WEBVTT

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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

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determinant of the outcome of the findings and the

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recommendations in the

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report so speaking of those price projections this is a

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graph of those

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we've also taken into account what brattle used when they

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had done a

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previous study for you so what we found was the brattle

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base case you can see

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goes quite high over time and that's something that we

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incorporated that into

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the numbers but that's something that we think is less

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likely for a couple of

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reasons one is that whenever we think it's important when

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somebody is

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projecting prices forward market information is very

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important and useful

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and the highest probability of where price is going to be

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tomorrow is where

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it is today so there's a lower probability of prices either

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rising or

00:12:17.960 --> 00:12:21.370
falling so a we think it's important when using price

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projections to use what

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the market is telling us as an expectation of where the

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market is going

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to go forward so we've incorporated that into the base case

00:12:31.289 --> 00:12:32.279
that's the red line

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here that's our base case gas is essentially where the

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market is trading

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now for going forward in the time the blue line is our high

00:12:42.899 --> 00:12:44.360
gas case and you

00:12:44.360 --> 00:12:50.070
notice we had a question yes yes but as more and more coal

00:12:50.070 --> 00:12:50.960
comes off and we

00:12:50.960 --> 00:12:55.009
start using more and more natural gas for generation don't

00:12:55.009 --> 00:12:55.759
you believe that

00:12:55.759 --> 00:13:00.330
those prices will start increasing that is reflected in our

00:13:00.330 --> 00:13:01.759
blue line okay and

00:13:01.759 --> 00:13:04.940
so there are two factors in that one is there are other

00:13:04.940 --> 00:13:06.360
factors in addition to

00:13:06.360 --> 00:13:10.679
what you mentioned LNG exports are going to pick up we're

00:13:10.679 --> 00:13:11.879
seeing lower drilling

00:13:11.879 --> 00:13:18.240
rigs so commodity markets go through these cycles of excess

00:13:18.240 --> 00:13:19.000
production and

00:13:19.000 --> 00:13:22.179
shortages of production natural gas is set up for a

00:13:22.179 --> 00:13:24.039
shortage we haven't seen a

00:13:24.039 --> 00:13:27.970
tremendous price rise yet but yes if you get retirements of

00:13:27.970 --> 00:13:29.279
coal additional

00:13:29.279 --> 00:13:33.230
demand for gas from for generation additional demand from

00:13:33.230 --> 00:13:34.120
gas from LNG

00:13:34.120 --> 00:13:39.059
that's what we've modeled in this blue curve here the thing

00:13:39.059 --> 00:13:40.639
is the the world

00:13:40.639 --> 00:13:45.519
changed in 2008 2009 with shale so there's a tremendous

00:13:45.519 --> 00:13:46.279
overhang of

00:13:46.279 --> 00:13:50.750
potential production the cost of drilling has gone down so

00:13:50.750 --> 00:13:51.759
there's a

00:13:51.759 --> 00:13:54.940
substantial overhang of potential production so if you do

00:13:54.940 --> 00:13:55.759
get a a short

00:13:55.759 --> 00:13:59.159
spike and what I mean by short might be a couple of years

00:13:59.159 --> 00:14:00.639
you're going to attract

00:14:00.639 --> 00:14:03.820
huge amounts of additional gas production this is not

00:14:03.820 --> 00:14:04.600
unlike what we

00:14:04.600 --> 00:14:08.860
saw let me go back here if you look over here that we've

00:14:08.860 --> 00:14:10.639
kind of modeled this on

00:14:10.639 --> 00:14:14.799
what history has done before back in the 2000 time frame

00:14:14.799 --> 00:14:15.720
when you got a

00:14:15.720 --> 00:14:19.120
tremendous amount of additional demand and lowered supply

00:14:19.120 --> 00:14:21.080
you got a few year

00:14:21.080 --> 00:14:24.379
substantial bump in gas but what did it do it tended to the

00:14:24.379 --> 00:14:25.360
go back and revert

00:14:25.360 --> 00:14:28.940
back to the we've taken that into account thank you that's

00:14:28.940 --> 00:14:29.320
a that was a

00:14:29.320 --> 00:14:32.320
good question that set up what I was going to describe on

00:14:32.320 --> 00:14:33.600
that yes yeah let

00:14:33.600 --> 00:14:36.639
me just add one thing if you'll notice that the last two

00:14:36.639 --> 00:14:37.559
years the average

00:14:37.559 --> 00:14:40.960
price has been two dollars and fifty cents so all these

00:14:40.960 --> 00:14:42.440
show higher

00:14:42.440 --> 00:14:49.000
expectations right right yes so I just wanted to comment

00:14:49.000 --> 00:14:49.919
that the difference is

00:14:49.919 --> 00:14:56.679
striking between your projections and the battle

00:14:56.679 --> 00:14:58.840
projections I know you can't

00:14:58.840 --> 00:15:02.669
speak for a bridle but it seemed that based on what you

00:15:02.669 --> 00:15:04.320
said and it makes

00:15:04.320 --> 00:15:08.330
sense to me that braddle somehow didn't seem to have fact

00:15:08.330 --> 00:15:10.840
ored in the market so I

00:15:10.840 --> 00:15:14.480
know you can't speak for them but what since since you seem

00:15:14.480 --> 00:15:15.639
to be making that

00:15:15.639 --> 00:15:21.399
assumption about what about them what do you think you know

00:15:21.399 --> 00:15:22.720
how how do you

00:15:22.720 --> 00:15:27.379
explain that disparity on their end not speaking for them I

00:15:27.379 --> 00:15:27.799
don't know what in

00:15:27.799 --> 00:15:30.720
the world could they have been yeah I don't know there

00:15:30.720 --> 00:15:31.720
there are others that

00:15:31.720 --> 00:15:36.039
could have similar projections there are I would say this

00:15:36.039 --> 00:15:37.480
anybody that is

00:15:37.480 --> 00:15:40.399
forecasting the price of gas has a very high likelihood of

00:15:40.399 --> 00:15:42.159
being wrong so it's

00:15:42.159 --> 00:15:45.539
just a hard thing to do and we've seen optimistic forecast

00:15:45.539 --> 00:15:46.679
from oil from others

00:15:46.679 --> 00:15:51.340
as well that don't come true this just that's a difficult

00:15:51.340 --> 00:15:52.200
thing to do now if

00:15:52.200 --> 00:15:56.070
you notice that their low case which is the more purple

00:15:56.070 --> 00:15:57.679
line is much closer to

00:15:57.679 --> 00:16:01.600
where the market is right now so just from our perspective

00:16:01.600 --> 00:16:02.399
we think that's

00:16:02.399 --> 00:16:05.779
pretty reasonable and we did factor in what could be a rise

00:16:05.779 --> 00:16:07.039
in natural gas but

00:16:07.039 --> 00:16:10.840
given just the revolutionary nature of shale as a potential

00:16:10.840 --> 00:16:12.120
production source

00:16:12.120 --> 00:16:16.519
we just didn't see that being sustainable and given the the

00:16:16.519 --> 00:16:19.720
characteristics of the commodity over decades that tends to

00:16:19.720 --> 00:16:20.679
revert to the mean

00:16:20.679 --> 00:16:25.039
we assumed it was a safer course of action to assume revert

00:16:25.039 --> 00:16:25.559
to the mean and

00:16:25.559 --> 00:16:29.789
the importance of this is these forecasts are so much of a

00:16:29.789 --> 00:16:30.559
driver of

00:16:30.559 --> 00:16:33.259
what the decks gonna do if you change your forecast you

00:16:33.259 --> 00:16:34.279
change the deck out

00:16:34.279 --> 00:16:37.049
there's just no way around absolutely thank you that makes

00:16:37.049 --> 00:16:37.879
a lot of sense on

00:16:37.879 --> 00:16:42.539
your blue line then you're projecting it going up and then

00:16:42.539 --> 00:16:44.320
you see a change in

00:16:44.320 --> 00:16:47.330
going back to the median and that's why you're above br

00:16:47.330 --> 00:16:48.679
attle but then you come

00:16:48.679 --> 00:16:52.379
back down because as time has shown yeah you go up and you

00:16:52.379 --> 00:16:53.399
come back to median

00:16:53.399 --> 00:16:57.059
I want to make sure I understood that yeah thank you so

00:16:57.059 --> 00:16:57.679
these are the

00:16:57.679 --> 00:17:03.029
forecasts that we used in the modeling for the process now

00:17:03.029 --> 00:17:04.279
I will say this

00:17:04.279 --> 00:17:08.990
you'll see this in just a moment renewables offer of a cost

00:17:08.990 --> 00:17:09.960
advantage

00:17:09.960 --> 00:17:14.039
right now in almost any gas case you'd have to have gas

00:17:14.039 --> 00:17:15.599
prices be a lot lower

00:17:15.599 --> 00:17:18.779
than they are now to even make renewables be sort of a 50/

00:17:18.779 --> 00:17:19.799
50 proposition

00:17:19.799 --> 00:17:24.309
so the gas price is not going to those projections none of

00:17:24.309 --> 00:17:25.440
those projections

00:17:25.440 --> 00:17:27.619
would affect what we're going to recommend in terms of the

00:17:27.619 --> 00:17:28.240
additions and

00:17:28.240 --> 00:17:33.319
the best fit assets for your to meet your renewal goals so

00:17:33.319 --> 00:17:34.319
turning to the

00:17:34.319 --> 00:17:38.009
evaluation factors the two main evaluation factors the two

00:17:38.009 --> 00:17:38.359
main

00:17:38.359 --> 00:17:41.400
objectives that we used in developing this were to achieve

00:17:41.400 --> 00:17:42.480
a least cost supply

00:17:42.480 --> 00:17:45.769
and to reduce these risk factors so again we wanted to

00:17:45.769 --> 00:17:46.799
match resource

00:17:46.799 --> 00:17:50.390
production profiles to your daily load and seasonal load

00:17:50.390 --> 00:17:51.799
profiles taking into

00:17:51.799 --> 00:17:55.099
account the assets that you already have for example you've

00:17:55.099 --> 00:17:56.039
got Santa Rita wind

00:17:56.039 --> 00:17:59.440
coming in that has a very particular West Texas type of

00:17:59.440 --> 00:18:00.720
profile so we wanted

00:18:00.720 --> 00:18:05.220
to find resources that were good fits and offsets to divers

00:18:05.220 --> 00:18:06.400
ify your portfolio

00:18:06.400 --> 00:18:09.670
we wanted to balance the need for selling excess supply and

00:18:09.670 --> 00:18:10.480
then purchasing

00:18:10.480 --> 00:18:13.730
shortages as much as possible and we took into account the

00:18:13.730 --> 00:18:14.559
quality of each

00:18:14.559 --> 00:18:17.740
resources production because different renewable resources

00:18:17.740 --> 00:18:18.519
have different

00:18:18.519 --> 00:18:22.269
quality factors and you'll see that in just a moment access

00:18:22.269 --> 00:18:23.319
to transmission air

00:18:23.319 --> 00:18:26.299
connections were important and then minimizing transmission

00:18:26.299 --> 00:18:26.960
issues with a

00:18:26.960 --> 00:18:30.339
particular focus on avoiding congestion costs so that will

00:18:30.339 --> 00:18:31.559
factor into the

00:18:31.559 --> 00:18:34.200
citing recommendations and the location recommendations

00:18:34.200 --> 00:18:35.880
that we have and then

00:18:35.880 --> 00:18:38.599
one more data input these are the dental load scenarios

00:18:38.599 --> 00:18:39.839
that we took into account

00:18:39.839 --> 00:18:42.759
in the modeling and the planning a slightly negative growth

00:18:42.759 --> 00:18:43.480
rate a mean

00:18:43.480 --> 00:18:46.660
annual growth of 1.6 percent and a high annual growth case

00:18:46.660 --> 00:18:50.680
of 3 percent then we

00:18:50.680 --> 00:18:53.140
perform the supply gap analysis we need to figure out first

00:18:53.140 --> 00:18:53.799
what do you need

00:18:53.799 --> 00:18:57.400
what do you have what's your load and then what do you need

00:18:57.400 --> 00:18:59.440
just as a reminder

00:18:59.440 --> 00:19:02.910
here that first sentence on the slide when we talk about

00:19:02.910 --> 00:19:04.319
renewable percentages

00:19:04.319 --> 00:19:06.609
the way we define that because there are different ways to

00:19:06.609 --> 00:19:07.720
define that the way we

00:19:07.720 --> 00:19:12.049
define that is we just we think an annual time frame is the

00:19:12.049 --> 00:19:13.519
best measurement

00:19:13.519 --> 00:19:18.869
period because then that doesn't get colored by seasonality

00:19:18.869 --> 00:19:19.359
so if we take

00:19:19.359 --> 00:19:23.289
annual load and then we take measured by megawatt hours and

00:19:23.289 --> 00:19:24.240
we take the total

00:19:24.240 --> 00:19:27.539
megawatt hours of resources that's what we're matching up

00:19:27.539 --> 00:19:28.279
and we're talking

00:19:28.279 --> 00:19:32.230
about 70% 100% those are the figures in the frame of

00:19:32.230 --> 00:19:34.079
reference we're using for

00:19:34.079 --> 00:19:37.720
that so this the next part of the slide shows your current

00:19:37.720 --> 00:19:38.960
supply portfolio

00:19:38.960 --> 00:19:43.309
you've got a little bit of landfill generation Santa Rita

00:19:43.309 --> 00:19:45.279
wind coming next

00:19:45.279 --> 00:19:50.009
year bluebell solar and then whitetail we'll talk about wh

00:19:50.009 --> 00:19:50.640
itetail in just a

00:19:50.640 --> 00:19:53.819
moment but you're gonna see some annual production figures

00:19:53.819 --> 00:19:54.880
and just for you all

00:19:54.880 --> 00:19:57.519
to know if some of you are familiar with this this annual

00:19:57.519 --> 00:19:58.839
production figure has

00:19:58.839 --> 00:20:04.609
been adjusted a lot of the a lot of the production values

00:20:04.609 --> 00:20:06.680
that a developer will

00:20:06.680 --> 00:20:11.769
tell you tend to be overstated that's just a natural aspect

00:20:11.769 --> 00:20:13.339
we we we use the

00:20:13.339 --> 00:20:16.259
analogy of when you go into the showroom buy a car the MPG

00:20:16.259 --> 00:20:16.900
that's on the

00:20:16.900 --> 00:20:19.650
stickers never the MPG you get an actual driving so there

00:20:19.650 --> 00:20:20.799
are various factors

00:20:20.799 --> 00:20:25.559
that can cause developers to sort of cherry pick and spin

00:20:25.559 --> 00:20:26.400
so we've taken

00:20:26.400 --> 00:20:29.990
into account our experience with the actual production of

00:20:29.990 --> 00:20:31.079
say wind resources

00:20:31.079 --> 00:20:33.660
versus what they've been offered at and we've done a

00:20:33.660 --> 00:20:34.759
reduction here in the

00:20:34.759 --> 00:20:38.230
annual production of megawatt hours for Santa Rita so just

00:20:38.230 --> 00:20:39.759
to conclude on this

00:20:39.759 --> 00:20:42.730
slide Denton's annual load for 2019 is one and a half

00:20:42.730 --> 00:20:43.799
million megawatt hours to

00:20:43.799 --> 00:20:46.380
give you a sense of the total that's the target we're

00:20:46.380 --> 00:20:48.000
looking at for 2019 in

00:20:48.000 --> 00:20:51.720
terms of our 70 to 100 percent goal counting whitetails a

00:20:51.720 --> 00:20:52.480
renewable resource

00:20:52.480 --> 00:20:55.230
leaves dent in at approximately 61 percent renewable

00:20:55.230 --> 00:20:56.920
without counting it it

00:20:56.920 --> 00:20:59.839
results in approximately 44 percent renewable and why is

00:20:59.839 --> 00:21:00.640
this important well

00:21:00.640 --> 00:21:03.259
it determines how you want to count that this is one of the

00:21:03.259 --> 00:21:04.240
decisions that needs

00:21:04.240 --> 00:21:06.740
to be made how you're going to count that to decide how

00:21:06.740 --> 00:21:08.319
much renewable assets

00:21:08.319 --> 00:21:13.269
you need and just as a reminder whitetail from what we the

00:21:13.269 --> 00:21:13.799
information we

00:21:13.799 --> 00:21:17.180
were given was originally a win deal it was converted at

00:21:17.180 --> 00:21:18.759
some point into a 30

00:21:18.759 --> 00:21:24.799
megawatt around-the-clock deal with Rex added given that

00:21:24.799 --> 00:21:26.960
the wreck market in

00:21:26.960 --> 00:21:30.259
Texas is really not that viable anymore because it was

00:21:30.259 --> 00:21:31.880
designed as an incentive

00:21:31.880 --> 00:21:34.369
for additional renewable production and those standards

00:21:34.369 --> 00:21:35.200
were far exceeded

00:21:35.200 --> 00:21:38.130
simply just through market forces there really is no

00:21:38.130 --> 00:21:39.759
residual value to those so

00:21:39.759 --> 00:21:42.509
we would just our recommendation would be would not to

00:21:42.509 --> 00:21:43.759
count that as renewable

00:21:43.759 --> 00:21:47.059
but that's a decision that the city needs to make that we

00:21:47.059 --> 00:21:47.960
can't make on your

00:21:47.960 --> 00:21:51.559
behalf so last bullet depending upon the classification of

00:21:51.559 --> 00:21:52.440
white pale of white

00:21:52.440 --> 00:21:55.359
tail didn't needs between 9 and 26 percent in additional

00:21:55.359 --> 00:21:55.640
renewable

00:21:55.640 --> 00:21:59.799
resources to meet the minimum goal 70% or between 39% and

00:21:59.799 --> 00:22:02.200
56% to meet the

00:22:02.200 --> 00:22:08.630
target of 100% so here is a summary high-level summary of

00:22:08.630 --> 00:22:09.359
some of the

00:22:09.359 --> 00:22:12.539
resource prices and delivery points that have been offered

00:22:12.539 --> 00:22:13.640
to you in your recent

00:22:13.640 --> 00:22:17.490
RFP so you've got some RFP results back in early October

00:22:17.490 --> 00:22:18.680
and this gives you a

00:22:18.680 --> 00:22:22.160
sense of the pricing so we just group these at a high level

00:22:22.160 --> 00:22:23.160
the bidders are

00:22:23.160 --> 00:22:26.549
confidential you'll see some more specific offers in one of

00:22:26.549 --> 00:22:26.839
the last

00:22:26.839 --> 00:22:30.130
slides when we really start honing in on some specifics

00:22:30.130 --> 00:22:31.200
that we think are

00:22:31.200 --> 00:22:34.759
attractive for additions to your portfolio but this just

00:22:34.759 --> 00:22:35.440
gives you a sense

00:22:35.440 --> 00:22:39.819
of location and type so solar you're getting prices at the

00:22:39.819 --> 00:22:40.599
delivery node

00:22:40.599 --> 00:22:43.869
versus prices at the North Hub West Texas coastal wind

00:22:43.869 --> 00:22:45.759
North Texas South Texas and

00:22:45.759 --> 00:22:49.700
panhandle wind are all there you can see these prices are

00:22:49.700 --> 00:22:50.980
quite attractive you

00:22:50.980 --> 00:22:55.720
got some wind prices below $20 solar prices in the mid-20s

00:22:55.720 --> 00:22:57.359
so these prices

00:22:57.359 --> 00:23:00.289
were used to estimate the cost of supply in our portfolio

00:23:00.289 --> 00:23:02.119
modeling and these have

00:23:02.119 --> 00:23:04.680
been further adjusted to the production profiles to

00:23:04.680 --> 00:23:06.640
calculate effective costs so

00:23:06.640 --> 00:23:09.819
the second bullet there explains that to an extent what we

00:23:09.819 --> 00:23:11.160
mean by effective cost

00:23:11.160 --> 00:23:16.869
is this your if you purchase a renewable resource you need

00:23:16.869 --> 00:23:18.079
to know the production

00:23:18.079 --> 00:23:21.619
profile and you need to know which hours of the day or

00:23:21.619 --> 00:23:23.279
which times of use that

00:23:23.279 --> 00:23:30.329
asset is actually producing so to compare it to a an on-pe

00:23:30.329 --> 00:23:31.680
ak offer from

00:23:31.680 --> 00:23:35.019
the market or a round-the-clock offer from the market those

00:23:35.019 --> 00:23:35.920
profiles don't

00:23:35.920 --> 00:23:39.599
always match up so we have to make an economic adjustment

00:23:39.599 --> 00:23:40.839
because a renewable

00:23:40.839 --> 00:23:44.500
resource may not be completely comparable to a market

00:23:44.500 --> 00:23:45.640
purchase because

00:23:45.640 --> 00:23:48.569
it's not going to produce all day at the same rate so a

00:23:48.569 --> 00:23:50.480
renewable resource may be

00:23:50.480 --> 00:23:53.400
cheaper but you might have to make up for those hours when

00:23:53.400 --> 00:23:54.400
it's not producing

00:23:54.400 --> 00:23:57.799
so we've done an economic adjustment to sort of put it on a

00:23:57.799 --> 00:23:59.079
kind of an apples to

00:23:59.079 --> 00:24:02.000
apples basis I call it green apples versus red apples and

00:24:02.000 --> 00:24:03.279
so forth so is an

00:24:03.279 --> 00:24:06.619
example there solar producers during the higher priced on

00:24:06.619 --> 00:24:07.799
peak hours when wind

00:24:07.799 --> 00:24:10.720
production typically drops off this a buyer would need at

00:24:10.720 --> 00:24:11.859
least a 20% lower

00:24:11.859 --> 00:24:16.119
price for West Texas wind to compete with a solar resource

00:24:16.119 --> 00:24:18.039
so these prices have

00:24:18.039 --> 00:24:23.089
been adjusted to calculate effective costs also in terms of

00:24:23.089 --> 00:24:25.000
our assembly of

00:24:25.000 --> 00:24:27.630
the recommendations for your resource plan we've also had

00:24:27.630 --> 00:24:28.559
to take into account

00:24:28.559 --> 00:24:32.529
that certain resources need to be placed in your portfolio

00:24:32.529 --> 00:24:34.079
to diversify against

00:24:34.079 --> 00:24:37.059
your load shape so for example dent will start receiving a

00:24:37.059 --> 00:24:38.279
large West Texas wind

00:24:38.279 --> 00:24:42.559
supply in the spring of 2018 and a solar resource in 2019

00:24:42.559 --> 00:24:44.400
so we don't want to

00:24:44.400 --> 00:24:47.319
recommend additional West Texas wind because that could put

00:24:47.319 --> 00:24:48.079
you with too much

00:24:48.079 --> 00:24:52.740
of that particular profile in your portfolio so let's talk

00:24:52.740 --> 00:24:53.839
now about least

00:24:53.839 --> 00:25:00.319
cost we've done a couple of approaches here the upper table

00:25:00.319 --> 00:25:01.599
I'll go through the

00:25:01.599 --> 00:25:06.009
columns the left-hand column shows you approximate annual

00:25:06.009 --> 00:25:07.019
prices right now in

00:25:07.019 --> 00:25:10.799
Urquhart about $31 for megawatt hour on peak and $27 around

00:25:10.799 --> 00:25:12.400
the clock

00:25:12.400 --> 00:25:16.430
representative offers from your RFP show that solar could

00:25:16.430 --> 00:25:18.119
save you about $8 a

00:25:18.119 --> 00:25:21.319
megawatt hour on peak and wind around five and a half

00:25:21.319 --> 00:25:22.599
dollars per megawatt hour

00:25:22.599 --> 00:25:28.369
so this gives us a renewable equivalent price of $23 and 21

00:25:28.369 --> 00:25:28.920
50

00:25:28.920 --> 00:25:33.670
correspondingly for those assets if we look at the market

00:25:33.670 --> 00:25:35.039
heat rates for on

00:25:35.039 --> 00:25:38.220
peak periods and the market heat rates for around the clock

00:25:38.220 --> 00:25:40.880
and then we convert

00:25:40.880 --> 00:25:43.920
those into their natural gas equivalent we get an

00:25:43.920 --> 00:25:45.720
approximate price or a value

00:25:45.720 --> 00:25:50.630
of around $2.20 per MVTU so what this is saying is that we

00:25:50.630 --> 00:25:51.480
look at the

00:25:51.480 --> 00:25:55.039
discount that those renewable assets offer versus the

00:25:55.039 --> 00:25:56.400
market and we look at

00:25:56.400 --> 00:25:58.619
the market heat rate and convert that into what the

00:25:58.619 --> 00:25:59.839
equivalent gas price would

00:25:59.839 --> 00:26:06.509
be to get that same value then we're looking at a $2.20 per

00:26:06.509 --> 00:26:07.519
MVTU

00:26:07.519 --> 00:26:11.200
gas price equivalent excuse me for these renewable assets

00:26:11.200 --> 00:26:12.319
with a gas price in the

00:26:12.319 --> 00:26:16.509
market a little under three dollars now so this is just one

00:26:16.509 --> 00:26:18.240
perspective one way

00:26:18.240 --> 00:26:21.930
to look at what least cost means these renewable assets are

00:26:21.930 --> 00:26:23.039
offering values

00:26:23.039 --> 00:26:26.769
that are below the price of market power and it's important

00:26:26.769 --> 00:26:28.880
to remember that gas

00:26:28.880 --> 00:26:32.599
is the price setter in ERCOT gas is frequently on the

00:26:32.599 --> 00:26:34.119
margin so we were

00:26:34.119 --> 00:26:37.299
always oriented around gas when we're thinking about the

00:26:37.299 --> 00:26:38.599
price of the power in

00:26:38.599 --> 00:26:43.039
ERCOT thus we can calculate these natural gas equivalency

00:26:43.039 --> 00:26:43.480
so that gives

00:26:43.480 --> 00:26:46.220
you a sense when we say least cost they are least cost it's

00:26:46.220 --> 00:26:47.599
as if you're able to

00:26:47.599 --> 00:26:51.829
buy a gas deal below the market the lower table gives you a

00:26:51.829 --> 00:26:52.960
little bit of a

00:26:52.960 --> 00:26:56.130
different perspective it just shows you how the market is

00:26:56.130 --> 00:26:57.200
so sensitive to gas

00:26:57.200 --> 00:27:01.400
and how the potential benefits of Denton adding renewable

00:27:01.400 --> 00:27:03.079
assets to your portfolio

00:27:03.079 --> 00:27:06.430
is dependent upon the price of gas if the price of gas goes

00:27:06.430 --> 00:27:07.440
a lot higher say

00:27:07.440 --> 00:27:11.650
to five dollars to the lowest row on the table you're gonna

00:27:11.650 --> 00:27:13.680
have power prices in

00:27:13.680 --> 00:27:17.529
the upper forty dollar range and that would give you a

00:27:17.529 --> 00:27:19.599
benefit of over $25 a

00:27:19.599 --> 00:27:22.920
megawatt hour so in other words if you add renewable

00:27:22.920 --> 00:27:24.160
resources to your portfolio

00:27:24.160 --> 00:27:27.099
and gas prices rise you're gonna have a portfolio cost it's

00:27:27.099 --> 00:27:28.079
much lower than the

00:27:28.079 --> 00:27:31.119
market because of the lower cost of renewables that you

00:27:31.119 --> 00:27:32.200
added but if gas

00:27:32.200 --> 00:27:35.480
prices fall to two dollars that's going to be above the

00:27:35.480 --> 00:27:36.640
price of your equivalent

00:27:36.640 --> 00:27:39.819
purchase and your purchase would be above the market so

00:27:39.819 --> 00:27:41.220
again as we said

00:27:41.220 --> 00:27:44.140
before it's so dependent upon where gases are going to go

00:27:44.140 --> 00:27:45.000
what your outlook

00:27:45.000 --> 00:27:48.250
for gas is and the outcome of natural gas in the market to

