59:49,239 --> 00:59:55,159
make immediate decision on we've seen utilities out there

1396
00:59:55,159 --> 00:59:56,760
act too early in

1397
00:59:56,760 --> 01:00:00,190
some of these areas and really spend a lot of money so it's

1398
01:00:00,190 --> 01:00:01,440
always good to sort

1399
01:00:01,440 --> 01:00:03,900
of wait for some of these technologies to come into play

1400
01:00:03,900 --> 01:00:04,719
and maybe a second

1401
01:00:04,719 --> 01:00:07,639
generation gives you a much better cost efficiency there so

1402
01:00:07,639 --> 01:00:08,800
we would we would

1403
01:00:08,800 --> 01:00:11,300
just caution that that would be something to plan out I

1404
01:00:11,300 --> 01:00:12,280
think it could make a

1405
01:00:12,280 --> 01:00:15,860
really important contribution to how you get up to your 100

1406
01:00:15,860 --> 01:00:17,079
% goal but that's

1407
01:00:17,079 --> 01:00:19,840
going to require a longer lead time a longer planning and a

1408
01:00:19,840 --> 01:00:21,400
longer deployment

1409
01:00:21,400 --> 01:00:24,960
for those types of resources whereas here you know to get

1410
01:00:24,960 --> 01:00:26,119
to 70% even to a

1411
01:00:26,119 --> 01:00:29,039
hundred percent immediately we were really focusing on the

1412
01:00:29,039 --> 01:00:29,679
big immediate

1413
01:00:29,679 --> 01:00:32,159
things that can be done to fill out the portfolio and if I

1414
01:00:32,159 --> 01:00:33,519
remember Brian weren't

1415
01:00:33,519 --> 01:00:37,289
we going to be able to go to like 88% because of the price

1416
01:00:37,289 --> 01:00:38,360
change that had

1417
01:00:38,360 --> 01:00:44,400
occurred between what we thought five months ago to today

1418
01:00:44,400 --> 01:00:45,639
yes I think that was

1419
01:00:45,639 --> 01:00:49,670
the the figures that we used back a few months ago we came

1420
01:00:49,670 --> 01:00:51,079
back to and we're in

1421
01:00:51,079 --> 01:00:53,349
just a moment you're gonna see some slides on what we

1422
01:00:53,349 --> 01:00:54,000
suggest as an

1423
01:00:54,000 --> 01:00:57,179
adoption path for this and we don't see any reason for you

1424
01:00:57,179 --> 01:00:58,000
to hold back I think

1425
01:00:58,000 --> 01:01:00,250
you can really accelerate what you're doing here because of

1426
01:01:00,250 --> 01:01:01,079
the advantages and

1427
01:01:01,079 --> 01:01:04,300
there are some arguments for accelerating it because of

1428
01:01:04,300 --> 01:01:05,079
some changes

1429
01:01:05,079 --> 01:01:07,349
that may be coming down pretty soon we're gonna we're gonna

1430
01:01:07,349 --> 01:01:08,360
especially the tariffs

1431
01:01:08,360 --> 01:01:11,440
on solar yes we're gonna cover those here very very soon

1432
01:01:11,440 --> 01:01:19,079
excuse me yes can you go to slide 15 the the seasonal

1433
01:01:19,079 --> 01:01:20,920
summer this one and yes

1434
01:01:20,920 --> 01:01:27,170
yes so the blue is the Denton Energy Center so yes the

1435
01:01:27,170 --> 01:01:27,880
vertical bars why do

1436
01:01:27,880 --> 01:01:31,639
we turn it on then you want to turn it on to maximize this

1437
01:01:31,639 --> 01:01:33,079
slide why do we turn

1438
01:01:33,079 --> 01:01:37,400
it on you don't turn it on okay so here's the dispatch

1439
01:01:37,400 --> 01:01:40,000
because the at that

1440
01:01:40,000 --> 01:01:43,409
time the whatever you've been in it let's say you let's see

1441
01:01:43,409 --> 01:01:43,960
what's the price

1442
01:01:43,960 --> 01:01:50,750
there the price is let's say $35 and that means it's more

1443
01:01:50,750 --> 01:01:51,440
than a 10 heat

1444
01:01:51,440 --> 01:01:55,530
break that's why they turn it on is because that meets you

1445
01:01:55,530 --> 01:01:56,400
've been in a

1446
01:01:56,400 --> 01:02:01,110
curve essentially and and during this this was a really

1447
01:02:01,110 --> 01:02:02,960
high priced August day

1448
01:02:02,960 --> 01:02:06,360
August is okay prices okay and so those things may have

1449
01:02:06,360 --> 01:02:07,559
been so can you go back

1450
01:02:07,559 --> 01:02:17,800
to your disadvantages advantages slide sure so then in

1451
01:02:17,800 --> 01:02:20,840
those situations it does

1452
01:02:20,840 --> 01:02:24,650
offer some kind of pricing power and competitive absolutely

1453
01:02:24,650 --> 01:02:25,599
at those hours

1454
01:02:25,599 --> 01:02:31,170
yes it does so then actually for the 12% to 20% of the time

1455
01:02:31,170 --> 01:02:32,159
that you estimate

1456
01:02:32,159 --> 01:02:37,099
that it is running or will run it will be offering pricing

1457
01:02:37,099 --> 01:02:38,760
power and competitive

1458
01:02:38,760 --> 01:02:43,739
yes at those that actually for nearly possibly 25% of the

1459
01:02:43,739 --> 01:02:45,239
time a quarter of

1460
01:02:45,239 --> 01:02:48,170
the time it will be that will be an advantage not a

1461
01:02:48,170 --> 01:02:49,039
disadvantage correct

1462
01:02:49,039 --> 01:02:51,690
absolutely and I'm not sure that's far different in

1463
01:02:51,690 --> 01:02:53,079
percentages from what we

1464
01:02:53,079 --> 01:02:56,010
were told no if I'm not mistaken I think it's pretty close

1465
01:02:56,010 --> 01:02:59,639
said 17 17 so yeah it

1466
01:02:59,639 --> 01:03:03,000
all depends on the gas price right sure so you so you've

1467
01:03:03,000 --> 01:03:04,440
actually nearly said

1468
01:03:04,440 --> 01:03:07,110
the same exact thing we were told in the renewable debt and

1469
01:03:07,110 --> 01:03:07,719
project and

1470
01:03:07,719 --> 01:03:13,039
technically then ERCOT is depending on us to firm up their

1471
01:03:13,039 --> 01:03:14,400
entire system

1472
01:03:14,400 --> 01:03:17,980
some granular data we haven't been given before yes but the

1473
01:03:17,980 --> 01:03:19,920
12 to 15 12 to 20% I

1474
01:03:19,920 --> 01:03:23,179
mean that's not far off from 17 and I would think you would

1475
01:03:23,179 --> 01:03:23,960
find in just a

1476
01:03:23,960 --> 01:03:26,929
moment we're gonna show you some projections of what we

1477
01:03:26,929 --> 01:03:28,119
think the value

1478
01:03:28,119 --> 01:03:31,670
of the portfolio is going forward with the renewables and I

1479
01:03:31,670 --> 01:03:33,079
think a lot of that

1480
01:03:33,079 --> 01:03:36,119
modeling very much lines up with what brattle it is just a

1481
01:03:36,119 --> 01:03:37,199
different gas price

1482
01:03:37,199 --> 01:03:39,659
assumption the whole different whole difference is just the

1483
01:03:39,659 --> 01:03:40,039
gas price

1484
01:03:40,039 --> 01:03:46,079
assumption yeah absolutely and and just to amplify what you

1485
01:03:46,079 --> 01:03:47,360
were asking about

1486
01:03:47,360 --> 01:03:51,590
just on this graph here that shows in the white during this

1487
01:03:51,590 --> 01:03:52,480
particular day

1488
01:03:52,480 --> 01:03:56,380
that is when the deck is the least cost firming resource

1489
01:03:56,380 --> 01:03:57,960
rather than the market

1490
01:03:57,960 --> 01:04:02,179
that's when it offers an advantage to you and so just go

1491
01:04:02,179 --> 01:04:03,320
ahead you make your

1492
01:04:03,320 --> 01:04:06,239
point and then I'll but annually that will still represent

1493
01:04:06,239 --> 01:04:07,559
that 12 to 20%

1494
01:04:07,559 --> 01:04:11,400
this is just kind of a quibble it actually doesn't give you

1495
01:04:11,400 --> 01:04:12,280
a power price

1496
01:04:12,280 --> 01:04:16,989
it gives you a heat rate and what's the difference in that

1497
01:04:16,989 --> 01:04:18,559
time put my mind

1498
01:04:18,559 --> 01:04:22,559
around heat rate I think professionals do that right yeah

1499
01:04:22,559 --> 01:04:23,440
it means your margin

1500
01:04:23,440 --> 01:04:26,369
basically yeah if I get just if the price is a hundred

1501
01:04:26,369 --> 01:04:27,519
dollars for the deck

1502
01:04:27,519 --> 01:04:32,039
and the markets 110 you get a $10 you know you don't get a

1503
01:04:32,039 --> 01:04:32,840
hundred dollars and

1504
01:04:32,840 --> 01:04:36,230
so that's one of the things about that's how the price has

1505
01:04:36,230 --> 01:04:38,360
slipped is a hundred

1506
01:04:38,360 --> 01:04:41,820
dollars a good hedge we would say if our average price is

1507
01:04:41,820 --> 01:04:43,559
25 not really that's

1508
01:04:43,559 --> 01:04:46,019
where we're saying this is a little bit you have to think

1509
01:04:46,019 --> 01:04:47,440
about this and and

1510
01:04:47,440 --> 01:04:50,679
that's how it works and then just what I was going to

1511
01:04:50,679 --> 01:04:51,840
conclude there and say is

1512
01:04:51,840 --> 01:04:54,449
that you know we say we see our mission and what we've done

1513
01:04:54,449 --> 01:04:55,480
in the resource plan

1514
01:04:55,480 --> 01:04:57,719
here is how does the deck fit into the portfolio you know

1515
01:04:57,719 --> 01:04:58,519
we're not sitting

1516
01:04:58,519 --> 01:05:00,980
here making any decisions about the deck it's how do you

1517
01:05:00,980 --> 01:05:02,320
best optimize it how do

1518
01:05:02,320 --> 01:05:04,800
we maximize the value of that how does it best serve Denton

1519
01:05:04,800 --> 01:05:06,159
going forward given

1520
01:05:06,159 --> 01:05:08,679
you're committed to it and so it's just that balance of

1521
01:05:08,679 --> 01:05:09,960
market purchases versus

1522
01:05:09,960 --> 01:05:12,710
the deck which is the least cost alternative at the time

1523
01:05:12,710 --> 01:05:13,480
you need it for

1524
01:05:13,480 --> 01:05:21,039
that but simultaneously when it is in excess you need to be

1525
01:05:21,039 --> 01:05:21,800
whoops I'm going

1526
01:05:21,800 --> 01:05:30,800
the wrong way you need to be maximizing sorry I'm off here

1527
01:05:30,800 --> 01:05:32,159
15 what you need to

1528
01:05:32,159 --> 01:05:36,320
be maximizing the revenue opportunities for this even if it

1529
01:05:36,320 --> 01:05:39,400
's in excess it's it's

1530
01:05:39,400 --> 01:05:42,849
the sort of thing where when the when the the opportunities

1531
01:05:42,849 --> 01:05:44,079
there you're taking

1532
01:05:44,079 --> 01:05:47,440
it full advantage of that opportunity so that's to maximize

1533
01:05:47,440 --> 01:05:50,039
the value just one

1534
01:05:50,039 --> 01:05:55,360
question and it if you go back to that slide I'm sorry this

1535
01:05:55,360 --> 01:05:56,320
one yeah that's

1536
01:05:56,320 --> 01:06:05,369
perfect just as so we're saying okay we this is during the

1537
01:06:05,369 --> 01:06:06,360
blue period there is

1538
01:06:06,360 --> 01:06:11,869
when the deck deck is engaged yes and then that is a that's

1539
01:06:11,869 --> 01:06:13,440
a one-day sample

1540
01:06:13,440 --> 01:06:17,789
now annually we're talking again what 15 20 percent or 20

1541
01:06:17,789 --> 01:06:19,960
percent of the time

1542
01:06:19,960 --> 01:06:25,059
runtime so I guess the question is if we look at it if we

1543
01:06:25,059 --> 01:06:27,559
're looking at it as

1544
01:06:27,559 --> 01:06:33,269
number of hours as a percentage of number of hours in a day

1545
01:06:33,269 --> 01:06:34,360
or a year or

1546
01:06:34,360 --> 01:06:40,719
whatever it is versus a percentage of what is the actual

1547
01:06:40,719 --> 01:06:42,599
load that we're using

1548
01:06:42,599 --> 01:06:47,909
or having the purchase or for the for the didn't load you

1549
01:06:47,909 --> 01:06:49,840
got the didn't load

1550
01:06:49,840 --> 01:06:54,650
so the load in August for instance would be a lot more than

1551
01:06:54,650 --> 01:06:56,519
the load in April yes

1552
01:06:56,519 --> 01:07:05,480
so can we can we look at from an annual basis just I'd just

1553
01:07:05,480 --> 01:07:06,480
like to see the

1554
01:07:06,480 --> 01:07:12,760
percentage of our annual power purchases of how it breaks

1555
01:07:12,760 --> 01:07:15,559
out I think we're

1556
01:07:15,559 --> 01:07:19,639
looking at the run hours and we've got that but I'm more

1557
01:07:19,639 --> 01:07:20,639
interested in what the

1558
01:07:20,639 --> 01:07:24,880
percentage of the load we're using yeah and that would be

1559
01:07:24,880 --> 01:07:26,199
then a function of

1560
01:07:26,199 --> 01:07:29,409
what renewable resources what the type you put in the

1561
01:07:29,409 --> 01:07:30,699
portfolio and the

1562
01:07:30,699 --> 01:07:34,139
quantity so that once we get a little closer to getting a

1563
01:07:34,139 --> 01:07:35,519
specific recommendation

1564
01:07:35,519 --> 01:07:39,119
fit we can run those so we could say okay a you're

1565
01:07:39,119 --> 01:07:40,320
producing this much for

1566
01:07:40,320 --> 01:07:43,039
your resources be this many hours or market purchases see

1567
01:07:43,039 --> 01:07:43,960
this many hours are

1568
01:07:43,960 --> 01:07:48,199
deck we can come up with that once we get a particular

1569
01:07:48,199 --> 01:07:49,500
portfolio and actually

1570
01:07:49,500 --> 01:07:52,730
maybe even reflected in megawatt hours absolutely that's

1571
01:07:52,730 --> 01:07:53,280
how we count that

1572
01:07:53,280 --> 01:07:57,230
you're doing yeah yeah but it's far smaller than 15 percent

1573
01:07:57,230 --> 01:07:58,360
maybe 5 percent

1574
01:07:58,360 --> 01:08:01,539
or something yeah 7 percent okay and that's because a lot

1575
01:08:01,539 --> 01:08:03,719
of it's so a lot of

1576
01:08:03,719 --> 01:08:06,440
it sold as you can see below there right yeah even though

1577
01:08:06,440 --> 01:08:07,480
those August days but I

1578
01:08:07,480 --> 01:08:10,440
think I'm still I'd still think that's an interesting thing

1579
01:08:10,440 --> 01:08:11,440
we need to look at

1580
01:08:11,440 --> 01:08:17,529
it are these all these projections based on current

1581
01:08:17,529 --> 01:08:19,560
population current demand

1582
01:08:19,560 --> 01:08:23,470
current load or do they project an increase you know the

1583
01:08:23,470 --> 01:08:25,439
city of Denton most

1584
01:08:25,439 --> 01:08:30,000
cities spend a lot of time trying to promote industry

1585
01:08:30,000 --> 01:08:32,119
promote jobs so people

1586
01:08:32,119 --> 01:08:36,960
have more income you got to have the resources and you need

1587
01:08:36,960 --> 01:08:37,359
the

1588
01:08:37,359 --> 01:08:41,500
diversification and be able to provide the energy and I

1589
01:08:41,500 --> 01:08:43,399
like the word hedge

1590
01:08:43,399 --> 01:08:49,609
because my world hedges a lot which is finance you need to

1591
01:08:49,609 --> 01:08:50,880
be able to have the

1592
01:08:50,880 --> 01:08:53,800
different resources you have the hedge and you have a city

1593
01:08:53,800 --> 01:08:54,760
trying to bring in

1594
01:08:54,760 --> 01:08:59,470
more people more industry create more jobs the more you can

1595
01:08:59,470 --> 01:09:00,560
offer and assure

1596
01:09:00,560 --> 01:09:05,359
them of all the different resources including the plant to

1597
01:09:05,359 --> 01:09:06,800
me that makes a

1598
01:09:06,800 --> 01:09:11,000
positive impact it's not just about tunnel vision here we

1599
01:09:11,000 --> 01:09:12,880
hedge we do this

1600
01:09:12,880 --> 01:09:16,170
we have a ton of options and but it would seem to me that

1601
01:09:16,170 --> 01:09:17,399
these numbers are

1602
01:09:17,399 --> 01:09:20,149
going to change if you said in 20 years the city didn't is

1603
01:09:20,149 --> 01:09:22,399
going to be 30% 40 50

1604
01:09:22,399 --> 01:09:26,000
percent larger or some major industries come in here and

1605
01:09:26,000 --> 01:09:27,600
that load changes and

1606
01:09:27,600 --> 01:09:32,260
and the cost of doing it then under crisis is a lot more

1607
01:09:32,260 --> 01:09:33,920
than spending the

1608
01:09:33,920 --> 01:09:37,199
money up front today well as of inflation because of the

1609
01:09:37,199 --> 01:09:38,319
cost of putting

1610
01:09:38,319 --> 01:09:41,500
in equipment prices are going to go up yeah you're at your

1611
01:09:41,500 --> 01:09:42,560
average annual growth

1612
01:09:42,560 --> 01:09:46,529
rate for let's say the last ten years about 1.6 percent and

1613
01:09:46,529 --> 01:09:48,680
that that's our

1614
01:09:48,680 --> 01:09:54,390
base case as we go through it is 1.6 percent one of the

1615
01:09:54,390 --> 01:09:55,560
things and the other

1616
01:09:55,560 --> 01:09:58,600
thing is in terms of economic development ours is at least

1617
01:09:58,600 --> 01:09:58,920
cost

1618
01:09:58,920 --> 01:10:02,869
solution and in our experience in attracting economic

1619
01:10:02,869 --> 01:10:03,880
development stuff and

1620
01:10:03,880 --> 01:10:07,199
that sort of thing they look at your rate and your cost if

1621
01:10:07,199 --> 01:10:07,680
it's the lowest

1622
01:10:07,680 --> 01:10:11,250
they like that then that a secondary consideration is how

1623
01:10:11,250 --> 01:10:13,079
green are you and

1624
01:10:13,079 --> 01:10:17,920
Georgetown can tell you that they have a branding of being

1625
01:10:17,920 --> 01:10:20,439
100% green and that

1626
01:10:20,439 --> 01:10:25,689
has helped them with economic development tremendously so

1627
01:10:25,689 --> 01:10:26,159
your your

1628
01:10:26,159 --> 01:10:30,479
point is well taken I think that in terms of our modeling

1629
01:10:30,479 --> 01:10:31,979
we have to model

1630
01:10:31,979 --> 01:10:34,489
what your typical growth rate has been you can always

1631
01:10:34,489 --> 01:10:35,680
incorporate a scenario

1632
01:10:35,680 --> 01:10:38,869
higher load growth but I don't know if that would be enough

1633
01:10:38,869 --> 01:10:39,680
to change the

1634
01:10:39,680 --> 01:10:42,609
resource quantity right now but it's a it's a good thing to

1635
01:10:42,609 --> 01:10:43,359
consider for the

1636
01:10:43,359 --> 01:10:46,029
future and that is a scenario because if your load growth

1637
01:10:46,029 --> 01:10:47,319
starts to increase then

1638
01:10:47,319 --> 01:10:59,220
the plan has to be adapted. All right the reason this slide

1639
01:10:59,220 --> 01:11:01,199
here is repeated is

1640
01:11:01,199 --> 01:11:04,449
that it's going to reference this next slide here for the

1641
01:11:04,449 --> 01:11:05,399
benefits of the

1642
01:11:05,399 --> 01:11:10,149
renewable portfolio and we want to be careful with our

1643
01:11:10,149 --> 01:11:11,319
words here you know

1644
01:11:11,319 --> 01:11:15,470
these are benefits I'm always hesitant when you're talking

1645
01:11:15,470 --> 01:11:16,279
about a hedging

1646
01:11:16,279 --> 01:11:18,939
entity a load serving entity when you start using the words

1647
01:11:18,939 --> 01:11:19,479
losses and

1648
01:11:19,479 --> 01:11:21,710
profits and returns and so forth you know the for-profit

1649
01:11:21,710 --> 01:11:22,920
entity you're trying

1650
01:11:22,920 --> 01:11:26,600
to manage to serve your load on a least cost basis so when

1651
01:11:26,600 --> 01:11:27,920
we are using the word

1652
01:11:27,920 --> 01:11:32,149
benefit we're using the word benefits of the portfolios as

1653
01:11:32,149 --> 01:11:34,159
designed here versus

1654
01:11:34,159 --> 01:11:38,920
the alternatives there from the marketplace so this slide

1655
01:11:38,920 --> 01:11:39,560
just shows

1656
01:11:39,560 --> 01:11:44,260
four different scenarios which are based on these four

1657
01:11:44,260 --> 01:11:46,119
different natural gas

1658
01:11:46,119 --> 01:11:50,659
forecasts so we've got the high gas case that we have again

1659
01:11:50,659 --> 01:11:52,119
just to remind that

1660
01:11:52,119 --> 01:11:55,800
that just models in an expectation of a rise in natural gas

1661
01:11:55,800 --> 01:11:56,960
prices and then a

1662
01:11:56,960 --> 01:12:00,890
reversion to the long-term mean our as the high gas case

1663
01:12:00,890 --> 01:12:02,439
our low gas case is

1664
01:12:02,439 --> 01:12:05,109
essentially a projection based on current market prices and

1665
01:12:05,109 --> 01:12:05,479
then we

1666
01:12:05,479 --> 01:12:10,210
incorporated the brattle low case and the brattle base case

1667
01:12:10,210 --> 01:12:11,119
into these

1668
01:12:11,119 --> 01:12:15,510
projections as well so the top two areas that the upper

1669
01:12:15,510 --> 01:12:17,199
half of the tornado

1670
01:12:17,199 --> 01:12:21,699
diagram here are using those different gas cases to project

1671
01:12:21,699 --> 01:12:22,800
the potential

1672
01:12:22,800 --> 01:12:27,460
benefits of the deck using the brattle gas cases and our

1673
01:12:27,460 --> 01:12:28,840
gas cases and the

1674
01:12:28,840 --> 01:12:34,600
bottom half is the total system benefits through the

1675
01:12:34,600 --> 01:12:37,000
additions of the renewable

1676
01:12:37,000 --> 01:12:39,720
resources that are proposed for the system you want to

1677
01:12:39,720 --> 01:12:40,600
speak to that anymore

1678
01:12:40,600 --> 01:12:48,210
just in the sense of the portfolio makeup so the for ours

1679
01:12:48,210 --> 01:12:49,680
what we did is we

1680
01:12:49,680 --> 01:12:55,390
took a hundred percent goal and that was achieved in 2024

1681
01:12:55,390 --> 01:12:57,359
so you went to a 70% in

1682
01:12:57,359 --> 01:13:04,630
19 per year renewable portfolio standard and then as soon

1683
01:13:04,630 --> 01:13:08,439
as the white tail fell

1684
01:13:08,439 --> 01:13:11,359
falls off it falls off in that year we will replace it with

1685
01:13:11,359 --> 01:13:12,239
the renewables and

1686
01:13:12,239 --> 01:13:16,319
that puts you at a hundred percent in between your year in

1687
01:13:16,319 --> 01:13:17,920
the 80s and so

1688
01:13:17,920 --> 01:13:22,229
that's a little bit different than what happened with a br

1689
01:13:22,229 --> 01:13:24,760
attle but it and what

1690
01:13:24,760 --> 01:13:28,199
it does is it allows you to get because they're lower cost

1691
01:13:28,199 --> 01:13:30,920
you get a better more

1692
01:13:30,920 --> 01:13:36,689
benefits earlier on in the planning horizon now if you

1693
01:13:36,689 --> 01:13:38,680
notice if we used our

1694
01:13:38,680 --> 01:13:42,810
model and used brattles total system benefits that come out

1695
01:13:42,810 --> 01:13:44,159
to be look pretty

1696
01:13:44,159 --> 01:13:49,319
darn close right so we given those gas prices we would

1697
01:13:49,319 --> 01:13:50,399
calculate almost the

1698
01:13:50,399 --> 01:13:54,329
same benefits what the main thing that we did is and this

1699
01:13:54,329 --> 01:13:55,520
is also true for the

1700
01:13:55,520 --> 01:14:00,729
deck to there we have these benefits for the deck the top

1701
01:14:00,729 --> 01:14:02,800
thing and it's not too

1702
01:14:02,800 --> 01:14:07,039
far off from the bridle deck now one thing I want to note

1703
01:14:07,039 --> 01:14:08,000
if you go look at

1704
01:14:08,000 --> 01:14:13,369
their things we put this all in 2008 and 18 real dollars or

1705
01:14:13,369 --> 01:14:14,119
constant dollars

1706
01:14:14,119 --> 01:14:18,069
dollars of the day they use nominal dollars inflated

1707
01:14:18,069 --> 01:14:19,600
dollars and if you

1708
01:14:19,600 --> 01:14:21,670
don't know the inflation rates you don't really know what

1709
01:14:21,670 --> 01:14:22,920
the price is so this is

1710
01:14:22,920 --> 01:14:26,100
something that we kind of corrected and we think so now

1711
01:14:26,100 --> 01:14:27,800
this is all on apples to

1712
01:14:27,800 --> 01:14:35,479
apples comparison thank you so let's get down to some of

1713
01:14:35,479 --> 01:14:37,119
the considerations for

1714
01:14:37,119 --> 01:14:39,579
selecting renewable resources and our recommendations for

1715
01:14:39,579 --> 01:14:40,640
those so didn't can

1716
01:14:40,640 --> 01:14:43,560
reach its 70% goal with additional renewable resources from

1717
01:14:43,560 --> 01:14:44,319
the current RFP

1718
01:14:44,319 --> 01:14:47,069
submissions there are very attractive offers for power in

1719
01:14:47,069 --> 01:14:48,800
the current RFP the

1720
01:14:48,800 --> 01:14:51,010
additional energy to reach the goal ranges from

1721
01:14:51,010 --> 01:14:52,720
approximately 9% to 27%

1722
01:14:52,720 --> 01:14:55,640
as we stated earlier this depends on whether or not why a

1723
01:14:55,640 --> 01:14:56,600
tail is designated

1724
01:14:56,600 --> 01:15:00,170
as a renewable resource the current portfolio as it stands

1725
01:15:00,170 --> 01:15:01,039
now falls far

1726
01:15:01,039 --> 01:15:03,960
short of a balanced and diversified portfolio because solar

1727
01:15:03,960 --> 01:15:04,960
is over only 30

1728
01:15:04,960 --> 01:15:08,859
megawatts and you've got a large chunk of West Texas wind

1729
01:15:08,859 --> 01:15:10,119
in there so those

1730
01:15:10,119 --> 01:15:15,149
things need to be balanced out the the deck is a heat rate

1731
01:15:15,149 --> 01:15:16,199
resource and

1732
01:15:16,199 --> 01:15:18,659
therefore doesn't contribute an energy hedge during peak

1733
01:15:18,659 --> 01:15:19,319
hours it's a heat

1734
01:15:19,319 --> 01:15:22,560
rate hedge only until the price of gas is known for that

1735
01:15:22,560 --> 01:15:23,920
this leaves Denton

1736
01:15:23,920 --> 01:15:28,489
with a on peak energy supply gap so a minimum of 90 120 meg

1737
01:15:28,489 --> 01:15:29,520
awatts of solar

1738
01:15:29,520 --> 01:15:31,989
would help balance the portfolio so that's going to be the

1739
01:15:31,989 --> 01:15:32,680
one of the chief

1740
01:15:32,680 --> 01:15:35,859
recommendations we're gonna make to reach the 70% goal in a

1741
01:15:35,859 --> 01:15:36,680
minimum another

1742
01:15:36,680 --> 01:15:38,949
70 megawatts of solar should be considered as an addition

1743
01:15:38,949 --> 01:15:39,239
to the

1744
01:15:39,239 --> 01:15:42,859
portfolio if white tail is not counted then another 120 meg

1745
01:15:42,859 --> 01:15:43,560
awatts of solar

1746
01:15:43,560 --> 01:15:46,739
should be considered with rent representing the balance of

1747
01:15:46,739 --> 01:15:47,279
energy to

1748
01:15:47,279 --> 01:15:51,560
reach the 70% goal. What's important about this if you

1749
01:15:51,560 --> 01:15:52,359
think about the

1750
01:15:52,359 --> 01:15:56,029
solar on peak that's what's completing the energy hedge

1751
01:15:56,029 --> 01:15:57,399
that is missing with

1752
01:15:57,399 --> 01:16:02,500
the deck so that's why you would purchase it and you say

1753
01:16:02,500 --> 01:16:03,159
well why should

1754
01:16:03,159 --> 01:16:06,760
we purchase this don't are we covered with the deck well

1755
01:16:06,760 --> 01:16:07,760
this has a price

1756
01:16:07,760 --> 01:16:11,689
associated with it the price is $2.20 natural gas equival

1757
01:16:11,689 --> 01:16:12,800
ency that's

1758
01:16:12,800 --> 01:16:16,359
incredibly cheap this is a discount you can't get in the

1759
01:16:16,359 --> 01:16:17,800
market only and it's a

1760
01:16:17,800 --> 01:16:23,029
renewable that follows our load profile yeah yeah and so we

1761
01:16:23,029 --> 01:16:25,000
see this as a it's

1762
01:16:25,000 --> 01:16:30,090
kind of a belt and suspenders kind of thing but the solar

1763
01:16:30,090 --> 01:16:31,119
is certainly the

1764
01:16:31,119 --> 01:16:39,149
belt and deck is the suspenders in this case. Now one

1765
01:16:39,149 --> 01:16:41,159
consideration here is a

1766
01:16:41,159 --> 01:16:44,079
potential solar tariff and I'll let Neil speak to that in

1767
01:16:44,079 --> 01:16:46,439
just a moment but there

1768
01:16:46,439 --> 01:16:49,649
are several things to consider that you might be able to do

1769
01:16:49,649 --> 01:16:50,840
because of that one

1770
01:16:50,840 --> 01:16:53,149
is that you might just take an approach that in your

1771
01:16:53,149 --> 01:16:54,319
contract and you're not

1772
01:16:54,319 --> 01:16:59,729
going to accept any tariff risk there is there's not enough

1773
01:16:59,729 --> 01:17:01,680
that's concrete yet

1774
01:17:01,680 --> 01:17:04,140
about the potential tariff there is the opportunity chance

1775
01:17:04,140 --> 01:17:04,680
that it may be

1776
01:17:04,680 --> 01:17:08,399
somewhat retroactive which is a little bit tricky you do

1777
01:17:08,399 --> 01:17:10,000
have some solar

1778
01:17:10,000 --> 01:17:14,500
suppliers that have stockpiled cells so they may be able to

1779
01:17:14,500 --> 01:17:15,920
either designate

1780
01:17:15,920 --> 01:17:19,920
that or if they're really that confident in when the timing

1781
01:17:19,920 --> 01:17:21,119
of those souls are

1782
01:17:21,119 --> 01:17:25,109
cells are if you can get them contractually to commit to

1783
01:17:25,109 --> 01:17:25,880
that that

1784
01:17:25,880 --> 01:17:28,470
would be a recommendation on our part so this is a bit of a

1785
01:17:28,470 --> 01:17:30,239
cloud overhanging the

1786
01:17:30,239 --> 01:17:33,770
the potential acquisition there an alternative we would be

1787
01:17:33,770 --> 01:17:34,680
to acquire more

1788
01:17:34,680 --> 01:17:37,159
coastal wind as you saw coastal wind has an on-peak profile

1789
01:17:37,159 --> 01:17:38,079
doesn't perfectly

1790
01:17:38,079 --> 01:17:41,880
match solar but it would be a reasonable offset yes I think

1791
01:17:41,880 --> 01:17:43,039
I saw come back to

1792
01:17:43,039 --> 01:17:46,260
the tariff do we know approximately what we think that

1793
01:17:46,260 --> 01:17:48,399
would increase yes the

1794
01:17:48,399 --> 01:17:52,779
cost yes we don't know exactly because it's a tariff and

1795
01:17:52,779 --> 01:17:54,000
there's quotas and

1796
01:17:54,000 --> 01:17:57,890
it's just as complicated as can be but I've heard it

1797
01:17:57,890 --> 01:17:59,359
increases the price from

1798
01:17:59,359 --> 01:18:06,970
say $25 delivered to the hub north to 40 so what does that

1799
01:18:06,970 --> 01:18:07,800
convert back to the

1800
01:18:07,800 --> 01:18:13,560
gas price of gas it makes it it makes it more expensive

1801
01:18:13,560 --> 01:18:17,840
yeah it's over doing the

1802
01:18:17,840 --> 01:18:22,909
math in my head okay yeah but it would make it non-compute

1803
01:18:22,909 --> 01:18:23,760
would make it that

1804
01:18:23,760 --> 01:18:28,079
attractive at that okay yeah it's still you'd be paying a

1805
01:18:28,079 --> 01:18:29,680
premium yeah to add

1806
01:18:29,680 --> 01:18:33,609
that in to reach your goals so all the more reason to it's

1807
01:18:33,609 --> 01:18:34,800
not our risk is

1808
01:18:34,800 --> 01:18:38,520
yours correct so coastal does have some of the

1809
01:18:38,520 --> 01:18:39,680
characteristics of summer wind so

1810
01:18:39,680 --> 01:18:42,859
you can increase the coastal and not do as much solar or

1811
01:18:42,859 --> 01:18:44,319
solar at all if that is

1812
01:18:44,319 --> 01:18:48,390
a important risk consideration for Denton you could

1813
01:18:48,390 --> 01:18:49,319
consider utility scale

1814
01:18:49,319 --> 01:18:51,619
wind resources with a storage component that could also add

1815
01:18:51,619 --> 01:18:52,439
a lot of cost though

1816
01:18:52,439 --> 01:18:56,310
and that's something that storage is intriguing this is the

1817
01:18:56,310 --> 01:18:57,239
next massive

1818
01:18:57,239 --> 01:19:00,239
revolution in this business but you're just now in the cusp

1819
01:19:00,239 --> 01:19:01,119
of it so once again

1820
01:19:01,119 --> 01:19:04,300
we've got that where's the price factor you know we're not

1821
01:19:04,300 --> 01:19:04,720
in the second-gen

1822
01:19:04,720 --> 01:19:08,819
generation yet where this becomes price competitive or didn

1823
01:19:08,819 --> 01:19:09,960
't could wait after

1824
01:19:09,960 --> 01:19:12,710
reaching the 70% goal it's tariff prices and supplies read

1825
01:19:12,710 --> 01:19:13,520
just to marketing

1826
01:19:13,520 --> 01:19:16,439
conditions or the tariff is no longer an issue so that's

1827
01:19:16,439 --> 01:19:17,159
just one other

1828
01:19:17,159 --> 01:19:19,859
consideration here you get to 70% you wait see what happens

1829
01:19:19,859 --> 01:19:20,760
to the solar and

1830
01:19:20,760 --> 01:19:22,920
then you could add more solar later once you get from want

1831
01:19:22,920 --> 01:19:23,840
to go from the 70 to

1832
01:19:23,840 --> 01:19:29,029
100% level not exactly a risk but other factors like this

1833
01:19:29,029 --> 01:19:30,000
that could be

1834
01:19:30,000 --> 01:19:32,479
potential purchase accelerators are the retirement of

1835
01:19:32,479 --> 01:19:33,680
conventional fossil fuel

1836
01:19:33,680 --> 01:19:36,609
generation if enough of that's retired that reduces the

1837
01:19:36,609 --> 01:19:37,600
resource base and the

1838
01:19:37,600 --> 01:19:40,539
cost base and could raise overall prices and because

1839
01:19:40,539 --> 01:19:42,800
renewable developers are in

1840
01:19:42,800 --> 01:19:45,359
there right now well we'll look at the second bullet there

1841
01:19:45,359 --> 01:19:46,520
the reduction of the

1842
01:19:46,520 --> 01:19:49,250
producer tax credit a lot of the developers in a hurry to

1843
01:19:49,250 --> 01:19:51,720
get in under the

1844
01:19:51,720 --> 01:19:55,010
the finish line before the tax credits go away there's a

1845
01:19:55,010 --> 01:19:56,199
lot of competitive

1846
01:19:56,199 --> 01:19:59,899
offers right now but those might go away after the tax

1847
01:19:59,899 --> 01:20:01,479
credits go away and if

1848
01:20:01,479 --> 01:20:03,489
prices are higher because of the retirements of

1849
01:20:03,489 --> 01:20:04,640
conventional generation

1850
01:20:04,640 --> 01:20:09,350
renewable prices might be higher so this conceptually could

1851
01:20:09,350 --> 01:20:10,239
be a really good time

1852
01:20:10,239 --> 01:20:13,420
to strike because of the timing of these things right now

1853
01:20:13,420 --> 01:20:14,560
and low natural gas

1854
01:20:14,560 --> 01:20:18,840
prices if they got your natural gas prices rise then there

1855
01:20:18,840 --> 01:20:19,680
's less competition

1856
01:20:19,680 --> 01:20:22,979
for these renewable resources and then the prices may rise

1857
01:20:22,979 --> 01:20:23,960
in your RFP so

1858
01:20:23,960 --> 01:20:26,420
you're seeing very attractive prices now there are a lot of

1859
01:20:26,420 --> 01:20:27,239
factors here that

1860
01:20:27,239 --> 01:20:31,090
make this appear to be a good time from a price standpoint

1861
01:20:31,090 --> 01:20:32,079
so those factors

1862
01:20:32,079 --> 01:20:35,300
could be potential purchase accelerators one other thing

1863
01:20:35,300 --> 01:20:36,439
this isn't a major point

1864
01:20:36,439 --> 01:20:41,279
but I wanted to include this here very briefly we talked a

1865
01:20:41,279 --> 01:20:42,479
little bit about

1866
01:20:42,479 --> 01:20:46,760
having to correct for what producers claim to be the output

1867
01:20:46,760 --> 01:20:47,680
of renewable

1868
01:20:47,680 --> 01:20:50,880
resources well they may also pick certain years and so

1869
01:20:50,880 --> 01:20:51,920
forth renewable

1870
01:20:51,920 --> 01:20:55,100
resources are variable wind speeds do vary this is a graph

1871
01:20:55,100 --> 01:20:55,960
from ERCOT that's

1872
01:20:55,960 --> 01:20:59,420
showing the variable variability of winds over the year so

1873
01:20:59,420 --> 01:21:00,399
you can get amount

1874
01:21:00,399 --> 01:21:03,590
of wind production varying by as much as 15% so if Denton

1875
01:21:03,590 --> 01:21:05,199
wants to reach a goal of

1876
01:21:05,199 --> 01:21:09,680
70% are you reaching 70% on average and then are you

1877
01:21:09,680 --> 01:21:10,640
willing to tolerate being

1878
01:21:10,640 --> 01:21:13,560
less than 70% in a year that the wind doesn't blow as much

1879
01:21:13,560 --> 01:21:14,239
or do you need to

1880
01:21:14,239 --> 01:21:17,460
overshoot the goal so that even in a low wind year you're

1881
01:21:17,460 --> 01:21:19,680
still reaching 70% this

1882
01:21:19,680 --> 01:21:23,050
is just one of those calibration questions that we can't

1883
01:21:23,050 --> 01:21:24,000
answer for you

1884
01:21:24,000 --> 01:21:26,270
this is just a value decision that didn't needs to make you

1885
01:21:26,270 --> 01:21:27,000
want to ensure

1886
01:21:27,000 --> 01:21:31,359
you're 70% or you want to get to 70% based on the average

1887
01:21:31,359 --> 01:21:32,840
profile and then be

1888
01:21:32,840 --> 01:21:35,439
willing to say well some years a little under 70 some years

1889
01:21:35,439 --> 01:21:36,840
a little over 70 or

1890
01:21:36,840 --> 01:21:39,460
whatever the goal tends to be just an additional

1891
01:21:39,460 --> 01:21:41,159
consideration there in terms

1892
01:21:41,159 --> 01:21:44,199
of the quantity that you really target when you go after

1893
01:21:44,199 --> 01:21:46,079
these resources so the

1894
01:21:46,079 --> 01:21:49,529
next three slides here show some adoption paths we've got

1895
01:21:49,529 --> 01:21:50,279
graphs here

1896
01:21:50,279 --> 01:21:54,479
these are graphs the horizontal scale is across years and

1897
01:21:54,479 --> 01:21:56,840
the vertical scale is in

1898
01:21:56,840 --> 01:22:01,109
the number of megawatt hours so what the big takeaways here

1899
01:22:01,109 --> 01:22:02,279
are the red vertical

1900
01:22:02,279 --> 01:22:05,479
bars represent quantities of renewable purchases that you

1901
01:22:05,479 --> 01:22:06,560
would make in those

1902
01:22:06,560 --> 01:22:11,680
years to reach your goals your load is in the light blue

1903
01:22:11,680 --> 01:22:12,880
shaded area that

1904
01:22:12,880 --> 01:22:17,449
reflects your load growth as we've used it for the base

1905
01:22:17,449 --> 01:22:19,439
case here and then

1906
01:22:19,439 --> 01:22:24,300
you're seeing the additions of renewables what that does to

1907
01:22:24,300 --> 01:22:24,479
the

1908
01:22:24,479 --> 01:22:28,319
portfolio and your fixed price exposure where that fixed

1909
01:22:28,319 --> 01:22:30,000
price exposure can vary

1910
01:22:30,000 --> 01:22:33,609
from the portfolio is in something like whitetail because

1911
01:22:33,609 --> 01:22:34,079
if you're not

1912
01:22:34,079 --> 01:22:37,640
considering it as a renewable resource and if you get to

1913
01:22:37,640 --> 01:22:39,840
say 70% renewables you

1914
01:22:39,840 --> 01:22:43,840
really have may have 88% fixed price exposure because of

1915
01:22:43,840 --> 01:22:45,720
having whitetail in

1916
01:22:45,720 --> 01:22:48,449
the portfolio in addition to the amount of renewable

1917
01:22:48,449 --> 01:22:50,239
resources that you add so

1918
01:22:50,239 --> 01:22:55,970
say that again I can't get my head around it yeah so if you

1919
01:22:55,970 --> 01:22:57,399
add enough

1920
01:22:57,399 --> 01:23:00,699
resources to get to 70% in your portfolio and you don't

1921
01:23:00,699 --> 01:23:01,680
count whitetail

1922
01:23:01,680 --> 01:23:05,430
as a renewable resource that's additional supply so if you

1923
01:23:05,430 --> 01:23:06,439
get to 70%

1924
01:23:06,439 --> 01:23:09,760
renewable but then you also have whitetail in there you may

1925
01:23:09,760 --> 01:23:12,119
have 88% fixed

1926
01:23:12,119 --> 01:23:15,369
price exposure even though you're only at 70% is a quantity

1927
01:23:15,369 --> 01:23:15,880
of renewable

1928
01:23:15,880 --> 01:23:18,840
resources that reflects the peak that's that gap in the

1929
01:23:18,840 --> 01:23:20,199
upper left hand corner

1930
01:23:20,199 --> 01:23:23,380
where your fixed price exposure exceeds the renewable

1931
01:23:23,380 --> 01:23:26,000
resource amount so this is

1932
01:23:26,000 --> 01:23:28,750
what we've termed the gradual adoption path this is where

1933
01:23:28,750 --> 01:23:29,840
you would execute on

1934
01:23:29,840 --> 01:23:34,720
low-cost alternatives in the present to get to 70% then

1935
01:23:34,720 --> 01:23:35,800
additional renewable

1936
01:23:35,800 --> 01:23:40,800
purchases would be made to reach 100% by 2024 and whitetail

1937
01:23:40,800 --> 01:23:41,520
ends in

1938
01:23:41,520 --> 01:23:45,720
2023 so that's when those two lines would resolve and meet

1939
01:23:45,720 --> 01:23:47,520
and as I said in

1940
01:23:47,520 --> 01:23:49,979
this example whitetail is not included as a renewable

1941
01:23:49,979 --> 01:23:51,680
resource and alternative

1942
01:23:51,680 --> 01:23:54,300
this could be the early adoption path and we like this path

1943
01:23:54,300 --> 01:23:55,119
because we think

1944
01:23:55,119 --> 01:23:57,840
the time is right it's a good time to strike so this is

1945
01:23:57,840 --> 01:23:58,399
something that we

1946
01:23:58,399 --> 01:24:02,069
would recommend this is when you reach the 100% renewable

1947
01:24:02,069 --> 01:24:04,239
goal faster by 2020

1948
01:24:04,239 --> 01:24:10,119
so this would though result in excess power supply of 18%

1949
01:24:10,119 --> 01:24:10,960
through from the

1950
01:24:10,960 --> 01:24:16,079
years 2020 to 2023 again this is not including whitetail as

1951
01:24:16,079 --> 01:24:16,520
a renewable

1952
01:24:16,520 --> 01:24:20,079
resource this is getting to 100% renewable faster you're

1953
01:24:20,079 --> 01:24:21,399
effectively for

1954
01:24:21,399 --> 01:24:26,109
a few years at 118% but with the addition of enough solar

1955
01:24:26,109 --> 01:24:27,600
where you would

1956
01:24:27,600 --> 01:24:31,829
have the excess power would be on peak and that's not a bad

1957
01:24:31,829 --> 01:24:33,039
time of use to have

1958
01:24:33,039 --> 01:24:36,689
excess power so then you could sell or monetize that excess

1959
01:24:36,689 --> 01:24:37,560
power and get

1960
01:24:37,560 --> 01:24:40,760
revenue for that you want to speak now I think you're on

1961
01:24:40,760 --> 01:24:43,720
this yeah then just the

1962
01:24:43,720 --> 01:24:46,640
third alternative is the early adoption counting whitetail

1963
01:24:46,640 --> 01:24:47,479
if you chose to

1964
01:24:47,479 --> 01:24:50,180
count whitetail you'll see now that the the line there

1965
01:24:50,180 --> 01:24:51,399
showing the amount that

1966
01:24:51,399 --> 01:24:54,720
you have has resolved there so including whitetail as a

1967
01:24:54,720 --> 01:24:55,800
supply as a renewable

1968
01:24:55,800 --> 01:24:59,199
resource would also accelerate the number single to 2020 it

1969
01:24:59,199 --> 01:25:00,079
would require

1970
01:25:00,079 --> 01:25:05,020
replacement of the whitetail piece in 2024 the principal

1971
01:25:05,020 --> 01:25:06,239
advantage of this is

1972
01:25:06,239 --> 01:25:12,010
you don't have that 18% excess of fixed price risk but

1973
01:25:12,010 --> 01:25:13,880
given what we see in

1974
01:25:13,880 --> 01:25:16,340
terms of the attractiveness of the prices out there and the

1975
01:25:16,340 --> 01:25:17,359
various factors

1976
01:25:17,359 --> 01:25:20,859
to consider this is what we would suggest if you ask us our

1977
01:25:20,859 --> 01:25:21,800
opinion would

1978
01:25:21,800 --> 01:25:23,989
be the early adoption path so these are just some

1979
01:25:23,989 --> 01:25:25,560
alternatives that you all need

1980
01:25:25,560 --> 01:25:29,369
to take into account in this some other considerations I

1981
01:25:29,369 --> 01:25:30,159
don't want to belabor

1982
01:25:30,159 --> 01:25:34,060
this slide they're just just to give you a sense there's

1983
01:25:34,060 --> 01:25:35,159
some alternative

1984
01:25:35,159 --> 01:25:37,510
configurations here to reaching some of those megawatt-hour

1985
01:25:37,510 --> 01:25:39,439
targets here if you

1986
01:25:39,439 --> 01:25:42,399
go to 100% renewable you could do it by 180 megawatts of

1987
01:25:42,399 --> 01:25:43,439
solar with 150 of

1988
01:25:43,439 --> 01:25:46,479
coastal if you chose to emphasize coastal more you could

1989
01:25:46,479 --> 01:25:47,319
get to the same

1990
01:25:47,319 --> 01:25:51,260
place with 120 megawatts of solar in 200 megawatts of

1991
01:25:51,260 --> 01:25:52,960
coastal just some more

1992
01:25:52,960 --> 01:25:55,649
considerations that we've listed here just wanted to give

1993
01:25:55,649 --> 01:25:56,520
you a flavor for

1994
01:25:56,520 --> 01:26:00,210
that so let's now get down to specific recommendations in

1995
01:26:00,210 --> 01:26:01,159
the decision so we're

1996
01:26:01,159 --> 01:26:05,329
finally wrapping this up here because of the confidential

1997
01:26:05,329 --> 01:26:06,800
ity of the RFP process

1998
01:26:06,800 --> 01:26:09,979
we've just labeled some of these companies bidders one two

1999
01:26:09,979 --> 01:26:10,760
and three but

2000
01:26:10,760 --> 01:26:13,939
these are these are some of the biggest suppliers out there

2001
01:26:13,939 --> 01:26:14,840
these are serious

2002
01:26:14,840 --> 01:26:19,159
players with those offers so you see some wind resources

2003
01:26:19,159 --> 01:26:20,399
solar resources

2004
01:26:20,399 --> 01:26:25,359
prices at the bus bar prices at the North Hub we just to

2005
01:26:25,359 --> 01:26:27,159
highlight the the

2006
01:26:27,159 --> 01:26:30,670
sort of craziness and how people will price in congestion

2007
01:26:30,670 --> 01:26:31,920
notice bidder number

2008
01:26:31,920 --> 01:26:36,239
two on the second row we got 1335 at the bus bar into $30

2009
01:26:36,239 --> 01:26:37,880
at the North Hub that's

2010
01:26:37,880 --> 01:26:40,800
a substantial amount of congestion that's how they're

2011
01:26:40,800 --> 01:26:41,600
pricing in if you

2012
01:26:41,600 --> 01:26:43,869
ask them to take that risk that's how they're going to

2013
01:26:43,869 --> 01:26:45,159
price it in so one of

2014
01:26:45,159 --> 01:26:48,079
the key considerations here and one of the things that we

2015
01:26:48,079 --> 01:26:48,760
've stressed

2016
01:26:48,760 --> 01:26:53,239
continually is CRR management is your congestion management