00:27:48.250 --> 00:27:49.279
determine what

00:27:49.279 --> 00:27:54.240
market prices are yes if you notice this is the same sort

00:27:54.240 --> 00:27:55.599
of methodology that

00:27:55.599 --> 00:27:59.440
Bradley used in their report basically if you have higher

00:27:59.440 --> 00:28:01.279
gas prices and the

00:28:01.279 --> 00:28:06.599
attendant heat rates they're produced at you you go to the

00:28:06.599 --> 00:28:08.319
right column you

00:28:08.319 --> 00:28:14.079
produce more return or more margin but notice this at three

00:28:14.079 --> 00:28:15.440
dollars the margin

00:28:15.440 --> 00:28:23.059
is 835 at five dollars which is an increase of what 67

00:28:23.059 --> 00:28:24.160
percent or something

00:28:24.160 --> 00:28:30.680
like that the margin is almost 26 which is 300 percent

00:28:30.680 --> 00:28:33.079
right so it's levered in

00:28:33.079 --> 00:28:38.019
other words the higher the gas price much more you know

00:28:38.019 --> 00:28:40.119
much more return from

00:28:40.119 --> 00:28:45.490
the fixed price renewables and that's good if gas prices go

00:28:45.490 --> 00:28:46.240
up everything's

00:28:46.240 --> 00:28:50.710
great for Denton on a high renewable but what if they don't

00:28:50.710 --> 00:28:52.039
go up so much and

00:28:52.039 --> 00:28:54.750
what if they go down if they go down actually you see the

00:28:54.750 --> 00:28:55.799
return that's two

00:28:55.799 --> 00:28:59.289
dollar gas but that's kind of remote but things can go down

00:28:59.289 --> 00:29:00.440
just as well as they

00:29:00.440 --> 00:29:04.339
can go up and you know you're just flat but that's also a

00:29:04.339 --> 00:29:05.680
good thing you know

00:29:05.680 --> 00:29:09.200
your return is negative one dollar but that's pretty small

00:29:09.200 --> 00:29:10.880
loss but that's a

00:29:10.880 --> 00:29:15.680
loss but it's a small loss so you know under this plan

00:29:15.680 --> 00:29:18.279
higher gas prices equate

00:29:18.279 --> 00:29:21.720
with a better performance that's also true for the deck but

00:29:21.720 --> 00:29:22.519
it's particularly

00:29:22.519 --> 00:29:25.740
true because almost all your return under this plan and

00:29:25.740 --> 00:29:26.880
under Brattle and

00:29:26.880 --> 00:29:32.720
both ours it depends on the renewables making return not

00:29:32.720 --> 00:29:34.680
the deck

00:29:38.319 --> 00:29:40.000
I won't spend too much time on this you've already seen

00:29:40.000 --> 00:29:41.640
this I think the

00:29:41.640 --> 00:29:44.569
last time we were here but just to make a few key points

00:29:44.569 --> 00:29:46.640
this is an ERCOT graph

00:29:46.640 --> 00:29:50.589
of the production profile of various renewable resources

00:29:50.589 --> 00:29:52.200
the red is coastal

00:29:52.200 --> 00:29:57.259
wind the purple is solar the blue wave-shaped line at the

00:29:57.259 --> 00:29:58.680
top is typical

00:29:58.680 --> 00:30:04.089
load and so this shows you say for a summer day what the

00:30:04.089 --> 00:30:06.000
type of production

00:30:06.000 --> 00:30:09.319
profiles you get versus the load profile so this is one of

00:30:09.319 --> 00:30:10.720
the key drivers of the

00:30:10.720 --> 00:30:15.460
resource plan is selecting assets of the right type and

00:30:15.460 --> 00:30:17.480
with the right quantity

00:30:17.480 --> 00:30:22.269
to achieve a diversified consistent production from your

00:30:22.269 --> 00:30:23.680
resource portfolio

00:30:23.680 --> 00:30:27.609
so West Texas wind is the worst match against load solar

00:30:27.609 --> 00:30:29.000
and coastal offer the

00:30:29.000 --> 00:30:32.529
best on-peak match against load and that also offers an

00:30:32.529 --> 00:30:34.160
advantage because it can

00:30:34.160 --> 00:30:37.700
displace purchases that you need to make to supplement your

00:30:37.700 --> 00:30:38.279
on-peak

00:30:38.279 --> 00:30:42.329
requirements during those most expensive hours coastal wind

00:30:42.329 --> 00:30:42.960
is at a low point

00:30:42.960 --> 00:30:46.650
doing a lower price a low production amount during lower

00:30:46.650 --> 00:30:47.799
priced hours so

00:30:47.799 --> 00:30:51.289
that's offers a benefit of producing less when the market

00:30:51.289 --> 00:30:52.440
value isn't there

00:30:52.440 --> 00:30:55.930
and so coastal wind and solar just in summary those are

00:30:55.930 --> 00:30:57.240
very attractive they

00:30:57.240 --> 00:31:00.420
offer low prices the production profiles are a better fit

00:31:00.420 --> 00:31:01.599
for Denton's load and

00:31:01.599 --> 00:31:05.200
they're a better complement to Denton's existing renewable

00:31:05.200 --> 00:31:06.559
resources such as

00:31:06.559 --> 00:31:10.819
Santa Rita so that's foreshadowing of where we're going to

00:31:10.819 --> 00:31:11.720
go in terms of the

00:31:11.720 --> 00:31:15.670
recommendations here you've also seen this chart in the

00:31:15.670 --> 00:31:17.799
next one just a couple

00:31:17.799 --> 00:31:20.980
of points we want to make and not spend too much time on

00:31:20.980 --> 00:31:22.960
this graph when we were

00:31:22.960 --> 00:31:26.519
here before just as a reminder what you're looking at the

00:31:26.519 --> 00:31:27.640
horizontal scale

00:31:27.640 --> 00:31:33.680
is the 24 hours across the day the vertical scale is is in

00:31:33.680 --> 00:31:36.359
megawatts the

00:31:36.359 --> 00:31:40.519
wave shape line across the top is load and then we have

00:31:40.519 --> 00:31:42.480
various types of assets

00:31:42.480 --> 00:31:47.670
that are filling the portfolio so this shows green and

00:31:47.670 --> 00:31:48.880
solar which would be

00:31:48.880 --> 00:31:53.160
producing during the middle of the day we've got wind which

00:31:53.160 --> 00:31:54.359
would be producing

00:31:54.359 --> 00:31:58.079
at higher and off peak hours and lower going on peak hours

00:31:58.079 --> 00:32:00.119
the purple bars here

00:32:00.119 --> 00:32:03.720
represent market purchases that would be necessary to fill

00:32:03.720 --> 00:32:04.839
the gaps to balance

00:32:04.839 --> 00:32:09.049
your supply requirements and then the blue bars are

00:32:09.049 --> 00:32:10.839
representative of when the

00:32:10.839 --> 00:32:14.019
deck would run so as you can see there are times of day

00:32:14.019 --> 00:32:15.119
here where there's

00:32:15.119 --> 00:32:18.039
excess production say from the deck this can be sold into

00:32:18.039 --> 00:32:19.200
the market to produce

00:32:19.200 --> 00:32:23.849
revenue there are times of day where market purchases are

00:32:23.849 --> 00:32:24.960
necessary to

00:32:24.960 --> 00:32:28.859
balance the portfolio so the takeaways here are seasonally

00:32:28.859 --> 00:32:30.000
low wind output would

00:32:30.000 --> 00:32:33.380
necessitate market purchases during off-peak hours and the

00:32:33.380 --> 00:32:34.319
combination of

00:32:34.319 --> 00:32:37.599
solar production and deck production could cause an excess

00:32:37.599 --> 00:32:39.279
supply and that

00:32:39.279 --> 00:32:42.779
would necessitate market sales during those higher priced

00:32:42.779 --> 00:32:44.160
hours if we then

00:32:44.160 --> 00:32:47.160
look at another period of the year this is a seasonal

00:32:47.160 --> 00:32:49.119
spring period you've got a

00:32:49.119 --> 00:32:52.579
different view here you've got a high wind season you can

00:32:52.579 --> 00:32:54.119
see that the wind at

00:32:54.119 --> 00:32:57.160
times is producing more than the load so there would be

00:32:57.160 --> 00:32:58.440
sales of excess wind

00:32:58.440 --> 00:33:04.170
capacity the deck is less likely to run your solar output

00:33:04.170 --> 00:33:05.160
would be not

00:33:05.160 --> 00:33:07.769
necessarily minimal but it wouldn't be nearly as much as

00:33:07.769 --> 00:33:08.839
you would have during

00:33:08.839 --> 00:33:12.509
the summer so you get a different profile so the takeaways

00:33:12.509 --> 00:33:13.400
from this are

00:33:13.400 --> 00:33:18.430
that part of the best fit in terms of the type of renewable

00:33:18.430 --> 00:33:19.680
asset and the

00:33:19.680 --> 00:33:23.640
quantity of that asset is to give you a portfolio that

00:33:23.640 --> 00:33:25.519
minimizes the amount of

00:33:25.519 --> 00:33:28.150
excess and minimizes the amount of market purchases it's

00:33:28.150 --> 00:33:28.880
impossible to

00:33:28.880 --> 00:33:31.589
eliminate those but we want to strike a reasonable balance

00:33:31.589 --> 00:33:32.359
in terms of your

00:33:32.359 --> 00:33:35.359
ongoing management of the portfolio to make it as efficient

00:33:35.359 --> 00:33:36.500
as possible to

00:33:36.500 --> 00:33:41.160
balance out those amounts another consideration we took

00:33:41.160 --> 00:33:41.839
into is wind

00:33:41.839 --> 00:33:46.359
location so wind is not wind you've seen the different

00:33:46.359 --> 00:33:47.519
production profiles from

00:33:47.519 --> 00:33:50.940
West Texas versus coastal those are starkly different there

00:33:50.940 --> 00:33:51.759
are also

00:33:51.759 --> 00:33:54.690
different factors in terms of the quality of wind at a

00:33:54.690 --> 00:33:57.039
specific location so there

00:33:57.039 --> 00:34:00.480
are six different wind regions in ERCOT they're not well

00:34:00.480 --> 00:34:01.559
correlated because of

00:34:01.559 --> 00:34:04.799
the distance between them and because Denton already owns a

00:34:04.799 --> 00:34:05.640
large resource in

00:34:05.640 --> 00:34:08.960
West Texas other regions will need to be considered and

00:34:08.960 --> 00:34:09.679
those are what we're going

00:34:09.679 --> 00:34:13.760
to offer both panhandle and coastal resources are not well

00:34:13.760 --> 00:34:14.480
correlated with

00:34:14.480 --> 00:34:17.860
system wide output that's a good thing because we want to

00:34:17.860 --> 00:34:19.079
add resources that

00:34:19.079 --> 00:34:21.639
are not necessarily correlated with what you've got that

00:34:21.639 --> 00:34:22.679
gives you a better fit

00:34:22.679 --> 00:34:25.650
in terms of diversification of the portfolio coastal wind

00:34:25.650 --> 00:34:26.599
is superior to

00:34:26.599 --> 00:34:29.639
other types of wind due to the higher capacity factor and

00:34:29.639 --> 00:34:30.320
the greater

00:34:30.320 --> 00:34:33.639
production during valuable on peak hours so as you can see

00:34:33.639 --> 00:34:35.159
here these are

00:34:35.159 --> 00:34:39.829
dispersion graphs that show the the output of the various

00:34:39.829 --> 00:34:41.360
wind resources at

00:34:41.360 --> 00:34:44.280
wind speeds which you would like to see is a tighter

00:34:44.280 --> 00:34:45.199
pattern and a more

00:34:45.199 --> 00:34:48.380
consistent pattern here and you're seeing three examples

00:34:48.380 --> 00:34:49.480
you're seeing wind

00:34:49.480 --> 00:34:52.730
resources from North Texas Texas Oklahoma border Abilene

00:34:52.730 --> 00:34:53.679
and then coastal

00:34:53.679 --> 00:34:56.900
wind and the main takeaway here without belaboring the

00:34:56.900 --> 00:34:58.119
slides you notice that

00:34:58.119 --> 00:35:01.300
there's a tighter diffusion pattern on the coastal wind

00:35:01.300 --> 00:35:02.320
resource that's

00:35:02.320 --> 00:35:06.110
indicative of more consistent and higher quality production

00:35:06.110 --> 00:35:07.159
that's something that

00:35:07.159 --> 00:35:10.090
is advantageous and one of the factors that we take into

00:35:10.090 --> 00:35:10.880
account in the

00:35:10.880 --> 00:35:16.650
resources that we recommend the reason for that is the

00:35:16.650 --> 00:35:18.719
coastal wind is produced

00:35:18.719 --> 00:35:22.639
by being on the coast it's the coastal land effect that

00:35:22.639 --> 00:35:24.000
every day in the summer

00:35:24.000 --> 00:35:31.889
and in particular as the the ground the surface of behind

00:35:31.889 --> 00:35:33.599
the wind heats up and

00:35:33.599 --> 00:35:37.860
creates a low pressure system whereas the water doesn't

00:35:37.860 --> 00:35:39.199
heat up as quickly as

00:35:39.199 --> 00:35:42.889
a result you get this low pressure high pressure situation

00:35:42.889 --> 00:35:44.599
and it's the that you

00:35:44.599 --> 00:35:49.349
get winds produced in the afternoon you know offshore winds

00:35:49.349 --> 00:35:50.719
and then it reverses

00:35:50.719 --> 00:35:54.760
at night but since it's the predominant wind direction is

00:35:54.760 --> 00:35:56.119
from the south those

00:35:56.119 --> 00:35:58.739
are diminished you can see that they're they're almost

00:35:58.739 --> 00:36:01.079
symmetrical but the neat

00:36:01.079 --> 00:36:04.039
thing about coastal it's not caused by sort of the

00:36:04.039 --> 00:36:05.960
geographic average wind over

00:36:05.960 --> 00:36:09.269
Texas it's cause it brings its own wind with it basically

00:36:09.269 --> 00:36:10.360
which is kind of an

00:36:10.360 --> 00:36:13.329
interesting concept and that's one of the reasons why it's

00:36:13.329 --> 00:36:14.320
valuable it also

00:36:14.320 --> 00:36:19.690
counts for capacity or cut counts it at about 56 percent of

00:36:19.690 --> 00:36:21.039
its installed

00:36:21.039 --> 00:36:24.570
capacity on peak during the summer whereas West Texas wind

00:36:24.570 --> 00:36:25.840
it's 18 percent

00:36:25.840 --> 00:36:33.900
and that's because of that same effect in terms of solar

00:36:33.900 --> 00:36:36.239
location solar

00:36:36.239 --> 00:36:40.309
radiance is the main is the main factor here you want to

00:36:40.309 --> 00:36:41.320
maximize the radiance

00:36:41.320 --> 00:36:44.559
which is going to maximize output so it's impacted by long

00:36:44.559 --> 00:36:45.280
itude and latitude

00:36:45.280 --> 00:36:48.460
essentially the location of it also the potential for cloud

00:36:48.460 --> 00:36:50.039
cover and temperature

00:36:50.039 --> 00:36:53.570
factors so for optimal radiance the best location in Texas

00:36:53.570 --> 00:36:54.360
would be all the way

00:36:54.360 --> 00:36:58.570
west to El Paso but El Paso is in an Urquhart but it's also

00:36:58.570 --> 00:36:59.360
not quite that

00:36:59.360 --> 00:37:01.599
simple yes you'd like to go as far west as you can to

00:37:01.599 --> 00:37:03.079
maximize your radiance but

00:37:03.079 --> 00:37:05.579
if you go too far west you get into an area that has

00:37:05.579 --> 00:37:07.159
substantial transmission

00:37:07.159 --> 00:37:10.460
congestion so then there's too much out there without

00:37:10.460 --> 00:37:12.119
sufficient transmission so

00:37:12.119 --> 00:37:15.079
the optimal location is as far west as you can go to

00:37:15.079 --> 00:37:16.800
maximize your radiance but

00:37:16.800 --> 00:37:20.170
to be within that border so we can minimize congestion

00:37:20.170 --> 00:37:21.119
there's still

00:37:21.119 --> 00:37:23.679
congestion out there but that can be managed but we don't

00:37:23.679 --> 00:37:24.599
want to go too far

00:37:24.599 --> 00:37:27.780
out where you're into an area that's going to subject you

00:37:27.780 --> 00:37:28.320
to too much

00:37:28.320 --> 00:37:31.989
congestion so the optimal balance the optimal location is

00:37:31.989 --> 00:37:32.400
going to be

00:37:32.400 --> 00:37:35.320
somewhere say close to Midland or a little bit east of

00:37:35.320 --> 00:37:36.360
there to give you the

00:37:36.360 --> 00:37:40.320
optimal location for radiance and avoiding or minimizing

00:37:40.320 --> 00:37:41.360
congestion a

00:37:41.360 --> 00:37:45.539
couple of other location considerations this graph on the

00:37:45.539 --> 00:37:46.519
left with the

00:37:46.519 --> 00:37:49.699
multicolored dots this came out recently from one of Urqu

00:37:49.699 --> 00:37:51.000
hart's long-term system

00:37:51.000 --> 00:37:55.469
assessment studies and this is essentially projecting where

00:37:55.469 --> 00:37:55.760
the

00:37:55.760 --> 00:37:58.710
additions of generation will be and the retirements of

00:37:58.710 --> 00:38:00.880
generation so the yellow

00:38:00.880 --> 00:38:03.159
and orange red dots that's where they're expecting

00:38:03.159 --> 00:38:04.519
additional generation to come

00:38:04.519 --> 00:38:07.559
in the blue dots are where they're expecting retirements

00:38:07.559 --> 00:38:08.480
you can see the

00:38:08.480 --> 00:38:11.820
additions are going to be out in the west and the retire

00:38:11.820 --> 00:38:13.079
ments are going to be

00:38:13.079 --> 00:38:15.539
mainly in the east well this is going to exacerbate some of

00:38:15.539 --> 00:38:16.280
the transmission

00:38:16.280 --> 00:38:19.659
problems in Urquhart from the west to east flows so if

00:38:19.659 --> 00:38:21.079
possible it would be

00:38:21.079 --> 00:38:24.119
good to locate new generation in the areas where the

00:38:24.119 --> 00:38:25.480
retirement is going to

00:38:25.480 --> 00:38:29.159
be that's really not that feasible in terms of solar but it

00:38:29.159 --> 00:38:30.159
is feasible in

00:38:30.159 --> 00:38:33.699
terms of wind so in terms of locations for wind coastal is

00:38:33.699 --> 00:38:34.760
going to be on the

00:38:34.760 --> 00:38:39.260
coast which is in the area with load growth because of say

00:38:39.260 --> 00:38:40.719
for example LNG

00:38:40.719 --> 00:38:43.219
exports and so forth there's load growth expected there and

00:38:43.219 --> 00:38:44.000
you're going to get

00:38:44.000 --> 00:38:47.690
some retirement so coastal also fits this location

00:38:47.690 --> 00:38:49.400
optimization from the

00:38:49.400 --> 00:38:52.679
generation retirement in additions portfolio and then

00:38:52.679 --> 00:38:54.519
lastly you want to

00:38:54.519 --> 00:38:58.030
have a renewable resource with a transmission interconnect

00:38:58.030 --> 00:38:59.480
ion that is on

00:38:59.480 --> 00:39:02.119
the correct side of the pricing clusters so we took into

00:39:02.119 --> 00:39:03.119
account where some of

00:39:03.119 --> 00:39:05.670
these other interconnections are and that's something that

00:39:05.670 --> 00:39:06.320
will be part of

00:39:06.320 --> 00:39:10.079
the RFP evaluation when you finally decide specific

00:39:10.079 --> 00:39:11.519
resources and offers you

00:39:11.519 --> 00:39:16.400
want to take into the transmission connection the optimal

00:39:16.400 --> 00:39:17.119
location for

00:39:17.119 --> 00:39:22.539
those all right this is just one single slide and we'll

00:39:22.539 --> 00:39:24.039
move on we don't want to

00:39:24.039 --> 00:39:26.610
belabor this just to give you a sense of all the various

00:39:26.610 --> 00:39:27.719
factors that we took

00:39:27.719 --> 00:39:30.329
into account of the portfolio model and we clearly look at

00:39:30.329 --> 00:39:31.239
natural gas prices

00:39:31.239 --> 00:39:35.599
because they're the main driver of how the portfolio would

00:39:35.599 --> 00:39:36.000
be would perform

00:39:36.000 --> 00:39:40.679
power prices heat rates the deck heats heat rate plus

00:39:40.679 --> 00:39:41.440
estimate or variable

00:39:41.440 --> 00:39:44.929
cost your load growth the various production profiles of

00:39:44.929 --> 00:39:45.639
renewable

00:39:45.639 --> 00:39:49.690
resources the prices of those CRR costs and prices and

00:39:49.690 --> 00:39:51.719
basis costs in ERCOT

00:39:51.719 --> 00:39:55.230
potential regulation changes things like marginal losses

00:39:55.230 --> 00:39:56.840
local reserves we're

00:39:56.840 --> 00:39:59.050
going to talk about the potential solar tariff in a little

00:39:59.050 --> 00:39:59.840
bit because that's

00:39:59.840 --> 00:40:02.880
one of the decisions that Denton's going to need to make

00:40:02.880 --> 00:40:05.239
the reducing in the the

00:40:05.239 --> 00:40:09.150
tax federal tax credits that are going away plant retire

00:40:09.150 --> 00:40:10.559
ments renewable

00:40:10.559 --> 00:40:14.210
saturation certain regions proposed new resources and the

00:40:14.210 --> 00:40:15.119
Lubbock ERCOT

00:40:15.119 --> 00:40:17.449
integration all of these things we took into account

00:40:17.449 --> 00:40:18.360
qualitatively and

00:40:18.360 --> 00:40:22.690
quantitatively in modeling the Denton portfolio so let's

00:40:22.690 --> 00:40:24.280
talk about some of

00:40:24.280 --> 00:40:28.050
the sort of conclusions that we came to in the in the in

00:40:28.050 --> 00:40:29.639
the plan here first we

00:40:29.639 --> 00:40:31.929
need to just talk about the concept of firming before we've

00:40:31.929 --> 00:40:32.760
been talking about

00:40:32.760 --> 00:40:36.119
the role of the deck in the role of market purchases and

00:40:36.119 --> 00:40:38.599
firming so using a

00:40:38.599 --> 00:40:42.030
specific power plant to firm in a written intermittent

00:40:42.030 --> 00:40:42.880
resources is

00:40:42.880 --> 00:40:46.599
necessary in a bilateral market where utility is

00:40:46.599 --> 00:40:48.920
responsible for reliability

00:40:48.920 --> 00:40:53.199
in its own control area but ERCOT is not a bilateral market

00:40:53.199 --> 00:40:54.199
the ERCOT market is

00:40:54.199 --> 00:40:58.079
designed as a power pool so it's managed as a single

00:40:58.079 --> 00:41:00.360
control area so the ERCOT

00:41:00.360 --> 00:41:04.329
market is designed for to use market resources from the

00:41:04.329 --> 00:41:05.360
pool for supply

00:41:05.360 --> 00:41:08.570
balancing or firming it's not necessary to have a specific

00:41:08.570 --> 00:41:09.880
power plant to do

00:41:09.880 --> 00:41:14.429
that so the primary issue here though with using those

00:41:14.429 --> 00:41:15.440
market purchases is how

00:41:15.440 --> 00:41:18.480
much is it going to cost it's really a cost issue what's

00:41:18.480 --> 00:41:20.659
your least cost way to

00:41:20.659 --> 00:41:23.119
balance your portfolio and to form those intermittent

00:41:23.119 --> 00:41:24.280
resources and a portfolio

00:41:24.280 --> 00:41:27.239
with 70 to 100 percent renewable resources will require a

00:41:27.239 --> 00:41:27.920
lot of firming

00:41:27.920 --> 00:41:31.230
so this was one of our main missions and the resource plan

00:41:31.230 --> 00:41:32.400
is here how to develop

00:41:32.400 --> 00:41:38.489
a resource plan and the associated portfolio management

00:41:38.489 --> 00:41:39.840
operational process

00:41:39.840 --> 00:41:44.039
necessary for optimal firming from a cost efficiency basis

00:41:44.039 --> 00:41:45.000
so the deck will

00:41:45.000 --> 00:41:47.690
clearly play a role in the renewable resource portfolio was

00:41:47.690 --> 00:41:48.239
a cost edge

00:41:48.239 --> 00:41:51.420
during really high priced hours but from the majority of

00:41:51.420 --> 00:41:52.719
time it'll be less risky

00:41:52.719 --> 00:41:57.000
and more cost efficient to use market purchases for firming

00:41:57.000 --> 00:41:59.599
so we've used an

00:41:59.599 --> 00:42:03.690
August day as an example to illustrate this concept so on

00:42:03.690 --> 00:42:05.400
this graph once again

00:42:05.400 --> 00:42:10.079
we have a 24-hour scale the 24 hours in a day and then we

00:42:10.079 --> 00:42:12.199
have costs market costs

00:42:12.199 --> 00:42:16.860
for power on the vertical the three different colors

00:42:16.860 --> 00:42:19.599
indicate here where in the green this is

00:42:19.599 --> 00:42:24.329
when you would use the market use the day ahead market to

00:42:24.329 --> 00:42:25.559
firm or to balance

00:42:25.559 --> 00:42:29.000
the portfolio the areas without the green this is when the

00:42:29.000 --> 00:42:30.480
deck would likely run

00:42:30.480 --> 00:42:34.130
and you're seeing examples of what real-time prices and day

00:42:34.130 --> 00:42:35.360
ahead prices are

00:42:35.360 --> 00:42:40.260
in here so I'll point out one factor here notice that

00:42:40.260 --> 00:42:42.079
during these off-peak

00:42:42.079 --> 00:42:44.579
hours you're really not getting much of a difference or a

00:42:44.579 --> 00:42:45.480
premium in the day

00:42:45.480 --> 00:42:48.659
ahead versus the real time that really shows up during the

00:42:48.659 --> 00:42:49.599
middle of the day

00:42:49.599 --> 00:42:52.789
and this is when the deck would be most valuable and would

00:42:52.789 --> 00:42:54.000
be quite a resource

00:42:54.000 --> 00:42:57.860
to be able to cover these hours so based on the modeling

00:42:57.860 --> 00:42:59.679
that we've done the deck

00:42:59.679 --> 00:43:02.630
using that as a sole hedge or a source for firming is not

00:43:02.630 --> 00:43:03.679
the least cost or

00:43:03.679 --> 00:43:07.190
lowest risk option the deck is going to run but most of the

00:43:07.190 --> 00:43:08.920
time per over 75% of

00:43:08.920 --> 00:43:11.960
the hours it's going to be cheaper to firm the renewable

00:43:11.960 --> 00:43:13.039
resource portfolio

00:43:13.039 --> 00:43:16.219
using market purchases than with a deck so the low heat

00:43:16.219 --> 00:43:17.840
rate associated with most

00:43:17.840 --> 00:43:21.579
of those hours in the dam will allow the firming using

00:43:21.579 --> 00:43:23.599
market purchases and

00:43:23.599 --> 00:43:27.570
at a lower cost than the deck while also avoiding

00:43:27.570 --> 00:43:31.320
congestion and price risk so to

00:43:31.320 --> 00:43:34.500
summarize some of the takeaways here on the deck looking at

00:43:34.500 --> 00:43:35.519
the advantages and

00:43:35.519 --> 00:43:38.739
the disadvantage of the plant the deck is a heat rate hedge

00:43:38.739 --> 00:43:39.639
so it will be very

00:43:39.639 --> 00:43:42.559
useful when you get times where the heat rate rises in the

00:43:42.559 --> 00:43:43.559
market that's the

00:43:43.559 --> 00:43:47.489
greatest value that it's going to add to your portfolio it

00:43:47.489 --> 00:43:48.519
'll also provide a

00:43:48.519 --> 00:43:51.050
long-term hedge benefit in the event of accelerated

00:43:51.050 --> 00:43:52.320
retirement of conventional

00:43:52.320 --> 00:43:54.780
generation resources and we're seeing that just recently we

00:43:54.780 --> 00:43:55.280
've seen some

00:43:55.280 --> 00:43:59.639
announcements of additional coal generation resource retire

00:43:59.639 --> 00:44:00.679
ments the

00:44:00.679 --> 00:44:03.610
disadvantages are that is a higher heat rate generators

00:44:03.610 --> 00:44:04.719
generator so it offers

00:44:04.719 --> 00:44:08.420
no pricing power no real competitive advantage ERCOT

00:44:08.420 --> 00:44:10.079
manages the system so

00:44:10.079 --> 00:44:13.760
that heat rates don't vary much you saw earlier that heat

00:44:13.760 --> 00:44:15.039
rate curve from ERCOT

00:44:15.039 --> 00:44:18.610
that showed that heat rates were very stable so you need

00:44:18.610 --> 00:44:20.880
some unusual market

00:44:20.880 --> 00:44:24.670
drivers to raise the heat rate to really make the deck to

00:44:24.670 --> 00:44:26.159
be the most valuable

00:44:26.159 --> 00:44:29.440
resources can be so our runtime estimation based on the

00:44:29.440 --> 00:44:30.559
natural gas price

00:44:30.559 --> 00:44:33.480
projections that you saw and you'll see those again is that

00:44:33.480 --> 00:44:34.360
the deck would be

00:44:34.360 --> 00:44:36.849
projected to run between 12 and 20 percent of the time

00:44:36.849 --> 00:44:37.599
which would be the

00:44:37.599 --> 00:44:40.880
equivalent in any year of 13 to 1700 hours per year that

00:44:40.880 --> 00:44:42.000
would be based on

00:44:42.000 --> 00:44:46.670
those high and low gas cases that we used in the analysis

00:44:46.670 --> 00:44:48.280
but there are some

00:44:48.280 --> 00:44:51.639
additional ways to get value from the deck so we think that

00:44:51.639 --> 00:44:52.639
Denton should be

00:44:52.639 --> 00:44:55.820
prepared to sell deck output forward winter if there's a

00:44:55.820 --> 00:44:56.960
spike in natural gas

00:44:56.960 --> 00:45:00.449
prices or a spike in heat rates those are times where that

00:45:00.449 --> 00:45:01.360
does occasionally

00:45:01.360 --> 00:45:03.460
happen in the forward market and there would be an

00:45:03.460 --> 00:45:04.639
advantageous time to take

00:45:04.639 --> 00:45:07.820
advantage of that and sell deck output in the forward

00:45:07.820 --> 00:45:10.000
market if didn't has an

00:45:10.000 --> 00:45:13.599
excess supply say for example if you've got a summer day

00:45:13.599 --> 00:45:15.079
with high coastal or

00:45:15.079 --> 00:45:18.769
solar output during the day then the deck can be sold into

00:45:18.769 --> 00:45:19.719
the day ahead

00:45:19.719 --> 00:45:24.400
market to produce revenue during higher priced hours the

00:45:24.400 --> 00:45:26.000
deck can also be used

00:45:26.000 --> 00:45:28.500
to sell firming services to other organizations looking to

00:45:28.500 --> 00:45:29.119
add renewable

00:45:29.119 --> 00:45:33.539
resources we are aware of some organizations that may be

00:45:33.539 --> 00:45:34.440
looking for

00:45:34.440 --> 00:45:37.090
those sorts of opportunities so it is an opportunity out

00:45:37.090 --> 00:45:39.519
there to to monetize the

00:45:39.519 --> 00:45:42.440
deck and it may also be beneficial to sell excess renewable

00:45:42.440 --> 00:45:43.039
power during

00:45:43.039 --> 00:45:45.730
periods of excess supply and then you could use the deck to

00:45:45.730 --> 00:45:46.159
firm the

00:45:46.159 --> 00:45:48.860
transaction now that doesn't mean the deck would

00:45:48.860 --> 00:45:50.599
necessarily always be needed

00:45:50.599 --> 00:45:53.519
to firm the transaction because if you for example sell

00:45:53.519 --> 00:45:54.599
excess renewables and

00:45:54.599 --> 00:45:59.059
you sell them on a firm basis it's up to your operators to

00:45:59.059 --> 00:46:00.119
then determine what

00:46:00.119 --> 00:46:02.820
the least cost at the time is to firm it it still might be

00:46:02.820 --> 00:46:03.820
cheaper to use the

00:46:03.820 --> 00:46:07.849
market to firm that power but the deck is always there as a

00:46:07.849 --> 00:46:09.159
resource so from

00:46:09.159 --> 00:46:12.630
a firming standpoint you've really got a two-part process

00:46:12.630 --> 00:46:13.800
here you always want to

00:46:13.800 --> 00:46:16.119
look to the market to see what the cost of the market is

00:46:16.119 --> 00:46:17.280
most of the time the

00:46:17.280 --> 00:46:19.949
market's going to be cheaper for firming the deck will be a

00:46:19.949 --> 00:46:20.880
valuable resource

00:46:20.880 --> 00:46:24.400
though in those higher priced hours to add to reduce your

00:46:24.400 --> 00:46:25.880
firming costs just to

00:46:25.880 --> 00:46:29.920
add to this even though you sell the deck as a firming

00:46:29.920 --> 00:46:30.760
resource doesn't mean

00:46:30.760 --> 00:46:35.420
it runs anymore it runs every year ERCOT determines how

00:46:35.420 --> 00:46:36.460
much it runs that's kind

00:46:36.460 --> 00:46:40.150
of a fixed thing that's outside of your control and so what

00:46:40.150 --> 00:46:41.440
you're doing is just

00:46:41.440 --> 00:46:44.369
selling a piece of your expected value out there in a

00:46:44.369 --> 00:46:45.800
financial sense so it

00:46:45.800 --> 00:46:50.780
doesn't actually use consume fuel for this it's just you're

00:46:50.780 --> 00:46:52.239
selling the the

00:46:52.239 --> 00:46:55.789
fact that you have this firming resource out so it's kind

00:46:55.789 --> 00:46:59.079
of a virtual resource

00:47:01.199 --> 00:47:05.250
would you can you go back a slide to this one or I'm sorry

00:47:05.250 --> 00:47:06.760
go forward go to the

00:47:06.760 --> 00:47:11.599
the advantages disadvantages slide there we go

00:47:11.599 --> 00:47:16.920
it would you say that from a fiscally conservative point of

00:47:16.920 --> 00:47:18.760
view and from a

00:47:18.760 --> 00:47:24.880
risk management point of view the disadvantages are greater

00:47:24.880 --> 00:47:25.760
than the

00:47:25.760 --> 00:47:29.539
advantages of the deck that all depends on what the price

00:47:29.539 --> 00:47:30.960
of gas is yeah well

00:47:30.960 --> 00:47:35.280
yes and and so there is no concrete answer to that question

00:47:35.280 --> 00:47:36.719
but I'm saying

00:47:36.719 --> 00:47:39.900
and that's why I mentioned risk management because risk

00:47:39.900 --> 00:47:40.840
management takes

00:47:40.840 --> 00:47:46.360
into account that yeah you see what I'm saying I do and I

00:47:46.360 --> 00:47:47.960
would also say this we

00:47:47.960 --> 00:47:50.519
have a variety of clients that we've worked with over the

00:47:50.519 --> 00:47:52.760
years and one of

00:47:52.760 --> 00:47:56.030
the chief challenges we have in working with those clients

00:47:56.030 --> 00:47:57.239
is to determine what

00:47:57.239 --> 00:48:01.480
their risk tolerance is I would term it risk intolerance

00:48:01.480 --> 00:48:02.400
but nobody asked me

00:48:02.400 --> 00:48:05.820
they coined the phrase before I came around we call it in

00:48:05.820 --> 00:48:07.199
risk intolerance

00:48:07.199 --> 00:48:09.849
you'll have very conservative organizations and

00:48:09.849 --> 00:48:10.960
organizations that

00:48:10.960 --> 00:48:14.989
are willing to take more risks and so it really depends on

00:48:14.989 --> 00:48:17.699
that value set as to

00:48:17.699 --> 00:48:21.369
what they feel more comfortable in terms of reducing their

00:48:21.369 --> 00:48:23.000
risks yes so there's a

00:48:23.000 --> 00:48:27.909
spectrum there of choices yes yeah and it's it's what is

00:48:27.909 --> 00:48:30.119
clear to me from from

00:48:30.119 --> 00:48:36.239
this presentation is that the renewable dentin plan was and

00:48:36.239 --> 00:48:37.679
the purchase of the

00:48:37.679 --> 00:48:43.329
Denton Energy Center was built on a very high risk tolerant

00:48:43.329 --> 00:48:45.400
very risk friendly

00:48:45.400 --> 00:48:50.639
philosophy and there's nothing that we can do about that

00:48:50.639 --> 00:48:52.599
now but I

00:48:52.599 --> 00:49:01.599
appreciate your focus on risk management and fiscal conserv

00:49:01.599 --> 00:49:03.440
ativism because we

00:49:03.440 --> 00:49:07.059
work we have not yet seen that we didn't see that in the

00:49:07.059 --> 00:49:07.480
past in

00:49:07.480 --> 00:49:10.480
presentations on this subject so thank you you're welcome

00:49:10.480 --> 00:49:15.440
my guess is that we

00:49:15.440 --> 00:49:18.920
were not privy to the thought process behind that other

00:49:18.920 --> 00:49:19.679
than you know like

00:49:19.679 --> 00:49:24.679
reading the Brattle report I would just estimate that that

00:49:24.679 --> 00:49:26.039
anybody who wanted

00:49:26.039 --> 00:49:28.969
that probably felt comfortable with a physical asset in

00:49:28.969 --> 00:49:30.039
order to do that and

00:49:30.039 --> 00:49:32.289
there are people that feel that way and that's just that's

00:49:32.289 --> 00:49:33.480
just a preference and

00:49:33.480 --> 00:49:39.190
that's just a preference is Denton a load-serving entity

00:49:39.190 --> 00:49:39.760
and what are the

00:49:39.760 --> 00:49:43.039
requirements under FERC and NERC if they are that you are a

00:49:43.039 --> 00:49:44.360
load-serving entity

00:49:44.360 --> 00:49:50.159
and isn't it better to have a physical asset because of the

00:49:50.159 --> 00:49:51.079
penalties that you

00:49:51.079 --> 00:49:54.119
could have in the future from FERC and NERC if there was

00:49:54.119 --> 00:49:55.639
something to go wrong

00:49:55.639 --> 00:50:02.320
we're in ERCOT we are not really regulated by FERC right we

00:50:02.320 --> 00:50:03.519
are ERCOT you

00:50:03.519 --> 00:50:06.699
know we don't have essentially interstate trade and

00:50:06.699 --> 00:50:09.239
electricity so what

00:50:09.239 --> 00:50:14.000
so you're a load-serving entity from ERCOT ERCOT is an

00:50:14.000 --> 00:50:15.800
energy only market

00:50:15.800 --> 00:50:23.420
and they score you on how how well you schedule energy or

00:50:23.420 --> 00:50:24.480
resources against your

00:50:24.480 --> 00:50:27.840
load and so as long as you do that you get a score of a

00:50:27.840 --> 00:50:29.280
hundred percent right

00:50:29.280 --> 00:50:33.510
where does physical resources add into them well they could

00:50:33.510 --> 00:50:34.480
be they can be

00:50:34.480 --> 00:50:38.559
resources at time but if they don't have the deck doesn't

00:50:38.559 --> 00:50:39.760
have any energy

00:50:39.760 --> 00:50:43.469
associated with it it has a heat rate so you can't really

00:50:43.469 --> 00:50:45.559
use that as an energy

00:50:45.559 --> 00:50:51.300
only resource in ERCOT to serve your load-serving

00:50:51.300 --> 00:50:54.880
obligations is that clear

00:50:54.880 --> 00:51:00.650
kind of sort of most of the market just I mean all the

00:51:00.650 --> 00:51:02.159
retail without physical

00:51:02.159 --> 00:51:05.730
assets behind ERCOT how are they going to firm anything ERC

00:51:05.730 --> 00:51:07.440
OT it's a it's all

00:51:07.440 --> 00:51:10.190
been socialized it's all been pooled you may have a

00:51:10.190 --> 00:51:11.760
resource but ERCOT really is

00:51:11.760 --> 00:51:14.800
the one who operates it and I remember a while ago that

00:51:14.800 --> 00:51:16.000
they were very concerned

00:51:16.000 --> 00:51:19.599
they didn't have enough capacity to be able to serve taxes

00:51:19.599 --> 00:51:21.039
that's always the

00:51:21.039 --> 00:51:24.659
story almost universally all over the country and they they

00:51:24.659 --> 00:51:25.679
all have a reserve

00:51:25.679 --> 00:51:30.739
margin and so that's that's true that's always an issue but

00:51:30.739 --> 00:51:31.760
you can always

00:51:31.760 --> 00:51:36.599
if you go out and buy your own resources a wind resource

00:51:36.599 --> 00:51:38.039
will fill your needs

00:51:38.039 --> 00:51:42.599
over the long term I understand and for the record I'm very

00:51:42.599 --> 00:51:43.639
even favorable of a

00:51:43.639 --> 00:51:48.989
lot of renewables no but but and so you can just simply you

00:51:48.989 --> 00:51:50.079
know solar plus wind

00:51:50.079 --> 00:51:53.730
that's just as as a matter of fact that will serve your

00:51:53.730 --> 00:51:54.960
load in terms of an

00:51:54.960 --> 00:51:58.340
expected value better than the deck will because the deck

00:51:58.340 --> 00:51:59.880
doesn't have any energy

00:51:59.880 --> 00:52:03.269
associated with it it's a heat rate call now it's good if

00:52:03.269 --> 00:52:06.239
you think that the will

00:52:06.239 --> 00:52:10.039
run out of capacity but let's say if you run out of

00:52:10.039 --> 00:52:11.679
capacity this the deck

00:52:11.679 --> 00:52:15.869
doesn't really serve Denton it serves I know so we're all

00:52:15.869 --> 00:52:16.840
in the same boat right

00:52:16.840 --> 00:52:21.809
and no small entity like Denton building resources is going

00:52:21.809 --> 00:52:23.440
to fix that it's a

00:52:23.440 --> 00:52:27.329
comprehensive big thing so this is where some people make

00:52:27.329 --> 00:52:28.639
mistakes they think

00:52:28.639 --> 00:52:33.480
that somehow by building a physical you know steel on the

00:52:33.480 --> 00:52:35.000
ground that that helps

00:52:35.000 --> 00:52:40.769
them and you're better off potentially buying natural gas

00:52:40.769 --> 00:52:41.840
because that's where

00:52:41.840 --> 00:52:47.550
all the risk is the actual if you go look at what Larry had

00:52:47.550 --> 00:52:49.159
this the dispatch

00:52:49.159 --> 00:52:53.030
heat rates don't vary very much in right cut that's because

00:52:53.030 --> 00:52:54.559
all these units that

00:52:54.559 --> 00:52:58.480
we built we have this huge unit build out and they're fixed

00:52:58.480 --> 00:52:59.440
and they keep

00:52:59.440 --> 00:53:02.619
operating day after day after day and what they're

00:53:02.619 --> 00:53:04.000
concerned is they're

00:53:04.000 --> 00:53:09.070
getting crowded out by renewables so ERCOT is incredibly

00:53:09.070 --> 00:53:10.440
safe you know this is

00:53:10.440 --> 00:53:13.369
the thing if you're worried about becoming short you

00:53:13.369 --> 00:53:15.840
shouldn't unless

00:53:15.840 --> 00:53:20.500
things change dramatically then they have a process to keep

00:53:20.500 --> 00:53:21.840
units from being

00:53:21.840 --> 00:53:25.719
retired and that's what Vistra just announced it's going to

00:53:25.719 --> 00:53:26.880
retire for

00:53:26.880 --> 00:53:31.659
instance a sandow plants Monticello and and Big Brown what

00:53:31.659 --> 00:53:33.000
ERCOT may came in and

00:53:33.000 --> 00:53:36.840
say no you're not going to you're required to keep these on

00:53:36.840 --> 00:53:38.440
RMR status

00:53:38.440 --> 00:53:43.280
that means reliable reliability must run because if you do

00:53:43.280 --> 00:53:43.880
this you're going to

00:53:43.880 --> 00:53:48.650
create local congestion and we there's a you know safety

00:53:48.650 --> 00:53:50.360
aspect to it so they

00:53:50.360 --> 00:53:54.300
won't let them retire and that process so think about it we

00:53:54.300 --> 00:53:55.480
you know if you

00:53:55.480 --> 00:53:59.239
retire coal units at some point they just say stop don't

00:53:59.239 --> 00:54:00.440
retire those units

00:54:00.440 --> 00:54:03.730
so it's there's a safety factor in that a lot of people don

00:54:03.730 --> 00:54:05.719
't consider and then

00:54:05.719 --> 00:54:10.190
what they do is they say here's an RMR you get all your

00:54:10.190 --> 00:54:11.159
costs are are you know

00:54:11.159 --> 00:54:15.679
included plus a return so people say well great now I have

00:54:15.679 --> 00:54:16.559
a asset that was

00:54:16.559 --> 00:54:20.719
losing money now it makes money so people will turn those

00:54:20.719 --> 00:54:21.960
into RMR status

00:54:21.960 --> 00:54:26.440
so just sort of conclude to some of the questions in here

00:54:26.440 --> 00:54:30.719
we have a particular

00:54:30.719 --> 00:54:33.309
expectation of where gas prices may go others have a

00:54:33.309 --> 00:54:34.760
different expectation and

00:54:34.760 --> 00:54:38.260
the relative weight of these advantages and disadvantages

00:54:38.260 --> 00:54:39.400
tilts depending upon

00:54:39.400 --> 00:54:43.110
where gas prices go and that's something that is just a

00:54:43.110 --> 00:54:44.480
preference to whoever

00:54:44.480 --> 00:54:49.280
thinks about where gas prices are going to go gives you the

00:54:49.280 --> 00:54:50.760
the relative weight

00:54:50.760 --> 00:54:54.000
of those advantages or disadvantages so speaking of that

00:54:54.000 --> 00:54:56.159
this is just yes question

00:54:56.159 --> 00:55:00.440
just just following up on what you were just saying would

00:55:00.440 --> 00:55:03.039
you would you say that

00:55:03.039 --> 00:55:08.090
the renewable dentin plan as it was previously imagined mis

00:55:08.090 --> 00:55:09.599
represented how

00:55:09.599 --> 00:55:15.730
ERCOT works I don't know if it misrepresented it it depends

00:55:15.730 --> 00:55:16.119
on how

00:55:16.119 --> 00:55:18.820
people felt that the way that the market would work so it

00:55:18.820 --> 00:55:20.400
could be in a view on

00:55:20.400 --> 00:55:25.449
that we haven't really dealt deeply it's a lot of what we

00:55:25.449 --> 00:55:26.280
've seen in terms of

00:55:26.280 --> 00:55:28.920
the dentin renewable resource plan were some PowerPoint

00:55:28.920 --> 00:55:29.880
slides that gave some

00:55:29.880 --> 00:55:32.400
expectations of what the portfolio yeah and that's as I

00:55:32.400 --> 00:55:33.440
understand it that's

00:55:33.440 --> 00:55:36.050
pretty much so we didn't really see a lot of detail in

00:55:36.050 --> 00:55:37.239
there that could really

00:55:37.239 --> 00:55:41.320
put that together yeah and and and there wasn't the I'll

00:55:41.320 --> 00:55:42.239
just just in terms of

00:55:42.239 --> 00:55:44.579
me communicating to the public who's watching and trying to

00:55:44.579 --> 00:55:45.280
piece together

00:55:45.280 --> 00:55:47.639
right because I think people are trying to piece together

00:55:47.639 --> 00:55:48.920
what we're hearing now

00:55:48.920 --> 00:55:53.579
versus what we heard in the past you know what we heard in

00:55:53.579 --> 00:55:55.719
the past was that

00:55:55.719 --> 00:56:01.929
ERCOT needs this this this gas plant and that without the

00:56:01.929 --> 00:56:05.960
gas plant dentin is in

00:56:05.960 --> 00:56:12.079
danger of not being reliable and ERCOT itself the grid is

00:56:12.079 --> 00:56:13.880
and what I hear what

00:56:13.880 --> 00:56:21.199
you're saying is that ERCOT takes care ERCOT takes care of

00:56:21.199 --> 00:56:22.360
it ERCOT is is in

00:56:22.360 --> 00:56:27.389
no risk of you know running out of power and if they and

00:56:27.389 --> 00:56:29.360
and we would know and

00:56:29.360 --> 00:56:36.719
and and we'll know if we're needed to to build a gas plant

00:56:36.719 --> 00:56:39.199
for them yes one

00:56:39.199 --> 00:56:42.969
thing that I think that's very important as we go forward

00:56:42.969 --> 00:56:44.280
and the PUC is talking

00:56:44.280 --> 00:56:47.519
about this right now and that is this as we go forward

00:56:47.519 --> 00:56:50.119
there's a huge ERCOT

00:56:50.119 --> 00:56:56.650
and the PUC have been focused basically on building assets

00:56:56.650 --> 00:56:58.039
all the assets they

00:56:58.039 --> 00:57:01.840
see all the resources that you see in the in the but that's

00:57:01.840 --> 00:57:02.880
all on the supply

00:57:02.880 --> 00:57:06.170
side they have not been focusing on the demand side and

00:57:06.170 --> 00:57:07.920
efficient market design

00:57:07.920 --> 00:57:13.679
requires that you focus on both sides so there is a price

00:57:13.679 --> 00:57:15.360
that I would and most

00:57:15.360 --> 00:57:18.639
people would if you saw prices too high and you were your

00:57:18.639 --> 00:57:20.039
rates reflected that

00:57:20.039 --> 00:57:23.219
you turn off your load and that hasn't been integrated in

00:57:23.219 --> 00:57:24.480
the market but it

00:57:24.480 --> 00:57:28.880
could be in the near future so this is one of the things

00:57:28.880 --> 00:57:30.960
about how the market

00:57:30.960 --> 00:57:35.619
is designed as you go forward this demand side resources

00:57:35.619 --> 00:57:36.920
and management is

00:57:36.920 --> 00:57:41.829
so important and so this is one of the risks I think about

00:57:41.829 --> 00:57:42.880
going out and

00:57:42.880 --> 00:57:46.159
committing anything to building physical resources what if

00:57:46.159 --> 00:57:47.360
everybody has an app

00:57:47.360 --> 00:57:51.570
on their phone it's connected to their smart thermostat and

00:57:51.570 --> 00:57:53.039
you start cycling

00:57:53.039 --> 00:57:58.389
air conditioner or there's a lot more work on commercial

00:57:58.389 --> 00:57:59.519
and industrial loads

00:57:59.519 --> 00:58:02.519
to do the same thing we see a lot of that activity in the

00:58:02.519 --> 00:58:03.639
market now where

00:58:03.639 --> 00:58:07.480
people are trying to do something called Lars load acting

00:58:07.480 --> 00:58:09.199
as resources and other

00:58:09.199 --> 00:58:13.380
programs which will lower the demand and we and that's one

00:58:13.380 --> 00:58:14.679
thing I don't think

00:58:14.679 --> 00:58:17.630
really was discussed that much in the Brattle report but it

00:58:17.630 --> 00:58:18.519
's something that's

00:58:18.519 --> 00:58:22.380
coming we just don't we had discussions about my inside

00:58:22.380 --> 00:58:25.320
management we did a lot

00:58:25.320 --> 00:58:28.800
of commercial businesses the experience that I have had

00:58:28.800 --> 00:58:29.719
they're not going to

00:58:29.719 --> 00:58:34.630
shift their production and do all kinds of changes to meet

00:58:34.630 --> 00:58:36.199
some of that we tried

00:58:36.199 --> 00:58:39.559
very aggressively where I came from and it just didn't

00:58:39.559 --> 00:58:40.960
happen on the industrial

00:58:40.960 --> 00:58:44.139
side it happened on the residential side because that was a

00:58:44.139 --> 00:58:45.440
little bit easier to

00:58:45.440 --> 00:58:48.929
manage but we just couldn't get some of the industrials to

00:58:48.929 --> 00:58:49.920
do it and it depends

00:58:49.920 --> 00:58:53.329
on the nature of your customer base and and so I do you do

00:58:53.329 --> 00:58:54.760
have some large loads

00:58:54.760 --> 00:58:57.679
and this may be something that develops in the future we

00:58:57.679 --> 00:58:59.360
did address this in

00:58:59.360 --> 00:59:02.280
the written report we don't have a slide on this we think

00:59:02.280 --> 00:59:02.960
there are a lot of

00:59:02.960 --> 00:59:06.139
advantages to pursuing demand response and demand side

00:59:06.139 --> 00:59:08.199
management programs in

00:59:08.199 --> 00:59:12.480
terms of where we saw the media priorities are you've got

00:59:12.480 --> 00:59:13.360
renewable

00:59:13.360 --> 00:59:16.539
resources coming online in a few months you've got an

00:59:16.539 --> 00:59:18.159
accelerated goal to reach

00:59:18.159 --> 00:59:22.719
70% so we saw that just we've referred to in the report

00:59:22.719 --> 00:59:24.239
from the 80/20 rule we

00:59:24.239 --> 00:59:26.940
had that we had to really take the big pieces immediately

00:59:26.940 --> 00:59:27.760
which is really

00:59:27.760 --> 00:59:31.409
addressing how you fill out the supply portfolio from a

00:59:31.409 --> 00:59:32.760
renewable perspective

00:59:32.760 --> 00:59:36.960
then your timeline to go on to a hundred percent during

00:59:36.960 --> 00:59:38.099
that I think that would be

00:59:38.099 --> 00:59:41.280
where you would really deserve a greater focus because it's

00:59:41.280 --> 00:59:42.280
gonna take a longer

00:59:42.280 --> 00:59:45.260
lead time to plan some of those demand side resources you

00:59:45.260 --> 00:59:46.239
've got to really

00:59:46.239 --> 00:59:48.400
integrate that into your rate incentives and that's not

00:59:48.400 --> 00:59:49.239
something that you can

00:59:49.239 --> 00:59:55.159
make immediate decision on we've seen utilities out there

00:59:55.159 --> 00:59:56.760
act too early in

00:59:56.760 --> 01:00:00.190
some of these areas and really spend a lot of money so it's

01:00:00.190 --> 01:00:01.440
always good to sort

01:00:01.440 --> 01:00:03.900
of wait for some of these technologies to come into play

01:00:03.900 --> 01:00:04.719
and maybe a second

01:00:04.719 --> 01:00:07.639
generation gives you a much better cost efficiency there so

01:00:07.639 --> 01:00:08.800
we would we would

01:00:08.800 --> 01:00:11.300
just caution that that would be something to plan out I

01:00:11.300 --> 01:00:12.280
think it could make a

01:00:12.280 --> 01:00:15.860
really important contribution to how you get up to your 100

01:00:15.860 --> 01:00:17.079
% goal but that's

01:00:17.079 --> 01:00:19.840
going to require a longer lead time a longer planning and a

01:00:19.840 --> 01:00:21.400
longer deployment

01:00:21.400 --> 01:00:24.960
for those types of resources whereas here you know to get

01:00:24.960 --> 01:00:26.119
to 70% even to a

01:00:26.119 --> 01:00:29.039
hundred percent immediately we were really focusing on the