2017
01:26:53,239 --> 01:26:53,920
because we feel

2018
01:26:53,920 --> 01:26:56,619
you can do that much more cheaply then they're going to

2019
01:26:56,619 --> 01:26:57,680
price it in now there

2020
01:26:57,680 --> 01:27:00,609
may be some cases here where they're doing it at a pretty

2021
01:27:00,609 --> 01:27:01,560
efficient way and

2022
01:27:01,560 --> 01:27:03,689
it may be to your benefit to go ahead and take the power of

2023
01:27:03,689 --> 01:27:04,319
the bus bar and

2024
01:27:04,319 --> 01:27:07,239
let them take the congestion risk because they've priced it

2025
01:27:07,239 --> 01:27:07,760
in fairly but

2026
01:27:07,760 --> 01:27:09,859
if you're getting a huge gap there it would be more

2027
01:27:09,859 --> 01:27:11,039
efficient for you to take

2028
01:27:11,039 --> 01:27:16,779
that on yeah so for example what he's saying bidder three

2029
01:27:16,779 --> 01:27:17,399
and yellow where

2030
01:27:17,399 --> 01:27:19,859
you've got the price of the bus bar of 2150 that's the

2031
01:27:19,859 --> 01:27:20,880
solar resource the next

2032
01:27:20,880 --> 01:27:23,800
to the bottom line and the price of the North Hub of $23

2033
01:27:23,800 --> 01:27:24,520
that may be something

2034
01:27:24,520 --> 01:27:26,710
where it's just to your advantage to take it at the hub

2035
01:27:26,710 --> 01:27:27,840
because that's

2036
01:27:27,840 --> 01:27:30,300
something that that that slight price premium in the

2037
01:27:30,300 --> 01:27:31,439
congestion market might

2038
01:27:31,439 --> 01:27:34,619
not be worth it so again these are some value

2039
01:27:34,619 --> 01:27:36,000
considerations that need to be

2040
01:27:36,000 --> 01:27:40,520
made by Denton to best fit this so just to go over this

2041
01:27:40,520 --> 01:27:43,319
here so this would entail

2042
01:27:43,319 --> 01:27:45,970
a purchase of approximately 30 to 40 percent of load in

2043
01:27:45,970 --> 01:27:47,199
2019 with additional

2044
01:27:47,199 --> 01:27:50,550
renewable resources we think the useful portfolio divers

2045
01:27:50,550 --> 01:27:51,520
ification could be

2046
01:27:51,520 --> 01:27:55,130
achieved with approximately 75 megawatts to 100 megawatts

2047
01:27:55,130 --> 01:27:56,000
of coastal and

2048
01:27:56,000 --> 01:27:59,180
approximately 90 to 120 megawatts of additional solar

2049
01:27:59,180 --> 01:28:00,119
resources to meet the

2050
01:28:00,119 --> 01:28:04,609
70% goal some amount not all but some amount of North Texas

2051
01:28:04,609 --> 01:28:05,079
one can be

2052
01:28:05,079 --> 01:28:08,000
substituted for coastal because the two resources are close

2053
01:28:08,000 --> 01:28:08,800
in cost this is just

2054
01:28:08,800 --> 01:28:11,979
an adjustment that would need to be made so our preference

2055
01:28:11,979 --> 01:28:13,479
is 200 megawatts of

2056
01:28:13,479 --> 01:28:16,779
West Texas solar within a congestion region so you wouldn't

2057
01:28:16,779 --> 01:28:17,760
be penalized with

2058
01:28:17,760 --> 01:28:21,520
that and then 150 of wind which could possibly be split

2059
01:28:21,520 --> 01:28:22,359
between locations

2060
01:28:22,359 --> 01:28:25,279
depending upon cost equivalency one more thing I want to

2061
01:28:25,279 --> 01:28:26,279
add here that's not on

2062
01:28:26,279 --> 01:28:29,899
the slide we've just recently been approached by another

2063
01:28:29,899 --> 01:28:31,359
municipality that

2064
01:28:31,359 --> 01:28:35,039
would be willing to go in with you on a solar resource and

2065
01:28:35,039 --> 01:28:36,479
solar in particular

2066
01:28:36,479 --> 01:28:41,050
benefits from cost scaling so because of the equipment so

2067
01:28:41,050 --> 01:28:42,119
there could be somebody

2068
01:28:42,119 --> 01:28:44,250
that might want to partner with you maybe on a 50/50 basis

2069
01:28:44,250 --> 01:28:44,800
and this could

2070
01:28:44,800 --> 01:28:47,720
reduce the cost even further if you're willing to do that

2071
01:28:47,720 --> 01:28:49,079
that's not reflected

2072
01:28:49,079 --> 01:28:52,000
in these prices by the way so the optimal solar location

2073
01:28:52,000 --> 01:28:52,800
was you talked

2074
01:28:52,800 --> 01:28:56,630
about it'd be close to Midland but east to get into a less

2075
01:28:56,630 --> 01:28:58,560
congestion pricing

2076
01:28:58,560 --> 01:29:03,409
region and then Denton is going to need to hedge both its

2077
01:29:03,409 --> 01:29:05,000
load from the hub

2078
01:29:05,000 --> 01:29:07,970
north to your load zone and from the resource node to the

2079
01:29:07,970 --> 01:29:09,359
hub north with CRRs

2080
01:29:09,359 --> 01:29:12,920
for the upcoming Santa Rita wind as well as your solar farm

2081
01:29:12,920 --> 01:29:14,279
so those are your

2082
01:29:14,279 --> 01:29:17,590
recommendations and then just a summary here of decisions

2083
01:29:17,590 --> 01:29:18,680
and then we're at a

2084
01:29:18,680 --> 01:29:22,239
close here so some of the decisions are should you count

2085
01:29:22,239 --> 01:29:22,880
quiet tail as a

2086
01:29:22,880 --> 01:29:27,039
renewable resource yes or no if not you're gonna have to

2087
01:29:27,039 --> 01:29:28,399
entail additional

2088
01:29:28,399 --> 01:29:32,920
fixed price risk some of the answers to this once we get

2089
01:29:32,920 --> 01:29:33,880
these answers back then

2090
01:29:33,880 --> 01:29:36,420
we can give you a more concrete specific recommendation for

2091
01:29:36,420 --> 01:29:37,560
the portfolio makeup

2092
01:29:37,560 --> 01:29:40,510
well didn't choose to delay solar purchases because of the

2093
01:29:40,510 --> 01:29:41,119
potential

2094
01:29:41,119 --> 01:29:43,729
federal solar tariff would you delay them substitute

2095
01:29:43,729 --> 01:29:44,800
coastal and so forth

2096
01:29:44,800 --> 01:29:47,529
that's another value decision that the organization needs

2097
01:29:47,529 --> 01:29:49,199
to make should didn't

2098
01:29:49,199 --> 01:29:51,699
accelerate renewable purchases especially wind resources

2099
01:29:51,699 --> 01:29:52,279
because of the

2100
01:29:52,279 --> 01:29:54,630
attractiveness of the timing you may want to accelerate

2101
01:29:54,630 --> 01:29:55,159
that that's that's

2102
01:29:55,159 --> 01:29:57,720
our recommended early adoption path there's no reason to

2103
01:29:57,720 --> 01:29:59,199
wait at 70% prices

2104
01:29:59,199 --> 01:30:03,149
look attractive you can go there faster so that also then

2105
01:30:03,149 --> 01:30:04,000
impacts that last

2106
01:30:04,000 --> 01:30:08,159
decision should you move for the date of the 100% renewable

2107
01:30:08,159 --> 01:30:08,760
goal and with that we

2108
01:30:08,760 --> 01:30:13,079
are at the end of the presentation so any follow-on

2109
01:30:13,079 --> 01:30:15,479
questions we can answer

2110
01:30:15,479 --> 01:30:22,239
the 18% risk is there a proximate dollar amount that is

2111
01:30:24,119 --> 01:30:30,460
all part yes the dollar amount would be 18% of your load

2112
01:30:30,460 --> 01:30:32,800
your load is 1.5 5

2113
01:30:32,800 --> 01:30:37,039
million so whatever that is that's about 300,000 and the

2114
01:30:37,039 --> 01:30:41,159
current price is $27 so

2115
01:30:41,159 --> 01:30:45,960
300,000 that's 7.5 million or something like that so that's

2116
01:30:45,960 --> 01:30:47,279
roughly the risk out

2117
01:30:47,279 --> 01:30:50,539
there on the portfolio the fixed price risk but again it

2118
01:30:50,539 --> 01:30:53,359
depends on the price

2119
01:30:53,359 --> 01:30:57,729
it depends on the price expectations so if you have that

2120
01:30:57,729 --> 01:30:59,600
extra fixed price risk

2121
01:30:59,600 --> 01:31:03,060
and then gas prices go up you're actually getting a benefit

2122
01:31:03,060 --> 01:31:03,680
to having

2123
01:31:03,680 --> 01:31:06,619
that extra 18% of gas prices go down you're at risk so it

2124
01:31:06,619 --> 01:31:07,479
really depends on

2125
01:31:07,479 --> 01:31:10,050
taking that base value that Neil calculated his head and

2126
01:31:10,050 --> 01:31:10,880
then saying okay

2127
01:31:10,880 --> 01:31:13,800
where could gas prices go higher low that gives you the

2128
01:31:13,800 --> 01:31:14,880
range of potential

2129
01:31:14,880 --> 01:31:19,779
outcomes some of them could be unintended benefits and

2130
01:31:19,779 --> 01:31:20,880
going back to

2131
01:31:20,880 --> 01:31:25,960
your the gas price model it was a blue line in the graph

2132
01:31:25,960 --> 01:31:26,960
there was a short-term

2133
01:31:26,960 --> 01:31:32,020
rise and then yes and then a drop yeah right that you yeah

2134
01:31:32,020 --> 01:31:33,680
so if that happened

2135
01:31:33,680 --> 01:31:36,909
and that's just a case we use we're not necessarily

2136
01:31:36,909 --> 01:31:38,680
predicting sure I understand

2137
01:31:38,680 --> 01:31:41,140
but if that's a case you use that would actually be quite

2138
01:31:41,140 --> 01:31:41,960
advantageous that

2139
01:31:41,960 --> 01:31:44,010
would almost perfectly overlap the time that you would have

2140
01:31:44,010 --> 01:31:44,720
that additional

2141
01:31:44,720 --> 01:31:58,279
dropped in 2024 okay good pretty good point five here the

2142
01:31:58,279 --> 01:31:58,279
dollar map no oh he

2143
01:31:58,279 --> 01:32:00,739
just calculated it would be the the base value to be about

2144
01:32:00,739 --> 01:32:01,520
seven point five

2145
01:32:01,520 --> 01:32:04,270
million per year but here's the thing going back to some of

2146
01:32:04,270 --> 01:32:05,840
those other slides

2147
01:32:05,840 --> 01:32:09,659
that we had what's gas gonna do if gas prices go up you get

2148
01:32:09,659 --> 01:32:10,600
a benefit on having

2149
01:32:10,600 --> 01:32:13,779
an extra 18% of gas prices go down it's gonna be a

2150
01:32:13,779 --> 01:32:14,680
detriment to that

2151
01:32:14,680 --> 01:32:17,310
so once again it kind of depends on what that gas price is

2152
01:32:17,310 --> 01:32:18,359
and the chairman here

2153
01:32:18,359 --> 01:32:21,789
just said well looking at that high gas case we had where

2154
01:32:21,789 --> 01:32:22,880
there was the gas

2155
01:32:22,880 --> 01:32:25,630
price rise for a few years that would ideally overlap with

2156
01:32:25,630 --> 01:32:26,439
that but that's

2157
01:32:26,439 --> 01:32:30,829
that's just a scenario that's not sure thank you yeah any

2158
01:32:30,829 --> 01:32:34,680
other questions yeah

2159
01:32:34,680 --> 01:32:40,000
this is for clarification for the public so just to be

2160
01:32:40,000 --> 01:32:41,640
clear so a hundred percent

2161
01:32:41,640 --> 01:32:49,560
renewable does not refers specifically as you're using that

2162
01:32:49,560 --> 01:32:51,399
term to Denton's

2163
01:32:51,399 --> 01:32:57,890
portfolio right meaning that is in use for Denton right how

2164
01:32:57,890 --> 01:33:00,319
much how much where

2165
01:33:00,319 --> 01:33:03,609
our power that we're using in Denton to turn on the lights

2166
01:33:03,609 --> 01:33:04,680
here in Denton is

2167
01:33:04,680 --> 01:33:07,609
coming from correct that's right so if you've got a certain

2168
01:33:07,609 --> 01:33:08,880
expectation of

2169
01:33:08,880 --> 01:33:12,119
megawatt hours of consumption in a year if you buy enough

2170
01:33:12,119 --> 01:33:13,399
renewable resources

2171
01:33:13,399 --> 01:33:16,760
with a projected production output of that same number of

2172
01:33:16,760 --> 01:33:18,159
megawatt hours if

2173
01:33:18,159 --> 01:33:20,130
those completely match then we would say you would be a

2174
01:33:20,130 --> 01:33:21,960
hundred percent yes yes

2175
01:33:21,960 --> 01:33:25,479
so it but that means some days were not and some days were

2176
01:33:25,479 --> 01:33:26,119
that's right more

2177
01:33:26,119 --> 01:33:29,319
than that but that's right and that's why we use annual

2178
01:33:29,319 --> 01:33:30,159
because if you start

2179
01:33:30,159 --> 01:33:33,159
picking a season you introduce seasonality in the distance

2180
01:33:33,159 --> 01:33:33,399
too much

2181
01:33:33,399 --> 01:33:37,090
variability so annual is really the shortest time period

2182
01:33:37,090 --> 01:33:38,079
you can do that

2183
01:33:38,079 --> 01:33:41,000
really smooths all that but moment to moment hour to hour

2184
01:33:41,000 --> 01:33:41,800
season to season

2185
01:33:41,800 --> 01:33:43,819
you're a lesson hundred percent you'll more than a hundred

2186
01:33:43,819 --> 01:33:45,279
percent yeah I had a

2187
01:33:45,279 --> 01:33:49,250
follow-up but really I had it no I was just gonna say that

2188
01:33:49,250 --> 01:33:49,760
I had read an article

2189
01:33:49,760 --> 01:33:52,680
not too long ago about Georgetown talking about a hundred

2190
01:33:52,680 --> 01:33:53,439
percent being a

2191
01:33:53,439 --> 01:33:55,659
hundred percent renewable and that actually that was more

2192
01:33:55,659 --> 01:33:56,319
marketing than

2193
01:33:56,319 --> 01:34:00,390
reality depends on how you define that because I would say

2194
01:34:00,390 --> 01:34:01,319
right now they may

2195
01:34:01,319 --> 01:34:04,000
be more than a percent yeah but because of the fact that at

2196
01:34:04,000 --> 01:34:04,840
times they would

2197
01:34:04,840 --> 01:34:09,500
have to purchase other in order because of you know the

2198
01:34:09,500 --> 01:34:11,199
lack of wind or the lack

2199
01:34:11,199 --> 01:34:15,159
of Sun or whatever that it wasn't always a hundred percent

2200
01:34:15,159 --> 01:34:17,039
unless you and so

2201
01:34:17,039 --> 01:34:20,409
that's kind of the scenario that I see for us as well is

2202
01:34:20,409 --> 01:34:21,579
that we could say

2203
01:34:21,579 --> 01:34:25,460
we're a hundred percent because we were trying to reach

2204
01:34:25,460 --> 01:34:27,680
that goal but in reality

2205
01:34:27,680 --> 01:34:32,340
we we wouldn't be that what we have suggested is the best

2206
01:34:32,340 --> 01:34:33,720
you can do under

2207
01:34:33,720 --> 01:34:36,649
the current market structure under which you have to

2208
01:34:36,649 --> 01:34:38,159
operate and you don't have

2209
01:34:38,159 --> 01:34:42,199
choice about that the only alternative would be is if you

2210
01:34:42,199 --> 01:34:43,479
ended up somehow

2211
01:34:43,479 --> 01:34:45,840
opting out of Urquhart which you couldn't do and then you

2212
01:34:45,840 --> 01:34:46,600
had enough wind

2213
01:34:46,600 --> 01:34:49,819
and solar so that at the absolute minimum you had that

2214
01:34:49,819 --> 01:34:51,000
generator hooked

2215
01:34:51,000 --> 01:34:53,920
directly into your own unique grid that's the only way you

2216
01:34:53,920 --> 01:34:54,880
could absolutely

2217
01:34:54,880 --> 01:34:57,239
ensure that because there will be times where you have to

2218
01:34:57,239 --> 01:34:58,079
purchase from the

2219
01:34:58,079 --> 01:35:00,640
market there's just no other way around that regardless of

2220
01:35:00,640 --> 01:35:01,840
the structure so this

2221
01:35:01,840 --> 01:35:06,800
is the best you can do given the reality that you operate

2222
01:35:06,800 --> 01:35:11,920
in. The fact is from

2223
01:35:11,920 --> 01:35:14,850
their definition they're always a hundred percent renewable

2224
01:35:14,850 --> 01:35:15,539
because they

2225
01:35:15,539 --> 01:35:19,680
purchased resources to fully supply their load and they're

2226
01:35:19,680 --> 01:35:20,359
over a hundred

2227
01:35:20,359 --> 01:35:26,069
percent so it's not marketing it's in actuality they have a

2228
01:35:26,069 --> 01:35:26,920
financial position

2229
01:35:26,920 --> 01:35:29,850
where they bought this stuff they own it it's they're

2230
01:35:29,850 --> 01:35:30,920
committed there's a real

2231
01:35:30,920 --> 01:35:34,140
wind farm or there's a real solar farm that they get that

2232
01:35:34,140 --> 01:35:36,239
output from now this

2233
01:35:36,239 --> 01:35:39,250
this other thing it's all commingled into the marketplace

2234
01:35:39,250 --> 01:35:39,920
and that's that's

2235
01:35:39,920 --> 01:35:44,000
one of the things but in from accounting and business sense

2236
01:35:44,000 --> 01:35:44,760
they are a hundred

2237
01:35:44,760 --> 01:35:49,420
percent renewable but no one is can be a hundred percent

2238
01:35:49,420 --> 01:35:50,560
renewable in the real

2239
01:35:50,560 --> 01:35:55,760
time in a physical sense that's under Urquhart. Not under

2240
01:35:55,760 --> 01:35:58,760
Urquhart. Our physics doesn't allow for that.

2241
01:35:58,760 --> 01:36:06,399
Well politics. So just to be clear for the ratepayers so a

2242
01:36:06,399 --> 01:36:07,279
hundred percent

2243
01:36:07,279 --> 01:36:13,779
renewable in 2020 means that we will no longer be using the

2244
01:36:13,779 --> 01:36:18,319
gas plant for power

2245
01:36:18,319 --> 01:36:24,670
in Denton it's only for selling after 2020. That's a

2246
01:36:24,670 --> 01:36:25,359
complicated answer

2247
01:36:25,359 --> 01:36:28,550
because remember that in Urquhart all the energy goes into

2248
01:36:28,550 --> 01:36:29,600
the pool and comes out.

2249
01:36:29,600 --> 01:36:32,880
So yeah it comes back to us because we're under Urquhart.

2250
01:36:32,880 --> 01:36:35,000
Remember that in any in any

2251
01:36:35,000 --> 01:36:41,220
hour when your portfolio forecast is not sufficient to meet

2252
01:36:41,220 --> 01:36:42,279
your load you have to

2253
01:36:42,279 --> 01:36:44,489
make up the difference and you have alternatives you can

2254
01:36:44,489 --> 01:36:45,159
just go into the

2255
01:36:45,159 --> 01:36:48,199
real time you could go into the day ahead but then the

2256
01:36:48,199 --> 01:36:49,079
question is okay what

2257
01:36:49,079 --> 01:36:52,539
is that gonna cost versus your resource? Absolutely. When

2258
01:36:52,539 --> 01:36:53,399
it's cheaper to

2259
01:36:53,399 --> 01:36:55,859
buy rather than run the deck you buy. When it's cheaper to

2260
01:36:55,859 --> 01:36:56,680
run the deck than to

2261
01:36:56,680 --> 01:37:00,390
buy you run the deck anytime you have a shortage. Yes. That

2262
01:37:00,390 --> 01:37:01,260
's just however that

2263
01:37:01,260 --> 01:37:04,840
wants to be portrayed that's just the reality of the least

2264
01:37:04,840 --> 01:37:05,600
cost supply

2265
01:37:05,600 --> 01:37:10,789
balancing that needs to occur. Yeah yeah so I'm just so I'm

2266
01:37:10,789 --> 01:37:11,880
I'm thrilled about the

2267
01:37:11,880 --> 01:37:19,109
the how soon we can meet our hundred percent renewable goal

2268
01:37:19,109 --> 01:37:20,760
and I support

2269
01:37:20,760 --> 01:37:26,670
your all of your recommendations so I don't mean the

2270
01:37:26,670 --> 01:37:29,119
following to be anti a

2271
01:37:29,119 --> 01:37:31,449
hundred percent renewable but just in terms of being clear

2272
01:37:31,449 --> 01:37:32,199
to the public and

2273
01:37:32,199 --> 01:37:36,859
also finding just getting your your sense of this to

2274
01:37:36,859 --> 01:37:39,479
confirm for me that we

2275
01:37:39,479 --> 01:37:46,300
are so we've paid we've taken out this you know 260 million

2276
01:37:46,300 --> 01:37:47,319
dollar bond for

2277
01:37:47,319 --> 01:37:53,090
this gas plant that the public was told was needed for

2278
01:37:53,090 --> 01:37:58,640
reliability in Denton and

2279
01:37:58,640 --> 01:38:06,260
now it is now finally we have someone standing behind that

2280
01:38:06,260 --> 01:38:08,039
that podium and

2281
01:38:08,039 --> 01:38:14,079
saying no you don't need it for reliability ERCOT takes ERC

2282
01:38:14,079 --> 01:38:14,439
OT takes

2283
01:38:14,439 --> 01:38:21,850
care of that and we are now it seems paying this 260

2284
01:38:21,850 --> 01:38:23,239
million dollar we're 260

2285
01:38:23,239 --> 01:38:28,470
million in the hole with with interest for the bonds for

2286
01:38:28,470 --> 01:38:29,279
essentially you know

2287
01:38:29,279 --> 01:38:32,560
two for using two years for using this for two years

2288
01:38:32,560 --> 01:38:34,720
directly to Denton and I

2289
01:38:34,720 --> 01:38:37,470
do understand that after that sure it comes back to us gets

2290
01:38:37,470 --> 01:38:38,239
filtered through

2291
01:38:38,239 --> 01:38:43,430
through ERCOT and and I think the public has a sense of how

2292
01:38:43,430 --> 01:38:46,319
that how that works

2293
01:38:46,319 --> 01:38:50,720
but is that would you say that that's inaccurate I would

2294
01:38:50,720 --> 01:38:52,359
say you're going to

2295
01:38:52,359 --> 01:38:57,010
use the deck to its best capability as long as the deck can

2296
01:38:57,010 --> 01:38:58,239
operate unless

2297
01:38:58,239 --> 01:39:01,640
unless you make a different choice so it's not a two-year

2298
01:39:01,640 --> 01:39:03,880
horizon it's over

2299
01:39:03,880 --> 01:39:08,539
the horizon sure sure but it's for these two years that I

2300
01:39:08,539 --> 01:39:10,039
mean it's after two

2301
01:39:10,039 --> 01:39:14,090
years assuming that we go with this well remember that you

2302
01:39:14,090 --> 01:39:15,560
will always have a

2303
01:39:15,560 --> 01:39:19,800
firming requirement no matter it you would have to probably

2304
01:39:19,800 --> 01:39:20,720
purchase I don't

2305
01:39:20,720 --> 01:39:24,510
know if Neil can make an estimate you might have to go 180%

2306
01:39:24,510 --> 01:39:26,159
or 225% renewable

2307
01:39:26,159 --> 01:39:29,079
not to have to firm anything so that you would have an

2308
01:39:29,079 --> 01:39:30,239
excess in every hour but

2309
01:39:30,239 --> 01:39:33,159
one during the year oh yeah I understand that but it will

2310
01:39:33,159 --> 01:39:33,960
always be used as a

2311
01:39:33,960 --> 01:39:37,149
firming resource regardless well but but by ERCOT and as

2312
01:39:37,149 --> 01:39:38,159
you as you made clear

2313
01:39:38,159 --> 01:39:41,079
ERCOT takes care of firming for us the firming yeah the

2314
01:39:41,079 --> 01:39:42,039
issues the cost that

2315
01:39:42,039 --> 01:39:45,260
that to us and that's the sole thing is how much is it

2316
01:39:45,260 --> 01:39:46,840
going to cost to make up

2317
01:39:46,840 --> 01:39:49,760
that portfolio well I think you made the statement earlier

2318
01:39:49,760 --> 01:39:51,039
in which I completely

2319
01:39:51,039 --> 01:39:55,909
agree with if it costs less to run deck than it is to

2320
01:39:55,909 --> 01:39:57,180
purchase in the market we

2321
01:39:57,180 --> 01:40:00,779
run that right if it costs more we purchase right but there

2322
01:40:00,779 --> 01:40:02,479
's always when

2323
01:40:02,479 --> 01:40:05,770
we say ERCOT takes care of the firming they take care of it

2324
01:40:05,770 --> 01:40:06,840
but at what price

2325
01:40:06,840 --> 01:40:10,359
right that's right so we've got to that's how we manage

2326
01:40:10,359 --> 01:40:11,520
that's right our

2327
01:40:11,520 --> 01:40:15,760
market purchases and the deck that's right so going back to