01:00:29.039 --> 01:00:29.679
big immediate

01:00:29.679 --> 01:00:32.159
things that can be done to fill out the portfolio and if I

01:00:32.159 --> 01:00:33.519
remember Brian weren't

01:00:33.519 --> 01:00:37.289
we going to be able to go to like 88% because of the price

01:00:37.289 --> 01:00:38.360
change that had

01:00:38.360 --> 01:00:44.400
occurred between what we thought five months ago to today

01:00:44.400 --> 01:00:45.639
yes I think that was

01:00:45.639 --> 01:00:49.670
the the figures that we used back a few months ago we came

01:00:49.670 --> 01:00:51.079
back to and we're in

01:00:51.079 --> 01:00:53.349
just a moment you're gonna see some slides on what we

01:00:53.349 --> 01:00:54.000
suggest as an

01:00:54.000 --> 01:00:57.179
adoption path for this and we don't see any reason for you

01:00:57.179 --> 01:00:58.000
to hold back I think

01:00:58.000 --> 01:01:00.250
you can really accelerate what you're doing here because of

01:01:00.250 --> 01:01:01.079
the advantages and

01:01:01.079 --> 01:01:04.300
there are some arguments for accelerating it because of

01:01:04.300 --> 01:01:05.079
some changes

01:01:05.079 --> 01:01:07.349
that may be coming down pretty soon we're gonna we're gonna

01:01:07.349 --> 01:01:08.360
especially the tariffs

01:01:08.360 --> 01:01:11.440
on solar yes we're gonna cover those here very very soon

01:01:11.440 --> 01:01:19.079
excuse me yes can you go to slide 15 the the seasonal

01:01:19.079 --> 01:01:20.920
summer this one and yes

01:01:20.920 --> 01:01:27.170
yes so the blue is the Denton Energy Center so yes the

01:01:27.170 --> 01:01:27.880
vertical bars why do

01:01:27.880 --> 01:01:31.639
we turn it on then you want to turn it on to maximize this

01:01:31.639 --> 01:01:33.079
slide why do we turn

01:01:33.079 --> 01:01:37.400
it on you don't turn it on okay so here's the dispatch

01:01:37.400 --> 01:01:40.000
because the at that

01:01:40.000 --> 01:01:43.409
time the whatever you've been in it let's say you let's see

01:01:43.409 --> 01:01:43.960
what's the price

01:01:43.960 --> 01:01:50.750
there the price is let's say $35 and that means it's more

01:01:50.750 --> 01:01:51.440
than a 10 heat

01:01:51.440 --> 01:01:55.530
break that's why they turn it on is because that meets you

01:01:55.530 --> 01:01:56.400
've been in a

01:01:56.400 --> 01:02:01.110
curve essentially and and during this this was a really

01:02:01.110 --> 01:02:02.960
high priced August day

01:02:02.960 --> 01:02:06.360
August is okay prices okay and so those things may have

01:02:06.360 --> 01:02:07.559
been so can you go back

01:02:07.559 --> 01:02:17.800
to your disadvantages advantages slide sure so then in

01:02:17.800 --> 01:02:20.840
those situations it does

01:02:20.840 --> 01:02:24.650
offer some kind of pricing power and competitive absolutely

01:02:24.650 --> 01:02:25.599
at those hours

01:02:25.599 --> 01:02:31.170
yes it does so then actually for the 12% to 20% of the time

01:02:31.170 --> 01:02:32.159
that you estimate

01:02:32.159 --> 01:02:37.099
that it is running or will run it will be offering pricing

01:02:37.099 --> 01:02:38.760
power and competitive

01:02:38.760 --> 01:02:43.739
yes at those that actually for nearly possibly 25% of the

01:02:43.739 --> 01:02:45.239
time a quarter of

01:02:45.239 --> 01:02:48.170
the time it will be that will be an advantage not a

01:02:48.170 --> 01:02:49.039
disadvantage correct

01:02:49.039 --> 01:02:51.690
absolutely and I'm not sure that's far different in

01:02:51.690 --> 01:02:53.079
percentages from what we

01:02:53.079 --> 01:02:56.010
were told no if I'm not mistaken I think it's pretty close

01:02:56.010 --> 01:02:59.639
said 17 17 so yeah it

01:02:59.639 --> 01:03:03.000
all depends on the gas price right sure so you so you've

01:03:03.000 --> 01:03:04.440
actually nearly said

01:03:04.440 --> 01:03:07.110
the same exact thing we were told in the renewable debt and

01:03:07.110 --> 01:03:07.719
project and

01:03:07.719 --> 01:03:13.039
technically then ERCOT is depending on us to firm up their

01:03:13.039 --> 01:03:14.400
entire system

01:03:14.400 --> 01:03:17.980
some granular data we haven't been given before yes but the

01:03:17.980 --> 01:03:19.920
12 to 15 12 to 20% I

01:03:19.920 --> 01:03:23.179
mean that's not far off from 17 and I would think you would

01:03:23.179 --> 01:03:23.960
find in just a

01:03:23.960 --> 01:03:26.929
moment we're gonna show you some projections of what we

01:03:26.929 --> 01:03:28.119
think the value

01:03:28.119 --> 01:03:31.670
of the portfolio is going forward with the renewables and I

01:03:31.670 --> 01:03:33.079
think a lot of that

01:03:33.079 --> 01:03:36.119
modeling very much lines up with what brattle it is just a

01:03:36.119 --> 01:03:37.199
different gas price

01:03:37.199 --> 01:03:39.659
assumption the whole different whole difference is just the

01:03:39.659 --> 01:03:40.039
gas price

01:03:40.039 --> 01:03:46.079
assumption yeah absolutely and and just to amplify what you

01:03:46.079 --> 01:03:47.360
were asking about

01:03:47.360 --> 01:03:51.590
just on this graph here that shows in the white during this

01:03:51.590 --> 01:03:52.480
particular day

01:03:52.480 --> 01:03:56.380
that is when the deck is the least cost firming resource

01:03:56.380 --> 01:03:57.960
rather than the market

01:03:57.960 --> 01:04:02.179
that's when it offers an advantage to you and so just go

01:04:02.179 --> 01:04:03.320
ahead you make your

01:04:03.320 --> 01:04:06.239
point and then I'll but annually that will still represent

01:04:06.239 --> 01:04:07.559
that 12 to 20%

01:04:07.559 --> 01:04:11.400
this is just kind of a quibble it actually doesn't give you

01:04:11.400 --> 01:04:12.280
a power price

01:04:12.280 --> 01:04:16.989
it gives you a heat rate and what's the difference in that

01:04:16.989 --> 01:04:18.559
time put my mind

01:04:18.559 --> 01:04:22.559
around heat rate I think professionals do that right yeah

01:04:22.559 --> 01:04:23.440
it means your margin

01:04:23.440 --> 01:04:26.369
basically yeah if I get just if the price is a hundred

01:04:26.369 --> 01:04:27.519
dollars for the deck

01:04:27.519 --> 01:04:32.039
and the markets 110 you get a $10 you know you don't get a

01:04:32.039 --> 01:04:32.840
hundred dollars and

01:04:32.840 --> 01:04:36.230
so that's one of the things about that's how the price has

01:04:36.230 --> 01:04:38.360
slipped is a hundred

01:04:38.360 --> 01:04:41.820
dollars a good hedge we would say if our average price is

01:04:41.820 --> 01:04:43.559
25 not really that's

01:04:43.559 --> 01:04:46.019
where we're saying this is a little bit you have to think

01:04:46.019 --> 01:04:47.440
about this and and

01:04:47.440 --> 01:04:50.679
that's how it works and then just what I was going to

01:04:50.679 --> 01:04:51.840
conclude there and say is

01:04:51.840 --> 01:04:54.449
that you know we say we see our mission and what we've done

01:04:54.449 --> 01:04:55.480
in the resource plan

01:04:55.480 --> 01:04:57.719
here is how does the deck fit into the portfolio you know

01:04:57.719 --> 01:04:58.519
we're not sitting

01:04:58.519 --> 01:05:00.980
here making any decisions about the deck it's how do you

01:05:00.980 --> 01:05:02.320
best optimize it how do

01:05:02.320 --> 01:05:04.800
we maximize the value of that how does it best serve Denton

01:05:04.800 --> 01:05:06.159
going forward given

01:05:06.159 --> 01:05:08.679
you're committed to it and so it's just that balance of

01:05:08.679 --> 01:05:09.960
market purchases versus

01:05:09.960 --> 01:05:12.710
the deck which is the least cost alternative at the time

01:05:12.710 --> 01:05:13.480
you need it for

01:05:13.480 --> 01:05:21.039
that but simultaneously when it is in excess you need to be

01:05:21.039 --> 01:05:21.800
whoops I'm going

01:05:21.800 --> 01:05:30.800
the wrong way you need to be maximizing sorry I'm off here

01:05:30.800 --> 01:05:32.159
15 what you need to

01:05:32.159 --> 01:05:36.320
be maximizing the revenue opportunities for this even if it

01:05:36.320 --> 01:05:39.400
's in excess it's it's

01:05:39.400 --> 01:05:42.849
the sort of thing where when the when the the opportunities

01:05:42.849 --> 01:05:44.079
there you're taking

01:05:44.079 --> 01:05:47.440
it full advantage of that opportunity so that's to maximize

01:05:47.440 --> 01:05:50.039
the value just one

01:05:50.039 --> 01:05:55.360
question and it if you go back to that slide I'm sorry this

01:05:55.360 --> 01:05:56.320
one yeah that's

01:05:56.320 --> 01:06:05.369
perfect just as so we're saying okay we this is during the

01:06:05.369 --> 01:06:06.360
blue period there is

01:06:06.360 --> 01:06:11.869
when the deck deck is engaged yes and then that is a that's

01:06:11.869 --> 01:06:13.440
a one-day sample

01:06:13.440 --> 01:06:17.789
now annually we're talking again what 15 20 percent or 20

01:06:17.789 --> 01:06:19.960
percent of the time

01:06:19.960 --> 01:06:25.059
runtime so I guess the question is if we look at it if we

01:06:25.059 --> 01:06:27.559
're looking at it as

01:06:27.559 --> 01:06:33.269
number of hours as a percentage of number of hours in a day

01:06:33.269 --> 01:06:34.360
or a year or

01:06:34.360 --> 01:06:40.719
whatever it is versus a percentage of what is the actual

01:06:40.719 --> 01:06:42.599
load that we're using

01:06:42.599 --> 01:06:47.909
or having the purchase or for the for the didn't load you

01:06:47.909 --> 01:06:49.840
got the didn't load

01:06:49.840 --> 01:06:54.650
so the load in August for instance would be a lot more than

01:06:54.650 --> 01:06:56.519
the load in April yes

01:06:56.519 --> 01:07:05.480
so can we can we look at from an annual basis just I'd just

01:07:05.480 --> 01:07:06.480
like to see the

01:07:06.480 --> 01:07:12.760
percentage of our annual power purchases of how it breaks

01:07:12.760 --> 01:07:15.559
out I think we're

01:07:15.559 --> 01:07:19.639
looking at the run hours and we've got that but I'm more

01:07:19.639 --> 01:07:20.639
interested in what the

01:07:20.639 --> 01:07:24.880
percentage of the load we're using yeah and that would be

01:07:24.880 --> 01:07:26.199
then a function of

01:07:26.199 --> 01:07:29.409
what renewable resources what the type you put in the

01:07:29.409 --> 01:07:30.699
portfolio and the

01:07:30.699 --> 01:07:34.139
quantity so that once we get a little closer to getting a

01:07:34.139 --> 01:07:35.519
specific recommendation

01:07:35.519 --> 01:07:39.119
fit we can run those so we could say okay a you're

01:07:39.119 --> 01:07:40.320
producing this much for

01:07:40.320 --> 01:07:43.039
your resources be this many hours or market purchases see

01:07:43.039 --> 01:07:43.960
this many hours are

01:07:43.960 --> 01:07:48.199
deck we can come up with that once we get a particular

01:07:48.199 --> 01:07:49.500
portfolio and actually

01:07:49.500 --> 01:07:52.730
maybe even reflected in megawatt hours absolutely that's

01:07:52.730 --> 01:07:53.280
how we count that

01:07:53.280 --> 01:07:57.230
you're doing yeah yeah but it's far smaller than 15 percent

01:07:57.230 --> 01:07:58.360
maybe 5 percent

01:07:58.360 --> 01:08:01.539
or something yeah 7 percent okay and that's because a lot

01:08:01.539 --> 01:08:03.719
of it's so a lot of

01:08:03.719 --> 01:08:06.440
it sold as you can see below there right yeah even though

01:08:06.440 --> 01:08:07.480
those August days but I

01:08:07.480 --> 01:08:10.440
think I'm still I'd still think that's an interesting thing

01:08:10.440 --> 01:08:11.440
we need to look at

01:08:11.440 --> 01:08:17.529
it are these all these projections based on current

01:08:17.529 --> 01:08:19.560
population current demand

01:08:19.560 --> 01:08:23.470
current load or do they project an increase you know the

01:08:23.470 --> 01:08:25.439
city of Denton most

01:08:25.439 --> 01:08:30.000
cities spend a lot of time trying to promote industry

01:08:30.000 --> 01:08:32.119
promote jobs so people

01:08:32.119 --> 01:08:36.960
have more income you got to have the resources and you need

01:08:36.960 --> 01:08:37.359
the

01:08:37.359 --> 01:08:41.500
diversification and be able to provide the energy and I

01:08:41.500 --> 01:08:43.399
like the word hedge

01:08:43.399 --> 01:08:49.609
because my world hedges a lot which is finance you need to

01:08:49.609 --> 01:08:50.880
be able to have the

01:08:50.880 --> 01:08:53.800
different resources you have the hedge and you have a city

01:08:53.800 --> 01:08:54.760
trying to bring in

01:08:54.760 --> 01:08:59.470
more people more industry create more jobs the more you can

01:08:59.470 --> 01:09:00.560
offer and assure

01:09:00.560 --> 01:09:05.359
them of all the different resources including the plant to

01:09:05.359 --> 01:09:06.800
me that makes a

01:09:06.800 --> 01:09:11.000
positive impact it's not just about tunnel vision here we

01:09:11.000 --> 01:09:12.880
hedge we do this

01:09:12.880 --> 01:09:16.170
we have a ton of options and but it would seem to me that

01:09:16.170 --> 01:09:17.399
these numbers are

01:09:17.399 --> 01:09:20.149
going to change if you said in 20 years the city didn't is

01:09:20.149 --> 01:09:22.399
going to be 30% 40 50

01:09:22.399 --> 01:09:26.000
percent larger or some major industries come in here and

01:09:26.000 --> 01:09:27.600
that load changes and

01:09:27.600 --> 01:09:32.260
and the cost of doing it then under crisis is a lot more

01:09:32.260 --> 01:09:33.920
than spending the

01:09:33.920 --> 01:09:37.199
money up front today well as of inflation because of the

01:09:37.199 --> 01:09:38.319
cost of putting

01:09:38.319 --> 01:09:41.500
in equipment prices are going to go up yeah you're at your

01:09:41.500 --> 01:09:42.560
average annual growth

01:09:42.560 --> 01:09:46.529
rate for let's say the last ten years about 1.6 percent and

01:09:46.529 --> 01:09:48.680
that that's our

01:09:48.680 --> 01:09:54.390
base case as we go through it is 1.6 percent one of the

01:09:54.390 --> 01:09:55.560
things and the other

01:09:55.560 --> 01:09:58.600
thing is in terms of economic development ours is at least

01:09:58.600 --> 01:09:58.920
cost

01:09:58.920 --> 01:10:02.869
solution and in our experience in attracting economic

01:10:02.869 --> 01:10:03.880
development stuff and

01:10:03.880 --> 01:10:07.199
that sort of thing they look at your rate and your cost if

01:10:07.199 --> 01:10:07.680
it's the lowest

01:10:07.680 --> 01:10:11.250
they like that then that a secondary consideration is how

01:10:11.250 --> 01:10:13.079
green are you and

01:10:13.079 --> 01:10:17.920
Georgetown can tell you that they have a branding of being

01:10:17.920 --> 01:10:20.439
100% green and that

01:10:20.439 --> 01:10:25.689
has helped them with economic development tremendously so

01:10:25.689 --> 01:10:26.159
your your

01:10:26.159 --> 01:10:30.479
point is well taken I think that in terms of our modeling

01:10:30.479 --> 01:10:31.979
we have to model

01:10:31.979 --> 01:10:34.489
what your typical growth rate has been you can always

01:10:34.489 --> 01:10:35.680
incorporate a scenario

01:10:35.680 --> 01:10:38.869
higher load growth but I don't know if that would be enough

01:10:38.869 --> 01:10:39.680
to change the

01:10:39.680 --> 01:10:42.609
resource quantity right now but it's a it's a good thing to

01:10:42.609 --> 01:10:43.359
consider for the

01:10:43.359 --> 01:10:46.029
future and that is a scenario because if your load growth

01:10:46.029 --> 01:10:47.319
starts to increase then

01:10:47.319 --> 01:10:59.220
the plan has to be adapted. All right the reason this slide

01:10:59.220 --> 01:11:01.199
here is repeated is

01:11:01.199 --> 01:11:04.449
that it's going to reference this next slide here for the

01:11:04.449 --> 01:11:05.399
benefits of the

01:11:05.399 --> 01:11:10.149
renewable portfolio and we want to be careful with our

01:11:10.149 --> 01:11:11.319
words here you know

01:11:11.319 --> 01:11:15.470
these are benefits I'm always hesitant when you're talking

01:11:15.470 --> 01:11:16.279
about a hedging

01:11:16.279 --> 01:11:18.939
entity a load serving entity when you start using the words

01:11:18.939 --> 01:11:19.479
losses and

01:11:19.479 --> 01:11:21.710
profits and returns and so forth you know the for-profit

01:11:21.710 --> 01:11:22.920
entity you're trying

01:11:22.920 --> 01:11:26.600
to manage to serve your load on a least cost basis so when

01:11:26.600 --> 01:11:27.920
we are using the word

01:11:27.920 --> 01:11:32.149
benefit we're using the word benefits of the portfolios as

01:11:32.149 --> 01:11:34.159
designed here versus

01:11:34.159 --> 01:11:38.920
the alternatives there from the marketplace so this slide

01:11:38.920 --> 01:11:39.560
just shows

01:11:39.560 --> 01:11:44.260
four different scenarios which are based on these four

01:11:44.260 --> 01:11:46.119
different natural gas

01:11:46.119 --> 01:11:50.659
forecasts so we've got the high gas case that we have again

01:11:50.659 --> 01:11:52.119
just to remind that

01:11:52.119 --> 01:11:55.800
that just models in an expectation of a rise in natural gas

01:11:55.800 --> 01:11:56.960
prices and then a

01:11:56.960 --> 01:12:00.890
reversion to the long-term mean our as the high gas case

01:12:00.890 --> 01:12:02.439
our low gas case is

01:12:02.439 --> 01:12:05.109
essentially a projection based on current market prices and

01:12:05.109 --> 01:12:05.479
then we

01:12:05.479 --> 01:12:10.210
incorporated the brattle low case and the brattle base case

01:12:10.210 --> 01:12:11.119
into these

01:12:11.119 --> 01:12:15.510
projections as well so the top two areas that the upper

01:12:15.510 --> 01:12:17.199
half of the tornado

01:12:17.199 --> 01:12:21.699
diagram here are using those different gas cases to project

01:12:21.699 --> 01:12:22.800
the potential

01:12:22.800 --> 01:12:27.460
benefits of the deck using the brattle gas cases and our

01:12:27.460 --> 01:12:28.840
gas cases and the

01:12:28.840 --> 01:12:34.600
bottom half is the total system benefits through the

01:12:34.600 --> 01:12:37.000
additions of the renewable

01:12:37.000 --> 01:12:39.720
resources that are proposed for the system you want to

01:12:39.720 --> 01:12:40.600
speak to that anymore

01:12:40.600 --> 01:12:48.210
just in the sense of the portfolio makeup so the for ours

01:12:48.210 --> 01:12:49.680
what we did is we

01:12:49.680 --> 01:12:55.390
took a hundred percent goal and that was achieved in 2024

01:12:55.390 --> 01:12:57.359
so you went to a 70% in

01:12:57.359 --> 01:13:04.630
19 per year renewable portfolio standard and then as soon

01:13:04.630 --> 01:13:08.439
as the white tail fell

01:13:08.439 --> 01:13:11.359
falls off it falls off in that year we will replace it with

01:13:11.359 --> 01:13:12.239
the renewables and

01:13:12.239 --> 01:13:16.319
that puts you at a hundred percent in between your year in

01:13:16.319 --> 01:13:17.920
the 80s and so

01:13:17.920 --> 01:13:22.229
that's a little bit different than what happened with a br

01:13:22.229 --> 01:13:24.760
attle but it and what

01:13:24.760 --> 01:13:28.199
it does is it allows you to get because they're lower cost

01:13:28.199 --> 01:13:30.920
you get a better more

01:13:30.920 --> 01:13:36.689
benefits earlier on in the planning horizon now if you

01:13:36.689 --> 01:13:38.680
notice if we used our

01:13:38.680 --> 01:13:42.810
model and used brattles total system benefits that come out

01:13:42.810 --> 01:13:44.159
to be look pretty

01:13:44.159 --> 01:13:49.319
darn close right so we given those gas prices we would

01:13:49.319 --> 01:13:50.399
calculate almost the

01:13:50.399 --> 01:13:54.329
same benefits what the main thing that we did is and this

01:13:54.329 --> 01:13:55.520
is also true for the

01:13:55.520 --> 01:14:00.729
deck to there we have these benefits for the deck the top

01:14:00.729 --> 01:14:02.800
thing and it's not too

01:14:02.800 --> 01:14:07.039
far off from the bridle deck now one thing I want to note

01:14:07.039 --> 01:14:08.000
if you go look at

01:14:08.000 --> 01:14:13.369
their things we put this all in 2008 and 18 real dollars or

01:14:13.369 --> 01:14:14.119
constant dollars

01:14:14.119 --> 01:14:18.069
dollars of the day they use nominal dollars inflated

01:14:18.069 --> 01:14:19.600
dollars and if you

01:14:19.600 --> 01:14:21.670
don't know the inflation rates you don't really know what

01:14:21.670 --> 01:14:22.920
the price is so this is

01:14:22.920 --> 01:14:26.100
something that we kind of corrected and we think so now

01:14:26.100 --> 01:14:27.800
this is all on apples to

01:14:27.800 --> 01:14:35.479
apples comparison thank you so let's get down to some of

01:14:35.479 --> 01:14:37.119
the considerations for

01:14:37.119 --> 01:14:39.579
selecting renewable resources and our recommendations for

01:14:39.579 --> 01:14:40.640
those so didn't can

01:14:40.640 --> 01:14:43.560
reach its 70% goal with additional renewable resources from

01:14:43.560 --> 01:14:44.319
the current RFP

01:14:44.319 --> 01:14:47.069
submissions there are very attractive offers for power in

01:14:47.069 --> 01:14:48.800
the current RFP the

01:14:48.800 --> 01:14:51.010
additional energy to reach the goal ranges from

01:14:51.010 --> 01:14:52.720
approximately 9% to 27%

01:14:52.720 --> 01:14:55.640
as we stated earlier this depends on whether or not why a

01:14:55.640 --> 01:14:56.600
tail is designated

01:14:56.600 --> 01:15:00.170
as a renewable resource the current portfolio as it stands

01:15:00.170 --> 01:15:01.039
now falls far

01:15:01.039 --> 01:15:03.960
short of a balanced and diversified portfolio because solar

01:15:03.960 --> 01:15:04.960
is over only 30

01:15:04.960 --> 01:15:08.859
megawatts and you've got a large chunk of West Texas wind

01:15:08.859 --> 01:15:10.119
in there so those

01:15:10.119 --> 01:15:15.149
things need to be balanced out the the deck is a heat rate

01:15:15.149 --> 01:15:16.199
resource and

01:15:16.199 --> 01:15:18.659
therefore doesn't contribute an energy hedge during peak

01:15:18.659 --> 01:15:19.319
hours it's a heat

01:15:19.319 --> 01:15:22.560
rate hedge only until the price of gas is known for that

01:15:22.560 --> 01:15:23.920
this leaves Denton

01:15:23.920 --> 01:15:28.489
with a on peak energy supply gap so a minimum of 90 120 meg

01:15:28.489 --> 01:15:29.520
awatts of solar

01:15:29.520 --> 01:15:31.989
would help balance the portfolio so that's going to be the

01:15:31.989 --> 01:15:32.680
one of the chief

01:15:32.680 --> 01:15:35.859
recommendations we're gonna make to reach the 70% goal in a

01:15:35.859 --> 01:15:36.680
minimum another

01:15:36.680 --> 01:15:38.949
70 megawatts of solar should be considered as an addition

01:15:38.949 --> 01:15:39.239
to the

01:15:39.239 --> 01:15:42.859
portfolio if white tail is not counted then another 120 meg

01:15:42.859 --> 01:15:43.560
awatts of solar

01:15:43.560 --> 01:15:46.739
should be considered with rent representing the balance of

01:15:46.739 --> 01:15:47.279
energy to

01:15:47.279 --> 01:15:51.560
reach the 70% goal. What's important about this if you

01:15:51.560 --> 01:15:52.359
think about the

01:15:52.359 --> 01:15:56.029
solar on peak that's what's completing the energy hedge

01:15:56.029 --> 01:15:57.399
that is missing with

01:15:57.399 --> 01:16:02.500
the deck so that's why you would purchase it and you say

01:16:02.500 --> 01:16:03.159
well why should

01:16:03.159 --> 01:16:06.760
we purchase this don't are we covered with the deck well

01:16:06.760 --> 01:16:07.760
this has a price

01:16:07.760 --> 01:16:11.689
associated with it the price is $2.20 natural gas equival

01:16:11.689 --> 01:16:12.800
ency that's

01:16:12.800 --> 01:16:16.359
incredibly cheap this is a discount you can't get in the

01:16:16.359 --> 01:16:17.800
market only and it's a

01:16:17.800 --> 01:16:23.029
renewable that follows our load profile yeah yeah and so we

01:16:23.029 --> 01:16:25.000
see this as a it's

01:16:25.000 --> 01:16:30.090
kind of a belt and suspenders kind of thing but the solar

01:16:30.090 --> 01:16:31.119
is certainly the

01:16:31.119 --> 01:16:39.149
belt and deck is the suspenders in this case. Now one

01:16:39.149 --> 01:16:41.159
consideration here is a

01:16:41.159 --> 01:16:44.079
potential solar tariff and I'll let Neil speak to that in

01:16:44.079 --> 01:16:46.439
just a moment but there

01:16:46.439 --> 01:16:49.649
are several things to consider that you might be able to do

01:16:49.649 --> 01:16:50.840
because of that one

01:16:50.840 --> 01:16:53.149
is that you might just take an approach that in your

01:16:53.149 --> 01:16:54.319
contract and you're not

01:16:54.319 --> 01:16:59.729
going to accept any tariff risk there is there's not enough

01:16:59.729 --> 01:17:01.680
that's concrete yet

01:17:01.680 --> 01:17:04.140
about the potential tariff there is the opportunity chance

01:17:04.140 --> 01:17:04.680
that it may be

01:17:04.680 --> 01:17:08.399
somewhat retroactive which is a little bit tricky you do

01:17:08.399 --> 01:17:10.000
have some solar

01:17:10.000 --> 01:17:14.500
suppliers that have stockpiled cells so they may be able to

01:17:14.500 --> 01:17:15.920
either designate

01:17:15.920 --> 01:17:19.920
that or if they're really that confident in when the timing

01:17:19.920 --> 01:17:21.119
of those souls are

01:17:21.119 --> 01:17:25.109
cells are if you can get them contractually to commit to