2328
01:40:15,760 --> 01:40:16,640
something we've

2329
01:40:16,640 --> 01:40:19,100
talked about earlier which is sort of the risk preference

2330
01:40:19,100 --> 01:40:19,760
or the the risk

2331
01:40:19,760 --> 01:40:22,939
intolerance there are some people in the marketplace that

2332
01:40:22,939 --> 01:40:23,640
feel more comfortable

2333
01:40:23,640 --> 01:40:28,319
having an actual power plant that they can use to dispatch

2334
01:40:28,319 --> 01:40:29,680
instead of paying

2335
01:40:29,680 --> 01:40:34,800
the higher cost market purchase and the exposure to risk

2336
01:40:34,800 --> 01:40:37,199
they yep right it's a

2337
01:40:37,199 --> 01:40:39,359
cost risk is what it really is you're not going to run out

2338
01:40:39,359 --> 01:40:40,319
of power just at

2339
01:40:40,319 --> 01:40:42,779
what price are you gonna have to pay for that so some

2340
01:40:42,779 --> 01:40:44,760
organizations prefer that

2341
01:40:44,760 --> 01:40:47,979
because that makes them feel more comfortable others don't

2342
01:40:47,979 --> 01:40:48,760
need to go

2343
01:40:48,760 --> 01:40:52,439
there that's simply just a value decision and that is a

2344
01:40:52,439 --> 01:40:53,640
risk preference

2345
01:40:53,640 --> 01:40:57,239
of whoever has made that sort of decision that's just a

2346
01:40:57,239 --> 01:40:58,359
portfolio design

2347
01:40:58,359 --> 01:41:04,140
aspect we see both out there in our client base so opposed

2348
01:41:04,140 --> 01:41:06,199
to two years now

2349
01:41:06,199 --> 01:41:11,970
to the end of time relatively speaking that serves as that

2350
01:41:11,970 --> 01:41:13,640
word I like hedge

2351
01:41:13,640 --> 01:41:19,520
against cost always it's a hedge against high heat rates

2352
01:41:19,520 --> 01:41:21,199
and high gas costs

2353
01:41:21,199 --> 01:41:24,659
because you have to pair the cost but yes it's a hedge

2354
01:41:24,659 --> 01:41:25,840
against those higher

2355
01:41:25,840 --> 01:41:29,600
to the end of time or however long it lasts yeah yeah it

2356
01:41:29,600 --> 01:41:30,560
really isn't a hedge

2357
01:41:30,560 --> 01:41:33,739
it's a partial heads or incomplete hedge or an imperfect

2358
01:41:33,739 --> 01:41:34,899
hedge when people say

2359
01:41:34,899 --> 01:41:37,460
it hedges this it really you have to be that's where the

2360
01:41:37,460 --> 01:41:38,579
risk comes in this is

2361
01:41:38,579 --> 01:41:41,069
this is what happens well it's a diversification in her

2362
01:41:41,069 --> 01:41:42,920
choice yes

2363
01:41:42,920 --> 01:41:46,199
your heat rate exposure right so if you if you took for

2364
01:41:46,199 --> 01:41:48,359
example a year like 2011

2365
01:41:48,359 --> 01:41:52,199
which was a really crazily high priced year with high heat

2366
01:41:52,199 --> 01:41:53,640
rates that's a great

2367
01:41:53,640 --> 01:41:55,939
year to have that sort of a engine there but that was when

2368
01:41:55,939 --> 01:41:57,800
the heat rates and it

2369
01:41:57,800 --> 01:42:01,430
does it's it's really not I would say that you know given

2370
01:42:01,430 --> 01:42:02,199
up are these

2371
01:42:02,199 --> 01:42:06,859
distribution of prices that we've seen these profiles as Br

2372
01:42:06,859 --> 01:42:09,119
attle calls and it

2373
01:42:09,119 --> 01:42:13,630
it's not necessarily the the value of the deck is the fact

2374
01:42:13,630 --> 01:42:14,600
that it makes it

2375
01:42:14,600 --> 01:42:18,140
easy to do a lot of things with renewables it makes it

2376
01:42:18,140 --> 01:42:20,279
easier so you have

2377
01:42:20,279 --> 01:42:24,939
purchased that and you can now manage all those renewables

2378
01:42:24,939 --> 01:42:26,760
most efficiently so

2379
01:42:26,760 --> 01:42:31,420
it does even even after you know two years even though if

2380
01:42:31,420 --> 01:42:33,199
we're solar it

2381
01:42:33,199 --> 01:42:37,470
doesn't have the you know if we can still buy solar

2382
01:42:37,470 --> 01:42:39,680
inexpensively it it still

2383
01:42:39,680 --> 01:42:44,199
will act as that but you may get out there with 100% solar

2384
01:42:44,199 --> 01:42:45,319
and realize that

2385
01:42:45,319 --> 01:42:48,270
the deck isn't dispatch very much and then you'll have

2386
01:42:48,270 --> 01:42:49,399
another question to

2387
01:42:49,399 --> 01:42:55,819
what you want to do with it so to your question slide the

2388
01:42:55,819 --> 01:42:58,640
last one yeah let's

2389
01:42:58,640 --> 01:43:03,079
talk about why we wouldn't or would not include whitetail

2390
01:43:03,079 --> 01:43:06,199
you mentioned 30% of

2391
01:43:06,199 --> 01:43:10,279
it or something is Rex or something and we're Rex arm it

2392
01:43:10,279 --> 01:43:11,119
was it's now a 30

2393
01:43:11,119 --> 01:43:15,640
megawatt around the clock deal that's firm that has Rex

2394
01:43:15,640 --> 01:43:18,039
added to it okay so if

2395
01:43:18,039 --> 01:43:20,989
you go back several years ago you've only find we wrote a

2396
01:43:20,989 --> 01:43:21,760
paper for the

2397
01:43:21,760 --> 01:43:24,939
Mitchell Foundation advocating the development of a power

2398
01:43:24,939 --> 01:43:25,920
product which

2399
01:43:25,920 --> 01:43:29,279
would be used we call it renew 50 which could be used to

2400
01:43:29,279 --> 01:43:30,560
take Rex and add that

2401
01:43:30,560 --> 01:43:34,020
to conventional power to help reduce the emissions exposure

2402
01:43:34,020 --> 01:43:35,399
but that was when the

2403
01:43:35,399 --> 01:43:38,579
Rex were a viable instrument that's before you'd gotten so

2404
01:43:38,579 --> 01:43:39,439
much renewable in

2405
01:43:39,439 --> 01:43:42,399
the marketplace that's when it had a lot of value so that's

2406
01:43:42,399 --> 01:43:43,560
really only changed

2407
01:43:43,560 --> 01:43:46,020
within maybe the last three to five years that's correct

2408
01:43:46,020 --> 01:43:46,979
that's correct so

2409
01:43:46,979 --> 01:43:51,460
then somebody's whose head was maybe in the game ten years

2410
01:43:51,460 --> 01:43:53,880
ago this idea of

2411
01:43:53,880 --> 01:43:58,399
firming or hedging our own renewable portfolio with our own

2412
01:43:58,399 --> 01:43:59,479
gas plant that

2413
01:43:59,479 --> 01:44:03,399
might have actually been something that would have struck

2414
01:44:03,399 --> 01:44:04,399
as a great idea

2415
01:44:04,399 --> 01:44:07,699
so I mean since there are other people today that might

2416
01:44:07,699 --> 01:44:08,680
think since what was

2417
01:44:08,680 --> 01:44:11,899
being offered at the time was being backed by around the

2418
01:44:11,899 --> 01:44:14,039
clock anyway right

2419
01:44:14,039 --> 01:44:16,720
if you're talking about that specific transaction well not

2420
01:44:16,720 --> 01:44:18,039
that transaction but

2421
01:44:18,039 --> 01:44:20,979
just the way the market was at the way the market yes and

2422
01:44:20,979 --> 01:44:22,399
the viability of the

2423
01:44:22,399 --> 01:44:25,829
Rex and the design of renewable standards and what those

2424
01:44:25,829 --> 01:44:27,239
were incentivized to do

2425
01:44:27,239 --> 01:44:30,420
there was definitely a value to that but the marketplace

2426
01:44:30,420 --> 01:44:31,640
got far ahead of that

2427
01:44:31,640 --> 01:44:34,619
target so those certificates really don't have much of a

2428
01:44:34,619 --> 01:44:35,180
value so it's

2429
01:44:35,180 --> 01:44:38,359
really a matter of perception you know do you believe that

2430
01:44:38,359 --> 01:44:39,199
that caught the

2431
01:44:39,199 --> 01:44:42,390
addition of Rex to that specific resource makes it

2432
01:44:42,390 --> 01:44:43,800
renewable or not some

2433
01:44:43,800 --> 01:44:47,810
people would say yes some people would say no in terms of

2434
01:44:47,810 --> 01:44:49,800
us as professionals

2435
01:44:49,800 --> 01:44:52,319
and risk professionals we would say that could entail a

2436
01:44:52,319 --> 01:44:53,680
potential reputation risk

2437
01:44:53,680 --> 01:44:57,800
so we would not recommend going there but you still could

2438
01:44:57,800 --> 01:44:59,560
okay well that's why

2439
01:44:59,560 --> 01:45:01,680
our relations did not count white tail or the we would we

2440
01:45:01,680 --> 01:45:03,680
call ourselves 70% or

2441
01:45:03,680 --> 01:45:11,829
100% that's what it needs to be not some concept of okay we

2442
01:45:11,829 --> 01:45:14,199
're really only that's

2443
01:45:14,199 --> 01:45:19,920
our recommendation yes that's I don't want to mislead that

2444
01:45:19,920 --> 01:45:21,119
we're something

2445
01:45:21,119 --> 01:45:23,680
that we're not right so then if that if that's the case

2446
01:45:23,680 --> 01:45:24,920
then the question is okay

2447
01:45:24,920 --> 01:45:27,840
how fast you want to get to a hundred are willing to go 118

2448
01:45:27,840 --> 01:45:29,960
% right from a from

2449
01:45:29,960 --> 01:45:33,279
a cost exposure standpoint for a few years to get to a

2450
01:45:33,279 --> 01:45:35,119
hundred percent faster

2451
01:45:35,119 --> 01:45:41,380
or not if you're telling us gas is gonna go up you know if

2452
01:45:41,380 --> 01:45:42,199
I could tell you that

2453
01:45:42,199 --> 01:45:44,659
wouldn't be sent here the podium I'd be some boat in the

2454
01:45:44,659 --> 01:45:46,600
Caribbean and a

2455
01:45:46,600 --> 01:45:50,800
trading account I'm not so sure our community would think

2456
01:45:50,800 --> 01:45:53,079
that white tail is

2457
01:45:53,079 --> 01:45:58,460
truly a renewable resource and that's our recommendation is

2458
01:45:58,460 --> 01:45:59,039
not to count it

2459
01:45:59,039 --> 01:46:01,960
that way I just think that's a lower risk position going

2460
01:46:01,960 --> 01:46:02,800
that's a value

2461
01:46:02,800 --> 01:46:06,800
question and the council's gonna have to chime in on that

2462
01:46:06,800 --> 01:46:09,039
even the Brattle report I

2463
01:46:09,039 --> 01:46:12,840
mean in a number of ways this presentation diverges from

2464
01:46:12,840 --> 01:46:13,479
the Brattle

2465
01:46:13,479 --> 01:46:16,239
report but as Brandon was saying and as you yourself said I

2466
01:46:16,239 --> 01:46:17,319
mean there's so much

2467
01:46:17,319 --> 01:46:21,630
that is that is the same it's just kind of your projections

2468
01:46:21,630 --> 01:46:22,960
are more conservative

2469
01:46:22,960 --> 01:46:27,699
and and conclusions somewhat somewhat different but even

2470
01:46:27,699 --> 01:46:30,399
the Brattle report

2471
01:46:30,399 --> 01:46:34,880
didn't count you know Rex as renewables which is why the Br

2472
01:46:34,880 --> 01:46:35,960
attle report ended up

2473
01:46:35,960 --> 01:46:42,529
changing the way we as a community talked about our

2474
01:46:42,529 --> 01:46:45,720
portfolio I have a

2475
01:46:45,720 --> 01:46:53,340
question about divesting engines specifically do we need

2476
01:46:53,340 --> 01:46:55,159
all 12 engines

2477
01:46:55,159 --> 01:47:02,800
and 250 megawatts to take advantage of the deck in the way

2478
01:47:02,800 --> 01:47:03,800
that you're talking

2479
01:47:03,800 --> 01:47:11,840
about taking advantage I've had a number of people tell me

2480
01:47:11,840 --> 01:47:13,720
that they were shocked

2481
01:47:13,720 --> 01:47:19,960
to see you know 250 megawatts for a load of this size how

2482
01:47:19,960 --> 01:47:22,199
many engines would we

2483
01:47:22,199 --> 01:47:27,600
need and do we need all do we need all 12 and if not then

2484
01:47:27,600 --> 01:47:29,199
how many do we need

2485
01:47:29,199 --> 01:47:33,460
and by how many do we need what I mean is in order to take

2486
01:47:33,460 --> 01:47:35,560
advantage of the

2487
01:47:35,560 --> 01:47:38,479
deck the way that you're talking about it so we can use it

2488
01:47:38,479 --> 01:47:39,199
for this small

2489
01:47:39,199 --> 01:47:46,840
period of time each year yeah it it depends on the hour but

2490
01:47:46,840 --> 01:47:48,760
if someone

2491
01:47:48,760 --> 01:47:53,739
brought us in and said you know design a help us figure out

2492
01:47:53,739 --> 01:47:54,960
what sort of a

2493
01:47:54,960 --> 01:47:57,569
firming plant we might need for that sort of thing we

2494
01:47:57,569 --> 01:47:58,640
probably wouldn't

2495
01:47:58,640 --> 01:48:04,789
recommend that size it is large on a proportional basis so

2496
01:48:04,789 --> 01:48:07,039
to me the question

2497
01:48:07,039 --> 01:48:10,890
is all right you're committed to it now what's the best way

2498
01:48:10,890 --> 01:48:11,920
to monetize this

2499
01:48:11,920 --> 01:48:14,810
thing going forward through all the different options and

2500
01:48:14,810 --> 01:48:15,560
if you could sell

2501
01:48:15,560 --> 01:48:19,239
the engines at a way that would be higher value than what

2502
01:48:19,239 --> 01:48:20,399
you might project

2503
01:48:20,399 --> 01:48:23,800
it would run over several years and sell the excess power

2504
01:48:23,800 --> 01:48:24,960
that's it's really just

2505
01:48:24,960 --> 01:48:28,970
that's a sales decision optimizing the value so how many

2506
01:48:28,970 --> 01:48:31,359
megawatts do would do

2507
01:48:31,359 --> 01:48:35,520
we need I'll let you speak I'll just say again that's a

2508
01:48:35,520 --> 01:48:36,279
cost thing because you

2509
01:48:36,279 --> 01:48:38,489
know you don't technically need any it's just a matter of

2510
01:48:38,489 --> 01:48:39,640
the deck is yeah cost

2511
01:48:39,640 --> 01:48:43,020
I know but when I say need I mean need defined as in order

2512
01:48:43,020 --> 01:48:44,039
to take advantage of

2513
01:48:44,039 --> 01:48:47,220
it in the way that you say it depends how much what's your

2514
01:48:47,220 --> 01:48:48,079
ratio to solar to

2515
01:48:48,079 --> 01:48:52,279
wind is as you saw that wind can have you know 15 percent

2516
01:48:52,279 --> 01:48:53,640
year-over-year but it

2517
01:48:53,640 --> 01:48:57,250
also can you know depending on how many wind resources you

2518
01:48:57,250 --> 01:48:58,600
have if you had wind

2519
01:48:58,600 --> 01:49:02,560
in North Texas and West Texas in South Texas and in the

2520
01:49:02,560 --> 01:49:04,439
coastal and that that

2521
01:49:04,439 --> 01:49:07,720
would provide diversification so you wouldn't need as much

2522
01:49:07,720 --> 01:49:08,720
you'd have a

2523
01:49:08,720 --> 01:49:12,600
steady flow most of the time and which but it's discounted

2524
01:49:12,600 --> 01:49:13,840
and then how much

2525
01:49:13,840 --> 01:49:16,760
solar is on top of that and that also you know depends on

2526
01:49:16,760 --> 01:49:17,680
cloudiness and stuff

2527
01:49:17,680 --> 01:49:21,340
like that but if you put that together in your load it's

2528
01:49:21,340 --> 01:49:23,079
probably something

2529
01:49:23,079 --> 01:49:31,560
between 50 megawatts and well all right 50 to 150 megawatts

2530
01:49:31,560 --> 01:49:32,399
something like that

2531
01:49:32,399 --> 01:49:36,369
somewhere's in that range the the actual installed I

2532
01:49:36,369 --> 01:49:38,680
believe is 225 megawatts not

2533
01:49:38,680 --> 01:49:43,229
250 but so what we're looking when we were looking at this

2534
01:49:43,229 --> 01:49:43,960
we could say look

2535
01:49:43,960 --> 01:49:48,619
there's a piece of this that you could one of the things

2536
01:49:48,619 --> 01:49:50,279
you could do is go to

2537
01:49:50,279 --> 01:49:56,319
other munis and say we can help you firm your renewables

2538
01:49:56,319 --> 01:49:58,439
for a price and then you

2539
01:49:58,439 --> 01:50:02,199
make sure that the price that that is a nice price and what

2540
01:50:02,199 --> 01:50:02,960
their advantage is

2541
01:50:02,960 --> 01:50:06,930
they don't get any debt services service and so it could be

2542
01:50:06,930 --> 01:50:08,319
a just a two or three

2543
01:50:08,319 --> 01:50:12,880
year arrangement and you could sell off this excess and

2544
01:50:12,880 --> 01:50:14,600
then you know and

2545
01:50:14,600 --> 01:50:17,520
what you're doing is your your risk has just been divers

2546
01:50:17,520 --> 01:50:19,640
ified for that.

2547
01:50:19,640 --> 01:50:22,210
So that would be another strong recommendation we would

2548
01:50:22,210 --> 01:50:23,119
have if you get

2549
01:50:23,119 --> 01:50:25,199
to that because there are muni municipalities out there

2550
01:50:25,199 --> 01:50:25,680
looking to

2551
01:50:25,680 --> 01:50:28,149
increase their renewable resources and they realize they're

2552
01:50:28,149 --> 01:50:28,760
going to be in a

2553
01:50:28,760 --> 01:50:32,479
similar circumstance with a more variable production output

2554
01:50:32,479 --> 01:50:33,159
with

2555
01:50:33,159 --> 01:50:35,859
more need for firming so that could be a valuable service

2556
01:50:35,859 --> 01:50:36,960
you could provide to

2557
01:50:36,960 --> 01:50:39,539
other municipalities to help them increase their renewable

2558
01:50:39,539 --> 01:50:40,239
resources and

2559
01:50:40,239 --> 01:50:45,079
increase the overall renewable content of ERCOT. Well sure

2560
01:50:45,079 --> 01:50:46,279
and I think that my

2561
01:50:46,279 --> 01:50:49,460
sense is that that was the goal from the beginning to sell

2562
01:50:49,460 --> 01:50:50,720
power elsewhere it's

2563
01:50:50,720 --> 01:50:56,810
yeah you know there are obvious you know negative

2564
01:50:56,810 --> 01:50:59,520
consequences for people who are

2565
01:50:59,520 --> 01:51:02,439
breathing in those emissions but that's I know that's a

2566
01:51:02,439 --> 01:51:03,279
whole other whole other

2567
01:51:03,279 --> 01:51:07,939
story but I do understand that and that was the intention

2568
01:51:07,939 --> 01:51:08,800
from the beginning to

2569
01:51:08,800 --> 01:51:13,899
sell. Remember when you sell it you don't increase the

2570
01:51:13,899 --> 01:51:14,560
dispatch you

2571
01:51:14,560 --> 01:51:17,789
don't increase the emissions that's that's the goal we hope

2572
01:51:17,789 --> 01:51:18,720
so so you're not

2573
01:51:18,720 --> 01:51:23,619
you know not worse off doing that. I mean worse off than

2574
01:51:23,619 --> 01:51:25,680
not having it at all.

2575
01:51:25,680 --> 01:51:29,800
Yeah and so there are ways to generate revenue from it

2576
01:51:29,800 --> 01:51:32,520
without it running.

2577
01:51:32,520 --> 01:51:35,520
Yeah well like he's saying you could sell firming services

2578
01:51:35,520 --> 01:51:36,159
and then you could

2579
01:51:36,159 --> 01:51:39,079
buy market purchases you could sell firming services to get

2580
01:51:39,079 --> 01:51:39,760
revenue off the

2581
01:51:39,760 --> 01:51:42,260
deck and then when you have to actually deliver the power

2582
01:51:42,260 --> 01:51:43,239
to somebody you just

2583
01:51:43,239 --> 01:51:45,039
buy it from the market if it's cheaper than running the

2584
01:51:45,039 --> 01:51:47,399
deck or if the deck

2585
01:51:47,399 --> 01:51:54,279
that this is a higher level of sophistication but there are

2586
01:51:54,279 --> 01:51:57,960
organizations out there would take a plant like that and if

2587
01:51:57,960 --> 01:51:58,920
the heat rates

2588
01:51:58,920 --> 01:52:01,670
rise in the Ford markets they could sell against that when

2589
01:52:01,670 --> 01:52:02,520
the heat rates fall

2590
01:52:02,520 --> 01:52:05,880
they buy it back and that's it and you're actually that's

2591
01:52:05,880 --> 01:52:06,600
called asset

2592
01:52:06,600 --> 01:52:09,520
optimization you're trading in the market against an asset

2593
01:52:09,520 --> 01:52:10,279
that never runs

2594
01:52:10,279 --> 01:52:13,279
but yet you're producing revenue. I understand so just to

2595
01:52:13,279 --> 01:52:14,159
clarify for the

2596
01:52:14,159 --> 01:52:18,439
public and also for myself so when we're selling power you

2597
01:52:18,439 --> 01:52:19,960
know and an electron

2598
01:52:19,960 --> 01:52:23,470
is an electron doesn't matter from what kind of source it's

2599
01:52:23,470 --> 01:52:24,720
coming from so as

2600
01:52:24,720 --> 01:52:27,899
long as we provide the kind of as long as we provide the

2601
01:52:27,899 --> 01:52:29,159
amount of power. As long

2602
01:52:29,159 --> 01:52:33,159
as you said if you've contractually arranged for a hundred

2603
01:52:33,159 --> 01:52:33,960
percent or 70

2604
01:52:33,960 --> 01:52:36,319
whatever your goal is that's the best you can do in this

2605
01:52:36,319 --> 01:52:38,479
market setup to meet

2606
01:52:38,479 --> 01:52:41,840
that goal. Yeah so it doesn't matter to the buyer where

2607
01:52:41,840 --> 01:52:42,720
that's coming from

2608
01:52:42,720 --> 01:52:45,279
just as it doesn't matter to ERCOT. That's right. Thank you

2609
01:52:45,279 --> 01:52:48,439
. A couple more.

2610
01:52:48,439 --> 01:52:53,100
When do we think that the federal solar tariff discussion

2611
01:52:53,100 --> 01:52:54,880
will conclude? What is

2612
01:52:54,880 --> 01:52:59,149
your recommendation on that? When is the wall gonna be

2613
01:52:59,149 --> 01:53:01,520
built? You know I don't

2614
01:53:01,520 --> 01:53:05,470
know it's all that stuff you know so that's a great

2615
01:53:05,470 --> 01:53:06,039
question.

2616
01:53:06,039 --> 01:53:13,149
That's a great question with a really difficult answer. The

2617
01:53:13,149 --> 01:53:13,439
actual

2618
01:53:13,439 --> 01:53:18,170
hearings are in place now and they started in June and they

2619
01:53:18,170 --> 01:53:18,399
're

2620
01:53:18,399 --> 01:53:22,460
winding up basically so it's it's gonna be fairly soon and

2621
01:53:22,460 --> 01:53:23,479
let's say sometime

2622
01:53:23,479 --> 01:53:30,560
this quarter next quarter. Okay. I have a question about so

2623
01:53:30,560 --> 01:53:31,239
we're talking about

2624
01:53:31,239 --> 01:53:34,470
how our portfolio might look you've mentioned Georgetown's

2625
01:53:34,470 --> 01:53:35,380
portfolio and how

2626
01:53:35,380 --> 01:53:40,479
they made their purchases and then we talk about ERCOT and

2627
01:53:40,479 --> 01:53:40,960
how they have how

2628
01:53:40,960 --> 01:53:44,960
they dispatch everybody's generating sources or resources

2629
01:53:44,960 --> 01:53:47,680
so do they does

2630
01:53:47,680 --> 01:53:54,210
ERCOT look at what percentage of generating resources have

2631
01:53:54,210 --> 01:53:54,800
to be

2632
01:53:54,800 --> 01:53:59,279
something that can they can turn on and it will always work

2633
01:53:59,279 --> 01:54:01,300
? I mean because like

2634
01:54:01,300 --> 01:54:04,220
as we're adding renewable resources obviously ERCOT's not

2635
01:54:04,220 --> 01:54:05,279
gonna let 100%

2636
01:54:05,279 --> 01:54:09,810
of the generations of resources be renewable because we've

2637
01:54:09,810 --> 01:54:10,640
just discussed

2638
01:54:10,640 --> 01:54:13,819
that you can't always do that you gotta buy power from the

2639
01:54:13,819 --> 01:54:15,720
market so where do

2640
01:54:15,720 --> 01:54:18,430
they see or do they have some kind of overall plan about

2641
01:54:18,430 --> 01:54:19,560
how they're looking

2642
01:54:19,560 --> 01:54:21,829
at how renewables are keeping going? They have a plan for

2643
01:54:21,829 --> 01:54:23,039
every minute.