01:17:25.109 --> 01:17:25.880
that that

01:17:25.880 --> 01:17:28.470
would be a recommendation on our part so this is a bit of a

01:17:28.470 --> 01:17:30.239
cloud overhanging the

01:17:30.239 --> 01:17:33.770
the potential acquisition there an alternative we would be

01:17:33.770 --> 01:17:34.680
to acquire more

01:17:34.680 --> 01:17:37.159
coastal wind as you saw coastal wind has an on-peak profile

01:17:37.159 --> 01:17:38.079
doesn't perfectly

01:17:38.079 --> 01:17:41.880
match solar but it would be a reasonable offset yes I think

01:17:41.880 --> 01:17:43.039
I saw come back to

01:17:43.039 --> 01:17:46.260
the tariff do we know approximately what we think that

01:17:46.260 --> 01:17:48.399
would increase yes the

01:17:48.399 --> 01:17:52.779
cost yes we don't know exactly because it's a tariff and

01:17:52.779 --> 01:17:54.000
there's quotas and

01:17:54.000 --> 01:17:57.890
it's just as complicated as can be but I've heard it

01:17:57.890 --> 01:17:59.359
increases the price from

01:17:59.359 --> 01:18:06.970
say $25 delivered to the hub north to 40 so what does that

01:18:06.970 --> 01:18:07.800
convert back to the

01:18:07.800 --> 01:18:13.560
gas price of gas it makes it it makes it more expensive

01:18:13.560 --> 01:18:17.840
yeah it's over doing the

01:18:17.840 --> 01:18:22.909
math in my head okay yeah but it would make it non-compute

01:18:22.909 --> 01:18:23.760
would make it that

01:18:23.760 --> 01:18:28.079
attractive at that okay yeah it's still you'd be paying a

01:18:28.079 --> 01:18:29.680
premium yeah to add

01:18:29.680 --> 01:18:33.609
that in to reach your goals so all the more reason to it's

01:18:33.609 --> 01:18:34.800
not our risk is

01:18:34.800 --> 01:18:38.520
yours correct so coastal does have some of the

01:18:38.520 --> 01:18:39.680
characteristics of summer wind so

01:18:39.680 --> 01:18:42.859
you can increase the coastal and not do as much solar or

01:18:42.859 --> 01:18:44.319
solar at all if that is

01:18:44.319 --> 01:18:48.390
a important risk consideration for Denton you could

01:18:48.390 --> 01:18:49.319
consider utility scale

01:18:49.319 --> 01:18:51.619
wind resources with a storage component that could also add

01:18:51.619 --> 01:18:52.439
a lot of cost though

01:18:52.439 --> 01:18:56.310
and that's something that storage is intriguing this is the

01:18:56.310 --> 01:18:57.239
next massive

01:18:57.239 --> 01:19:00.239
revolution in this business but you're just now in the cusp

01:19:00.239 --> 01:19:01.119
of it so once again

01:19:01.119 --> 01:19:04.300
we've got that where's the price factor you know we're not

01:19:04.300 --> 01:19:04.720
in the second-gen

01:19:04.720 --> 01:19:08.819
generation yet where this becomes price competitive or didn

01:19:08.819 --> 01:19:09.960
't could wait after

01:19:09.960 --> 01:19:12.710
reaching the 70% goal it's tariff prices and supplies read

01:19:12.710 --> 01:19:13.520
just to marketing

01:19:13.520 --> 01:19:16.439
conditions or the tariff is no longer an issue so that's

01:19:16.439 --> 01:19:17.159
just one other

01:19:17.159 --> 01:19:19.859
consideration here you get to 70% you wait see what happens

01:19:19.859 --> 01:19:20.760
to the solar and

01:19:20.760 --> 01:19:22.920
then you could add more solar later once you get from want

01:19:22.920 --> 01:19:23.840
to go from the 70 to

01:19:23.840 --> 01:19:29.029
100% level not exactly a risk but other factors like this

01:19:29.029 --> 01:19:30.000
that could be

01:19:30.000 --> 01:19:32.479
potential purchase accelerators are the retirement of

01:19:32.479 --> 01:19:33.680
conventional fossil fuel

01:19:33.680 --> 01:19:36.609
generation if enough of that's retired that reduces the

01:19:36.609 --> 01:19:37.600
resource base and the

01:19:37.600 --> 01:19:40.539
cost base and could raise overall prices and because

01:19:40.539 --> 01:19:42.800
renewable developers are in

01:19:42.800 --> 01:19:45.359
there right now well we'll look at the second bullet there

01:19:45.359 --> 01:19:46.520
the reduction of the

01:19:46.520 --> 01:19:49.250
producer tax credit a lot of the developers in a hurry to

01:19:49.250 --> 01:19:51.720
get in under the

01:19:51.720 --> 01:19:55.010
the finish line before the tax credits go away there's a

01:19:55.010 --> 01:19:56.199
lot of competitive

01:19:56.199 --> 01:19:59.899
offers right now but those might go away after the tax

01:19:59.899 --> 01:20:01.479
credits go away and if

01:20:01.479 --> 01:20:03.489
prices are higher because of the retirements of

01:20:03.489 --> 01:20:04.640
conventional generation

01:20:04.640 --> 01:20:09.350
renewable prices might be higher so this conceptually could

01:20:09.350 --> 01:20:10.239
be a really good time

01:20:10.239 --> 01:20:13.420
to strike because of the timing of these things right now

01:20:13.420 --> 01:20:14.560
and low natural gas

01:20:14.560 --> 01:20:18.840
prices if they got your natural gas prices rise then there

01:20:18.840 --> 01:20:19.680
's less competition

01:20:19.680 --> 01:20:22.979
for these renewable resources and then the prices may rise

01:20:22.979 --> 01:20:23.960
in your RFP so

01:20:23.960 --> 01:20:26.420
you're seeing very attractive prices now there are a lot of

01:20:26.420 --> 01:20:27.239
factors here that

01:20:27.239 --> 01:20:31.090
make this appear to be a good time from a price standpoint

01:20:31.090 --> 01:20:32.079
so those factors

01:20:32.079 --> 01:20:35.300
could be potential purchase accelerators one other thing

01:20:35.300 --> 01:20:36.439
this isn't a major point

01:20:36.439 --> 01:20:41.279
but I wanted to include this here very briefly we talked a

01:20:41.279 --> 01:20:42.479
little bit about

01:20:42.479 --> 01:20:46.760
having to correct for what producers claim to be the output

01:20:46.760 --> 01:20:47.680
of renewable

01:20:47.680 --> 01:20:50.880
resources well they may also pick certain years and so

01:20:50.880 --> 01:20:51.920
forth renewable

01:20:51.920 --> 01:20:55.100
resources are variable wind speeds do vary this is a graph

01:20:55.100 --> 01:20:55.960
from ERCOT that's

01:20:55.960 --> 01:20:59.420
showing the variable variability of winds over the year so

01:20:59.420 --> 01:21:00.399
you can get amount

01:21:00.399 --> 01:21:03.590
of wind production varying by as much as 15% so if Denton

01:21:03.590 --> 01:21:05.199
wants to reach a goal of

01:21:05.199 --> 01:21:09.680
70% are you reaching 70% on average and then are you

01:21:09.680 --> 01:21:10.640
willing to tolerate being

01:21:10.640 --> 01:21:13.560
less than 70% in a year that the wind doesn't blow as much

01:21:13.560 --> 01:21:14.239
or do you need to

01:21:14.239 --> 01:21:17.460
overshoot the goal so that even in a low wind year you're

01:21:17.460 --> 01:21:19.680
still reaching 70% this

01:21:19.680 --> 01:21:23.050
is just one of those calibration questions that we can't

01:21:23.050 --> 01:21:24.000
answer for you

01:21:24.000 --> 01:21:26.270
this is just a value decision that didn't needs to make you

01:21:26.270 --> 01:21:27.000
want to ensure

01:21:27.000 --> 01:21:31.359
you're 70% or you want to get to 70% based on the average

01:21:31.359 --> 01:21:32.840
profile and then be

01:21:32.840 --> 01:21:35.439
willing to say well some years a little under 70 some years

01:21:35.439 --> 01:21:36.840
a little over 70 or

01:21:36.840 --> 01:21:39.460
whatever the goal tends to be just an additional

01:21:39.460 --> 01:21:41.159
consideration there in terms

01:21:41.159 --> 01:21:44.199
of the quantity that you really target when you go after

01:21:44.199 --> 01:21:46.079
these resources so the

01:21:46.079 --> 01:21:49.529
next three slides here show some adoption paths we've got

01:21:49.529 --> 01:21:50.279
graphs here

01:21:50.279 --> 01:21:54.479
these are graphs the horizontal scale is across years and

01:21:54.479 --> 01:21:56.840
the vertical scale is in

01:21:56.840 --> 01:22:01.109
the number of megawatt hours so what the big takeaways here

01:22:01.109 --> 01:22:02.279
are the red vertical

01:22:02.279 --> 01:22:05.479
bars represent quantities of renewable purchases that you

01:22:05.479 --> 01:22:06.560
would make in those

01:22:06.560 --> 01:22:11.680
years to reach your goals your load is in the light blue

01:22:11.680 --> 01:22:12.880
shaded area that

01:22:12.880 --> 01:22:17.449
reflects your load growth as we've used it for the base

01:22:17.449 --> 01:22:19.439
case here and then

01:22:19.439 --> 01:22:24.300
you're seeing the additions of renewables what that does to

01:22:24.300 --> 01:22:24.479
the

01:22:24.479 --> 01:22:28.319
portfolio and your fixed price exposure where that fixed

01:22:28.319 --> 01:22:30.000
price exposure can vary

01:22:30.000 --> 01:22:33.609
from the portfolio is in something like whitetail because

01:22:33.609 --> 01:22:34.079
if you're not

01:22:34.079 --> 01:22:37.640
considering it as a renewable resource and if you get to

01:22:37.640 --> 01:22:39.840
say 70% renewables you

01:22:39.840 --> 01:22:43.840
really have may have 88% fixed price exposure because of

01:22:43.840 --> 01:22:45.720
having whitetail in

01:22:45.720 --> 01:22:48.449
the portfolio in addition to the amount of renewable

01:22:48.449 --> 01:22:50.239
resources that you add so

01:22:50.239 --> 01:22:55.970
say that again I can't get my head around it yeah so if you

01:22:55.970 --> 01:22:57.399
add enough

01:22:57.399 --> 01:23:00.699
resources to get to 70% in your portfolio and you don't

01:23:00.699 --> 01:23:01.680
count whitetail

01:23:01.680 --> 01:23:05.430
as a renewable resource that's additional supply so if you

01:23:05.430 --> 01:23:06.439
get to 70%

01:23:06.439 --> 01:23:09.760
renewable but then you also have whitetail in there you may

01:23:09.760 --> 01:23:12.119
have 88% fixed

01:23:12.119 --> 01:23:15.369
price exposure even though you're only at 70% is a quantity

01:23:15.369 --> 01:23:15.880
of renewable

01:23:15.880 --> 01:23:18.840
resources that reflects the peak that's that gap in the

01:23:18.840 --> 01:23:20.199
upper left hand corner

01:23:20.199 --> 01:23:23.380
where your fixed price exposure exceeds the renewable

01:23:23.380 --> 01:23:26.000
resource amount so this is

01:23:26.000 --> 01:23:28.750
what we've termed the gradual adoption path this is where

01:23:28.750 --> 01:23:29.840
you would execute on

01:23:29.840 --> 01:23:34.720
low-cost alternatives in the present to get to 70% then

01:23:34.720 --> 01:23:35.800
additional renewable

01:23:35.800 --> 01:23:40.800
purchases would be made to reach 100% by 2024 and whitetail

01:23:40.800 --> 01:23:41.520
ends in

01:23:41.520 --> 01:23:45.720
2023 so that's when those two lines would resolve and meet

01:23:45.720 --> 01:23:47.520
and as I said in

01:23:47.520 --> 01:23:49.979
this example whitetail is not included as a renewable

01:23:49.979 --> 01:23:51.680
resource and alternative

01:23:51.680 --> 01:23:54.300
this could be the early adoption path and we like this path

01:23:54.300 --> 01:23:55.119
because we think

01:23:55.119 --> 01:23:57.840
the time is right it's a good time to strike so this is

01:23:57.840 --> 01:23:58.399
something that we

01:23:58.399 --> 01:24:02.069
would recommend this is when you reach the 100% renewable

01:24:02.069 --> 01:24:04.239
goal faster by 2020

01:24:04.239 --> 01:24:10.119
so this would though result in excess power supply of 18%

01:24:10.119 --> 01:24:10.960
through from the

01:24:10.960 --> 01:24:16.079
years 2020 to 2023 again this is not including whitetail as

01:24:16.079 --> 01:24:16.520
a renewable

01:24:16.520 --> 01:24:20.079
resource this is getting to 100% renewable faster you're

01:24:20.079 --> 01:24:21.399
effectively for

01:24:21.399 --> 01:24:26.109
a few years at 118% but with the addition of enough solar

01:24:26.109 --> 01:24:27.600
where you would

01:24:27.600 --> 01:24:31.829
have the excess power would be on peak and that's not a bad

01:24:31.829 --> 01:24:33.039
time of use to have

01:24:33.039 --> 01:24:36.689
excess power so then you could sell or monetize that excess

01:24:36.689 --> 01:24:37.560
power and get

01:24:37.560 --> 01:24:40.760
revenue for that you want to speak now I think you're on

01:24:40.760 --> 01:24:43.720
this yeah then just the

01:24:43.720 --> 01:24:46.640
third alternative is the early adoption counting whitetail

01:24:46.640 --> 01:24:47.479
if you chose to

01:24:47.479 --> 01:24:50.180
count whitetail you'll see now that the the line there

01:24:50.180 --> 01:24:51.399
showing the amount that

01:24:51.399 --> 01:24:54.720
you have has resolved there so including whitetail as a

01:24:54.720 --> 01:24:55.800
supply as a renewable

01:24:55.800 --> 01:24:59.199
resource would also accelerate the number single to 2020 it

01:24:59.199 --> 01:25:00.079
would require

01:25:00.079 --> 01:25:05.020
replacement of the whitetail piece in 2024 the principal

01:25:05.020 --> 01:25:06.239
advantage of this is

01:25:06.239 --> 01:25:12.010
you don't have that 18% excess of fixed price risk but

01:25:12.010 --> 01:25:13.880
given what we see in

01:25:13.880 --> 01:25:16.340
terms of the attractiveness of the prices out there and the

01:25:16.340 --> 01:25:17.359
various factors

01:25:17.359 --> 01:25:20.859
to consider this is what we would suggest if you ask us our

01:25:20.859 --> 01:25:21.800
opinion would

01:25:21.800 --> 01:25:23.989
be the early adoption path so these are just some

01:25:23.989 --> 01:25:25.560
alternatives that you all need

01:25:25.560 --> 01:25:29.369
to take into account in this some other considerations I

01:25:29.369 --> 01:25:30.159
don't want to belabor

01:25:30.159 --> 01:25:34.060
this slide they're just just to give you a sense there's

01:25:34.060 --> 01:25:35.159
some alternative

01:25:35.159 --> 01:25:37.510
configurations here to reaching some of those megawatt-hour

01:25:37.510 --> 01:25:39.439
targets here if you

01:25:39.439 --> 01:25:42.399
go to 100% renewable you could do it by 180 megawatts of

01:25:42.399 --> 01:25:43.439
solar with 150 of

01:25:43.439 --> 01:25:46.479
coastal if you chose to emphasize coastal more you could

01:25:46.479 --> 01:25:47.319
get to the same

01:25:47.319 --> 01:25:51.260
place with 120 megawatts of solar in 200 megawatts of

01:25:51.260 --> 01:25:52.960
coastal just some more

01:25:52.960 --> 01:25:55.649
considerations that we've listed here just wanted to give

01:25:55.649 --> 01:25:56.520
you a flavor for

01:25:56.520 --> 01:26:00.210
that so let's now get down to specific recommendations in

01:26:00.210 --> 01:26:01.159
the decision so we're

01:26:01.159 --> 01:26:05.329
finally wrapping this up here because of the confidential

01:26:05.329 --> 01:26:06.800
ity of the RFP process

01:26:06.800 --> 01:26:09.979
we've just labeled some of these companies bidders one two

01:26:09.979 --> 01:26:10.760
and three but

01:26:10.760 --> 01:26:13.939
these are these are some of the biggest suppliers out there

01:26:13.939 --> 01:26:14.840
these are serious

01:26:14.840 --> 01:26:19.159
players with those offers so you see some wind resources

01:26:19.159 --> 01:26:20.399
solar resources

01:26:20.399 --> 01:26:25.359
prices at the bus bar prices at the North Hub we just to

01:26:25.359 --> 01:26:27.159
highlight the the

01:26:27.159 --> 01:26:30.670
sort of craziness and how people will price in congestion

01:26:30.670 --> 01:26:31.920
notice bidder number

01:26:31.920 --> 01:26:36.239
two on the second row we got 1335 at the bus bar into $30

01:26:36.239 --> 01:26:37.880
at the North Hub that's

01:26:37.880 --> 01:26:40.800
a substantial amount of congestion that's how they're

01:26:40.800 --> 01:26:41.600
pricing in if you

01:26:41.600 --> 01:26:43.869
ask them to take that risk that's how they're going to

01:26:43.869 --> 01:26:45.159
price it in so one of

01:26:45.159 --> 01:26:48.079
the key considerations here and one of the things that we

01:26:48.079 --> 01:26:48.760
've stressed

01:26:48.760 --> 01:26:53.239
continually is CRR management is your congestion management

01:26:53.239 --> 01:26:53.920
because we feel

01:26:53.920 --> 01:26:56.619
you can do that much more cheaply then they're going to

01:26:56.619 --> 01:26:57.680
price it in now there

01:26:57.680 --> 01:27:00.609
may be some cases here where they're doing it at a pretty

01:27:00.609 --> 01:27:01.560
efficient way and

01:27:01.560 --> 01:27:03.689
it may be to your benefit to go ahead and take the power of

01:27:03.689 --> 01:27:04.319
the bus bar and

01:27:04.319 --> 01:27:07.239
let them take the congestion risk because they've priced it

01:27:07.239 --> 01:27:07.760
in fairly but

01:27:07.760 --> 01:27:09.859
if you're getting a huge gap there it would be more

01:27:09.859 --> 01:27:11.039
efficient for you to take

01:27:11.039 --> 01:27:16.779
that on yeah so for example what he's saying bidder three

01:27:16.779 --> 01:27:17.399
and yellow where

01:27:17.399 --> 01:27:19.859
you've got the price of the bus bar of 2150 that's the

01:27:19.859 --> 01:27:20.880
solar resource the next

01:27:20.880 --> 01:27:23.800
to the bottom line and the price of the North Hub of $23

01:27:23.800 --> 01:27:24.520
that may be something

01:27:24.520 --> 01:27:26.710
where it's just to your advantage to take it at the hub

01:27:26.710 --> 01:27:27.840
because that's

01:27:27.840 --> 01:27:30.300
something that that that slight price premium in the

01:27:30.300 --> 01:27:31.439
congestion market might

01:27:31.439 --> 01:27:34.619
not be worth it so again these are some value

01:27:34.619 --> 01:27:36.000
considerations that need to be

01:27:36.000 --> 01:27:40.520
made by Denton to best fit this so just to go over this

01:27:40.520 --> 01:27:43.319
here so this would entail

01:27:43.319 --> 01:27:45.970
a purchase of approximately 30 to 40 percent of load in

01:27:45.970 --> 01:27:47.199
2019 with additional

01:27:47.199 --> 01:27:50.550
renewable resources we think the useful portfolio divers

01:27:50.550 --> 01:27:51.520
ification could be

01:27:51.520 --> 01:27:55.130
achieved with approximately 75 megawatts to 100 megawatts

01:27:55.130 --> 01:27:56.000
of coastal and

01:27:56.000 --> 01:27:59.180
approximately 90 to 120 megawatts of additional solar

01:27:59.180 --> 01:28:00.119
resources to meet the

01:28:00.119 --> 01:28:04.609
70% goal some amount not all but some amount of North Texas

01:28:04.609 --> 01:28:05.079
one can be

01:28:05.079 --> 01:28:08.000
substituted for coastal because the two resources are close

01:28:08.000 --> 01:28:08.800
in cost this is just

01:28:08.800 --> 01:28:11.979
an adjustment that would need to be made so our preference

01:28:11.979 --> 01:28:13.479
is 200 megawatts of

01:28:13.479 --> 01:28:16.779
West Texas solar within a congestion region so you wouldn't

01:28:16.779 --> 01:28:17.760
be penalized with

01:28:17.760 --> 01:28:21.520
that and then 150 of wind which could possibly be split

01:28:21.520 --> 01:28:22.359
between locations

01:28:22.359 --> 01:28:25.279
depending upon cost equivalency one more thing I want to

01:28:25.279 --> 01:28:26.279
add here that's not on

01:28:26.279 --> 01:28:29.899
the slide we've just recently been approached by another

01:28:29.899 --> 01:28:31.359
municipality that

01:28:31.359 --> 01:28:35.039
would be willing to go in with you on a solar resource and

01:28:35.039 --> 01:28:36.479
solar in particular

01:28:36.479 --> 01:28:41.050
benefits from cost scaling so because of the equipment so

01:28:41.050 --> 01:28:42.119
there could be somebody

01:28:42.119 --> 01:28:44.250
that might want to partner with you maybe on a 50/50 basis

01:28:44.250 --> 01:28:44.800
and this could

01:28:44.800 --> 01:28:47.720
reduce the cost even further if you're willing to do that

01:28:47.720 --> 01:28:49.079
that's not reflected

01:28:49.079 --> 01:28:52.000
in these prices by the way so the optimal solar location

01:28:52.000 --> 01:28:52.800
was you talked

01:28:52.800 --> 01:28:56.630
about it'd be close to Midland but east to get into a less

01:28:56.630 --> 01:28:58.560
congestion pricing

01:28:58.560 --> 01:29:03.409
region and then Denton is going to need to hedge both its

01:29:03.409 --> 01:29:05.000
load from the hub

01:29:05.000 --> 01:29:07.970
north to your load zone and from the resource node to the

01:29:07.970 --> 01:29:09.359
hub north with CRRs

01:29:09.359 --> 01:29:12.920
for the upcoming Santa Rita wind as well as your solar farm

01:29:12.920 --> 01:29:14.279
so those are your

01:29:14.279 --> 01:29:17.590
recommendations and then just a summary here of decisions

01:29:17.590 --> 01:29:18.680
and then we're at a

01:29:18.680 --> 01:29:22.239
close here so some of the decisions are should you count

01:29:22.239 --> 01:29:22.880
quiet tail as a

01:29:22.880 --> 01:29:27.039
renewable resource yes or no if not you're gonna have to

01:29:27.039 --> 01:29:28.399
entail additional

01:29:28.399 --> 01:29:32.920
fixed price risk some of the answers to this once we get

01:29:32.920 --> 01:29:33.880
these answers back then

01:29:33.880 --> 01:29:36.420
we can give you a more concrete specific recommendation for

01:29:36.420 --> 01:29:37.560
the portfolio makeup

01:29:37.560 --> 01:29:40.510
well didn't choose to delay solar purchases because of the

01:29:40.510 --> 01:29:41.119
potential

01:29:41.119 --> 01:29:43.729
federal solar tariff would you delay them substitute

01:29:43.729 --> 01:29:44.800
coastal and so forth

01:29:44.800 --> 01:29:47.529
that's another value decision that the organization needs

01:29:47.529 --> 01:29:49.199
to make should didn't

01:29:49.199 --> 01:29:51.699
accelerate renewable purchases especially wind resources

01:29:51.699 --> 01:29:52.279
because of the

01:29:52.279 --> 01:29:54.630
attractiveness of the timing you may want to accelerate

01:29:54.630 --> 01:29:55.159
that that's that's

01:29:55.159 --> 01:29:57.720
our recommended early adoption path there's no reason to

01:29:57.720 --> 01:29:59.199
wait at 70% prices

01:29:59.199 --> 01:30:03.149
look attractive you can go there faster so that also then

01:30:03.149 --> 01:30:04.000
impacts that last

01:30:04.000 --> 01:30:08.159
decision should you move for the date of the 100% renewable

01:30:08.159 --> 01:30:08.760
goal and with that we

01:30:08.760 --> 01:30:13.079
are at the end of the presentation so any follow-on

01:30:13.079 --> 01:30:15.479
questions we can answer

01:30:15.479 --> 01:30:22.239
the 18% risk is there a proximate dollar amount that is

01:30:24.119 --> 01:30:30.460
all part yes the dollar amount would be 18% of your load

01:30:30.460 --> 01:30:32.800
your load is 1.5 5

01:30:32.800 --> 01:30:37.039
million so whatever that is that's about 300,000 and the

01:30:37.039 --> 01:30:41.159
current price is $27 so

01:30:41.159 --> 01:30:45.960
300,000 that's 7.5 million or something like that so that's

01:30:45.960 --> 01:30:47.279
roughly the risk out

01:30:47.279 --> 01:30:50.539
there on the portfolio the fixed price risk but again it

01:30:50.539 --> 01:30:53.359
depends on the price

01:30:53.359 --> 01:30:57.729
it depends on the price expectations so if you have that

01:30:57.729 --> 01:30:59.600
extra fixed price risk

01:30:59.600 --> 01:31:03.060
and then gas prices go up you're actually getting a benefit

01:31:03.060 --> 01:31:03.680
to having

01:31:03.680 --> 01:31:06.619
that extra 18% of gas prices go down you're at risk so it

01:31:06.619 --> 01:31:07.479
really depends on

01:31:07.479 --> 01:31:10.050
taking that base value that Neil calculated his head and

01:31:10.050 --> 01:31:10.880
then saying okay

01:31:10.880 --> 01:31:13.800
where could gas prices go higher low that gives you the

01:31:13.800 --> 01:31:14.880
range of potential

01:31:14.880 --> 01:31:19.779
outcomes some of them could be unintended benefits and

01:31:19.779 --> 01:31:20.880
going back to

01:31:20.880 --> 01:31:25.960
your the gas price model it was a blue line in the graph

01:31:25.960 --> 01:31:26.960
there was a short-term

01:31:26.960 --> 01:31:32.020
rise and then yes and then a drop yeah right that you yeah

01:31:32.020 --> 01:31:33.680
so if that happened

01:31:33.680 --> 01:31:36.909
and that's just a case we use we're not necessarily

01:31:36.909 --> 01:31:38.680
predicting sure I understand

01:31:38.680 --> 01:31:41.140
but if that's a case you use that would actually be quite

01:31:41.140 --> 01:31:41.960
advantageous that

01:31:41.960 --> 01:31:44.010
would almost perfectly overlap the time that you would have

01:31:44.010 --> 01:31:44.720
that additional

01:31:44.720 --> 01:31:58.279
dropped in 2024 okay good pretty good point five here the

01:31:58.279 --> 01:31:58.279
dollar map no oh he

01:31:58.279 --> 01:32:00.739
just calculated it would be the the base value to be about

01:32:00.739 --> 01:32:01.520
seven point five

01:32:01.520 --> 01:32:04.270
million per year but here's the thing going back to some of

01:32:04.270 --> 01:32:05.840
those other slides

01:32:05.840 --> 01:32:09.659
that we had what's gas gonna do if gas prices go up you get

01:32:09.659 --> 01:32:10.600
a benefit on having

01:32:10.600 --> 01:32:13.779
an extra 18% of gas prices go down it's gonna be a

01:32:13.779 --> 01:32:14.680
detriment to that

01:32:14.680 --> 01:32:17.310
so once again it kind of depends on what that gas price is