2644
01:54:23,039 --> 01:54:26,000
So spend just a minute explaining that. I'm just trying to

2645
01:54:26,000 --> 01:54:28,800
think about how that impacts you know when you

2646
01:54:28,800 --> 01:54:31,720
when you build something that might last 20 or 30 years you

2647
01:54:31,720 --> 01:54:32,479
really have to think

2648
01:54:32,479 --> 01:54:35,439
20 or 30 years out. Well yes they have that and they have a

2649
01:54:35,439 --> 01:54:37,520
great thing that discusses this in

2650
01:54:37,520 --> 01:54:40,239
depth it's called a long-term assessment you saw that those

2651
01:54:40,239 --> 01:54:41,119
red and blue

2652
01:54:41,119 --> 01:54:44,930
that's an excerpt from it it's really well written and what

2653
01:54:44,930 --> 01:54:45,680
they did is they

2654
01:54:45,680 --> 01:54:48,989
they're talking about market forces and how you know coal

2655
01:54:48,989 --> 01:54:50,319
units are retiring but

2656
01:54:50,319 --> 01:54:53,239
at the same time natural gas units are being built they're

2657
01:54:53,239 --> 01:54:54,279
kind of replacing

2658
01:54:54,279 --> 01:54:58,250
each other and at the same time there's more renewables

2659
01:54:58,250 --> 01:54:59,560
being brought on

2660
01:54:59,560 --> 01:55:05,289
particularly solar. Solar is one that is particularly

2661
01:55:05,289 --> 01:55:07,119
desirable now in a relative

2662
01:55:07,119 --> 01:55:11,779
pricing thing and so that's what they look at and then they

2663
01:55:11,779 --> 01:55:13,000
run models to make

2664
01:55:13,000 --> 01:55:18,880
sure everything is secure all the time and and so it works

2665
01:55:18,880 --> 01:55:20,720
it works you know

2666
01:55:20,720 --> 01:55:23,760
the the security is really high all the time and that's

2667
01:55:23,760 --> 01:55:24,960
what their job is and

2668
01:55:24,960 --> 01:55:28,189
that's so they go out to 20 35 and they make sure that

2669
01:55:28,189 --> 01:55:28,960
every hour you are

2670
01:55:28,960 --> 01:55:32,140
secured no matter what the renewable portfolio percentage

2671
01:55:32,140 --> 01:55:32,859
is and they're

2672
01:55:32,859 --> 01:55:36,449
they're saying I'm trying to think right now they still

2673
01:55:36,449 --> 01:55:38,079
have coal out there you

2674
01:55:38,079 --> 01:55:42,779
know but I think it's about eight to ten thousand has been

2675
01:55:42,779 --> 01:55:44,239
retired by something

2676
01:55:44,239 --> 01:55:50,050
like 20 21 and that will leave probably about half to 60

2677
01:55:50,050 --> 01:55:52,199
percent still operating

2678
01:55:52,199 --> 01:55:55,720
and then at the end of the term even more retirements occur

2679
01:55:55,720 --> 01:55:56,920
so it's a gradual

2680
01:55:56,920 --> 01:56:00,659
thing on both the integration of the renewables and the

2681
01:56:00,659 --> 01:56:02,279
solar and the natural

2682
01:56:02,279 --> 01:56:08,050
gas and and they do it under different gas prices so just

2683
01:56:08,050 --> 01:56:09,079
one more thing on

2684
01:56:09,079 --> 01:56:12,000
that Urquhart is an energy only market so it's designed

2685
01:56:12,000 --> 01:56:13,079
that that market signal

2686
01:56:13,079 --> 01:56:16,069
is all it is needed to signal to the market when additional

2687
01:56:16,069 --> 01:56:16,640
generation is

2688
01:56:16,640 --> 01:56:19,560
there that's the only incentive to bring generation so they

2689
01:56:19,560 --> 01:56:20,840
don't always they're

2690
01:56:20,840 --> 01:56:23,779
they're trying to project what the portfolio might be in

2691
01:56:23,779 --> 01:56:25,000
the future but

2692
01:56:25,000 --> 01:56:27,359
what Neil alluded to what they're really concerned about is

2693
01:56:27,359 --> 01:56:27,939
operational

2694
01:56:27,939 --> 01:56:30,600
reliability so they don't necessarily have a cap or a

2695
01:56:30,600 --> 01:56:31,560
target on how many

2696
01:56:31,560 --> 01:56:33,550
renewables that come in but they're going to really make

2697
01:56:33,550 --> 01:56:34,279
sure that there are

2698
01:56:34,279 --> 01:56:37,930
certain units that are designated must run to alleviate

2699
01:56:37,930 --> 01:56:39,159
congestion and to

2700
01:56:39,159 --> 01:56:42,460
manage the the market efficiently until having a sufficient

2701
01:56:42,460 --> 01:56:44,359
reserve margin one

2702
01:56:44,359 --> 01:56:46,119
of the things though that's interesting is there have been

2703
01:56:46,119 --> 01:56:47,000
predictions for years

2704
01:56:47,000 --> 01:56:49,460
that you're going to see more instability in markets as

2705
01:56:49,460 --> 01:56:50,079
more renewable

2706
01:56:50,079 --> 01:56:53,000
resources come in and ironically that hasn't happened yet

2707
01:56:53,000 --> 01:56:53,680
we were just

2708
01:56:53,680 --> 01:56:55,439
discussing this the other day it may be just because you're

2709
01:56:55,439 --> 01:56:56,319
getting enough solar

2710
01:56:56,319 --> 01:56:59,500
in here solar is a beautiful offset to wind and it only

2711
01:56:59,500 --> 01:57:00,520
leaves a little bit on

2712
01:57:00,520 --> 01:57:03,699
the margin that needs to be filled in so if enough solar

2713
01:57:03,699 --> 01:57:04,920
comes in and a natural

2714
01:57:04,920 --> 01:57:08,979
balance to win it's a really nice setup for stability going

2715
01:57:08,979 --> 01:57:09,840
forward and maybe

2716
01:57:09,840 --> 01:57:17,729
more answer that you want so on this August day that you

2717
01:57:17,729 --> 01:57:18,880
have the graph for

2718
01:57:18,880 --> 01:57:23,819
where we're dispatched where ERCOT is dispatching the deck

2719
01:57:23,819 --> 01:57:25,800
the heat index has

2720
01:57:25,800 --> 01:57:31,569
risen and made the deck a viable option for the market

2721
01:57:31,569 --> 01:57:33,840
essentially so are all

2722
01:57:33,840 --> 01:57:37,659
the get are all the coal plants run in full tilt at this

2723
01:57:37,659 --> 01:57:39,840
time okay so the their

2724
01:57:39,840 --> 01:57:43,119
gas the the coal plants are running full tilt and then

2725
01:57:43,119 --> 01:57:44,640
these the gas plants would

2726
01:57:44,640 --> 01:57:49,489
be dispatched because it becomes marketable basically so we

2727
01:57:49,489 --> 01:57:50,319
were talking

2728
01:57:50,319 --> 01:57:55,529
about renewables and which really the thrust is the

2729
01:57:55,529 --> 01:57:56,800
environment for that but

2730
01:57:56,800 --> 01:57:59,310
we really haven't talked much about the environment in

2731
01:57:59,310 --> 01:58:02,159
these discussions so so

2732
01:58:02,159 --> 01:58:07,479
from the standpoint of emissions so on that hot August day

2733
01:58:07,479 --> 01:58:08,880
turning on the gas

2734
01:58:08,880 --> 01:58:12,060
plants really doesn't do much for emissions because all the

2735
01:58:12,060 --> 01:58:12,640
coal plants

2736
01:58:12,640 --> 01:58:19,039
are already running right so as coal plants are decomm

2737
01:58:19,039 --> 01:58:20,439
issioned as the older

2738
01:58:20,439 --> 01:58:24,170
coal plants are decommissioned and something like the deck

2739
01:58:24,170 --> 01:58:25,079
then it seems

2740
01:58:25,079 --> 01:58:29,279
like then its viability or marketability comes on sooner it

2741
01:58:29,279 --> 01:58:31,039
also burns cleaner

2742
01:58:31,039 --> 01:58:34,640
than a 30 year old coal plant that we're using is that not

2743
01:58:34,640 --> 01:58:35,399
correct that's correct

2744
01:58:35,399 --> 01:58:39,439
yeah yeah so if coal gets retired and the deck runs sooner

2745
01:58:39,439 --> 01:58:40,680
because of its

2746
01:58:40,680 --> 01:58:43,380
relative advantage at that time because of the way the

2747
01:58:43,380 --> 01:58:44,520
resource stack looks

2748
01:58:44,520 --> 01:58:48,960
it's replaced something that is bigger polluters and the

2749
01:58:48,960 --> 01:58:50,439
water use and the

2750
01:58:50,439 --> 01:58:52,989
water use yes yes and that's right that's not to be

2751
01:58:52,989 --> 01:58:54,279
overlooked that often

2752
01:58:54,279 --> 01:58:59,279
gets overlooked that's important aspect and so one of the

2753
01:58:59,279 --> 01:59:00,079
things that we keep

2754
01:59:00,079 --> 01:59:03,520
talking about is the dollar value and within our community

2755
01:59:03,520 --> 01:59:04,439
and within the

2756
01:59:04,439 --> 01:59:07,140
ratepayers and just the general public there are some

2757
01:59:07,140 --> 01:59:08,239
people that would pay

2758
01:59:08,239 --> 01:59:12,899
more for cleaner energy that the cost doesn't really matter

2759
01:59:12,899 --> 01:59:13,960
to them if you

2760
01:59:13,960 --> 01:59:18,039
could say that you're reducing instances of asthma or

2761
01:59:18,039 --> 01:59:20,119
hospital visits for you

2762
01:59:20,119 --> 01:59:22,800
know for whatever so I just I guess I just wanted to say

2763
01:59:22,800 --> 01:59:24,079
that yeah it's

2764
01:59:24,079 --> 01:59:26,220
interesting that if you look at the retail market in the

2765
01:59:26,220 --> 01:59:27,319
past few years when

2766
01:59:27,319 --> 01:59:30,510
retailers have actually offered a green premium product

2767
01:59:30,510 --> 01:59:31,760
people don't go for it

2768
01:59:31,760 --> 01:59:34,119
they say they want it but when it comes to paying for it

2769
01:59:34,119 --> 01:59:35,279
the track record isn't

2770
01:59:35,279 --> 01:59:39,479
there yeah I do I do I just wanted to go back because I

2771
01:59:39,479 --> 01:59:40,760
hate to quote articles

2772
01:59:40,760 --> 01:59:43,460
and say I read this article without knowing it and I found

2773
01:59:43,460 --> 01:59:45,000
it it's from UT

2774
01:59:45,000 --> 01:59:49,340
News and this is in July 2017 so it's fairly recent but I

2775
01:59:49,340 --> 01:59:50,760
wanted to read just

2776
01:59:50,760 --> 01:59:53,689
one paragraph and then the ending paragraph and it says for

2777
01:59:53,689 --> 01:59:54,399
Georgetown and

2778
01:59:54,399 --> 01:59:59,159
Aspen 100% renewable means that those cities purchase as

2779
01:59:59,159 --> 02:00:00,180
much renewable

2780
02:00:00,180 --> 02:00:04,130
electricity as they can get it does not mean that all the

2781
02:00:04,130 --> 02:00:05,600
power they consume

2782
02:00:05,600 --> 02:00:09,319
comes from renewable sources however that's because there

2783
02:00:09,319 --> 02:00:10,279
are times when

2784
02:00:10,279 --> 02:00:13,859
renewable power isn't available on windless nights for

2785
02:00:13,859 --> 02:00:15,079
example when that

2786
02:00:15,079 --> 02:00:18,520
happens both cities consume non-renewable power from the

2787
02:00:18,520 --> 02:00:19,199
regional grid

2788
02:00:19,199 --> 02:00:21,550
and that's where I was getting the it's kind of marketing

2789
02:00:21,550 --> 02:00:22,319
that's a hundred

2790
02:00:22,319 --> 02:00:26,079
percent renewable but then it goes on and at the very end

2791
02:00:26,079 --> 02:00:28,399
it says for the time

2792
02:00:28,399 --> 02:00:32,229
being it's much cheaper to back up renewable power with

2793
02:00:32,229 --> 02:00:33,319
natural gas or

2794
02:00:33,319 --> 02:00:38,729
other forms of non-renewable generation perhaps by 2045

2795
02:00:38,729 --> 02:00:40,439
that no longer will be

2796
02:00:40,439 --> 02:00:44,840
true so 2045 is when they're saying that and that's kind of

2797
02:00:44,840 --> 02:00:45,560
the lights probably

2798
02:00:45,560 --> 02:00:49,800
when batteries storage will be really great right right

2799
02:00:49,800 --> 02:00:51,279
right yeah so that's

2800
02:00:51,279 --> 02:00:55,229
where okay so I just wanted to yeah so I just think you

2801
02:00:55,229 --> 02:00:55,920
have to you know be

2802
02:00:55,920 --> 02:00:59,520
careful how you represent that absolutely you know but if

2803
02:00:59,520 --> 02:01:00,199
you clear

2804
02:01:00,199 --> 02:01:03,119
with the goal I think right right and I'm and I just for

2805
02:01:03,119 --> 02:01:04,239
the record I would

2806
02:01:04,239 --> 02:01:07,420
love to be at a hundred percent renewable and but and I

2807
02:01:07,420 --> 02:01:08,239
know that it's

2808
02:01:08,239 --> 02:01:11,569
it's a path that we're going to but I want to do it you

2809
02:01:11,569 --> 02:01:12,520
know economically

2810
02:01:12,520 --> 02:01:17,430
feasible in a cost-effective manner well what a Georgetown

2811
02:01:17,430 --> 02:01:18,520
and Aspen didn't buy

2812
02:01:18,520 --> 02:01:21,119
as much as they could they could have bought a lot more but

2813
02:01:21,119 --> 02:01:22,479
they bought what

2814
02:01:22,479 --> 02:01:25,659
they felt was the lower you know least cost so they only

2815
02:01:25,659 --> 02:01:27,039
bought to their needs

2816
02:01:27,039 --> 02:01:30,899
and that that was a little bit different from what that

2817
02:01:30,899 --> 02:01:35,239
article said and so that

2818
02:01:35,239 --> 02:01:40,050
the the other thing is these prices that you see there aren

2819
02:01:40,050 --> 02:01:41,140
't any cheaper prices

2820
02:01:41,140 --> 02:01:45,890
out there there isn't anything that competes with this no

2821
02:01:45,890 --> 02:01:48,359
for anything for

2822
02:01:48,359 --> 02:01:51,539
a nuke for coal for a combined cycle for peaking plant for

2823
02:01:51,539 --> 02:01:52,560
the deck it's all

2824
02:01:52,560 --> 02:01:57,630
cheaper lots cheaper right and so that's what you need to

2825
02:01:57,630 --> 02:01:59,079
keep in mind so if

2826
02:01:59,079 --> 02:02:04,159
going to 70% is like saying you know you have to consider

2827
02:02:04,159 --> 02:02:05,079
going to a hundred

2828
02:02:05,079 --> 02:02:10,229
percent is less expensive or a lower rate than a 70% rate

2829
02:02:10,229 --> 02:02:11,520
so if you're

2830
02:02:11,520 --> 02:02:14,439
interested in lowering your cost to your customers that's

2831
02:02:14,439 --> 02:02:14,939
something you may

2832
02:02:14,939 --> 02:02:19,430
consider now it has an attendant risks within but it's the

2833
02:02:19,430 --> 02:02:21,319
cheapest alternative

2834
02:02:21,319 --> 02:02:26,010
so do you need these decisions today to finish your report

2835
02:02:26,010 --> 02:02:27,000
is that no no no

2836
02:02:27,000 --> 02:02:30,210
yes and they're gonna be asked to mark the city council but

2837
02:02:30,210 --> 02:02:31,399
you know sooner

2838
02:02:31,399 --> 02:02:34,020
rather than later would be good because the RFP is there

2839
02:02:34,020 --> 02:02:35,239
the results are in so

2840
02:02:35,239 --> 02:02:38,159
sooner rather than later yes right I just want I just want

2841
02:02:38,159 --> 02:02:38,800
to make a couple

2842
02:02:38,800 --> 02:02:41,500
comments about that it's a great question we are presenting

2843
02:02:41,500 --> 02:02:42,079
this I don't

2844
02:02:42,079 --> 02:02:43,630
think I mentioned this we're presenting the same

2845
02:02:43,630 --> 02:02:44,840
presentation to council tomorrow

2846
02:02:44,840 --> 02:02:47,109
to get their feedback this has been a very good discussion

2847
02:02:47,109 --> 02:02:47,840
to get your feedback

2848
02:02:47,840 --> 02:02:50,760
and then we want to come back to you at some point once we

2849
02:02:50,760 --> 02:02:51,640
have some of this

2850
02:02:51,640 --> 02:02:54,819
input once we have had more of an opportunity to look at

2851
02:02:54,819 --> 02:02:55,560
the RFPs and

2852
02:02:55,560 --> 02:02:58,930
bringing back a plan that both the PB and the City Council

2853
02:02:58,930 --> 02:02:59,920
could formally

2854
02:02:59,920 --> 02:03:03,100
approve so we'll be working on that and bringing something

2855
02:03:03,100 --> 02:03:03,640
back to you in the

2856
02:03:03,640 --> 02:03:08,569
next couple of months with that information I just have one

2857
02:03:08,569 --> 02:03:09,960
point the key

2858
02:03:09,960 --> 02:03:13,529
point you just brought up was the fact that the rate payer

2859
02:03:13,529 --> 02:03:14,600
is who we need to

2860
02:03:14,600 --> 02:03:20,329
look out for and I think we would like to see the impact of

2861
02:03:20,329 --> 02:03:21,479
going to a hundred

2862
02:03:21,479 --> 02:03:27,840
percent sooner and not counting white tails renewable on

2863
02:03:27,840 --> 02:03:28,760
the rates at that

2864
02:03:28,760 --> 02:03:32,439
during that gap time because this might be the least cost

2865
02:03:32,439 --> 02:03:34,039
but what does that

2866
02:03:34,039 --> 02:03:43,460
mean to the rates okay okay well hopefully you've taken

2867
02:03:43,460 --> 02:03:44,279
from

2868
02:03:44,279 --> 02:03:50,829
our comments some some getting some feedback from it I mean

2869
02:03:50,829 --> 02:03:53,039
any while the

2870
02:03:53,039 --> 02:03:55,670
father here any other questions I'm sure we'll get to see

2871
02:03:55,670 --> 02:03:56,520
them again at some

2872
02:03:56,520 --> 02:03:58,960
point

2873
02:04:12,039 --> 02:04:17,229
all right very good okay thank you thank you very much and

2874
02:04:17,229 --> 02:04:17,920
I'll also say before

2875
02:04:17,920 --> 02:04:21,869
we end the discussion I support the early adoption path

2876
02:04:21,869 --> 02:04:24,039
just based on what I

2877
02:04:24,039 --> 02:04:28,039
what I see here but I do I appreciate your I think that's a

2878
02:04:28,039 --> 02:04:28,319
good question

2879
02:04:28,319 --> 02:04:34,149
about rates I would like to see that too but it seems to be

2880
02:04:34,149 --> 02:04:35,720
definitely the

2881
02:04:35,720 --> 02:04:40,939
financially responsible thing for us and also I found it

2882
02:04:40,939 --> 02:04:42,840
very interesting what

2883
02:04:42,840 --> 02:04:47,640
you had to say about a city offering solar to go into us on

2884
02:04:47,640 --> 02:04:48,600
a solar project

2885
02:04:48,600 --> 02:04:56,439
recent recently yeah is that I see no I haven't any of

2886
02:04:56,439 --> 02:04:56,760
those specific

2887
02:04:56,760 --> 02:05:00,270
conversations we'll follow up with enterprise risk and and

2888
02:05:00,270 --> 02:05:01,159
see what those

2889
02:05:01,159 --> 02:05:03,510
possibilities are and bring back that for this yeah because

2890
02:05:03,510 --> 02:05:04,119
that's really

2891
02:05:04,119 --> 02:05:06,859
exciting and that's also something that could really save

2892
02:05:06,859 --> 02:05:07,760
us it would save us

2893
02:05:07,760 --> 02:05:14,720
money and be good for our environment too okay very good

2894
02:05:14,720 --> 02:05:18,439
well that took up

2895
02:05:18,439 --> 02:05:32,600
we're only on our second item now okay item B in the work

2896
02:05:32,600 --> 02:05:33,399
session is to receive

2897
02:05:33,399 --> 02:05:36,149
report hold discussion and provide staff direction

2898
02:05:36,149 --> 02:05:37,920
regarding the solid waste

2899
02:05:37,920 --> 02:05:41,510
department and watershed protection divisions community

2900
02:05:41,510 --> 02:05:42,720
sponsorship program

2901
02:05:42,720 --> 02:05:45,760
well good morning my name is Ethan Cox I'm the director of

2902
02:05:45,760 --> 02:05:47,079
solid waste I have a

2903
02:05:47,079 --> 02:05:49,649
very brief presentation for you this morning to talk about

2904
02:05:49,649 --> 02:05:50,279
sponsorship

2905
02:05:50,279 --> 02:05:52,989
programs for both the solid waste department as well as the

2906
02:05:52,989 --> 02:05:53,560
watershed

2907
02:05:53,560 --> 02:05:56,489
division in addition to myself the assistant director of

2908
02:05:56,489 --> 02:05:57,319
environmental

2909
02:05:57,319 --> 02:06:00,699
services Deborah Vera is here I'll do my best to kind of

2910
02:06:00,699 --> 02:06:01,199
get through the

2911
02:06:01,199 --> 02:06:04,909
presentation but both she and I are available for questions

2912
02:06:04,909 --> 02:06:05,880
if you have any

2913
02:06:05,880 --> 02:06:08,920
so as we go through this at this presentation looks very

2914
02:06:08,920 --> 02:06:09,640
familiar it's

2915
02:06:09,640 --> 02:06:12,229
probably because this is almost an exact carbon copy of the

2916
02:06:12,229 --> 02:06:13,159
one that you received

2917
02:06:13,159 --> 02:06:15,689
from Denton municipal electric a few weeks ago I just

2918
02:06:15,689 --> 02:06:17,800
refresh your memory both

2919
02:06:17,800 --> 02:06:21,090
the PB and the City Council received or provided direction

2920
02:06:21,090 --> 02:06:22,680
to DME that we wanted

2921
02:06:22,680 --> 02:06:25,859
the program to continue but at the same time that DME was

2922
02:06:25,859 --> 02:06:26,920
going to reduce their

2923
02:06:26,920 --> 02:06:28,920
budget in terms of the sponsorships that they were

2924
02:06:28,920 --> 02:06:30,600
supporting in addition to

2925
02:06:30,600 --> 02:06:33,520
that there was also specific criteria and also an approval

2926
02:06:33,520 --> 02:06:34,319
process that was

2927
02:06:34,319 --> 02:06:37,920
presented and approved by the PUB or it's up for approval

2928
02:06:37,920 --> 02:06:39,079
by PUB today and

2929
02:06:39,079 --> 02:06:42,260
council tomorrow I believe similarly solid waste our

2930
02:06:42,260 --> 02:06:43,439
sponsorship budget is a

2931
02:06:43,439 --> 02:06:46,369
little bit lower than the DME's but the principles are the

2932
02:06:46,369 --> 02:06:47,239
same it is there to

2933
02:06:47,239 --> 02:06:51,350
promote recycling responsible waste practices what you see

2934
02:06:51,350 --> 02:06:52,760
typically is we

2935
02:06:52,760 --> 02:06:56,000
have a number of nonprofits that we support there's some

2936
02:06:56,000 --> 02:06:56,760
community events

2937
02:06:56,760 --> 02:06:59,939
that I'll talk about in a few moments and there's also some

2938
02:06:59,939 --> 02:07:01,239
industry sponsorships

2939
02:07:01,239 --> 02:07:03,699
that we do as well in the solid waste industry watershed

2940
02:07:03,699 --> 02:07:04,840
sponsorships are very

2941
02:07:04,840 --> 02:07:07,840
similar that's to promote the pollution prevention storm

2942
02:07:07,840 --> 02:07:08,960
water water quality

2943
02:07:08,960 --> 02:07:12,140
awareness it's also to meet the city's MS4 permit

2944
02:07:12,140 --> 02:07:14,119
requirements and the two

2945
02:07:14,119 --> 02:07:16,409
budgets you can see there solid waste over the last couple

2946
02:07:16,409 --> 02:07:17,319
years we've ranged

2947
02:07:17,319 --> 02:07:19,840
between twenty to thirty thousand dollars each year and

2948
02:07:19,840 --> 02:07:20,920
watershed is about

2949
02:07:20,920 --> 02:07:25,300
half of that one of the similarities between the solid

2950
02:07:25,300 --> 02:07:26,239
waste sponsorships and

2951
02:07:26,239 --> 02:07:29,170
watershed sponsorships is keep them beautiful plays an

2952
02:07:29,170 --> 02:07:30,119
important role in

2953
02:07:30,119 --> 02:07:35,350
both keep them beautiful also knows KDB is a 501 c3 meaning

2954
02:07:35,350 --> 02:07:36,239
it's a nonprofit

2955
02:07:36,239 --> 02:07:39,210
they do a lot of work that really has some synergies with