01:32:17.310 --> 01:32:18.359
and the chairman here

01:32:18.359 --> 01:32:21.789
just said well looking at that high gas case we had where

01:32:21.789 --> 01:32:22.880
there was the gas

01:32:22.880 --> 01:32:25.630
price rise for a few years that would ideally overlap with

01:32:25.630 --> 01:32:26.439
that but that's

01:32:26.439 --> 01:32:30.829
that's just a scenario that's not sure thank you yeah any

01:32:30.829 --> 01:32:34.680
other questions yeah

01:32:34.680 --> 01:32:40.000
this is for clarification for the public so just to be

01:32:40.000 --> 01:32:41.640
clear so a hundred percent

01:32:41.640 --> 01:32:49.560
renewable does not refers specifically as you're using that

01:32:49.560 --> 01:32:51.399
term to Denton's

01:32:51.399 --> 01:32:57.890
portfolio right meaning that is in use for Denton right how

01:32:57.890 --> 01:33:00.319
much how much where

01:33:00.319 --> 01:33:03.609
our power that we're using in Denton to turn on the lights

01:33:03.609 --> 01:33:04.680
here in Denton is

01:33:04.680 --> 01:33:07.609
coming from correct that's right so if you've got a certain

01:33:07.609 --> 01:33:08.880
expectation of

01:33:08.880 --> 01:33:12.119
megawatt hours of consumption in a year if you buy enough

01:33:12.119 --> 01:33:13.399
renewable resources

01:33:13.399 --> 01:33:16.760
with a projected production output of that same number of

01:33:16.760 --> 01:33:18.159
megawatt hours if

01:33:18.159 --> 01:33:20.130
those completely match then we would say you would be a

01:33:20.130 --> 01:33:21.960
hundred percent yes yes

01:33:21.960 --> 01:33:25.479
so it but that means some days were not and some days were

01:33:25.479 --> 01:33:26.119
that's right more

01:33:26.119 --> 01:33:29.319
than that but that's right and that's why we use annual

01:33:29.319 --> 01:33:30.159
because if you start

01:33:30.159 --> 01:33:33.159
picking a season you introduce seasonality in the distance

01:33:33.159 --> 01:33:33.399
too much

01:33:33.399 --> 01:33:37.090
variability so annual is really the shortest time period

01:33:37.090 --> 01:33:38.079
you can do that

01:33:38.079 --> 01:33:41.000
really smooths all that but moment to moment hour to hour

01:33:41.000 --> 01:33:41.800
season to season

01:33:41.800 --> 01:33:43.819
you're a lesson hundred percent you'll more than a hundred

01:33:43.819 --> 01:33:45.279
percent yeah I had a

01:33:45.279 --> 01:33:49.250
follow-up but really I had it no I was just gonna say that

01:33:49.250 --> 01:33:49.760
I had read an article

01:33:49.760 --> 01:33:52.680
not too long ago about Georgetown talking about a hundred

01:33:52.680 --> 01:33:53.439
percent being a

01:33:53.439 --> 01:33:55.659
hundred percent renewable and that actually that was more

01:33:55.659 --> 01:33:56.319
marketing than

01:33:56.319 --> 01:34:00.390
reality depends on how you define that because I would say

01:34:00.390 --> 01:34:01.319
right now they may

01:34:01.319 --> 01:34:04.000
be more than a percent yeah but because of the fact that at

01:34:04.000 --> 01:34:04.840
times they would

01:34:04.840 --> 01:34:09.500
have to purchase other in order because of you know the

01:34:09.500 --> 01:34:11.199
lack of wind or the lack

01:34:11.199 --> 01:34:15.159
of Sun or whatever that it wasn't always a hundred percent

01:34:15.159 --> 01:34:17.039
unless you and so

01:34:17.039 --> 01:34:20.409
that's kind of the scenario that I see for us as well is

01:34:20.409 --> 01:34:21.579
that we could say

01:34:21.579 --> 01:34:25.460
we're a hundred percent because we were trying to reach

01:34:25.460 --> 01:34:27.680
that goal but in reality

01:34:27.680 --> 01:34:32.340
we we wouldn't be that what we have suggested is the best

01:34:32.340 --> 01:34:33.720
you can do under

01:34:33.720 --> 01:34:36.649
the current market structure under which you have to

01:34:36.649 --> 01:34:38.159
operate and you don't have

01:34:38.159 --> 01:34:42.199
choice about that the only alternative would be is if you

01:34:42.199 --> 01:34:43.479
ended up somehow

01:34:43.479 --> 01:34:45.840
opting out of Urquhart which you couldn't do and then you

01:34:45.840 --> 01:34:46.600
had enough wind

01:34:46.600 --> 01:34:49.819
and solar so that at the absolute minimum you had that

01:34:49.819 --> 01:34:51.000
generator hooked

01:34:51.000 --> 01:34:53.920
directly into your own unique grid that's the only way you

01:34:53.920 --> 01:34:54.880
could absolutely

01:34:54.880 --> 01:34:57.239
ensure that because there will be times where you have to

01:34:57.239 --> 01:34:58.079
purchase from the

01:34:58.079 --> 01:35:00.640
market there's just no other way around that regardless of

01:35:00.640 --> 01:35:01.840
the structure so this

01:35:01.840 --> 01:35:06.800
is the best you can do given the reality that you operate

01:35:06.800 --> 01:35:11.920
in. The fact is from

01:35:11.920 --> 01:35:14.850
their definition they're always a hundred percent renewable

01:35:14.850 --> 01:35:15.539
because they

01:35:15.539 --> 01:35:19.680
purchased resources to fully supply their load and they're

01:35:19.680 --> 01:35:20.359
over a hundred

01:35:20.359 --> 01:35:26.069
percent so it's not marketing it's in actuality they have a

01:35:26.069 --> 01:35:26.920
financial position

01:35:26.920 --> 01:35:29.850
where they bought this stuff they own it it's they're

01:35:29.850 --> 01:35:30.920
committed there's a real

01:35:30.920 --> 01:35:34.140
wind farm or there's a real solar farm that they get that

01:35:34.140 --> 01:35:36.239
output from now this

01:35:36.239 --> 01:35:39.250
this other thing it's all commingled into the marketplace

01:35:39.250 --> 01:35:39.920
and that's that's

01:35:39.920 --> 01:35:44.000
one of the things but in from accounting and business sense

01:35:44.000 --> 01:35:44.760
they are a hundred

01:35:44.760 --> 01:35:49.420
percent renewable but no one is can be a hundred percent

01:35:49.420 --> 01:35:50.560
renewable in the real

01:35:50.560 --> 01:35:55.760
time in a physical sense that's under Urquhart. Not under

01:35:55.760 --> 01:35:58.760
Urquhart. Our physics doesn't allow for that.

01:35:58.760 --> 01:36:06.399
Well politics. So just to be clear for the ratepayers so a

01:36:06.399 --> 01:36:07.279
hundred percent

01:36:07.279 --> 01:36:13.779
renewable in 2020 means that we will no longer be using the

01:36:13.779 --> 01:36:18.319
gas plant for power

01:36:18.319 --> 01:36:24.670
in Denton it's only for selling after 2020. That's a

01:36:24.670 --> 01:36:25.359
complicated answer

01:36:25.359 --> 01:36:28.550
because remember that in Urquhart all the energy goes into

01:36:28.550 --> 01:36:29.600
the pool and comes out.

01:36:29.600 --> 01:36:32.880
So yeah it comes back to us because we're under Urquhart.

01:36:32.880 --> 01:36:35.000
Remember that in any in any

01:36:35.000 --> 01:36:41.220
hour when your portfolio forecast is not sufficient to meet

01:36:41.220 --> 01:36:42.279
your load you have to

01:36:42.279 --> 01:36:44.489
make up the difference and you have alternatives you can

01:36:44.489 --> 01:36:45.159
just go into the

01:36:45.159 --> 01:36:48.199
real time you could go into the day ahead but then the

01:36:48.199 --> 01:36:49.079
question is okay what

01:36:49.079 --> 01:36:52.539
is that gonna cost versus your resource? Absolutely. When

01:36:52.539 --> 01:36:53.399
it's cheaper to

01:36:53.399 --> 01:36:55.859
buy rather than run the deck you buy. When it's cheaper to

01:36:55.859 --> 01:36:56.680
run the deck than to

01:36:56.680 --> 01:37:00.390
buy you run the deck anytime you have a shortage. Yes. That

01:37:00.390 --> 01:37:01.260
's just however that

01:37:01.260 --> 01:37:04.840
wants to be portrayed that's just the reality of the least

01:37:04.840 --> 01:37:05.600
cost supply

01:37:05.600 --> 01:37:10.789
balancing that needs to occur. Yeah yeah so I'm just so I'm

01:37:10.789 --> 01:37:11.880
I'm thrilled about the

01:37:11.880 --> 01:37:19.109
the how soon we can meet our hundred percent renewable goal

01:37:19.109 --> 01:37:20.760
and I support

01:37:20.760 --> 01:37:26.670
your all of your recommendations so I don't mean the

01:37:26.670 --> 01:37:29.119
following to be anti a

01:37:29.119 --> 01:37:31.449
hundred percent renewable but just in terms of being clear

01:37:31.449 --> 01:37:32.199
to the public and

01:37:32.199 --> 01:37:36.859
also finding just getting your your sense of this to

01:37:36.859 --> 01:37:39.479
confirm for me that we

01:37:39.479 --> 01:37:46.300
are so we've paid we've taken out this you know 260 million

01:37:46.300 --> 01:37:47.319
dollar bond for

01:37:47.319 --> 01:37:53.090
this gas plant that the public was told was needed for

01:37:53.090 --> 01:37:58.640
reliability in Denton and

01:37:58.640 --> 01:38:06.260
now it is now finally we have someone standing behind that

01:38:06.260 --> 01:38:08.039
that podium and

01:38:08.039 --> 01:38:14.079
saying no you don't need it for reliability ERCOT takes ERC

01:38:14.079 --> 01:38:14.439
OT takes

01:38:14.439 --> 01:38:21.850
care of that and we are now it seems paying this 260

01:38:21.850 --> 01:38:23.239
million dollar we're 260

01:38:23.239 --> 01:38:28.470
million in the hole with with interest for the bonds for

01:38:28.470 --> 01:38:29.279
essentially you know

01:38:29.279 --> 01:38:32.560
two for using two years for using this for two years

01:38:32.560 --> 01:38:34.720
directly to Denton and I

01:38:34.720 --> 01:38:37.470
do understand that after that sure it comes back to us gets

01:38:37.470 --> 01:38:38.239
filtered through

01:38:38.239 --> 01:38:43.430
through ERCOT and and I think the public has a sense of how

01:38:43.430 --> 01:38:46.319
that how that works

01:38:46.319 --> 01:38:50.720
but is that would you say that that's inaccurate I would

01:38:50.720 --> 01:38:52.359
say you're going to

01:38:52.359 --> 01:38:57.010
use the deck to its best capability as long as the deck can

01:38:57.010 --> 01:38:58.239
operate unless

01:38:58.239 --> 01:39:01.640
unless you make a different choice so it's not a two-year

01:39:01.640 --> 01:39:03.880
horizon it's over

01:39:03.880 --> 01:39:08.539
the horizon sure sure but it's for these two years that I

01:39:08.539 --> 01:39:10.039
mean it's after two

01:39:10.039 --> 01:39:14.090
years assuming that we go with this well remember that you

01:39:14.090 --> 01:39:15.560
will always have a

01:39:15.560 --> 01:39:19.800
firming requirement no matter it you would have to probably

01:39:19.800 --> 01:39:20.720
purchase I don't

01:39:20.720 --> 01:39:24.510
know if Neil can make an estimate you might have to go 180%

01:39:24.510 --> 01:39:26.159
or 225% renewable

01:39:26.159 --> 01:39:29.079
not to have to firm anything so that you would have an

01:39:29.079 --> 01:39:30.239
excess in every hour but

01:39:30.239 --> 01:39:33.159
one during the year oh yeah I understand that but it will

01:39:33.159 --> 01:39:33.960
always be used as a

01:39:33.960 --> 01:39:37.149
firming resource regardless well but but by ERCOT and as

01:39:37.149 --> 01:39:38.159
you as you made clear

01:39:38.159 --> 01:39:41.079
ERCOT takes care of firming for us the firming yeah the

01:39:41.079 --> 01:39:42.039
issues the cost that

01:39:42.039 --> 01:39:45.260
that to us and that's the sole thing is how much is it

01:39:45.260 --> 01:39:46.840
going to cost to make up

01:39:46.840 --> 01:39:49.760
that portfolio well I think you made the statement earlier

01:39:49.760 --> 01:39:51.039
in which I completely

01:39:51.039 --> 01:39:55.909
agree with if it costs less to run deck than it is to

01:39:55.909 --> 01:39:57.180
purchase in the market we

01:39:57.180 --> 01:40:00.779
run that right if it costs more we purchase right but there

01:40:00.779 --> 01:40:02.479
's always when

01:40:02.479 --> 01:40:05.770
we say ERCOT takes care of the firming they take care of it

01:40:05.770 --> 01:40:06.840
but at what price

01:40:06.840 --> 01:40:10.359
right that's right so we've got to that's how we manage

01:40:10.359 --> 01:40:11.520
that's right our

01:40:11.520 --> 01:40:15.760
market purchases and the deck that's right so going back to

01:40:15.760 --> 01:40:16.640
something we've

01:40:16.640 --> 01:40:19.100
talked about earlier which is sort of the risk preference

01:40:19.100 --> 01:40:19.760
or the the risk

01:40:19.760 --> 01:40:22.939
intolerance there are some people in the marketplace that

01:40:22.939 --> 01:40:23.640
feel more comfortable

01:40:23.640 --> 01:40:28.319
having an actual power plant that they can use to dispatch

01:40:28.319 --> 01:40:29.680
instead of paying

01:40:29.680 --> 01:40:34.800
the higher cost market purchase and the exposure to risk

01:40:34.800 --> 01:40:37.199
they yep right it's a

01:40:37.199 --> 01:40:39.359
cost risk is what it really is you're not going to run out

01:40:39.359 --> 01:40:40.319
of power just at

01:40:40.319 --> 01:40:42.779
what price are you gonna have to pay for that so some

01:40:42.779 --> 01:40:44.760
organizations prefer that

01:40:44.760 --> 01:40:47.979
because that makes them feel more comfortable others don't

01:40:47.979 --> 01:40:48.760
need to go

01:40:48.760 --> 01:40:52.439
there that's simply just a value decision and that is a

01:40:52.439 --> 01:40:53.640
risk preference

01:40:53.640 --> 01:40:57.239
of whoever has made that sort of decision that's just a

01:40:57.239 --> 01:40:58.359
portfolio design

01:40:58.359 --> 01:41:04.140
aspect we see both out there in our client base so opposed

01:41:04.140 --> 01:41:06.199
to two years now

01:41:06.199 --> 01:41:11.970
to the end of time relatively speaking that serves as that

01:41:11.970 --> 01:41:13.640
word I like hedge

01:41:13.640 --> 01:41:19.520
against cost always it's a hedge against high heat rates

01:41:19.520 --> 01:41:21.199
and high gas costs

01:41:21.199 --> 01:41:24.659
because you have to pair the cost but yes it's a hedge

01:41:24.659 --> 01:41:25.840
against those higher

01:41:25.840 --> 01:41:29.600
to the end of time or however long it lasts yeah yeah it

01:41:29.600 --> 01:41:30.560
really isn't a hedge

01:41:30.560 --> 01:41:33.739
it's a partial heads or incomplete hedge or an imperfect

01:41:33.739 --> 01:41:34.899
hedge when people say

01:41:34.899 --> 01:41:37.460
it hedges this it really you have to be that's where the

01:41:37.460 --> 01:41:38.579
risk comes in this is

01:41:38.579 --> 01:41:41.069
this is what happens well it's a diversification in her

01:41:41.069 --> 01:41:42.920
choice yes

01:41:42.920 --> 01:41:46.199
your heat rate exposure right so if you if you took for

01:41:46.199 --> 01:41:48.359
example a year like 2011

01:41:48.359 --> 01:41:52.199
which was a really crazily high priced year with high heat

01:41:52.199 --> 01:41:53.640
rates that's a great

01:41:53.640 --> 01:41:55.939
year to have that sort of a engine there but that was when

01:41:55.939 --> 01:41:57.800
the heat rates and it

01:41:57.800 --> 01:42:01.430
does it's it's really not I would say that you know given

01:42:01.430 --> 01:42:02.199
up are these

01:42:02.199 --> 01:42:06.859
distribution of prices that we've seen these profiles as Br

01:42:06.859 --> 01:42:09.119
attle calls and it

01:42:09.119 --> 01:42:13.630
it's not necessarily the the value of the deck is the fact

01:42:13.630 --> 01:42:14.600
that it makes it

01:42:14.600 --> 01:42:18.140
easy to do a lot of things with renewables it makes it

01:42:18.140 --> 01:42:20.279
easier so you have

01:42:20.279 --> 01:42:24.939
purchased that and you can now manage all those renewables

01:42:24.939 --> 01:42:26.760
most efficiently so

01:42:26.760 --> 01:42:31.420
it does even even after you know two years even though if

01:42:31.420 --> 01:42:33.199
we're solar it

01:42:33.199 --> 01:42:37.470
doesn't have the you know if we can still buy solar

01:42:37.470 --> 01:42:39.680
inexpensively it it still

01:42:39.680 --> 01:42:44.199
will act as that but you may get out there with 100% solar

01:42:44.199 --> 01:42:45.319
and realize that

01:42:45.319 --> 01:42:48.270
the deck isn't dispatch very much and then you'll have

01:42:48.270 --> 01:42:49.399
another question to

01:42:49.399 --> 01:42:55.819
what you want to do with it so to your question slide the

01:42:55.819 --> 01:42:58.640
last one yeah let's

01:42:58.640 --> 01:43:03.079
talk about why we wouldn't or would not include whitetail

01:43:03.079 --> 01:43:06.199
you mentioned 30% of

01:43:06.199 --> 01:43:10.279
it or something is Rex or something and we're Rex arm it

01:43:10.279 --> 01:43:11.119
was it's now a 30

01:43:11.119 --> 01:43:15.640
megawatt around the clock deal that's firm that has Rex

01:43:15.640 --> 01:43:18.039
added to it okay so if

01:43:18.039 --> 01:43:20.989
you go back several years ago you've only find we wrote a

01:43:20.989 --> 01:43:21.760
paper for the

01:43:21.760 --> 01:43:24.939
Mitchell Foundation advocating the development of a power

01:43:24.939 --> 01:43:25.920
product which

01:43:25.920 --> 01:43:29.279
would be used we call it renew 50 which could be used to

01:43:29.279 --> 01:43:30.560
take Rex and add that

01:43:30.560 --> 01:43:34.020
to conventional power to help reduce the emissions exposure

01:43:34.020 --> 01:43:35.399
but that was when the

01:43:35.399 --> 01:43:38.579
Rex were a viable instrument that's before you'd gotten so

01:43:38.579 --> 01:43:39.439
much renewable in

01:43:39.439 --> 01:43:42.399
the marketplace that's when it had a lot of value so that's

01:43:42.399 --> 01:43:43.560
really only changed

01:43:43.560 --> 01:43:46.020
within maybe the last three to five years that's correct

01:43:46.020 --> 01:43:46.979
that's correct so

01:43:46.979 --> 01:43:51.460
then somebody's whose head was maybe in the game ten years

01:43:51.460 --> 01:43:53.880
ago this idea of

01:43:53.880 --> 01:43:58.399
firming or hedging our own renewable portfolio with our own

01:43:58.399 --> 01:43:59.479
gas plant that

01:43:59.479 --> 01:44:03.399
might have actually been something that would have struck

01:44:03.399 --> 01:44:04.399
as a great idea

01:44:04.399 --> 01:44:07.699
so I mean since there are other people today that might

01:44:07.699 --> 01:44:08.680
think since what was

01:44:08.680 --> 01:44:11.899
being offered at the time was being backed by around the

01:44:11.899 --> 01:44:14.039
clock anyway right

01:44:14.039 --> 01:44:16.720
if you're talking about that specific transaction well not

01:44:16.720 --> 01:44:18.039
that transaction but

01:44:18.039 --> 01:44:20.979
just the way the market was at the way the market yes and

01:44:20.979 --> 01:44:22.399
the viability of the

01:44:22.399 --> 01:44:25.829
Rex and the design of renewable standards and what those

01:44:25.829 --> 01:44:27.239
were incentivized to do

01:44:27.239 --> 01:44:30.420
there was definitely a value to that but the marketplace

01:44:30.420 --> 01:44:31.640
got far ahead of that

01:44:31.640 --> 01:44:34.619
target so those certificates really don't have much of a

01:44:34.619 --> 01:44:35.180
value so it's

01:44:35.180 --> 01:44:38.359
really a matter of perception you know do you believe that

01:44:38.359 --> 01:44:39.199
that caught the

01:44:39.199 --> 01:44:42.390
addition of Rex to that specific resource makes it

01:44:42.390 --> 01:44:43.800
renewable or not some

01:44:43.800 --> 01:44:47.810
people would say yes some people would say no in terms of

01:44:47.810 --> 01:44:49.800
us as professionals

01:44:49.800 --> 01:44:52.319
and risk professionals we would say that could entail a

01:44:52.319 --> 01:44:53.680
potential reputation risk

01:44:53.680 --> 01:44:57.800
so we would not recommend going there but you still could

01:44:57.800 --> 01:44:59.560
okay well that's why

01:44:59.560 --> 01:45:01.680
our relations did not count white tail or the we would we

01:45:01.680 --> 01:45:03.680
call ourselves 70% or

01:45:03.680 --> 01:45:11.829
100% that's what it needs to be not some concept of okay we

01:45:11.829 --> 01:45:14.199
're really only that's

01:45:14.199 --> 01:45:19.920
our recommendation yes that's I don't want to mislead that

01:45:19.920 --> 01:45:21.119
we're something

01:45:21.119 --> 01:45:23.680
that we're not right so then if that if that's the case

01:45:23.680 --> 01:45:24.920
then the question is okay

01:45:24.920 --> 01:45:27.840
how fast you want to get to a hundred are willing to go 118

01:45:27.840 --> 01:45:29.960
% right from a from

01:45:29.960 --> 01:45:33.279
a cost exposure standpoint for a few years to get to a

01:45:33.279 --> 01:45:35.119
hundred percent faster

01:45:35.119 --> 01:45:41.380
or not if you're telling us gas is gonna go up you know if

01:45:41.380 --> 01:45:42.199
I could tell you that

01:45:42.199 --> 01:45:44.659
wouldn't be sent here the podium I'd be some boat in the

01:45:44.659 --> 01:45:46.600
Caribbean and a

01:45:46.600 --> 01:45:50.800
trading account I'm not so sure our community would think

01:45:50.800 --> 01:45:53.079
that white tail is

01:45:53.079 --> 01:45:58.460
truly a renewable resource and that's our recommendation is

01:45:58.460 --> 01:45:59.039
not to count it

01:45:59.039 --> 01:46:01.960
that way I just think that's a lower risk position going

01:46:01.960 --> 01:46:02.800
that's a value

01:46:02.800 --> 01:46:06.800
question and the council's gonna have to chime in on that

01:46:06.800 --> 01:46:09.039
even the Brattle report I

01:46:09.039 --> 01:46:12.840
mean in a number of ways this presentation diverges from

01:46:12.840 --> 01:46:13.479
the Brattle

01:46:13.479 --> 01:46:16.239
report but as Brandon was saying and as you yourself said I

01:46:16.239 --> 01:46:17.319
mean there's so much

01:46:17.319 --> 01:46:21.630
that is that is the same it's just kind of your projections

01:46:21.630 --> 01:46:22.960
are more conservative

01:46:22.960 --> 01:46:27.699
and and conclusions somewhat somewhat different but even

01:46:27.699 --> 01:46:30.399
the Brattle report

01:46:30.399 --> 01:46:34.880
didn't count you know Rex as renewables which is why the Br

01:46:34.880 --> 01:46:35.960
attle report ended up

01:46:35.960 --> 01:46:42.529
changing the way we as a community talked about our

01:46:42.529 --> 01:46:45.720
portfolio I have a

01:46:45.720 --> 01:46:53.340
question about divesting engines specifically do we need

01:46:53.340 --> 01:46:55.159
all 12 engines

01:46:55.159 --> 01:47:02.800
and 250 megawatts to take advantage of the deck in the way

01:47:02.800 --> 01:47:03.800
that you're talking

01:47:03.800 --> 01:47:11.840
about taking advantage I've had a number of people tell me

01:47:11.840 --> 01:47:13.720
that they were shocked

01:47:13.720 --> 01:47:19.960
to see you know 250 megawatts for a load of this size how

01:47:19.960 --> 01:47:22.199
many engines would we

01:47:22.199 --> 01:47:27.600
need and do we need all do we need all 12 and if not then

01:47:27.600 --> 01:47:29.199
how many do we need

01:47:29.199 --> 01:47:33.460
and by how many do we need what I mean is in order to take

01:47:33.460 --> 01:47:35.560
advantage of the

01:47:35.560 --> 01:47:38.479
deck the way that you're talking about it so we can use it

01:47:38.479 --> 01:47:39.199
for this small

01:47:39.199 --> 01:47:46.840
period of time each year yeah it it depends on the hour but

01:47:46.840 --> 01:47:48.760
if someone

01:47:48.760 --> 01:47:53.739
brought us in and said you know design a help us figure out

01:47:53.739 --> 01:47:54.960
what sort of a

01:47:54.960 --> 01:47:57.569
firming plant we might need for that sort of thing we

01:47:57.569 --> 01:47:58.640
probably wouldn't

01:47:58.640 --> 01:48:04.789
recommend that size it is large on a proportional basis so

01:48:04.789 --> 01:48:07.039
to me the question

01:48:07.039 --> 01:48:10.890
is all right you're committed to it now what's the best way

01:48:10.890 --> 01:48:11.920
to monetize this

01:48:11.920 --> 01:48:14.810
thing going forward through all the different options and

01:48:14.810 --> 01:48:15.560
if you could sell

01:48:15.560 --> 01:48:19.239
the engines at a way that would be higher value than what

01:48:19.239 --> 01:48:20.399
you might project

01:48:20.399 --> 01:48:23.800
it would run over several years and sell the excess power

01:48:23.800 --> 01:48:24.960
that's it's really just

01:48:24.960 --> 01:48:28.970
that's a sales decision optimizing the value so how many

01:48:28.970 --> 01:48:31.359
megawatts do would do

01:48:31.359 --> 01:48:35.520
we need I'll let you speak I'll just say again that's a

01:48:35.520 --> 01:48:36.279
cost thing because you

01:48:36.279 --> 01:48:38.489
know you don't technically need any it's just a matter of

01:48:38.489 --> 01:48:39.640
the deck is yeah cost

01:48:39.640 --> 01:48:43.020
I know but when I say need I mean need defined as in order

01:48:43.020 --> 01:48:44.039
to take advantage of

01:48:44.039 --> 01:48:47.220
it in the way that you say it depends how much what's your

01:48:47.220 --> 01:48:48.079
ratio to solar to

01:48:48.079 --> 01:48:52.279
wind is as you saw that wind can have you know 15 percent

01:48:52.279 --> 01:48:53.640
year-over-year but it

01:48:53.640 --> 01:48:57.250
also can you know depending on how many wind resources you

01:48:57.250 --> 01:48:58.600
have if you had wind

01:48:58.600 --> 01:49:02.560
in North Texas and West Texas in South Texas and in the

01:49:02.560 --> 01:49:04.439
coastal and that that

01:49:04.439 --> 01:49:07.720
would provide diversification so you wouldn't need as much

01:49:07.720 --> 01:49:08.720
you'd have a

01:49:08.720 --> 01:49:12.600
steady flow most of the time and which but it's discounted

01:49:12.600 --> 01:49:13.840
and then how much

01:49:13.840 --> 01:49:16.760
solar is on top of that and that also you know depends on

01:49:16.760 --> 01:49:17.680
cloudiness and stuff

01:49:17.680 --> 01:49:21.340
like that but if you put that together in your load it's

01:49:21.340 --> 01:49:23.079
probably something

01:49:23.079 --> 01:49:31.560
between 50 megawatts and well all right 50 to 150 megawatts

01:49:31.560 --> 01:49:32.399
something like that

01:49:32.399 --> 01:49:36.369
somewhere's in that range the the actual installed I

01:49:36.369 --> 01:49:38.680
believe is 225 megawatts not

01:49:38.680 --> 01:49:43.229
250 but so what we're looking when we were looking at this

01:49:43.229 --> 01:49:43.960
we could say look

01:49:43.960 --> 01:49:48.619
there's a piece of this that you could one of the things

01:49:48.619 --> 01:49:50.279
you could do is go to

01:49:50.279 --> 01:49:56.319
other munis and say we can help you firm your renewables

01:49:56.319 --> 01:49:58.439
for a price and then you

01:49:58.439 --> 01:50:02.199
make sure that the price that that is a nice price and what

01:50:02.199 --> 01:50:02.960
their advantage is

01:50:02.960 --> 01:50:06.930
they don't get any debt services service and so it could be

01:50:06.930 --> 01:50:08.319
a just a two or three

01:50:08.319 --> 01:50:12.880
year arrangement and you could sell off this excess and

01:50:12.880 --> 01:50:14.600
then you know and

01:50:14.600 --> 01:50:17.520
what you're doing is your your risk has just been divers

01:50:17.520 --> 01:50:19.640
ified for that.