2956
02:07:39,210 --> 02:07:40,319
both solid waste as

2957
02:07:40,319 --> 02:07:44,680
well as watershed actually within the KDB contract with the

2958
02:07:44,680 --> 02:07:45,560
city the solid

2959
02:07:45,560 --> 02:07:48,109
waste department is to provide or is obligated to provide a

2960
02:07:48,109 --> 02:07:48,800
ten thousand

2961
02:07:48,800 --> 02:07:51,720
dollar sponsorship directly to KDB each and every year that

2962
02:07:51,720 --> 02:07:52,640
goes toward their

2963
02:07:52,640 --> 02:07:55,930
program of services in addition to that both solid waste

2964
02:07:55,930 --> 02:07:57,039
and the watershed

2965
02:07:57,039 --> 02:08:00,640
division we provide financial aid to some of the

2966
02:08:00,640 --> 02:08:02,800
sponsorship events like red

2967
02:08:02,800 --> 02:08:05,840
bud festival the great American cleanup and also the

2968
02:08:05,840 --> 02:08:06,439
environmental education

2969
02:08:06,439 --> 02:08:10,069
program so that makes up the lion's share of both of our

2970
02:08:10,069 --> 02:08:11,840
sponsorship programs in

2971
02:08:11,840 --> 02:08:15,560
addition to that in solid waste we do have a number of

2972
02:08:15,560 --> 02:08:16,479
community events I

2973
02:08:16,479 --> 02:08:18,779
believe an exhibit to in your backup we kind of give you a

2974
02:08:18,779 --> 02:08:19,680
breakdown of what we

2975
02:08:19,680 --> 02:08:23,680
sponsored in the past what I would say to that is some of

2976
02:08:23,680 --> 02:08:24,439
those events I don't

2977
02:08:24,439 --> 02:08:27,619
know know that they necessarily lived up to this is a

2978
02:08:27,619 --> 02:08:29,479
something that we feel like

2979
02:08:29,479 --> 02:08:31,460
there's some synergies there for solid waste and so we are

2980
02:08:31,460 --> 02:08:32,159
going to reevaluate

2981
02:08:32,159 --> 02:08:35,739
those I think two or three within that list really meet

2982
02:08:35,739 --> 02:08:36,680
that level they are

2983
02:08:36,680 --> 02:08:40,039
501 c3 is there about renewable resources and things of

2984
02:08:40,039 --> 02:08:41,479
that nature so

2985
02:08:41,479 --> 02:08:43,819
to that end we are going to be reducing our budget and

2986
02:08:43,819 --> 02:08:45,000
solid waste next year to

2987
02:08:45,000 --> 02:08:47,930
about fifteen thousand dollars we feel like that provides

2988
02:08:47,930 --> 02:08:48,960
adequate coverage for

2989
02:08:48,960 --> 02:08:52,340
some of those events that we want to sponsor in addition to

2990
02:08:52,340 --> 02:08:53,039
that on the

2991
02:08:53,039 --> 02:08:55,500
community events side one of the things that I would say is

2992
02:08:55,500 --> 02:08:56,239
solid waste focus

2993
02:08:56,239 --> 02:08:59,420
instead of sponsorships will be how can we make sure that

2994
02:08:59,420 --> 02:09:00,319
we have adequate

2995
02:09:00,319 --> 02:09:02,779
resources there for those events that the waste is being

2996
02:09:02,779 --> 02:09:03,920
disposed correctly and

2997
02:09:03,920 --> 02:09:06,859
so as we see those opportunities we definitely want to jump

2998
02:09:06,859 --> 02:09:07,720
on that it may

2999
02:09:07,720 --> 02:09:09,840
not be a sponsorship that may just be something that we

3000
02:09:09,840 --> 02:09:10,840
choose to participate

3001
02:09:10,840 --> 02:09:14,130
operationally and to help that event out we do have some

3002
02:09:14,130 --> 02:09:15,520
industry organizations

3003
02:09:15,520 --> 02:09:19,729
in there as well much like DME and so as those come up what

3004
02:09:19,729 --> 02:09:20,800
we would recommend is

3005
02:09:20,800 --> 02:09:23,260
that we follow the exact same guidelines that you've seen a

3006
02:09:23,260 --> 02:09:24,159
couple of times now

3007
02:09:24,159 --> 02:09:27,159
that is sponsorships over twenty five hundred dollars would

3008
02:09:27,159 --> 02:09:28,000
come to the PB and

3009
02:09:28,000 --> 02:09:31,180
Council for approval and then you have the qualifying

3010
02:09:31,180 --> 02:09:32,000
criteria which we've

3011
02:09:32,000 --> 02:09:35,039
talked a little bit about that we also have a quarterly

3012
02:09:35,039 --> 02:09:36,000
report that we have

3013
02:09:36,000 --> 02:09:39,649
provided the PB and Council if and when those sponsorships

3014
02:09:39,649 --> 02:09:41,560
do arise so I said

3015
02:09:41,560 --> 02:09:43,609
this is going to be a short presentation I'm trying to live

3016
02:09:43,609 --> 02:09:45,039
up to my promise I

3017
02:09:45,039 --> 02:09:47,960
recommendations today is this solid waste not in this

3018
02:09:47,960 --> 02:09:49,119
budget year but on the

3019
02:09:49,119 --> 02:09:51,579
the next proposed budget we are going to reduce from twenty

3020
02:09:51,579 --> 02:09:52,199
two thousand to

3021
02:09:52,199 --> 02:09:55,739
fifteen thousand that allow us to cover the KDB sponsors

3022
02:09:55,739 --> 02:09:56,800
hips as well as a few

3023
02:09:56,800 --> 02:09:59,289
others that we feel are important we want to maintain the

3024
02:09:59,289 --> 02:09:59,859
watershed

3025
02:09:59,859 --> 02:10:03,039
sponsorships again those are almost exclusively a hundred

3026
02:10:03,039 --> 02:10:03,920
percent keep it in

3027
02:10:03,920 --> 02:10:07,100
beautiful programs like I said that there's there is some

3028
02:10:07,100 --> 02:10:08,039
synergies there

3029
02:10:08,039 --> 02:10:10,310
that we feel are important and we'll also adhere to the

3030
02:10:10,310 --> 02:10:11,279
proposed policy and

3031
02:10:11,279 --> 02:10:15,600
criteria that you've seen previously with that next steps

3032
02:10:15,600 --> 02:10:16,319
unless there's any

3033
02:10:16,319 --> 02:10:18,970
questions or concerns alternative direction we're going to

3034
02:10:18,970 --> 02:10:19,560
take this to

3035
02:10:19,560 --> 02:10:22,600
council next week have them review this and then we will

3036
02:10:22,600 --> 02:10:23,359
circle back with the

3037
02:10:23,359 --> 02:10:26,550
resolution for both PB and council to approve so with that

3038
02:10:26,550 --> 02:10:27,520
I'll stand for any

3039
02:10:27,520 --> 02:10:33,229
questions questions you know one thing we we wanted to do

3040
02:10:33,229 --> 02:10:35,000
was the statements we

3041
02:10:35,000 --> 02:10:39,239
made is let's be consistent the way we do things and I

3042
02:10:39,239 --> 02:10:40,319
think this kind of

3043
02:10:40,319 --> 02:10:45,970
follows that pattern we need to be consistent throughout

3044
02:10:45,970 --> 02:10:47,840
the city on these

3045
02:10:47,840 --> 02:10:51,560
type of things so not making any judgment on who to give

3046
02:10:51,560 --> 02:10:52,239
money to or who

3047
02:10:52,239 --> 02:10:56,079
not just be consistent that makes me feel better about

3048
02:10:56,079 --> 02:10:56,760
copying bronze

3049
02:10:56,760 --> 02:10:59,359
presentation

3050
02:11:00,840 --> 02:11:04,329
greatest form of flattering right yeah that's right still

3051
02:11:04,329 --> 02:11:06,399
shamelessly I do thank

3052
02:11:06,399 --> 02:11:12,130
you I appreciate your you know looking at this list towards

3053
02:11:12,130 --> 02:11:13,439
trying to in the

3054
02:11:13,439 --> 02:11:18,100
future focus more on entities that specifically have to do

3055
02:11:18,100 --> 02:11:19,000
with solid

3056
02:11:19,000 --> 02:11:24,039
waste I when I saw that list I was surprised to find only

3057
02:11:24,039 --> 02:11:25,159
well three total

3058
02:11:25,159 --> 02:11:29,960
and two current entities on that list that have directly to

3059
02:11:29,960 --> 02:11:31,880
do with recycling

3060
02:11:31,880 --> 02:11:39,189
or just solid waste in general so you know I appreciate

3061
02:11:39,189 --> 02:11:40,359
that that this is

3062
02:11:40,359 --> 02:11:43,909
something that staff already saw and in terms of what we're

3063
02:11:43,909 --> 02:11:45,560
spending now out of

3064
02:11:45,560 --> 02:11:54,439
that $22,000 we're only spending about 6,000 on on entities

3065
02:11:54,439 --> 02:11:55,520
that specifically

3066
02:11:55,520 --> 02:12:00,449
have to do with solid waste so this is a program that I

3067
02:12:00,449 --> 02:12:02,720
believe is really in need

3068
02:12:02,720 --> 02:12:08,430
of reform so I support you on that and I had a question

3069
02:12:08,430 --> 02:12:09,560
about the the keep dent

3070
02:12:09,560 --> 02:12:13,939
and beautiful ordinance that was attached and and I'm

3071
02:12:13,939 --> 02:12:15,520
asking this really

3072
02:12:15,520 --> 02:12:23,409
because I I don't know the I don't know the answer why does

3073
02:12:23,409 --> 02:12:26,279
keep why it is is keep dent and why does keep dent and

3074
02:12:26,279 --> 02:12:34,359
beautiful need money from solid waste and the watershed

3075
02:12:34,359 --> 02:12:37,939
fund instead of all from the general fund does this have

3076
02:12:37,939 --> 02:12:41,000
something to do with them being a nonprofit and how does

3077
02:12:41,000 --> 02:12:45,420
that work if you could just accept yeah and hopefully I don

3078
02:12:45,420 --> 02:12:45,439
't

3079
02:12:45,439 --> 02:12:49,949
butcher this I've fairly new at our relationship with Katie

3080
02:12:49,949 --> 02:12:51,399
B however my

3081
02:12:51,399 --> 02:12:54,149
understanding is a lot of the keep America beautiful

3082
02:12:54,149 --> 02:12:55,399
foundations which keep

3083
02:12:55,399 --> 02:12:58,819
dent and beautiful as a part of they can be independent 100

3084
02:12:58,819 --> 02:13:00,560
% probably funded or

3085
02:13:00,560 --> 02:13:03,149
they can be kind of a private public partnership which is

3086
02:13:03,149 --> 02:13:04,000
what we have here

3087
02:13:04,000 --> 02:13:07,470
years ago keep them beautiful was in the general fund under

3088
02:13:07,470 --> 02:13:09,000
the parks department

3089
02:13:09,000 --> 02:13:11,930
I believe I can't remember exactly when that change

3090
02:13:11,930 --> 02:13:12,960
occurred but we made a

3091
02:13:12,960 --> 02:13:16,840
transition over to solid waste and you know looking back at

3092
02:13:16,840 --> 02:13:18,119
that just my

3093
02:13:18,119 --> 02:13:20,739
personal opinion is there are some synergies with solid

3094
02:13:20,739 --> 02:13:21,520
waste I think we

3095
02:13:21,520 --> 02:13:24,560
have essentially the same goals in mind is we want to make

3096
02:13:24,560 --> 02:13:25,439
sure that we're

3097
02:13:25,439 --> 02:13:28,100
managing our waste responsibly and we want a beautiful

3098
02:13:28,100 --> 02:13:29,239
community and so with

3099
02:13:29,239 --> 02:13:32,420
that the arrangement that we have between solid waste and

3100
02:13:32,420 --> 02:13:33,079
keep dent and

3101
02:13:33,079 --> 02:13:36,439
beautiful is we support the operations and then the board

3102
02:13:36,439 --> 02:13:37,600
and the foundation

3103
02:13:37,600 --> 02:13:40,520
actually support the program of services and so as you look

3104
02:13:40,520 --> 02:13:41,479
at sponsorships that

3105
02:13:41,479 --> 02:13:44,789
is the one area where we somewhat jump across those lines

3106
02:13:44,789 --> 02:13:45,800
and say in addition

3107
02:13:45,800 --> 02:13:48,979
to that this particular program or this particular activity

3108
02:13:48,979 --> 02:13:50,279
has some synergies

3109
02:13:50,279 --> 02:13:52,960
with our department and what we intend to do and so we feel

3110
02:13:52,960 --> 02:13:53,840
like a sponsorship

3111
02:13:53,840 --> 02:13:58,199
is appropriate you know we will certainly take pub and

3112
02:13:58,199 --> 02:13:58,960
council direction

3113
02:13:58,960 --> 02:14:02,250
if that's something that we wish to reevaluate or discontin

3114
02:14:02,250 --> 02:14:03,359
ue we feel like

3115
02:14:03,359 --> 02:14:08,409
it's it's something that the Red Bud Festival did the great

3116
02:14:08,409 --> 02:14:09,479
American cleanup

3117
02:14:09,479 --> 02:14:11,550
those are things that support our purpose as well and so

3118
02:14:11,550 --> 02:14:12,199
that's where it

3119
02:14:12,199 --> 02:14:16,869
makes sense to us and and I myself I'm a big supporter of

3120
02:14:16,869 --> 02:14:18,159
the great American

3121
02:14:18,159 --> 02:14:21,119
cleanup and have participated in that with my children's

3122
02:14:21,119 --> 02:14:22,039
school and food keep

3123
02:14:22,039 --> 02:14:26,060
them beautiful and it does a really good job on a number of

3124
02:14:26,060 --> 02:14:29,279
levels so I I do

3125
02:14:29,279 --> 02:14:33,000
appreciate that I didn't mean to suggest that I wanted to

3126
02:14:33,000 --> 02:14:34,560
you know I that was

3127
02:14:34,560 --> 02:14:39,550
just a genuine question about you know whether there was a

3128
02:14:39,550 --> 02:14:41,319
need for that or not

3129
02:14:41,319 --> 02:14:44,649
the the funding to come from solid waste as opposed to

3130
02:14:44,649 --> 02:14:46,800
general fund thanks well

3131
02:14:46,800 --> 02:14:50,479
and to follow up on that I believe that these are

3132
02:14:50,479 --> 02:14:53,000
activities or events that are

3133
02:14:53,000 --> 02:14:56,180
funded by not just ourselves the watershed department I

3134
02:14:56,180 --> 02:14:56,840
believe Denton

3135
02:14:56,840 --> 02:14:59,760
municipal electric is supported some of those as well and

3136
02:14:59,760 --> 02:15:00,760
so it isn't just solid

3137
02:15:00,760 --> 02:15:03,050
waste that's footing the bill for that I believe that there

3138
02:15:03,050 --> 02:15:03,859
are contributions

3139
02:15:03,859 --> 02:15:10,560
across the organization in some cases okay other questions

3140
02:15:10,560 --> 02:15:13,439
no thank you very

3141
02:15:13,439 --> 02:15:19,970
good thank you thank you okay that's the that's the end of

3142
02:15:19,970 --> 02:15:23,560
our work session we

3143
02:15:23,560 --> 02:15:28,119
okay everybody okay to move straight into regular meeting

3144
02:15:28,119 --> 02:15:29,800
okay just push

3145
02:15:29,800 --> 02:15:36,470
forward all right so the regular meeting side we have first

3146
02:15:36,470 --> 02:15:38,039
our consent agenda

3147
02:15:38,039 --> 02:15:42,819
two items on the consent agenda is there any member who

3148
02:15:42,819 --> 02:15:45,479
would like to have one or

3149
02:15:45,479 --> 02:15:51,250
both or or none of these taken out and considered on an

3150
02:15:51,250 --> 02:15:52,960
individual basis I'd

3151
02:15:52,960 --> 02:15:59,630
like to have none that's not really an option I just you

3152
02:15:59,630 --> 02:16:00,640
said I would try to use

3153
02:16:00,640 --> 02:16:04,210
it let me rephrase that or the reading items that anybody

3154
02:16:04,210 --> 02:16:05,460
wants to take out a

3155
02:16:05,460 --> 02:16:09,920
consider individually I would like be taken out but not

3156
02:16:09,920 --> 02:16:10,680
because I don't need

3157
02:16:10,680 --> 02:16:13,350
any more I don't think more explanation on that is needed

3158
02:16:13,350 --> 02:16:14,399
we've been over that

3159
02:16:14,399 --> 02:16:17,939
but just because I had planned to vote no on that for

3160
02:16:17,939 --> 02:16:20,399
reasons I've stated on

3161
02:16:20,399 --> 02:16:26,840
other occasions okay so item B is taken out for individual

3162
02:16:26,840 --> 02:16:29,079
and in in that case

3163
02:16:29,079 --> 02:16:35,170
is there a motion on item a most approval motion to approve

3164
02:16:35,170 --> 02:16:35,799
item a is

3165
02:16:35,799 --> 02:16:44,799
there a second second seconded pick any discussion no all

3166
02:16:44,799 --> 02:16:46,440
in favor say aye aye

3167
02:16:46,440 --> 02:16:57,040
any opposed same sign okay item a passes item B which is to

3168
02:16:57,040 --> 02:16:57,920
consider recommending

3169
02:16:57,920 --> 02:17:01,100
approval of a resolution of the city of Denton Texas appro

3170
02:17:01,100 --> 02:17:02,040
ving the Denton

3171
02:17:02,040 --> 02:17:06,690
Municipal Electric sponsorship program guidelines and

3172
02:17:06,690 --> 02:17:11,639
application process this

3173
02:17:11,639 --> 02:17:14,250
is the item that we had talked to you on a couple of

3174
02:17:14,250 --> 02:17:16,200
different occasions about we

3175
02:17:16,200 --> 02:17:19,120
had a couple of work session or two about it and it was

3176
02:17:19,120 --> 02:17:20,319
there was only four

3177
02:17:20,319 --> 02:17:22,899
members that were here at the last meeting so it only

3178
02:17:22,899 --> 02:17:23,719
received three

3179
02:17:23,719 --> 02:17:26,639
affirmative votes we wanted to bring it back to the full

3180
02:17:26,639 --> 02:17:27,600
board four votes are

3181
02:17:27,600 --> 02:17:30,600
required to pass the item be happy to answer any questions

3182
02:17:30,600 --> 02:17:32,280
okay seeing that

3183
02:17:32,280 --> 02:17:35,200
this was bringing every them into consistency with the rest

3184
02:17:35,200 --> 02:17:35,920
of the city I

3185
02:17:35,920 --> 02:17:41,719
move approval okay okay we have a motion and a second for

3186
02:17:41,719 --> 02:17:45,719
approval any discussion

3187
02:17:46,440 --> 02:17:52,209
hearing none we'll go to the vote all in favor say aye aye

3188
02:17:52,209 --> 02:17:54,479
any opposed nay one

3189
02:17:54,479 --> 02:18:02,319
nay six ayes one nay motion passes okay

3190
02:18:02,680 --> 02:18:09,040
going into the second part of the agenda first item we have

3191
02:18:09,040 --> 02:18:10,680
is to receive

3192
02:18:10,680 --> 02:18:15,930
nominations and elect a secretary for the public utilities

3193
02:18:15,930 --> 02:18:17,959
board somebody want

3194
02:18:17,959 --> 02:18:24,420
to explain what what those duties are the secretary

3195
02:18:24,420 --> 02:18:26,079
position is a charter

3196
02:18:26,079 --> 02:18:30,030
required position we do have someone who takes minutes here

3197
02:18:30,030 --> 02:18:31,159
can make and takes

3198
02:18:31,159 --> 02:18:33,340
those so there's no minutes that are required but it's a

3199
02:18:33,340 --> 02:18:34,399
position required in

3200
02:18:34,399 --> 02:18:37,879
the charter it doesn't serve as the third level in the

3201
02:18:37,879 --> 02:18:38,719
event that the chair

3202
02:18:38,719 --> 02:18:42,120
and vice chair are missing that they that's correct yes

3203
02:18:42,120 --> 02:18:43,280
yeah it is that

3204
02:18:43,280 --> 02:18:48,520
stated in the Charter or is that just assumed I'm not sure

3205
02:18:48,520 --> 02:18:50,479
we can look and see

3206
02:18:50,479 --> 02:19:08,329
fine assumption yeah I think that's very good we came to

3207
02:19:08,329 --> 02:19:09,639
the last time we went

3208
02:19:09,639 --> 02:19:12,959
through this yeah yeah you guys should all read it though

3209
02:19:12,959 --> 02:19:13,680
if you haven't read

3210
02:19:13,680 --> 02:19:15,670
it's only it's only happened once that I could ever

3211
02:19:15,670 --> 02:19:16,959
remember with the secretary

3212
02:19:16,959 --> 02:19:21,809
I think I was secretary at the time so okay but anyway that

3213
02:19:21,809 --> 02:19:22,959
's you were absent

3214
02:19:22,959 --> 02:19:26,909
the other time is Barbara the chair meeting oh they see

3215
02:19:26,909 --> 02:19:28,319
okay okay anybody

3216
02:19:28,319 --> 02:19:34,030
other than Randy and myself and Susan correct right so

3217
02:19:34,030 --> 02:19:35,079
there's nobody absent

3218
02:19:35,079 --> 02:19:39,049
that we can know nobody's absent so we'll solicit

3219
02:19:39,049 --> 02:19:41,520
nominations for to a

3220
02:19:41,520 --> 02:19:57,719
secretary of the board no I nominate Brendan okay we have a

3221
02:19:57,719 --> 02:19:58,479
nomination and a

3222
02:19:58,479 --> 02:20:03,440
second for Brendan Carroll or their other nominations

3223
02:20:07,040 --> 02:20:11,180
somebody want to second that I second that and second it

3224
02:20:11,180 --> 02:20:13,360
very good okay so we

3225
02:20:13,360 --> 02:20:18,020
have one nominee for secretary of the book of utility board

3226
02:20:18,020 --> 02:20:18,799
that being Brendan

3227
02:20:18,799 --> 02:20:26,690
Carroll any discussion on that all in favor say aye any

3228
02:20:26,690 --> 02:20:29,360
opposed none opposed so

3229
02:20:29,360 --> 02:20:34,440
congratulations mr. secretary we'll try to try to make sure

3230
02:20:34,440 --> 02:20:36,760
that my services are

3231
02:20:36,760 --> 02:20:44,120
never needed that's a harsh way of saying it okay next item

3232
02:20:44,120 --> 02:20:44,799
we have were

3233
02:20:44,799 --> 02:20:49,510
the to consider approval of the public utility board

3234
02:20:49,510 --> 02:20:51,799
meeting minutes of October

3235
02:20:51,799 --> 02:21:03,159
the 9th 2017 are there any changes corrections comments I

3236
02:21:03,159 --> 02:21:04,319
have a comment I

3237
02:21:04,319 --> 02:21:08,479
just want to say that Kim I've just been so impressed by

3238
02:21:08,479 --> 02:21:10,079
the minutes that you

3239
02:21:10,079 --> 02:21:14,879
take and how detailed they are and I really appreciate that

3240
02:21:14,879 --> 02:21:16,200
and I hope that

3241
02:21:16,200 --> 02:21:18,360
members of the public you know in addition to going back

3242
02:21:18,360 --> 02:21:19,000
and looking at

3243
02:21:19,000 --> 02:21:22,600
the videos go and read the minutes because it really it

3244
02:21:22,600 --> 02:21:23,959
does not simply read

3245
02:21:23,959 --> 02:21:30,629
like the agenda well and this very very good and that's not

3246
02:21:30,629 --> 02:21:31,840
easy to do I could

3247
02:21:31,840 --> 02:21:35,110
not do them the minutes of our meeting also go into the

3248
02:21:35,110 --> 02:21:36,520
workbook for the City

3249
02:21:36,520 --> 02:21:44,420
Council yes so I really appreciate that and that is not

3250
02:21:44,420 --> 02:21:46,120
easy to do yeah I agree

3251
02:21:46,120 --> 02:21:50,600
I have one question which I guess if I'd taken Brendan's

3252
02:21:50,600 --> 02:21:52,440
chart and followed read

3253
02:21:52,440 --> 02:21:57,309
the charter the answered the two items that were failed on

3254
02:21:57,309 --> 02:21:59,200
the 3o vote is that

3255
02:21:59,200 --> 02:22:05,590
in the charter that requires the quorum is for and I think

3256
02:22:05,590 --> 02:22:07,760
after research if

3257
02:22:07,760 --> 02:22:14,040
there is a if there is less than four votes there's some

3258
02:22:14,040 --> 02:22:15,200
other recuses

3259
02:22:15,200 --> 02:22:22,079
themselves or abstains that does not count as a vote my

3260
02:22:22,079 --> 02:22:23,000
understanding no

3261
02:22:23,000 --> 02:22:25,629
that's my understanding as well it requires a majority of

3262
02:22:25,629 --> 02:22:26,760
the full board so

3263
02:22:26,760 --> 02:22:30,030
if there's seven members you have to have four votes to

3264
02:22:30,030 --> 02:22:31,200
pass an item for

3265
02:22:31,200 --> 02:22:35,239
affirmative for affirmative or for negative votes correct

3266
02:22:35,239 --> 02:22:38,200
okay I would like

3267
02:22:38,200 --> 02:22:43,760
to see the record reflect that there was abstention on