01:50:19.640 --> 01:50:22.210
So that would be another strong recommendation we would

01:50:22.210 --> 01:50:23.119
have if you get

01:50:23.119 --> 01:50:25.199
to that because there are muni municipalities out there

01:50:25.199 --> 01:50:25.680
looking to

01:50:25.680 --> 01:50:28.149
increase their renewable resources and they realize they're

01:50:28.149 --> 01:50:28.760
going to be in a

01:50:28.760 --> 01:50:32.479
similar circumstance with a more variable production output

01:50:32.479 --> 01:50:33.159
with

01:50:33.159 --> 01:50:35.859
more need for firming so that could be a valuable service

01:50:35.859 --> 01:50:36.960
you could provide to

01:50:36.960 --> 01:50:39.539
other municipalities to help them increase their renewable

01:50:39.539 --> 01:50:40.239
resources and

01:50:40.239 --> 01:50:45.079
increase the overall renewable content of ERCOT. Well sure

01:50:45.079 --> 01:50:46.279
and I think that my

01:50:46.279 --> 01:50:49.460
sense is that that was the goal from the beginning to sell

01:50:49.460 --> 01:50:50.720
power elsewhere it's

01:50:50.720 --> 01:50:56.810
yeah you know there are obvious you know negative

01:50:56.810 --> 01:50:59.520
consequences for people who are

01:50:59.520 --> 01:51:02.439
breathing in those emissions but that's I know that's a

01:51:02.439 --> 01:51:03.279
whole other whole other

01:51:03.279 --> 01:51:07.939
story but I do understand that and that was the intention

01:51:07.939 --> 01:51:08.800
from the beginning to

01:51:08.800 --> 01:51:13.899
sell. Remember when you sell it you don't increase the

01:51:13.899 --> 01:51:14.560
dispatch you

01:51:14.560 --> 01:51:17.789
don't increase the emissions that's that's the goal we hope

01:51:17.789 --> 01:51:18.720
so so you're not

01:51:18.720 --> 01:51:23.619
you know not worse off doing that. I mean worse off than

01:51:23.619 --> 01:51:25.680
not having it at all.

01:51:25.680 --> 01:51:29.800
Yeah and so there are ways to generate revenue from it

01:51:29.800 --> 01:51:32.520
without it running.

01:51:32.520 --> 01:51:35.520
Yeah well like he's saying you could sell firming services

01:51:35.520 --> 01:51:36.159
and then you could

01:51:36.159 --> 01:51:39.079
buy market purchases you could sell firming services to get

01:51:39.079 --> 01:51:39.760
revenue off the

01:51:39.760 --> 01:51:42.260
deck and then when you have to actually deliver the power

01:51:42.260 --> 01:51:43.239
to somebody you just

01:51:43.239 --> 01:51:45.039
buy it from the market if it's cheaper than running the

01:51:45.039 --> 01:51:47.399
deck or if the deck

01:51:47.399 --> 01:51:54.279
that this is a higher level of sophistication but there are

01:51:54.279 --> 01:51:57.960
organizations out there would take a plant like that and if

01:51:57.960 --> 01:51:58.920
the heat rates

01:51:58.920 --> 01:52:01.670
rise in the Ford markets they could sell against that when

01:52:01.670 --> 01:52:02.520
the heat rates fall

01:52:02.520 --> 01:52:05.880
they buy it back and that's it and you're actually that's

01:52:05.880 --> 01:52:06.600
called asset

01:52:06.600 --> 01:52:09.520
optimization you're trading in the market against an asset

01:52:09.520 --> 01:52:10.279
that never runs

01:52:10.279 --> 01:52:13.279
but yet you're producing revenue. I understand so just to

01:52:13.279 --> 01:52:14.159
clarify for the

01:52:14.159 --> 01:52:18.439
public and also for myself so when we're selling power you

01:52:18.439 --> 01:52:19.960
know and an electron

01:52:19.960 --> 01:52:23.470
is an electron doesn't matter from what kind of source it's

01:52:23.470 --> 01:52:24.720
coming from so as

01:52:24.720 --> 01:52:27.899
long as we provide the kind of as long as we provide the

01:52:27.899 --> 01:52:29.159
amount of power. As long

01:52:29.159 --> 01:52:33.159
as you said if you've contractually arranged for a hundred

01:52:33.159 --> 01:52:33.960
percent or 70

01:52:33.960 --> 01:52:36.319
whatever your goal is that's the best you can do in this

01:52:36.319 --> 01:52:38.479
market setup to meet

01:52:38.479 --> 01:52:41.840
that goal. Yeah so it doesn't matter to the buyer where

01:52:41.840 --> 01:52:42.720
that's coming from

01:52:42.720 --> 01:52:45.279
just as it doesn't matter to ERCOT. That's right. Thank you

01:52:45.279 --> 01:52:48.439
. A couple more.

01:52:48.439 --> 01:52:53.100
When do we think that the federal solar tariff discussion

01:52:53.100 --> 01:52:54.880
will conclude? What is

01:52:54.880 --> 01:52:59.149
your recommendation on that? When is the wall gonna be

01:52:59.149 --> 01:53:01.520
built? You know I don't

01:53:01.520 --> 01:53:05.470
know it's all that stuff you know so that's a great

01:53:05.470 --> 01:53:06.039
question.

01:53:06.039 --> 01:53:13.149
That's a great question with a really difficult answer. The

01:53:13.149 --> 01:53:13.439
actual

01:53:13.439 --> 01:53:18.170
hearings are in place now and they started in June and they

01:53:18.170 --> 01:53:18.399
're

01:53:18.399 --> 01:53:22.460
winding up basically so it's it's gonna be fairly soon and

01:53:22.460 --> 01:53:23.479
let's say sometime

01:53:23.479 --> 01:53:30.560
this quarter next quarter. Okay. I have a question about so

01:53:30.560 --> 01:53:31.239
we're talking about

01:53:31.239 --> 01:53:34.470
how our portfolio might look you've mentioned Georgetown's

01:53:34.470 --> 01:53:35.380
portfolio and how

01:53:35.380 --> 01:53:40.479
they made their purchases and then we talk about ERCOT and

01:53:40.479 --> 01:53:40.960
how they have how

01:53:40.960 --> 01:53:44.960
they dispatch everybody's generating sources or resources

01:53:44.960 --> 01:53:47.680
so do they does

01:53:47.680 --> 01:53:54.210
ERCOT look at what percentage of generating resources have

01:53:54.210 --> 01:53:54.800
to be

01:53:54.800 --> 01:53:59.279
something that can they can turn on and it will always work

01:53:59.279 --> 01:54:01.300
? I mean because like

01:54:01.300 --> 01:54:04.220
as we're adding renewable resources obviously ERCOT's not

01:54:04.220 --> 01:54:05.279
gonna let 100%

01:54:05.279 --> 01:54:09.810
of the generations of resources be renewable because we've

01:54:09.810 --> 01:54:10.640
just discussed

01:54:10.640 --> 01:54:13.819
that you can't always do that you gotta buy power from the

01:54:13.819 --> 01:54:15.720
market so where do

01:54:15.720 --> 01:54:18.430
they see or do they have some kind of overall plan about

01:54:18.430 --> 01:54:19.560
how they're looking

01:54:19.560 --> 01:54:21.829
at how renewables are keeping going? They have a plan for

01:54:21.829 --> 01:54:23.039
every minute.

01:54:23.039 --> 01:54:26.000
So spend just a minute explaining that. I'm just trying to

01:54:26.000 --> 01:54:28.800
think about how that impacts you know when you

01:54:28.800 --> 01:54:31.720
when you build something that might last 20 or 30 years you

01:54:31.720 --> 01:54:32.479
really have to think

01:54:32.479 --> 01:54:35.439
20 or 30 years out. Well yes they have that and they have a

01:54:35.439 --> 01:54:37.520
great thing that discusses this in

01:54:37.520 --> 01:54:40.239
depth it's called a long-term assessment you saw that those

01:54:40.239 --> 01:54:41.119
red and blue

01:54:41.119 --> 01:54:44.930
that's an excerpt from it it's really well written and what

01:54:44.930 --> 01:54:45.680
they did is they

01:54:45.680 --> 01:54:48.989
they're talking about market forces and how you know coal

01:54:48.989 --> 01:54:50.319
units are retiring but

01:54:50.319 --> 01:54:53.239
at the same time natural gas units are being built they're

01:54:53.239 --> 01:54:54.279
kind of replacing

01:54:54.279 --> 01:54:58.250
each other and at the same time there's more renewables

01:54:58.250 --> 01:54:59.560
being brought on

01:54:59.560 --> 01:55:05.289
particularly solar. Solar is one that is particularly

01:55:05.289 --> 01:55:07.119
desirable now in a relative

01:55:07.119 --> 01:55:11.779
pricing thing and so that's what they look at and then they

01:55:11.779 --> 01:55:13.000
run models to make

01:55:13.000 --> 01:55:18.880
sure everything is secure all the time and and so it works

01:55:18.880 --> 01:55:20.720
it works you know

01:55:20.720 --> 01:55:23.760
the the security is really high all the time and that's

01:55:23.760 --> 01:55:24.960
what their job is and

01:55:24.960 --> 01:55:28.189
that's so they go out to 20 35 and they make sure that

01:55:28.189 --> 01:55:28.960
every hour you are

01:55:28.960 --> 01:55:32.140
secured no matter what the renewable portfolio percentage

01:55:32.140 --> 01:55:32.859
is and they're

01:55:32.859 --> 01:55:36.449
they're saying I'm trying to think right now they still

01:55:36.449 --> 01:55:38.079
have coal out there you

01:55:38.079 --> 01:55:42.779
know but I think it's about eight to ten thousand has been

01:55:42.779 --> 01:55:44.239
retired by something

01:55:44.239 --> 01:55:50.050
like 20 21 and that will leave probably about half to 60

01:55:50.050 --> 01:55:52.199
percent still operating

01:55:52.199 --> 01:55:55.720
and then at the end of the term even more retirements occur

01:55:55.720 --> 01:55:56.920
so it's a gradual

01:55:56.920 --> 01:56:00.659
thing on both the integration of the renewables and the

01:56:00.659 --> 01:56:02.279
solar and the natural

01:56:02.279 --> 01:56:08.050
gas and and they do it under different gas prices so just

01:56:08.050 --> 01:56:09.079
one more thing on

01:56:09.079 --> 01:56:12.000
that Urquhart is an energy only market so it's designed

01:56:12.000 --> 01:56:13.079
that that market signal

01:56:13.079 --> 01:56:16.069
is all it is needed to signal to the market when additional

01:56:16.069 --> 01:56:16.640
generation is

01:56:16.640 --> 01:56:19.560
there that's the only incentive to bring generation so they

01:56:19.560 --> 01:56:20.840
don't always they're

01:56:20.840 --> 01:56:23.779
they're trying to project what the portfolio might be in

01:56:23.779 --> 01:56:25.000
the future but

01:56:25.000 --> 01:56:27.359
what Neil alluded to what they're really concerned about is

01:56:27.359 --> 01:56:27.939
operational

01:56:27.939 --> 01:56:30.600
reliability so they don't necessarily have a cap or a

01:56:30.600 --> 01:56:31.560
target on how many

01:56:31.560 --> 01:56:33.550
renewables that come in but they're going to really make

01:56:33.550 --> 01:56:34.279
sure that there are

01:56:34.279 --> 01:56:37.930
certain units that are designated must run to alleviate

01:56:37.930 --> 01:56:39.159
congestion and to

01:56:39.159 --> 01:56:42.460
manage the the market efficiently until having a sufficient

01:56:42.460 --> 01:56:44.359
reserve margin one

01:56:44.359 --> 01:56:46.119
of the things though that's interesting is there have been

01:56:46.119 --> 01:56:47.000
predictions for years

01:56:47.000 --> 01:56:49.460
that you're going to see more instability in markets as

01:56:49.460 --> 01:56:50.079
more renewable

01:56:50.079 --> 01:56:53.000
resources come in and ironically that hasn't happened yet

01:56:53.000 --> 01:56:53.680
we were just

01:56:53.680 --> 01:56:55.439
discussing this the other day it may be just because you're

01:56:55.439 --> 01:56:56.319
getting enough solar

01:56:56.319 --> 01:56:59.500
in here solar is a beautiful offset to wind and it only

01:56:59.500 --> 01:57:00.520
leaves a little bit on

01:57:00.520 --> 01:57:03.699
the margin that needs to be filled in so if enough solar

01:57:03.699 --> 01:57:04.920
comes in and a natural

01:57:04.920 --> 01:57:08.979
balance to win it's a really nice setup for stability going

01:57:08.979 --> 01:57:09.840
forward and maybe

01:57:09.840 --> 01:57:17.729
more answer that you want so on this August day that you

01:57:17.729 --> 01:57:18.880
have the graph for

01:57:18.880 --> 01:57:23.819
where we're dispatched where ERCOT is dispatching the deck

01:57:23.819 --> 01:57:25.800
the heat index has

01:57:25.800 --> 01:57:31.569
risen and made the deck a viable option for the market

01:57:31.569 --> 01:57:33.840
essentially so are all

01:57:33.840 --> 01:57:37.659
the get are all the coal plants run in full tilt at this

01:57:37.659 --> 01:57:39.840
time okay so the their

01:57:39.840 --> 01:57:43.119
gas the the coal plants are running full tilt and then

01:57:43.119 --> 01:57:44.640
these the gas plants would

01:57:44.640 --> 01:57:49.489
be dispatched because it becomes marketable basically so we

01:57:49.489 --> 01:57:50.319
were talking

01:57:50.319 --> 01:57:55.529
about renewables and which really the thrust is the

01:57:55.529 --> 01:57:56.800
environment for that but

01:57:56.800 --> 01:57:59.310
we really haven't talked much about the environment in

01:57:59.310 --> 01:58:02.159
these discussions so so

01:58:02.159 --> 01:58:07.479
from the standpoint of emissions so on that hot August day

01:58:07.479 --> 01:58:08.880
turning on the gas

01:58:08.880 --> 01:58:12.060
plants really doesn't do much for emissions because all the

01:58:12.060 --> 01:58:12.640
coal plants

01:58:12.640 --> 01:58:19.039
are already running right so as coal plants are decomm

01:58:19.039 --> 01:58:20.439
issioned as the older

01:58:20.439 --> 01:58:24.170
coal plants are decommissioned and something like the deck

01:58:24.170 --> 01:58:25.079
then it seems

01:58:25.079 --> 01:58:29.279
like then its viability or marketability comes on sooner it

01:58:29.279 --> 01:58:31.039
also burns cleaner

01:58:31.039 --> 01:58:34.640
than a 30 year old coal plant that we're using is that not

01:58:34.640 --> 01:58:35.399
correct that's correct

01:58:35.399 --> 01:58:39.439
yeah yeah so if coal gets retired and the deck runs sooner

01:58:39.439 --> 01:58:40.680
because of its

01:58:40.680 --> 01:58:43.380
relative advantage at that time because of the way the

01:58:43.380 --> 01:58:44.520
resource stack looks

01:58:44.520 --> 01:58:48.960
it's replaced something that is bigger polluters and the

01:58:48.960 --> 01:58:50.439
water use and the

01:58:50.439 --> 01:58:52.989
water use yes yes and that's right that's not to be

01:58:52.989 --> 01:58:54.279
overlooked that often

01:58:54.279 --> 01:58:59.279
gets overlooked that's important aspect and so one of the

01:58:59.279 --> 01:59:00.079
things that we keep

01:59:00.079 --> 01:59:03.520
talking about is the dollar value and within our community

01:59:03.520 --> 01:59:04.439
and within the

01:59:04.439 --> 01:59:07.140
ratepayers and just the general public there are some

01:59:07.140 --> 01:59:08.239
people that would pay

01:59:08.239 --> 01:59:12.899
more for cleaner energy that the cost doesn't really matter

01:59:12.899 --> 01:59:13.960
to them if you

01:59:13.960 --> 01:59:18.039
could say that you're reducing instances of asthma or

01:59:18.039 --> 01:59:20.119
hospital visits for you

01:59:20.119 --> 01:59:22.800
know for whatever so I just I guess I just wanted to say

01:59:22.800 --> 01:59:24.079
that yeah it's

01:59:24.079 --> 01:59:26.220
interesting that if you look at the retail market in the

01:59:26.220 --> 01:59:27.319
past few years when

01:59:27.319 --> 01:59:30.510
retailers have actually offered a green premium product

01:59:30.510 --> 01:59:31.760
people don't go for it

01:59:31.760 --> 01:59:34.119
they say they want it but when it comes to paying for it

01:59:34.119 --> 01:59:35.279
the track record isn't

01:59:35.279 --> 01:59:39.479
there yeah I do I do I just wanted to go back because I

01:59:39.479 --> 01:59:40.760
hate to quote articles

01:59:40.760 --> 01:59:43.460
and say I read this article without knowing it and I found

01:59:43.460 --> 01:59:45.000
it it's from UT

01:59:45.000 --> 01:59:49.340
News and this is in July 2017 so it's fairly recent but I

01:59:49.340 --> 01:59:50.760
wanted to read just

01:59:50.760 --> 01:59:53.689
one paragraph and then the ending paragraph and it says for

01:59:53.689 --> 01:59:54.399
Georgetown and

01:59:54.399 --> 01:59:59.159
Aspen 100% renewable means that those cities purchase as

01:59:59.159 --> 02:00:00.180
much renewable

02:00:00.180 --> 02:00:04.130
electricity as they can get it does not mean that all the

02:00:04.130 --> 02:00:05.600
power they consume

02:00:05.600 --> 02:00:09.319
comes from renewable sources however that's because there

02:00:09.319 --> 02:00:10.279
are times when

02:00:10.279 --> 02:00:13.859
renewable power isn't available on windless nights for

02:00:13.859 --> 02:00:15.079
example when that

02:00:15.079 --> 02:00:18.520
happens both cities consume non-renewable power from the

02:00:18.520 --> 02:00:19.199
regional grid

02:00:19.199 --> 02:00:21.550
and that's where I was getting the it's kind of marketing

02:00:21.550 --> 02:00:22.319
that's a hundred

02:00:22.319 --> 02:00:26.079
percent renewable but then it goes on and at the very end

02:00:26.079 --> 02:00:28.399
it says for the time

02:00:28.399 --> 02:00:32.229
being it's much cheaper to back up renewable power with

02:00:32.229 --> 02:00:33.319
natural gas or

02:00:33.319 --> 02:00:38.729
other forms of non-renewable generation perhaps by 2045

02:00:38.729 --> 02:00:40.439
that no longer will be

02:00:40.439 --> 02:00:44.840
true so 2045 is when they're saying that and that's kind of

02:00:44.840 --> 02:00:45.560
the lights probably

02:00:45.560 --> 02:00:49.800
when batteries storage will be really great right right

02:00:49.800 --> 02:00:51.279
right yeah so that's

02:00:51.279 --> 02:00:55.229
where okay so I just wanted to yeah so I just think you

02:00:55.229 --> 02:00:55.920
have to you know be

02:00:55.920 --> 02:00:59.520
careful how you represent that absolutely you know but if

02:00:59.520 --> 02:01:00.199
you clear

02:01:00.199 --> 02:01:03.119
with the goal I think right right and I'm and I just for

02:01:03.119 --> 02:01:04.239
the record I would

02:01:04.239 --> 02:01:07.420
love to be at a hundred percent renewable and but and I

02:01:07.420 --> 02:01:08.239
know that it's

02:01:08.239 --> 02:01:11.569
it's a path that we're going to but I want to do it you

02:01:11.569 --> 02:01:12.520
know economically

02:01:12.520 --> 02:01:17.430
feasible in a cost-effective manner well what a Georgetown

02:01:17.430 --> 02:01:18.520
and Aspen didn't buy

02:01:18.520 --> 02:01:21.119
as much as they could they could have bought a lot more but

02:01:21.119 --> 02:01:22.479
they bought what

02:01:22.479 --> 02:01:25.659
they felt was the lower you know least cost so they only

02:01:25.659 --> 02:01:27.039
bought to their needs

02:01:27.039 --> 02:01:30.899
and that that was a little bit different from what that

02:01:30.899 --> 02:01:35.239
article said and so that

02:01:35.239 --> 02:01:40.050
the the other thing is these prices that you see there aren

02:01:40.050 --> 02:01:41.140
't any cheaper prices

02:01:41.140 --> 02:01:45.890
out there there isn't anything that competes with this no

02:01:45.890 --> 02:01:48.359
for anything for

02:01:48.359 --> 02:01:51.539
a nuke for coal for a combined cycle for peaking plant for

02:01:51.539 --> 02:01:52.560
the deck it's all

02:01:52.560 --> 02:01:57.630
cheaper lots cheaper right and so that's what you need to

02:01:57.630 --> 02:01:59.079
keep in mind so if

02:01:59.079 --> 02:02:04.159
going to 70% is like saying you know you have to consider

02:02:04.159 --> 02:02:05.079
going to a hundred

02:02:05.079 --> 02:02:10.229
percent is less expensive or a lower rate than a 70% rate

02:02:10.229 --> 02:02:11.520
so if you're

02:02:11.520 --> 02:02:14.439
interested in lowering your cost to your customers that's

02:02:14.439 --> 02:02:14.939
something you may

02:02:14.939 --> 02:02:19.430
consider now it has an attendant risks within but it's the

02:02:19.430 --> 02:02:21.319
cheapest alternative

02:02:21.319 --> 02:02:26.010
so do you need these decisions today to finish your report

02:02:26.010 --> 02:02:27.000
is that no no no

02:02:27.000 --> 02:02:30.210
yes and they're gonna be asked to mark the city council but

02:02:30.210 --> 02:02:31.399
you know sooner

02:02:31.399 --> 02:02:34.020
rather than later would be good because the RFP is there

02:02:34.020 --> 02:02:35.239
the results are in so

02:02:35.239 --> 02:02:38.159
sooner rather than later yes right I just want I just want

02:02:38.159 --> 02:02:38.800
to make a couple

02:02:38.800 --> 02:02:41.500
comments about that it's a great question we are presenting

02:02:41.500 --> 02:02:42.079
this I don't

02:02:42.079 --> 02:02:43.630
think I mentioned this we're presenting the same

02:02:43.630 --> 02:02:44.840
presentation to council tomorrow

02:02:44.840 --> 02:02:47.109
to get their feedback this has been a very good discussion

02:02:47.109 --> 02:02:47.840
to get your feedback

02:02:47.840 --> 02:02:50.760
and then we want to come back to you at some point once we

02:02:50.760 --> 02:02:51.640
have some of this

02:02:51.640 --> 02:02:54.819
input once we have had more of an opportunity to look at

02:02:54.819 --> 02:02:55.560
the RFPs and

02:02:55.560 --> 02:02:58.930
bringing back a plan that both the PB and the City Council

02:02:58.930 --> 02:02:59.920
could formally

02:02:59.920 --> 02:03:03.100
approve so we'll be working on that and bringing something

02:03:03.100 --> 02:03:03.640
back to you in the

02:03:03.640 --> 02:03:08.569
next couple of months with that information I just have one

02:03:08.569 --> 02:03:09.960
point the key

02:03:09.960 --> 02:03:13.529
point you just brought up was the fact that the rate payer

02:03:13.529 --> 02:03:14.600
is who we need to

02:03:14.600 --> 02:03:20.329
look out for and I think we would like to see the impact of

02:03:20.329 --> 02:03:21.479
going to a hundred

02:03:21.479 --> 02:03:27.840
percent sooner and not counting white tails renewable on

02:03:27.840 --> 02:03:28.760
the rates at that

02:03:28.760 --> 02:03:32.439
during that gap time because this might be the least cost

02:03:32.439 --> 02:03:34.039
but what does that

02:03:34.039 --> 02:03:43.460
mean to the rates okay okay well hopefully you've taken

02:03:43.460 --> 02:03:44.279
from

02:03:44.279 --> 02:03:50.829
our comments some some getting some feedback from it I mean

02:03:50.829 --> 02:03:53.039
any while the

02:03:53.039 --> 02:03:55.670
father here any other questions I'm sure we'll get to see

02:03:55.670 --> 02:03:56.520
them again at some

02:03:56.520 --> 02:03:58.960
point

02:04:12.039 --> 02:04:17.229
all right very good okay thank you thank you very much and

02:04:17.229 --> 02:04:17.920
I'll also say before

02:04:17.920 --> 02:04:21.869
we end the discussion I support the early adoption path

02:04:21.869 --> 02:04:24.039
just based on what I

02:04:24.039 --> 02:04:28.039
what I see here but I do I appreciate your I think that's a

02:04:28.039 --> 02:04:28.319
good question

02:04:28.319 --> 02:04:34.149
about rates I would like to see that too but it seems to be

02:04:34.149 --> 02:04:35.720
definitely the

02:04:35.720 --> 02:04:40.939
financially responsible thing for us and also I found it

02:04:40.939 --> 02:04:42.840
very interesting what

02:04:42.840 --> 02:04:47.640
you had to say about a city offering solar to go into us on

02:04:47.640 --> 02:04:48.600
a solar project

02:04:48.600 --> 02:04:56.439
recent recently yeah is that I see no I haven't any of

02:04:56.439 --> 02:04:56.760
those specific

02:04:56.760 --> 02:05:00.270
conversations we'll follow up with enterprise risk and and

02:05:00.270 --> 02:05:01.159
see what those

02:05:01.159 --> 02:05:03.510
possibilities are and bring back that for this yeah because

02:05:03.510 --> 02:05:04.119
that's really

02:05:04.119 --> 02:05:06.859
exciting and that's also something that could really save

02:05:06.859 --> 02:05:07.760
us it would save us

02:05:07.760 --> 02:05:14.720
money and be good for our environment too okay very good

02:05:14.720 --> 02:05:18.439
well that took up

02:05:18.439 --> 02:05:32.600
we're only on our second item now okay item B in the work

02:05:32.600 --> 02:05:33.399
session is to receive

02:05:33.399 --> 02:05:36.149
report hold discussion and provide staff direction

02:05:36.149 --> 02:05:37.920
regarding the solid waste

02:05:37.920 --> 02:05:41.510
department and watershed protection divisions community