3268
02:22:43,760 --> 02:22:43,760
those two yeah because

3269
02:22:43,760 --> 02:22:48,079
just you abstained you didn't say no yeah as opposed to

3270
02:22:48,079 --> 02:22:50,639
saying yeah maybe only

3271
02:22:50,639 --> 02:22:56,879
three people here right right okay we can make that change

3272
02:22:56,879 --> 02:22:59,520
okay any other

3273
02:22:59,520 --> 02:23:04,090
comments changes I guess since we're making changes to the

3274
02:23:04,090 --> 02:23:05,280
minutes we need a

3275
02:23:05,280 --> 02:23:09,600
motion to approve those as corrected move approval as

3276
02:23:09,600 --> 02:23:11,719
corrected second and a

3277
02:23:11,719 --> 02:23:17,559
second any discussion yes how will you denote an abstention

3278
02:23:17,559 --> 02:23:19,760
she sits behind you

3279
02:23:19,760 --> 02:23:27,790
do a verbal thing how will she know who abstained future if

3280
02:23:27,790 --> 02:23:30,440
we're gonna say that

3281
02:23:30,440 --> 02:23:33,040
we're gonna record abstentions which is fine with me I don

3282
02:23:33,040 --> 02:23:33,739
't care I'm just

3283
02:23:33,739 --> 02:23:36,920
saying that if you don't have a verb some way to any abst

3284
02:23:36,920 --> 02:23:38,000
ention you know if

3285
02:23:38,000 --> 02:23:41,600
you don't have a way to do that she's not gonna know who

3286
02:23:41,600 --> 02:23:43,520
how to yeah I think

3287
02:23:43,520 --> 02:23:49,229
it's I think it's a requirement or if it's Robert's rule of

3288
02:23:49,229 --> 02:23:49,739
order if he's

3289
02:23:49,739 --> 02:23:53,000
abstaining it needs to be record you need to note yourself

3290
02:23:53,000 --> 02:23:53,479
you need to

3291
02:23:53,479 --> 02:23:58,389
declare that yeah it's just like a recusal sure okay okay

3292
02:23:58,389 --> 02:24:02,159
okay that's a

3293
02:24:02,159 --> 02:24:09,190
good idea okay any other discussion all in favor of the

3294
02:24:09,190 --> 02:24:11,760
minutes as as changed

3295
02:24:11,760 --> 02:24:22,040
say aye aye any opposed okay thank you okay item C is to

3296
02:24:22,040 --> 02:24:23,440
receive report hold

3297
02:24:23,440 --> 02:24:27,079
discussion and provide staff with direction concerning the

3298
02:24:27,079 --> 02:24:27,840
approval of

3299
02:24:27,840 --> 02:24:31,020
contract for the supply of water treatment chemicals for

3300
02:24:31,020 --> 02:24:31,760
the city didn't

3301
02:24:31,760 --> 02:24:36,620
water production and water reclamation departments in the

3302
02:24:36,620 --> 02:24:38,719
amount not to excuse

3303
02:24:38,719 --> 02:24:42,739
me for each item in the four-year not to exceed amount of

3304
02:24:42,739 --> 02:24:44,239
seven million twenty

3305
02:24:44,239 --> 02:24:49,950
six thousand one hundred dollars good morning my name is

3306
02:24:49,950 --> 02:24:50,680
Tim Fisher I'm

3307
02:24:50,680 --> 02:24:55,250
director of water utilities we use water treatment

3308
02:24:55,250 --> 02:24:59,079
chemicals at both the water

3309
02:24:59,079 --> 02:25:03,190
treatment plants and then also in the water reclamation

3310
02:25:03,190 --> 02:25:04,600
plant though these are

3311
02:25:04,600 --> 02:25:09,610
routine budget items annual chemical budgets and the actual

3312
02:25:09,610 --> 02:25:10,959
purchases vary

3313
02:25:10,959 --> 02:25:13,889
from year to year there's three variables that kind of

3314
02:25:13,889 --> 02:25:14,559
affect that

3315
02:25:14,559 --> 02:25:18,309
treated water volumes vary because of seasonality and

3316
02:25:18,309 --> 02:25:19,600
weather patterns

3317
02:25:19,600 --> 02:25:23,190
chemical dosages can also change because water quality

3318
02:25:23,190 --> 02:25:25,280
changes and so the biggest

3319
02:25:25,280 --> 02:25:28,879
impact that we have on treatment chemicals are the coagul

3320
02:25:28,879 --> 02:25:29,920
ants that we use

3321
02:25:29,920 --> 02:25:33,250
so when the turbidity is high due to runoff we'd have

3322
02:25:33,250 --> 02:25:34,440
higher doses some of

3323
02:25:34,440 --> 02:25:38,270
the other chemicals are less variable as far as our doses

3324
02:25:38,270 --> 02:25:39,479
and then we do see

3325
02:25:39,479 --> 02:25:45,239
price fluctuations with chemicals we didn't see them post

3326
02:25:45,239 --> 02:25:47,000
Katrina and read

3327
02:25:47,000 --> 02:25:52,069
reach some highs but then they stabilized and came back

3328
02:25:52,069 --> 02:25:53,579
down we

3329
02:25:53,579 --> 02:25:58,670
basically did production and reclamation division chemicals

3330
02:25:58,670 --> 02:26:01,879
was one package water

3331
02:26:01,879 --> 02:26:05,350
production represents about 70% of the total purchases of

3332
02:26:05,350 --> 02:26:06,920
the water treatment

3333
02:26:06,920 --> 02:26:10,459
process is a little bit more intensive that way and then

3334
02:26:10,459 --> 02:26:11,159
the treatment

3335
02:26:11,159 --> 02:26:15,360
chemicals have to be NSF 60 certified to comply with state

3336
02:26:15,360 --> 02:26:17,200
and federal so as an

3337
02:26:17,200 --> 02:26:21,850
additive to your drinking water they have to be NSF

3338
02:26:21,850 --> 02:26:26,159
certified we do this is a

3339
02:26:26,159 --> 02:26:30,569
good competitively bid process qualified low bidders are

3340
02:26:30,569 --> 02:26:32,200
awarded the contract

3341
02:26:32,200 --> 02:26:36,860
we've been doing multiple year contracts where each year we

3342
02:26:36,860 --> 02:26:37,920
use the same bed

3343
02:26:37,920 --> 02:26:41,899
there's a modest cost inflation embedded in that bid

3344
02:26:41,899 --> 02:26:44,360
process this for references

3345
02:26:44,360 --> 02:26:51,350
we bid back in 2012 and 2015 and so this is a 2017 bid and

3346
02:26:51,350 --> 02:26:53,280
then they're both both

3347
02:26:53,280 --> 02:26:56,719
all these purchases are done through purchase orders and

3348
02:26:56,719 --> 02:26:57,719
they're funded

3349
02:26:57,719 --> 02:27:05,750
through the annual budgets we have a exhibit one in your

3350
02:27:05,750 --> 02:27:06,920
backup that is a

3351
02:27:06,920 --> 02:27:12,020
summary we actually did 15 chemicals and had 19 vendors and

3352
02:27:12,020 --> 02:27:13,079
that was pretty big

3353
02:27:13,079 --> 02:27:16,579
big bid spread so exhibit one kind of shows the low bidder

3354
02:27:16,579 --> 02:27:18,280
in every case the

3355
02:27:18,280 --> 02:27:21,200
only exception of that was potassium permanganate which did

3356
02:27:21,200 --> 02:27:21,719
not meet our

3357
02:27:21,719 --> 02:27:29,969
specification so anyway staff recommends approval of the

3358
02:27:29,969 --> 02:27:31,399
bid and I'll have any

3359
02:27:31,399 --> 02:27:36,799
questions I'll try to answer can you go back to the prior

3360
02:27:36,799 --> 02:27:37,840
just the one just

3361
02:27:37,840 --> 02:27:43,600
before well now it was a purchase chemical purchase by year

3362
02:27:43,600 --> 02:27:44,600
pardon there

3363
02:27:44,600 --> 02:27:48,889
was one that said chemical purchase by year I think there

3364
02:27:48,889 --> 02:27:49,760
was a graph in there

3365
02:27:49,760 --> 02:27:55,139
I just saw oh there there you go come to cost that's that's

3366
02:27:55,139 --> 02:27:56,399
just a history for

3367
02:27:56,399 --> 02:28:00,879
production of what I just sent each year I just wanted to

3368
02:28:00,879 --> 02:28:01,959
see that as a

3369
02:28:01,959 --> 02:28:07,319
comparison and it just shows the variability that we have

3370
02:28:07,319 --> 02:28:08,360
and then also

3371
02:28:08,360 --> 02:28:13,340
you know the primary coagulant of which iron is one of the

3372
02:28:13,340 --> 02:28:15,120
major ones that has

3373
02:28:15,120 --> 02:28:19,500
probably the bigger dosage fluctuation year to year and the

3374
02:28:19,500 --> 02:28:20,920
caustic is the one

3375
02:28:20,920 --> 02:28:24,120
where we see probably a much bigger price fluctuation

3376
02:28:24,120 --> 02:28:26,120
historically cost of

3377
02:28:26,120 --> 02:28:37,440
cost it fluctuates quite a bit no we just issue purchase

3378
02:28:37,440 --> 02:28:39,360
orders typically

3379
02:28:39,360 --> 02:28:44,479
annually and then at the beginning of the fiscal year will

3380
02:28:44,479 --> 02:28:45,879
reissue those

3381
02:28:45,879 --> 02:28:49,729
through purchase orders and then we also monitor what the

3382
02:28:49,729 --> 02:28:51,360
market is with other

3383
02:28:51,360 --> 02:28:54,540
water treatment plants in the area in the Metroplex as far

3384
02:28:54,540 --> 02:28:55,479
as what they use

3385
02:28:55,479 --> 02:28:58,450
and if we see that it's advantageous then we'll go out to b

3386
02:28:58,450 --> 02:29:00,319
ids again and it's

3387
02:29:00,319 --> 02:29:03,979
really locking in the unit cost pardon it's really locking

3388
02:29:03,979 --> 02:29:05,040
in the unit's cost

3389
02:29:05,040 --> 02:29:09,479
per chemical what we're gonna pay per unit for the chemical

3390
02:29:09,479 --> 02:29:10,559
versus overall

3391
02:29:10,559 --> 02:29:13,889
yeah yeah we're not we're just making it because you don't

3392
02:29:13,889 --> 02:29:14,399
know how much you're

3393
02:29:14,399 --> 02:29:16,860
gonna need yeah we're gonna make an estimate on the

3394
02:29:16,860 --> 02:29:18,159
purchase orders and if

3395
02:29:18,159 --> 02:29:21,959
at the end of the fiscal year we don't spend it we don't

3396
02:29:21,959 --> 02:29:23,360
buy it if we have to

3397
02:29:23,360 --> 02:29:27,270
increase that amount we have the flexibility under this

3398
02:29:27,270 --> 02:29:28,600
approval process

3399
02:29:28,600 --> 02:29:36,239
to do that we're just curious because that if we spent

3400
02:29:36,239 --> 02:29:38,120
roughly 750 is it

3401
02:29:38,120 --> 02:29:41,049
seven hundred fifty thousand dollars in chemical costs for

3402
02:29:41,049 --> 02:29:44,959
2017 in a four-year

3403
02:29:44,959 --> 02:29:48,559
not to exceed of seven million okay this is just the water

3404
02:29:48,559 --> 02:29:50,280
production piece of

3405
02:29:50,280 --> 02:29:54,319
it so it doesn't reflect the purchases from reclamation

3406
02:29:54,319 --> 02:29:56,680
okay also this one is

3407
02:29:56,680 --> 02:30:02,450
only water correct correct the other thing is is the

3408
02:30:02,450 --> 02:30:03,559
calculation of

3409
02:30:03,559 --> 02:30:06,600
authorization over the four-year period was based on a

3410
02:30:06,600 --> 02:30:08,120
preliminary estimate this

3411
02:30:08,120 --> 02:30:11,469
for the bid purposes and so it probably exceeds what we

3412
02:30:11,469 --> 02:30:14,879
will actually spend are

3413
02:30:14,879 --> 02:30:19,680
you seeing any price increases are they fairly stable from

3414
02:30:19,680 --> 02:30:21,360
what they have been

3415
02:30:25,040 --> 02:30:30,360
I know this is very good I just want to know if we're

3416
02:30:30,360 --> 02:30:31,280
spending more we're

3417
02:30:31,280 --> 02:30:36,200
spending less on chemicals going forward assets well that

3418
02:30:36,200 --> 02:30:38,200
this would potentially

3419
02:30:38,200 --> 02:30:43,139
suggest that we're gonna be spending slightly more but the

3420
02:30:43,139 --> 02:30:44,879
this is a long

3421
02:30:44,879 --> 02:30:49,040
term history of a grouping of them ferric is one of the

3422
02:30:49,040 --> 02:30:50,360
bigger players

3423
02:30:50,360 --> 02:30:54,719
again you can see caustic with the big price fluctuations

3424
02:30:54,719 --> 02:30:56,079
bike that we have

3425
02:30:56,079 --> 02:31:00,430
so it's settling down it's up slightly this is another

3426
02:31:00,430 --> 02:31:03,399
grouping of chemicals

3427
02:31:03,399 --> 02:31:09,489
the cost of ammonia is actually down a little bit this year

3428
02:31:09,489 --> 02:31:10,520
we don't use much

3429
02:31:10,520 --> 02:31:15,379
of that so that kind of goes back to this stack bar chart

3430
02:31:15,379 --> 02:31:16,700
of all the

3431
02:31:16,700 --> 02:31:25,520
different components okay okay any other questions I have a

3432
02:31:25,520 --> 02:31:28,479
motion for item C

3433
02:31:28,479 --> 02:31:33,590
recommend approval motion to approve approval of item C's

3434
02:31:33,590 --> 02:31:35,079
or second second

3435
02:31:35,079 --> 02:31:44,489
second discussion all in favor say aye aye any opposed same

3436
02:31:44,489 --> 02:31:45,760
sign hearing none

3437
02:31:45,760 --> 02:31:49,840
item a or excuse me item C passes thank you thank you

3438
02:31:49,840 --> 02:31:53,399
thanks Tim item D is to

3439
02:31:53,399 --> 02:31:56,090
receive report holder discussion and provide staff with

3440
02:31:56,090 --> 02:31:57,079
direction concerning

3441
02:31:57,079 --> 02:32:00,600
the approval of a public works contract for directional

3442
02:32:00,600 --> 02:32:02,559
boring services for DME

3443
02:32:02,559 --> 02:32:10,180
and other utility departments with CNC directional boring

3444
02:32:10,180 --> 02:32:11,479
LLC I'm assuming

3445
02:32:11,479 --> 02:32:14,860
this a three-year or five-year it is actually a five-year

3446
02:32:14,860 --> 02:32:16,200
five-year here in

3447
02:32:16,200 --> 02:32:19,409
the word yeah wording of it it says three-year and then in

3448
02:32:19,409 --> 02:32:20,319
the numerical it

3449
02:32:20,319 --> 02:32:23,620
says five five okay it is actually a five-year so a five-

3450
02:32:23,620 --> 02:32:24,639
year not to exceed

3451
02:32:24,639 --> 02:32:28,209
amount of three million dollars that is correct I'm Rowdy

3452
02:32:28,209 --> 02:32:29,360
Patterson I'm

3453
02:32:29,360 --> 02:32:32,829
superintendent of distribution for didn't municipal

3454
02:32:32,829 --> 02:32:34,200
electric didn't

3455
02:32:34,200 --> 02:32:37,500
municipal electric isn't the only ones that use this boring

3456
02:32:37,500 --> 02:32:39,000
contract base water

3457
02:32:39,000 --> 02:32:41,920
and water department also use it but we are the biggest

3458
02:32:41,920 --> 02:32:43,159
user so we're the ones

3459
02:32:43,159 --> 02:32:48,930
making the presentation a little bit of background the city

3460
02:32:48,930 --> 02:32:49,719
has utilized

3461
02:32:49,719 --> 02:32:53,870
contractors for the installation of underground since 2000

3462
02:32:53,870 --> 02:32:55,120
with the rapid

3463
02:32:55,120 --> 02:33:00,030
growth that we were seeing at the time and the city's

3464
02:33:00,030 --> 02:33:01,799
desire to install

3465
02:33:01,799 --> 02:33:07,649
underground utilities we went to a contract for these

3466
02:33:07,649 --> 02:33:09,879
services we use them

3467
02:33:09,879 --> 02:33:12,840
to install underground facilities and all new subdivisions

3468
02:33:12,840 --> 02:33:14,079
no we no longer

3469
02:33:14,079 --> 02:33:18,739
have any overhead subdivisions that come in that are brand

3470
02:33:18,739 --> 02:33:20,479
new we also put it in

3471
02:33:20,479 --> 02:33:26,250
locations that are feasible we did a major underground

3472
02:33:26,250 --> 02:33:27,479
reconstruction in on

3473
02:33:27,479 --> 02:33:30,700
the Hickory Street project we're doing some around UNT

3474
02:33:30,700 --> 02:33:32,079
right now helping with

3475
02:33:32,079 --> 02:33:37,840
that RFP 6516 includes the labor equipment tools

3476
02:33:37,840 --> 02:33:39,079
supervision and as well

3477
02:33:39,079 --> 02:33:42,049
as all administrative and insurance costs incurred by the

3478
02:33:42,049 --> 02:33:42,719
contractor

3479
02:33:42,719 --> 02:33:47,799
necessary to complete all these installations they're also

3480
02:33:47,799 --> 02:33:48,479
they also are

3481
02:33:48,479 --> 02:33:52,079
are supervised by city staff and I brought one of the guys

3482
02:33:52,079 --> 02:33:53,040
with me Craig

3483
02:33:53,040 --> 02:33:58,219
Stastny he is our contractor coordinator over this contract

3484
02:33:58,219 --> 02:33:59,159
and the one we'll be

3485
02:33:59,159 --> 02:34:06,280
talking about next. Request for proposals were sent to 464

3486
02:34:06,280 --> 02:34:07,520
prospective suppliers

3487
02:34:07,520 --> 02:34:11,879
of this item in addition specifications were placed on

3488
02:34:11,879 --> 02:34:12,959
materials management

3489
02:34:12,959 --> 02:34:18,889
website suppliers could download the advertised we also

3490
02:34:18,889 --> 02:34:19,639
advertised in the

3491
02:34:19,639 --> 02:34:23,700
newspaper we only received three proposals which is pretty

3492
02:34:23,700 --> 02:34:24,639
common for us

3493
02:34:24,639 --> 02:34:29,059
I mean this is about what we get every time we go out for

3494
02:34:29,059 --> 02:34:31,159
bid for this they

3495
02:34:31,159 --> 02:34:36,100
were we we evaluated the proposals based on advertised

3496
02:34:36,100 --> 02:34:38,360
criteria including price

3497
02:34:38,360 --> 02:34:41,729
project schedule compliance with specifications and

3498
02:34:41,729 --> 02:34:42,639
indicators of

3499
02:34:42,639 --> 02:34:46,879
probable performance best and final offer was made by all

3500
02:34:46,879 --> 02:34:49,399
three that proposed

3501
02:34:49,399 --> 02:34:55,600
put in proposals and CNC directional boring was ranked the

3502
02:34:55,600 --> 02:34:56,239
highest in

3503
02:34:56,239 --> 02:34:59,709
determined to be the best back value for the city and y'all

3504
02:34:59,709 --> 02:35:00,879
have an exhibit that

3505
02:35:00,879 --> 02:35:06,639
shows all of that. Here are some active projects that this

3506
02:35:06,639 --> 02:35:07,639
contract will be used

3507
02:35:07,639 --> 02:35:14,360
on as you can see UNT where we do a lot of work with UNT

3508
02:35:14,360 --> 02:35:15,120
that's one of the major

3509
02:35:15,120 --> 02:35:21,290
projects there's several 1515 out towards Airport Road we

3510
02:35:21,290 --> 02:35:22,000
're looking at

3511
02:35:22,000 --> 02:35:25,719
taking some stuff underground across the highway there just

3512
02:35:25,719 --> 02:35:26,920
numerous projects and

3513
02:35:26,920 --> 02:35:31,670
we also this product this contract will be in conjunction

3514
02:35:31,670 --> 02:35:32,360
with all of our

3515
02:35:32,360 --> 02:35:36,129
maintenance boards that we do to replace direct buried

3516
02:35:36,129 --> 02:35:37,399
cable we no longer

3517
02:35:37,399 --> 02:35:44,069
utilize direct buried cable in in in our underground system

3518
02:35:44,069 --> 02:35:45,920
some of y'all are new

3519
02:35:45,920 --> 02:35:49,209
to the public utilities board so I just wanted to kind of

3520
02:35:49,209 --> 02:35:50,159
go over what is

3521
02:35:50,159 --> 02:35:55,959
directional drilling it's commonly it's horizontal

3522
02:35:55,959 --> 02:35:57,559
directional drilling or HDD

3523
02:35:57,559 --> 02:36:00,260
and it's a stirruble trenchless method of installing

3524
02:36:00,260 --> 02:36:01,879
underground pipe condor

3525
02:36:01,879 --> 02:36:05,479
or cables in a shallow arc a longer prescribed bore path by

3526
02:36:05,479 --> 02:36:06,399
using a surface

3527
02:36:06,399 --> 02:36:09,139
launch drilling rig with minimal impact on the surrounding

3528
02:36:09,139 --> 02:36:10,600
area that's one of

3529
02:36:10,600 --> 02:36:13,909
the main reasons we use directional drilling is because it

3530
02:36:13,909 --> 02:36:14,719
going under a

3531
02:36:14,719 --> 02:36:18,739
roadway we don't have to open cut 380 Carroll Boulevard

3532
02:36:18,739 --> 02:36:20,360
something like that it

3533
02:36:20,360 --> 02:36:23,909
helps a lot or if you have a lot of landscaping you don't

3534
02:36:23,909 --> 02:36:25,420
have to repair the

3535
02:36:25,420 --> 02:36:29,340
landscaping when you dig through there you can actually go

3536
02:36:29,340 --> 02:36:32,319
under the pipe that

3537
02:36:32,319 --> 02:36:35,250
we use can be PVC polyethylene that just talks about the

3538
02:36:35,250 --> 02:36:36,360
different types of

3539
02:36:36,360 --> 02:36:41,110
pipe the one misconception is that directional drilling is

3540
02:36:41,110 --> 02:36:41,760
easier if you

3541
02:36:41,760 --> 02:36:46,440
the softer the soil is and that's that's incorrect it's

3542
02:36:46,440 --> 02:36:47,600
actually easier to drill

3543
02:36:47,600 --> 02:36:52,469
in rock or a harder type of material because as you as you

3544
02:36:52,469 --> 02:36:54,319
're drilling you

3545
02:36:54,319 --> 02:36:58,219
have the the outer wall stays intact where with sand or

3546
02:36:58,219 --> 02:36:59,680
anything like that

3547
02:36:59,680 --> 02:37:02,860
that outer wall will fall down and it creates a vacuum and

3548
02:37:02,860 --> 02:37:03,799
it keeps you from

3549
02:37:03,799 --> 02:37:08,610
being able to pull your pull your product back this is just

3550
02:37:08,610 --> 02:37:09,319
a little

3551
02:37:09,319 --> 02:37:12,700
picture of what you know how directional drilling looks you

3552
02:37:12,700 --> 02:37:13,639
can actually steer

3553
02:37:13,639 --> 02:37:16,559
this I mean you can actually it has a pitch and it has a

3554
02:37:16,559 --> 02:37:17,600
curve and it has a

3555
02:37:17,600 --> 02:37:21,180
turn so you can actually steer it along the path now you

3556
02:37:21,180 --> 02:37:23,479
can't make a big sharp

3557
02:37:23,479 --> 02:37:27,950
turn like that but you can make a wide sweeping arc the

3558
02:37:27,950 --> 02:37:29,540
head on the on the

3559
02:37:29,540 --> 02:37:33,159
drilling rigs that are used here in Denton by us they have

3560
02:37:33,159 --> 02:37:34,239
a paddle on that

3561
02:37:34,239 --> 02:37:36,510
can help you to steer it that's that's how they steer it

3562
02:37:36,510 --> 02:37:37,440
they actually just

3563
02:37:37,440 --> 02:37:40,909
push it and and don't turn it and it guides it in a

3564
02:37:40,909 --> 02:37:43,319
direction that's just a

3565
02:37:43,319 --> 02:37:47,979
picture of what one typically looks like going in the

3566
02:37:47,979 --> 02:37:49,360
ground that's the other

3567
02:37:49,360 --> 02:37:53,680
thing for it you don't have a lot of open trench you have a

3568
02:37:53,680 --> 02:37:55,200
receiving pit and

3569
02:37:55,200 --> 02:38:00,940
a starting pit that's all you have recommendation is the

3570
02:38:00,940 --> 02:38:01,479
award of a

3571
02:38:01,479 --> 02:38:05,120
contract to CNC directional drilling in the five-year not

3572
02:38:05,120 --> 02:38:06,360
to exceed amount of

3573
02:38:06,360 --> 02:38:08,950
three million dollars which is based on previous spend

3574
02:38:08,950 --> 02:38:10,040
history over the last

3575
02:38:10,040 --> 02:38:13,020
contract period this contractor was the lowest cost respond

3576
02:38:13,020 --> 02:38:13,920
ent who also had the

3577
02:38:13,920 --> 02:38:22,040
highest evaluated score any questions were they the last

3578
02:38:22,040 --> 02:38:23,959
contract winner no

3579
02:38:23,959 --> 02:38:27,979
they were not GTI was our last contract winner and they

3580
02:38:27,979 --> 02:38:29,840
they were a little bit

3581
02:38:29,840 --> 02:38:33,120
higher they were a little bit higher I think no actually

3582
02:38:33,120 --> 02:38:34,680
they were about 19%

3583
02:38:34,680 --> 02:38:37,860
higher that's why if it would have been close we probably

3584
02:38:37,860 --> 02:38:38,600
would have liked to

3585
02:38:38,600 --> 02:38:41,290
have stayed with somebody that we were familiar with but it

3586
02:38:41,290 --> 02:38:42,159
wasn't even close

3587
02:38:42,159 --> 02:38:48,200
so we couldn't I couldn't justify considering them okay

3588
02:38:48,200 --> 02:38:51,840
questions no is

3589
02:38:51,840 --> 02:38:56,139
there a recommendation or approval motion to approve their

3590
02:38:56,139 --> 02:38:56,879
second second

3591
02:38:56,879 --> 02:39:04,920
and a second discussion I do want to ask one thing how you

3592
02:39:04,920 --> 02:39:06,280
evaluated bringing

3593
02:39:06,280 --> 02:39:12,969
that service in-house instead of contracting that out we

3594
02:39:12,969 --> 02:39:16,920
actually did

3595
02:39:16,920 --> 02:39:22,569
that about 25 years ago and it wasn't a pretty sight it was

3596
02:39:22,569 --> 02:39:23,399
it was fairly new at

3597
02:39:23,399 --> 02:39:26,569
the time it's something that you have to continually do it

3598
02:39:26,569 --> 02:39:27,280
's kind of like being

3599
02:39:27,280 --> 02:39:29,530
a lineman you have to continually work on the lines you

3600
02:39:29,530 --> 02:39:30,879
have to continually do

3601
02:39:30,879 --> 02:39:34,520
that job and we don't actually do enough of it to keep

3602
02:39:34,520 --> 02:39:36,559
somebody busy in doing it

3603
02:39:36,559 --> 02:39:40,479
that much so you kind of lose you know you you lose that

3604
02:39:40,479 --> 02:39:43,340
edge we after we

3605
02:39:43,340 --> 02:39:46,319
bought we did actually buy a big machine we brought it in

3606
02:39:46,319 --> 02:39:48,079
we utilized it after we

3607
02:39:48,079 --> 02:39:52,610
lost several fifteen thousand dollar boar heads we decided

3608
02:39:52,610 --> 02:39:53,479
that probably

3609
02:39:53,479 --> 02:39:56,409
wasn't the best idea so we that's when we decided to

3610
02:39:56,409 --> 02:39:57,760
contract it out but I

3611
02:39:57,760 --> 02:40:00,729
guess at some point though like 25 years ago we probably

3612
02:40:00,729 --> 02:40:01,360
weren't putting that

3613
02:40:01,360 --> 02:40:06,549
much we were actually doing about as much as we're doing

3614
02:40:06,549 --> 02:40:07,440
now just for the

3615
02:40:07,440 --> 02:40:10,200
simple fact that we were just starting to put some of the

3616
02:40:10,200 --> 02:40:11,319
South Ridge and that

3617
02:40:11,319 --> 02:40:16,500
top stuff okay and underground okay thank you to go back

3618
02:40:16,500 --> 02:40:19,719
okay other comments

3619
02:40:20,239 --> 02:40:26,000
then all in favor of the motion say aye aye any opposed

3620
02:40:26,000 --> 02:40:28,600
okay motion passes item

3621
02:40:28,600 --> 02:40:33,600
number E which is a receive report whole discussion provide

3622
02:40:33,600 --> 02:40:34,719
staff with direction

3623
02:40:34,719 --> 02:40:39,469
concerning the approval of RP number 65 18 and recommend

3624
02:40:39,469 --> 02:40:41,040
award of a contract for

3625
02:40:41,040 --> 02:40:47,350
the purchase of underground electric installation services

3626
02:40:47,350 --> 02:40:49,760
for DME to FX 5

3627
02:40:49,760 --> 02:40:53,819
construction and excavation in a contract that amount not

3628
02:40:53,819 --> 02:40:54,959
to exceed six

3629
02:40:54,959 --> 02:40:58,209
million dollars this would be a three-year contract is that

3630
02:40:58,209 --> 02:40:58,639
correct that's

3631
02:40:58,639 --> 02:41:06,090
correct again the background is the same for this because

3632
02:41:06,090 --> 02:41:06,579
it is the

3633
02:41:06,579 --> 02:41:09,120
underground the only difference is you know when we were

3634
02:41:09,120 --> 02:41:10,200
talking about the the

3635
02:41:10,200 --> 02:41:14,079
boring versus open trench there's certain times that boring

3636
02:41:14,079 --> 02:41:15,440
is not it's

3637
02:41:15,440 --> 02:41:18,629
it's it won't work for us and I'll show you some pictures

3638
02:41:18,629 --> 02:41:20,280
here in a minute that

3639
02:41:20,280 --> 02:41:23,459
will go along with that the wording is pretty much all the

3640
02:41:23,459 --> 02:41:26,040
same this but this

3641
02:41:26,040 --> 02:41:30,459
is our fp 65 18 it includes the same type of labor tools

3642
02:41:30,459 --> 02:41:31,600
equipment and

3643
02:41:31,600 --> 02:41:35,549
everything to be supplied and also Craig is also our

3644
02:41:35,549 --> 02:41:39,079
contract coordinator on that

3645
02:41:39,319 --> 02:41:43,450
request were sent out to 325 prospective suppliers on this

3646
02:41:43,450 --> 02:41:44,239
one and we only

3647
02:41:44,239 --> 02:41:48,610
received three again so it's that's kind of I mean we've

3648
02:41:48,610 --> 02:41:49,959
got and they're not the

3649
02:41:49,959 --> 02:41:53,489
same three there are three different ones so it's kind of I

3650
02:41:53,489 --> 02:41:54,879
don't understand

3651
02:41:54,879 --> 02:41:59,799
that are we just a three strike town or what is it we

3652
02:41:59,799 --> 02:42:02,000
received best and final

3653
02:42:02,000 --> 02:42:06,110
offers we clarified some line item pricing there was some

3654
02:42:06,110 --> 02:42:07,159
there was some

3655
02:42:07,159 --> 02:42:10,809
large discrepancies between two two separate bidders and we

3656
02:42:10,809 --> 02:42:11,760
wanted to make

3657
02:42:11,760 --> 02:42:16,100
sure that like I tell everybody we can get the best price

3658
02:42:16,100 --> 02:42:17,280
in here but if

3659
02:42:17,280 --> 02:42:20,520
somebody's low balling us on a price and they can't make

3660
02:42:20,520 --> 02:42:21,920
money we're not going

3661
02:42:21,920 --> 02:42:23,700
to need one of us is going to win in the end because they

3662
02:42:23,700 --> 02:42:24,399
're not going to be able

3663
02:42:24,399 --> 02:42:27,620
to fulfill their contract so we had to go back in and kind

3664
02:42:27,620 --> 02:42:28,680
of meet with those

3665
02:42:28,680 --> 02:42:33,040
people and talk about that FX five ended up being the high

3666
02:42:33,040 --> 02:42:34,100
strength and the

3667
02:42:34,100 --> 02:42:41,409
lowest price again just as CNC was only only first one here

3668
02:42:41,409 --> 02:42:42,520
's just a little

3669
02:42:42,520 --> 02:42:45,760
picture of the Winko distribution center whenever we

3670
02:42:45,760 --> 02:42:47,399
installed all this and this

3671
02:42:47,399 --> 02:42:50,440
kind of tells you why we couldn't use a directional

3672
02:42:50,440 --> 02:42:52,040
drilling you can see this

3673
02:42:52,040 --> 02:42:55,989
is taken from from the air but you can see the ditch and

3674
02:42:55,989 --> 02:42:57,280
the piping in there

3675
02:42:57,280 --> 02:43:00,569
well that that little diagram shows you how many six inch

3676
02:43:00,569 --> 02:43:01,799
conduits we installed

3677
02:43:01,799 --> 02:43:05,690
there to get that in in a directional drilling it's almost

3678
02:43:05,690 --> 02:43:07,120
impossible because

3679
02:43:07,120 --> 02:43:11,459
of how much dirt you have to displace here's another

3680
02:43:11,459 --> 02:43:13,319
picture of Winko where we

3681
02:43:13,319 --> 02:43:18,440
covered this mainline duck with concrete here's a pull box

3682
02:43:18,440 --> 02:43:19,840
out at the new loves

3683
02:43:19,840 --> 02:43:25,200
going in off of 35 and 77 with some conduit coming out of

3684
02:43:25,200 --> 02:43:26,719
it another picture

3685
02:43:26,719 --> 02:43:28,700
where they're back filling and you can see the pipe

3686
02:43:28,700 --> 02:43:29,459
sticking up in the

3687
02:43:29,459 --> 02:43:32,639
foreground that's where we're going to set a piece of

3688
02:43:32,639 --> 02:43:34,559
switch gear here are

3689
02:43:34,559 --> 02:43:37,989
forecasted projects for the URD as you can see there's

3690
02:43:37,989 --> 02:43:41,280
quite a few UNT projects

3691
02:43:41,280 --> 02:43:44,959
substation feeders coming out of Jim Crystal and Locus

3692
02:43:44,959 --> 02:43:46,879
several tie feeders

3693
02:43:46,879 --> 02:43:52,920
and then some apartments Buc-Ease is included and then the

3694
02:43:52,920 --> 02:43:54,079
most of these are

3695
02:43:54,079 --> 02:43:59,040
subdivisions that that we have forecasted in the future

3696
02:44:00,440 --> 02:44:04,200
our recommendation is to ward the contract FX-5

3697
02:44:04,200 --> 02:44:06,360
construction in the

3698
02:44:06,360 --> 02:44:09,280
three-year not to exceed amount of six million dollars

3699
02:44:09,280 --> 02:44:10,559
which is based again on

3700
02:44:10,559 --> 02:44:18,590
previous spend history and they were the best value that we

3701
02:44:18,590 --> 02:44:21,040
had any questions

3702
02:44:21,040 --> 02:44:25,159
questions I don't really have a question on the contract

3703
02:44:25,159 --> 02:44:26,600
but how what is our

3704
02:44:26,600 --> 02:44:31,049
percentage of underground now we have 57% of our our

3705
02:44:31,049 --> 02:44:32,680
distribution lines are

3706
02:44:32,680 --> 02:44:38,790
underground we have 800 miles of total distribution and we

3707
02:44:38,790 --> 02:44:40,000
have about four

3708
02:44:40,000 --> 02:44:47,620
hundred and fifty nine miles of that 459 of that is

3709
02:44:47,620 --> 02:44:49,479
actually underground okay

3710
02:44:49,479 --> 02:44:58,319
very good other questions is there a recommendation motion

3711
02:44:58,319 --> 02:45:00,159
second of a

3712
02:45:00,159 --> 02:45:06,319
motion to approve item II in a second further discussion

3713
02:45:06,319 --> 02:45:08,360
all in favor say aye

3714
02:45:08,360 --> 02:45:13,090
any opposed same sign thank you thank y'all thank you guys

3715
02:45:13,090 --> 02:45:13,680
for sticking around

3716
02:45:13,680 --> 02:45:22,129
to realize you're gonna be yeah that's what I said thank

3717
02:45:22,129 --> 02:45:26,879
you okay next is item

3718
02:45:26,879 --> 02:45:32,069
F which is ACM update just a few items for you today we

3719
02:45:32,069 --> 02:45:32,959
have a couple of

3720
02:45:32,959 --> 02:45:35,889
articles that we're providing to you item one is a

3721
02:45:35,889 --> 02:45:37,440
wastewater article that

3722
02:45:37,440 --> 02:45:39,610
we had on our asset management system we were featured in

3723
02:45:39,610 --> 02:45:40,319
that particular

3724
02:45:40,319 --> 02:45:42,780
magazine and just wanted to bring that to your attention we

3725
02:45:42,780 --> 02:45:43,360
also had a

3726
02:45:43,360 --> 02:45:48,100
request from member Armantor for the utility dive article

3727
02:45:48,100 --> 02:45:48,719
so we've included

3728
02:45:48,719 --> 02:45:51,639
that in your backup for your review and I wanted to point

3729
02:45:51,639 --> 02:45:53,280
out that we've began

3730
02:45:53,280 --> 02:45:55,780
to include the future agenda items list for those of you

3731
02:45:55,780 --> 02:45:56,840
who are familiar with

3732
02:45:56,840 --> 02:45:59,879
the council agenda we have future items list that we also

3733
02:45:59,879 --> 02:46:01,159
publish for the council

3734
02:46:01,159 --> 02:46:03,190
of just kind of what we think is the tentative schedule for

3735
02:46:03,190 --> 02:46:03,840
some different

3736
02:46:03,840 --> 02:46:06,440
topics coming forward those items tend to move around

3737
02:46:06,440 --> 02:46:07,639
sometimes from for

3738
02:46:07,639 --> 02:46:10,860
different reasons but what we wanted to try to provide you

3739
02:46:10,860 --> 02:46:11,879
with some type of a

3740
02:46:11,879 --> 02:46:14,920
schedule of what we think items are going to be over the

3741
02:46:14,920 --> 02:46:15,840
next few months

3742
02:46:15,840 --> 02:46:18,100
obviously there will have to be some changes to that but we

3743
02:46:18,100 --> 02:46:18,680
thought that

3744
02:46:18,680 --> 02:46:22,180
would be helpful for you as you look at your your work here

3745
02:46:22,180 --> 02:46:23,280
on the board and

3746
02:46:23,280 --> 02:46:26,319
then finally we had the new business matrix some of the

3747
02:46:26,319 --> 02:46:27,399
items that have been

3748
02:46:27,399 --> 02:46:31,379
requested we've provided a couple of memos in that section

3749
02:46:31,379 --> 02:46:32,840
with just some

3750
02:46:32,840 --> 02:46:35,299
answers to some requests for information that you've had

3751
02:46:35,299 --> 02:46:36,280
over the last few weeks

3752
02:46:36,280 --> 02:46:38,959
and we'll continue to provide that information as as we get

3753
02:46:38,959 --> 02:46:39,680
those from the

3754
02:46:39,680 --> 02:46:43,629
board so that's all I have for you today unless there's any

3755
02:46:43,629 --> 02:46:44,000
questions

3756
02:46:44,000 --> 02:46:50,090
question question I assume this is a typo on the new

3757
02:46:50,090 --> 02:46:52,319
business action items

3758
02:46:52,319 --> 02:46:56,680
list on number 11 says we'll provide informal staff report

3759
02:46:56,680 --> 02:46:57,280
to be be on

3760
02:46:57,280 --> 02:47:01,479
October 17th and that means November 7th so that mean

3761
02:47:01,479 --> 02:47:04,840
November 7 yes yes you're

3762
02:47:04,840 --> 02:47:08,280
correct I believe that is a type of October 17th but just

3763
02:47:08,280 --> 02:47:09,000
wanted to yes I

3764
02:47:09,000 --> 02:47:13,899
don't believe we've provided that yet okay thank you thank

3765
02:47:13,899 --> 02:47:16,360
you okay you know

3766
02:47:16,360 --> 02:47:22,180
the questions about the ACM report oh I'll just say just a

3767
02:47:22,180 --> 02:47:22,840
comment I just want

3768
02:47:22,840 --> 02:47:25,760
to say congratulations to Denton Wastewater on that article

3769
02:47:25,760 --> 02:47:26,120
that was

3770
02:47:26,120 --> 02:47:29,879
really interesting and I encourage people to read that also

3771
02:47:29,879 --> 02:47:31,120
great stuff that

3772
02:47:31,120 --> 02:47:34,600
they're doing over there and yeah thanks

3773
02:47:34,600 --> 02:47:46,370
yes we'll recognize PS he's in the back there okay conclud

3774
02:47:46,370 --> 02:47:48,040
ing items if there's

3775
02:47:48,040 --> 02:47:55,280
any anything to add comments public recognition for going

3776
02:47:55,280 --> 02:47:56,319
forward future

3777
02:47:56,319 --> 02:48:00,700
agenda items we'd like to see on there on the agenda now's

3778
02:48:00,700 --> 02:48:02,680
the time to bring

3779
02:48:02,680 --> 02:48:09,159
those up I had several um number one I would like us to

3780
02:48:09,159 --> 02:48:11,680
have a discussion on

3781
02:48:11,680 --> 02:48:15,159
the possibility of holding our meetings in the evening

3782
02:48:15,159 --> 02:48:16,120
thank you I was gonna say

3783
02:48:16,120 --> 02:48:25,680
that oh yeah we can't decide but we'll put it yeah I think

3784
02:48:25,680 --> 02:48:26,440
the benefits of

3785
02:48:26,440 --> 02:48:32,479
that are obvious to the public and future members of pub my

3786
02:48:32,479 --> 02:48:33,440
second thing

3787
02:48:33,440 --> 02:48:36,620
and these are in no particular order but I'm reading off a

3788
02:48:36,620 --> 02:48:39,719
list that I made I was

3789
02:48:39,719 --> 02:48:48,079
wondering if staff if Todd if you or Brian could ask our DM

3790
02:48:48,079 --> 02:48:50,280
E lineman if they

3791
02:48:50,280 --> 02:48:54,440
if there's any interest in helping out in Puerto Rico like

3792
02:48:54,440 --> 02:48:55,600
they did with

3793
02:48:55,600 --> 02:49:00,120
Houston area many parts of Texas affected by the hurricane

3794
02:49:00,120 --> 02:49:02,840
and in Florida

3795
02:49:02,840 --> 02:49:06,959
doesn't that typically that request comes from Puerto Rico

3796
02:49:06,959 --> 02:49:08,280
that's that's

3797
02:49:08,280 --> 02:49:10,549
typically how it's done we've gotten requests from

3798
02:49:10,549 --> 02:49:12,079
different agencies I think

3799
02:49:12,079 --> 02:49:14,049
there's probably some logistical issues of getting

3800
02:49:14,049 --> 02:49:14,920
equipment there but we can

3801
02:49:14,920 --> 02:49:21,799
certainly yeah we couldn't bring our line truck and kind of

3802
02:49:21,799 --> 02:49:23,639
and a kind of

3803
02:49:23,639 --> 02:49:26,360
question packed into there was I was also curious if there

3804
02:49:26,360 --> 02:49:27,000
had been any

3805
02:49:27,000 --> 02:49:30,180
requests but but even if there hadn't I was wondering if

3806
02:49:30,180 --> 02:49:30,920
there was and

3807
02:49:30,920 --> 02:49:34,520
specifically an interest among the linemen just you know

3808
02:49:34,520 --> 02:49:35,719
just hearing them

3809
02:49:35,719 --> 02:49:39,010
talk about the work they did it obviously was it was such

3810
02:49:39,010 --> 02:49:39,879
hard work but

3811
02:49:39,879 --> 02:49:45,590
it was so really gratifying for them to be able to do that

3812
02:49:45,590 --> 02:49:48,040
and as one of the

3813
02:49:48,040 --> 02:49:52,370
presenters said at the council meeting last week that you

3814
02:49:52,370 --> 02:49:53,600
know when we get

3815
02:49:53,600 --> 02:49:57,079
someone else's back it also means that they have our back

3816
02:49:57,079 --> 02:49:58,440
and I know that

3817
02:49:58,440 --> 02:50:00,899
people are all over Denton are concerned you know many

3818
02:50:00,899 --> 02:50:02,159
people here have have ties

3819
02:50:02,159 --> 02:50:09,229
to Puerto Rico or the area so anyway and then the other my

3820
02:50:09,229 --> 02:50:13,920
other two issues that

3821
02:50:13,920 --> 02:50:18,299
I would like to see discussed in future both about billing

3822
02:50:18,299 --> 02:50:19,319
one I was approached

3823
02:50:19,319 --> 02:50:25,360
by a rate payer about it DME billing issue that I hadn't

3824
02:50:25,360 --> 02:50:27,440
been aware of and

3825
02:50:27,440 --> 02:50:33,260
she she told me that that she would prefer in terms of her

3826
02:50:33,260 --> 02:50:35,159
payment schedule

3827
02:50:35,159 --> 02:50:38,340
when she gets paid for work versus when her husband paid

3828
02:50:38,340 --> 02:50:39,440
gets work she would

3829
02:50:39,440 --> 02:50:43,649
prefer to get get billed at a certain date but when she

3830
02:50:43,649 --> 02:50:45,079
asked DME can you

3831
02:50:45,079 --> 02:50:49,600
switch my billing date she was told and I didn't have time

3832
02:50:49,600 --> 02:50:51,079
to guess for proof of

3833
02:50:51,079 --> 02:50:57,559
this this was literally in the grocery store but just just

3834
02:50:57,559 --> 02:50:59,719
yesterday but or the

3835
02:50:59,719 --> 02:51:03,670
day before yesterday but she was told that if you want to

3836
02:51:03,670 --> 02:51:04,319
switch your your

3837
02:51:04,319 --> 02:51:07,799
billing date you'll have to switch your neighborhood that

3838
02:51:07,799 --> 02:51:09,120
your neighborhood gets

3839
02:51:09,120 --> 02:51:14,889
built in this date so I know how you know how our customer

3840
02:51:14,889 --> 02:51:16,559
service is so eager as

3841
02:51:16,559 --> 02:51:20,590
we saw from the presentation to be flexible I was wondering

3842
02:51:20,590 --> 02:51:21,440
if this is

3843
02:51:21,440 --> 02:51:25,479
indeed the policy or if there was some misunderstanding and

3844
02:51:25,479 --> 02:51:27,159
and if it is indeed

3845
02:51:27,159 --> 02:51:30,399
the policy if there could be a change where we could have

3846
02:51:30,399 --> 02:51:31,620
customizable billing

3847
02:51:31,620 --> 02:51:35,219
due dates so anyway sorry that was so long but but that but

3848
02:51:35,219 --> 02:51:36,000
that was the issue

3849
02:51:36,000 --> 02:51:39,870
and I'm just assuming that it doesn't affect this just this

3850
02:51:39,870 --> 02:51:41,120
one person that it

3851
02:51:41,120 --> 02:51:48,739
affects more and then the final issues is about about

3852
02:51:48,739 --> 02:51:51,559
wastewater billing and this

3853
02:51:51,559 --> 02:51:54,549
is something else that I was not aware of until a rate

3854
02:51:54,549 --> 02:51:56,319
payer approached me about

3855
02:51:56,319 --> 02:52:00,120
it apparently because there there's a 30-day

3856
02:52:00,120 --> 02:52:08,239
grace period whereby you know if you don't pay your bill by

3857
02:52:08,239 --> 02:52:09,399
a certain amount

3858
02:52:09,399 --> 02:52:15,239
you get some sort of extra charge and this rate payer had a

3859
02:52:15,239 --> 02:52:16,920
question that I

3860
02:52:16,920 --> 02:52:21,600
thought was a good one and I want want to pose that if we

3861
02:52:21,600 --> 02:52:22,840
could see if there

3862
02:52:22,840 --> 02:52:27,739
could be a rule put in place whereby wastewater bills would

3863
02:52:27,739 --> 02:52:29,200
would not exceed

3864
02:52:29,200 --> 02:52:34,379
water usage so in other words because he missed the 30-day

3865
02:52:34,379 --> 02:52:35,639
grace period because I

3866
02:52:35,639 --> 02:52:37,709
think he was out of the country or something like that this

3867
02:52:37,709 --> 02:52:38,280
had happened

3868
02:52:38,280 --> 02:52:41,530
to him in the past it happened recently you know he ended

3869
02:52:41,530 --> 02:52:42,760
up having to pay for

3870
02:52:42,760 --> 02:52:50,030
water that he didn't use so I was just want just having a

3871
02:52:50,030 --> 02:52:51,440
some sort of work

3872
02:52:51,440 --> 02:52:57,600
session on how those how wastewater bills are determined

3873
02:52:57,600 --> 02:52:58,959
and what the

3874
02:52:58,959 --> 02:53:02,209
rationale was behind the grace period and how it could end

3875
02:53:02,209 --> 02:53:03,399
up a situation like

3876
02:53:03,399 --> 02:53:05,840
that

3877
02:53:09,840 --> 02:53:15,280
yep it's during the yeah yes do you want it yeah

3878
02:53:17,280 --> 02:53:22,989
oh yeah that's true that's true nevermind yes if I could

3879
02:53:22,989 --> 02:53:23,760
clarify there

3880
02:53:24,799 --> 02:53:27,729
there rules there were several questions that this board

3881
02:53:27,729 --> 02:53:28,680
had about some of the

3882
02:53:28,680 --> 02:53:31,139
credit and collections processes we also had a similar

3883
02:53:31,139 --> 02:53:32,040
discussion with the

3884
02:53:32,040 --> 02:53:33,770
council there were some questions that they had some of

3885
02:53:33,770 --> 02:53:34,479
those were about the

3886
02:53:34,479 --> 02:53:36,959
schedules I'll look at these questions that you've offered

3887
02:53:36,959 --> 02:53:37,760
here and try to bring

3888
02:53:37,760 --> 02:53:39,909
all that back and we can have the discussion at one time

3889
02:53:39,909 --> 02:53:41,040
excellent excellent

3890
02:53:41,040 --> 02:53:49,200
thank you so much okay all right anything else sir motion

3891
02:53:49,200 --> 02:53:50,399
to adjourn so

3892
02:53:50,399 --> 02:53:55,200
moved second second and a second all in favor say aye aye

3893
02:53:55,200 --> 02:53:57,120
any opposed same sign

3894
02:53:57,120 --> 02:53:59,680
thank you