02:05:41.510 --> 02:05:42.720
sponsorship program

02:05:42.720 --> 02:05:45.760
well good morning my name is Ethan Cox I'm the director of

02:05:45.760 --> 02:05:47.079
solid waste I have a

02:05:47.079 --> 02:05:49.649
very brief presentation for you this morning to talk about

02:05:49.649 --> 02:05:50.279
sponsorship

02:05:50.279 --> 02:05:52.989
programs for both the solid waste department as well as the

02:05:52.989 --> 02:05:53.560
watershed

02:05:53.560 --> 02:05:56.489
division in addition to myself the assistant director of

02:05:56.489 --> 02:05:57.319
environmental

02:05:57.319 --> 02:06:00.699
services Deborah Vera is here I'll do my best to kind of

02:06:00.699 --> 02:06:01.199
get through the

02:06:01.199 --> 02:06:04.909
presentation but both she and I are available for questions

02:06:04.909 --> 02:06:05.880
if you have any

02:06:05.880 --> 02:06:08.920
so as we go through this at this presentation looks very

02:06:08.920 --> 02:06:09.640
familiar it's

02:06:09.640 --> 02:06:12.229
probably because this is almost an exact carbon copy of the

02:06:12.229 --> 02:06:13.159
one that you received

02:06:13.159 --> 02:06:15.689
from Denton municipal electric a few weeks ago I just

02:06:15.689 --> 02:06:17.800
refresh your memory both

02:06:17.800 --> 02:06:21.090
the PB and the City Council received or provided direction

02:06:21.090 --> 02:06:22.680
to DME that we wanted

02:06:22.680 --> 02:06:25.859
the program to continue but at the same time that DME was

02:06:25.859 --> 02:06:26.920
going to reduce their

02:06:26.920 --> 02:06:28.920
budget in terms of the sponsorships that they were

02:06:28.920 --> 02:06:30.600
supporting in addition to

02:06:30.600 --> 02:06:33.520
that there was also specific criteria and also an approval

02:06:33.520 --> 02:06:34.319
process that was

02:06:34.319 --> 02:06:37.920
presented and approved by the PUB or it's up for approval

02:06:37.920 --> 02:06:39.079
by PUB today and

02:06:39.079 --> 02:06:42.260
council tomorrow I believe similarly solid waste our

02:06:42.260 --> 02:06:43.439
sponsorship budget is a

02:06:43.439 --> 02:06:46.369
little bit lower than the DME's but the principles are the

02:06:46.369 --> 02:06:47.239
same it is there to

02:06:47.239 --> 02:06:51.350
promote recycling responsible waste practices what you see

02:06:51.350 --> 02:06:52.760
typically is we

02:06:52.760 --> 02:06:56.000
have a number of nonprofits that we support there's some

02:06:56.000 --> 02:06:56.760
community events

02:06:56.760 --> 02:06:59.939
that I'll talk about in a few moments and there's also some

02:06:59.939 --> 02:07:01.239
industry sponsorships

02:07:01.239 --> 02:07:03.699
that we do as well in the solid waste industry watershed

02:07:03.699 --> 02:07:04.840
sponsorships are very

02:07:04.840 --> 02:07:07.840
similar that's to promote the pollution prevention storm

02:07:07.840 --> 02:07:08.960
water water quality

02:07:08.960 --> 02:07:12.140
awareness it's also to meet the city's MS4 permit

02:07:12.140 --> 02:07:14.119
requirements and the two

02:07:14.119 --> 02:07:16.409
budgets you can see there solid waste over the last couple

02:07:16.409 --> 02:07:17.319
years we've ranged

02:07:17.319 --> 02:07:19.840
between twenty to thirty thousand dollars each year and

02:07:19.840 --> 02:07:20.920
watershed is about

02:07:20.920 --> 02:07:25.300
half of that one of the similarities between the solid

02:07:25.300 --> 02:07:26.239
waste sponsorships and

02:07:26.239 --> 02:07:29.170
watershed sponsorships is keep them beautiful plays an

02:07:29.170 --> 02:07:30.119
important role in

02:07:30.119 --> 02:07:35.350
both keep them beautiful also knows KDB is a 501 c3 meaning

02:07:35.350 --> 02:07:36.239
it's a nonprofit

02:07:36.239 --> 02:07:39.210
they do a lot of work that really has some synergies with

02:07:39.210 --> 02:07:40.319
both solid waste as

02:07:40.319 --> 02:07:44.680
well as watershed actually within the KDB contract with the

02:07:44.680 --> 02:07:45.560
city the solid

02:07:45.560 --> 02:07:48.109
waste department is to provide or is obligated to provide a

02:07:48.109 --> 02:07:48.800
ten thousand

02:07:48.800 --> 02:07:51.720
dollar sponsorship directly to KDB each and every year that

02:07:51.720 --> 02:07:52.640
goes toward their

02:07:52.640 --> 02:07:55.930
program of services in addition to that both solid waste

02:07:55.930 --> 02:07:57.039
and the watershed

02:07:57.039 --> 02:08:00.640
division we provide financial aid to some of the

02:08:00.640 --> 02:08:02.800
sponsorship events like red

02:08:02.800 --> 02:08:05.840
bud festival the great American cleanup and also the

02:08:05.840 --> 02:08:06.439
environmental education

02:08:06.439 --> 02:08:10.069
program so that makes up the lion's share of both of our

02:08:10.069 --> 02:08:11.840
sponsorship programs in

02:08:11.840 --> 02:08:15.560
addition to that in solid waste we do have a number of

02:08:15.560 --> 02:08:16.479
community events I

02:08:16.479 --> 02:08:18.779
believe an exhibit to in your backup we kind of give you a

02:08:18.779 --> 02:08:19.680
breakdown of what we

02:08:19.680 --> 02:08:23.680
sponsored in the past what I would say to that is some of

02:08:23.680 --> 02:08:24.439
those events I don't

02:08:24.439 --> 02:08:27.619
know know that they necessarily lived up to this is a

02:08:27.619 --> 02:08:29.479
something that we feel like

02:08:29.479 --> 02:08:31.460
there's some synergies there for solid waste and so we are

02:08:31.460 --> 02:08:32.159
going to reevaluate

02:08:32.159 --> 02:08:35.739
those I think two or three within that list really meet

02:08:35.739 --> 02:08:36.680
that level they are

02:08:36.680 --> 02:08:40.039
501 c3 is there about renewable resources and things of

02:08:40.039 --> 02:08:41.479
that nature so

02:08:41.479 --> 02:08:43.819
to that end we are going to be reducing our budget and

02:08:43.819 --> 02:08:45.000
solid waste next year to

02:08:45.000 --> 02:08:47.930
about fifteen thousand dollars we feel like that provides

02:08:47.930 --> 02:08:48.960
adequate coverage for

02:08:48.960 --> 02:08:52.340
some of those events that we want to sponsor in addition to

02:08:52.340 --> 02:08:53.039
that on the

02:08:53.039 --> 02:08:55.500
community events side one of the things that I would say is

02:08:55.500 --> 02:08:56.239
solid waste focus

02:08:56.239 --> 02:08:59.420
instead of sponsorships will be how can we make sure that

02:08:59.420 --> 02:09:00.319
we have adequate

02:09:00.319 --> 02:09:02.779
resources there for those events that the waste is being

02:09:02.779 --> 02:09:03.920
disposed correctly and

02:09:03.920 --> 02:09:06.859
so as we see those opportunities we definitely want to jump

02:09:06.859 --> 02:09:07.720
on that it may

02:09:07.720 --> 02:09:09.840
not be a sponsorship that may just be something that we

02:09:09.840 --> 02:09:10.840
choose to participate

02:09:10.840 --> 02:09:14.130
operationally and to help that event out we do have some

02:09:14.130 --> 02:09:15.520
industry organizations

02:09:15.520 --> 02:09:19.729
in there as well much like DME and so as those come up what

02:09:19.729 --> 02:09:20.800
we would recommend is

02:09:20.800 --> 02:09:23.260
that we follow the exact same guidelines that you've seen a

02:09:23.260 --> 02:09:24.159
couple of times now

02:09:24.159 --> 02:09:27.159
that is sponsorships over twenty five hundred dollars would

02:09:27.159 --> 02:09:28.000
come to the PB and

02:09:28.000 --> 02:09:31.180
Council for approval and then you have the qualifying

02:09:31.180 --> 02:09:32.000
criteria which we've

02:09:32.000 --> 02:09:35.039
talked a little bit about that we also have a quarterly

02:09:35.039 --> 02:09:36.000
report that we have

02:09:36.000 --> 02:09:39.649
provided the PB and Council if and when those sponsorships

02:09:39.649 --> 02:09:41.560
do arise so I said

02:09:41.560 --> 02:09:43.609
this is going to be a short presentation I'm trying to live

02:09:43.609 --> 02:09:45.039
up to my promise I

02:09:45.039 --> 02:09:47.960
recommendations today is this solid waste not in this

02:09:47.960 --> 02:09:49.119
budget year but on the

02:09:49.119 --> 02:09:51.579
the next proposed budget we are going to reduce from twenty

02:09:51.579 --> 02:09:52.199
two thousand to

02:09:52.199 --> 02:09:55.739
fifteen thousand that allow us to cover the KDB sponsors

02:09:55.739 --> 02:09:56.800
hips as well as a few

02:09:56.800 --> 02:09:59.289
others that we feel are important we want to maintain the

02:09:59.289 --> 02:09:59.859
watershed

02:09:59.859 --> 02:10:03.039
sponsorships again those are almost exclusively a hundred

02:10:03.039 --> 02:10:03.920
percent keep it in

02:10:03.920 --> 02:10:07.100
beautiful programs like I said that there's there is some

02:10:07.100 --> 02:10:08.039
synergies there

02:10:08.039 --> 02:10:10.310
that we feel are important and we'll also adhere to the

02:10:10.310 --> 02:10:11.279
proposed policy and

02:10:11.279 --> 02:10:15.600
criteria that you've seen previously with that next steps

02:10:15.600 --> 02:10:16.319
unless there's any

02:10:16.319 --> 02:10:18.970
questions or concerns alternative direction we're going to

02:10:18.970 --> 02:10:19.560
take this to

02:10:19.560 --> 02:10:22.600
council next week have them review this and then we will

02:10:22.600 --> 02:10:23.359
circle back with the

02:10:23.359 --> 02:10:26.550
resolution for both PB and council to approve so with that

02:10:26.550 --> 02:10:27.520
I'll stand for any

02:10:27.520 --> 02:10:33.229
questions questions you know one thing we we wanted to do

02:10:33.229 --> 02:10:35.000
was the statements we

02:10:35.000 --> 02:10:39.239
made is let's be consistent the way we do things and I

02:10:39.239 --> 02:10:40.319
think this kind of

02:10:40.319 --> 02:10:45.970
follows that pattern we need to be consistent throughout

02:10:45.970 --> 02:10:47.840
the city on these

02:10:47.840 --> 02:10:51.560
type of things so not making any judgment on who to give

02:10:51.560 --> 02:10:52.239
money to or who

02:10:52.239 --> 02:10:56.079
not just be consistent that makes me feel better about

02:10:56.079 --> 02:10:56.760
copying bronze

02:10:56.760 --> 02:10:59.359
presentation

02:11:00.840 --> 02:11:04.329
greatest form of flattering right yeah that's right still

02:11:04.329 --> 02:11:06.399
shamelessly I do thank

02:11:06.399 --> 02:11:12.130
you I appreciate your you know looking at this list towards

02:11:12.130 --> 02:11:13.439
trying to in the

02:11:13.439 --> 02:11:18.100
future focus more on entities that specifically have to do

02:11:18.100 --> 02:11:19.000
with solid

02:11:19.000 --> 02:11:24.039
waste I when I saw that list I was surprised to find only

02:11:24.039 --> 02:11:25.159
well three total

02:11:25.159 --> 02:11:29.960
and two current entities on that list that have directly to

02:11:29.960 --> 02:11:31.880
do with recycling

02:11:31.880 --> 02:11:39.189
or just solid waste in general so you know I appreciate

02:11:39.189 --> 02:11:40.359
that that this is

02:11:40.359 --> 02:11:43.909
something that staff already saw and in terms of what we're

02:11:43.909 --> 02:11:45.560
spending now out of

02:11:45.560 --> 02:11:54.439
that $22,000 we're only spending about 6,000 on on entities

02:11:54.439 --> 02:11:55.520
that specifically

02:11:55.520 --> 02:12:00.449
have to do with solid waste so this is a program that I

02:12:00.449 --> 02:12:02.720
believe is really in need

02:12:02.720 --> 02:12:08.430
of reform so I support you on that and I had a question

02:12:08.430 --> 02:12:09.560
about the the keep dent

02:12:09.560 --> 02:12:13.939
and beautiful ordinance that was attached and and I'm

02:12:13.939 --> 02:12:15.520
asking this really

02:12:15.520 --> 02:12:23.409
because I I don't know the I don't know the answer why does

02:12:23.409 --> 02:12:26.279
keep why it is is keep dent and why does keep dent and

02:12:26.279 --> 02:12:34.359
beautiful need money from solid waste and the watershed

02:12:34.359 --> 02:12:37.939
fund instead of all from the general fund does this have

02:12:37.939 --> 02:12:41.000
something to do with them being a nonprofit and how does

02:12:41.000 --> 02:12:45.420
that work if you could just accept yeah and hopefully I don

02:12:45.420 --> 02:12:45.439
't

02:12:45.439 --> 02:12:49.949
butcher this I've fairly new at our relationship with Katie

02:12:49.949 --> 02:12:51.399
B however my

02:12:51.399 --> 02:12:54.149
understanding is a lot of the keep America beautiful

02:12:54.149 --> 02:12:55.399
foundations which keep

02:12:55.399 --> 02:12:58.819
dent and beautiful as a part of they can be independent 100

02:12:58.819 --> 02:13:00.560
% probably funded or

02:13:00.560 --> 02:13:03.149
they can be kind of a private public partnership which is

02:13:03.149 --> 02:13:04.000
what we have here

02:13:04.000 --> 02:13:07.470
years ago keep them beautiful was in the general fund under

02:13:07.470 --> 02:13:09.000
the parks department

02:13:09.000 --> 02:13:11.930
I believe I can't remember exactly when that change

02:13:11.930 --> 02:13:12.960
occurred but we made a

02:13:12.960 --> 02:13:16.840
transition over to solid waste and you know looking back at

02:13:16.840 --> 02:13:18.119
that just my

02:13:18.119 --> 02:13:20.739
personal opinion is there are some synergies with solid

02:13:20.739 --> 02:13:21.520
waste I think we

02:13:21.520 --> 02:13:24.560
have essentially the same goals in mind is we want to make

02:13:24.560 --> 02:13:25.439
sure that we're

02:13:25.439 --> 02:13:28.100
managing our waste responsibly and we want a beautiful

02:13:28.100 --> 02:13:29.239
community and so with

02:13:29.239 --> 02:13:32.420
that the arrangement that we have between solid waste and

02:13:32.420 --> 02:13:33.079
keep dent and

02:13:33.079 --> 02:13:36.439
beautiful is we support the operations and then the board

02:13:36.439 --> 02:13:37.600
and the foundation

02:13:37.600 --> 02:13:40.520
actually support the program of services and so as you look

02:13:40.520 --> 02:13:41.479
at sponsorships that

02:13:41.479 --> 02:13:44.789
is the one area where we somewhat jump across those lines

02:13:44.789 --> 02:13:45.800
and say in addition

02:13:45.800 --> 02:13:48.979
to that this particular program or this particular activity

02:13:48.979 --> 02:13:50.279
has some synergies

02:13:50.279 --> 02:13:52.960
with our department and what we intend to do and so we feel

02:13:52.960 --> 02:13:53.840
like a sponsorship

02:13:53.840 --> 02:13:58.199
is appropriate you know we will certainly take pub and

02:13:58.199 --> 02:13:58.960
council direction

02:13:58.960 --> 02:14:02.250
if that's something that we wish to reevaluate or discontin

02:14:02.250 --> 02:14:03.359
ue we feel like

02:14:03.359 --> 02:14:08.409
it's it's something that the Red Bud Festival did the great

02:14:08.409 --> 02:14:09.479
American cleanup

02:14:09.479 --> 02:14:11.550
those are things that support our purpose as well and so

02:14:11.550 --> 02:14:12.199
that's where it

02:14:12.199 --> 02:14:16.869
makes sense to us and and I myself I'm a big supporter of

02:14:16.869 --> 02:14:18.159
the great American

02:14:18.159 --> 02:14:21.119
cleanup and have participated in that with my children's

02:14:21.119 --> 02:14:22.039
school and food keep

02:14:22.039 --> 02:14:26.060
them beautiful and it does a really good job on a number of

02:14:26.060 --> 02:14:29.279
levels so I I do

02:14:29.279 --> 02:14:33.000
appreciate that I didn't mean to suggest that I wanted to

02:14:33.000 --> 02:14:34.560
you know I that was

02:14:34.560 --> 02:14:39.550
just a genuine question about you know whether there was a

02:14:39.550 --> 02:14:41.319
need for that or not

02:14:41.319 --> 02:14:44.649
the the funding to come from solid waste as opposed to

02:14:44.649 --> 02:14:46.800
general fund thanks well

02:14:46.800 --> 02:14:50.479
and to follow up on that I believe that these are

02:14:50.479 --> 02:14:53.000
activities or events that are

02:14:53.000 --> 02:14:56.180
funded by not just ourselves the watershed department I

02:14:56.180 --> 02:14:56.840
believe Denton

02:14:56.840 --> 02:14:59.760
municipal electric is supported some of those as well and

02:14:59.760 --> 02:15:00.760
so it isn't just solid

02:15:00.760 --> 02:15:03.050
waste that's footing the bill for that I believe that there

02:15:03.050 --> 02:15:03.859
are contributions

02:15:03.859 --> 02:15:10.560
across the organization in some cases okay other questions

02:15:10.560 --> 02:15:13.439
no thank you very

02:15:13.439 --> 02:15:19.970
good thank you thank you okay that's the that's the end of

02:15:19.970 --> 02:15:23.560
our work session we

02:15:23.560 --> 02:15:28.119
okay everybody okay to move straight into regular meeting

02:15:28.119 --> 02:15:29.800
okay just push

02:15:29.800 --> 02:15:36.470
forward all right so the regular meeting side we have first

02:15:36.470 --> 02:15:38.039
our consent agenda

02:15:38.039 --> 02:15:42.819
two items on the consent agenda is there any member who

02:15:42.819 --> 02:15:45.479
would like to have one or

02:15:45.479 --> 02:15:51.250
both or or none of these taken out and considered on an

02:15:51.250 --> 02:15:52.960
individual basis I'd

02:15:52.960 --> 02:15:59.630
like to have none that's not really an option I just you

02:15:59.630 --> 02:16:00.640
said I would try to use

02:16:00.640 --> 02:16:04.210
it let me rephrase that or the reading items that anybody

02:16:04.210 --> 02:16:05.460
wants to take out a

02:16:05.460 --> 02:16:09.920
consider individually I would like be taken out but not

02:16:09.920 --> 02:16:10.680
because I don't need

02:16:10.680 --> 02:16:13.350
any more I don't think more explanation on that is needed

02:16:13.350 --> 02:16:14.399
we've been over that

02:16:14.399 --> 02:16:17.939
but just because I had planned to vote no on that for

02:16:17.939 --> 02:16:20.399
reasons I've stated on

02:16:20.399 --> 02:16:26.840
other occasions okay so item B is taken out for individual

02:16:26.840 --> 02:16:29.079
and in in that case

02:16:29.079 --> 02:16:35.170
is there a motion on item a most approval motion to approve

02:16:35.170 --> 02:16:35.799
item a is

02:16:35.799 --> 02:16:44.799
there a second second seconded pick any discussion no all

02:16:44.799 --> 02:16:46.440
in favor say aye aye

02:16:46.440 --> 02:16:57.040
any opposed same sign okay item a passes item B which is to

02:16:57.040 --> 02:16:57.920
consider recommending

02:16:57.920 --> 02:17:01.100
approval of a resolution of the city of Denton Texas appro

02:17:01.100 --> 02:17:02.040
ving the Denton

02:17:02.040 --> 02:17:06.690
Municipal Electric sponsorship program guidelines and

02:17:06.690 --> 02:17:11.639
application process this

02:17:11.639 --> 02:17:14.250
is the item that we had talked to you on a couple of

02:17:14.250 --> 02:17:16.200
different occasions about we

02:17:16.200 --> 02:17:19.120
had a couple of work session or two about it and it was

02:17:19.120 --> 02:17:20.319
there was only four

02:17:20.319 --> 02:17:22.899
members that were here at the last meeting so it only

02:17:22.899 --> 02:17:23.719
received three

02:17:23.719 --> 02:17:26.639
affirmative votes we wanted to bring it back to the full

02:17:26.639 --> 02:17:27.600
board four votes are

02:17:27.600 --> 02:17:30.600
required to pass the item be happy to answer any questions

02:17:30.600 --> 02:17:32.280
okay seeing that

02:17:32.280 --> 02:17:35.200
this was bringing every them into consistency with the rest

02:17:35.200 --> 02:17:35.920
of the city I

02:17:35.920 --> 02:17:41.719
move approval okay okay we have a motion and a second for

02:17:41.719 --> 02:17:45.719
approval any discussion

02:17:46.440 --> 02:17:52.209
hearing none we'll go to the vote all in favor say aye aye

02:17:52.209 --> 02:17:54.479
any opposed nay one

02:17:54.479 --> 02:18:02.319
nay six ayes one nay motion passes okay

02:18:02.680 --> 02:18:09.040
going into the second part of the agenda first item we have

02:18:09.040 --> 02:18:10.680
is to receive

02:18:10.680 --> 02:18:15.930
nominations and elect a secretary for the public utilities

02:18:15.930 --> 02:18:17.959
board somebody want

02:18:17.959 --> 02:18:24.420
to explain what what those duties are the secretary

02:18:24.420 --> 02:18:26.079
position is a charter

02:18:26.079 --> 02:18:30.030
required position we do have someone who takes minutes here

02:18:30.030 --> 02:18:31.159
can make and takes

02:18:31.159 --> 02:18:33.340
those so there's no minutes that are required but it's a

02:18:33.340 --> 02:18:34.399
position required in

02:18:34.399 --> 02:18:37.879
the charter it doesn't serve as the third level in the

02:18:37.879 --> 02:18:38.719
event that the chair

02:18:38.719 --> 02:18:42.120
and vice chair are missing that they that's correct yes

02:18:42.120 --> 02:18:43.280
yeah it is that

02:18:43.280 --> 02:18:48.520
stated in the Charter or is that just assumed I'm not sure

02:18:48.520 --> 02:18:50.479
we can look and see

02:18:50.479 --> 02:19:08.329
fine assumption yeah I think that's very good we came to

02:19:08.329 --> 02:19:09.639
the last time we went

02:19:09.639 --> 02:19:12.959
through this yeah yeah you guys should all read it though

02:19:12.959 --> 02:19:13.680
if you haven't read

02:19:13.680 --> 02:19:15.670
it's only it's only happened once that I could ever

02:19:15.670 --> 02:19:16.959
remember with the secretary

02:19:16.959 --> 02:19:21.809
I think I was secretary at the time so okay but anyway that

02:19:21.809 --> 02:19:22.959
's you were absent

02:19:22.959 --> 02:19:26.909
the other time is Barbara the chair meeting oh they see

02:19:26.909 --> 02:19:28.319
okay okay anybody

02:19:28.319 --> 02:19:34.030
other than Randy and myself and Susan correct right so

02:19:34.030 --> 02:19:35.079
there's nobody absent

02:19:35.079 --> 02:19:39.049
that we can know nobody's absent so we'll solicit

02:19:39.049 --> 02:19:41.520
nominations for to a

02:19:41.520 --> 02:19:57.719
secretary of the board no I nominate Brendan okay we have a

02:19:57.719 --> 02:19:58.479
nomination and a

02:19:58.479 --> 02:20:03.440
second for Brendan Carroll or their other nominations

02:20:07.040 --> 02:20:11.180
somebody want to second that I second that and second it

02:20:11.180 --> 02:20:13.360
very good okay so we

02:20:13.360 --> 02:20:18.020
have one nominee for secretary of the book of utility board

02:20:18.020 --> 02:20:18.799
that being Brendan

02:20:18.799 --> 02:20:26.690
Carroll any discussion on that all in favor say aye any

02:20:26.690 --> 02:20:29.360
opposed none opposed so

02:20:29.360 --> 02:20:34.440
congratulations mr. secretary we'll try to try to make sure

02:20:34.440 --> 02:20:36.760
that my services are

02:20:36.760 --> 02:20:44.120
never needed that's a harsh way of saying it okay next item

02:20:44.120 --> 02:20:44.799
we have were

02:20:44.799 --> 02:20:49.510
the to consider approval of the public utility board

02:20:49.510 --> 02:20:51.799
meeting minutes of October

02:20:51.799 --> 02:21:03.159
the 9th 2017 are there any changes corrections comments I

02:21:03.159 --> 02:21:04.319
have a comment I

02:21:04.319 --> 02:21:08.479
just want to say that Kim I've just been so impressed by

02:21:08.479 --> 02:21:10.079
the minutes that you

02:21:10.079 --> 02:21:14.879
take and how detailed they are and I really appreciate that

02:21:14.879 --> 02:21:16.200
and I hope that

02:21:16.200 --> 02:21:18.360
members of the public you know in addition to going back

02:21:18.360 --> 02:21:19.000
and looking at

02:21:19.000 --> 02:21:22.600
the videos go and read the minutes because it really it

02:21:22.600 --> 02:21:23.959
does not simply read

02:21:23.959 --> 02:21:30.629
like the agenda well and this very very good and that's not

02:21:30.629 --> 02:21:31.840
easy to do I could

02:21:31.840 --> 02:21:35.110
not do them the minutes of our meeting also go into the

02:21:35.110 --> 02:21:36.520
workbook for the City

02:21:36.520 --> 02:21:44.420
Council yes so I really appreciate that and that is not

02:21:44.420 --> 02:21:46.120
easy to do yeah I agree

02:21:46.120 --> 02:21:50.600
I have one question which I guess if I'd taken Brendan's

02:21:50.600 --> 02:21:52.440
chart and followed read

02:21:52.440 --> 02:21:57.309
the charter the answered the two items that were failed on

02:21:57.309 --> 02:21:59.200
the 3o vote is that

02:21:59.200 --> 02:22:05.590
in the charter that requires the quorum is for and I think

02:22:05.590 --> 02:22:07.760
after research if

02:22:07.760 --> 02:22:14.040
there is a if there is less than four votes there's some

02:22:14.040 --> 02:22:15.200
other recuses

02:22:15.200 --> 02:22:22.079
themselves or abstains that does not count as a vote my

02:22:22.079 --> 02:22:23.000
understanding no

02:22:23.000 --> 02:22:25.629
that's my understanding as well it requires a majority of

02:22:25.629 --> 02:22:26.760
the full board so

02:22:26.760 --> 02:22:30.030
if there's seven members you have to have four votes to

02:22:30.030 --> 02:22:31.200
pass an item for

02:22:31.200 --> 02:22:35.239
affirmative for affirmative or for negative votes correct

02:22:35.239 --> 02:22:38.200
okay I would like

02:22:38.200 --> 02:22:43.760
to see the record reflect that there was abstention on

02:22:43.760 --> 02:22:43.760
those two yeah because

02:22:43.760 --> 02:22:48.079
just you abstained you didn't say no yeah as opposed to

02:22:48.079 --> 02:22:50.639
saying yeah maybe only

02:22:50.639 --> 02:22:56.879
three people here right right okay we can make that change

02:22:56.879 --> 02:22:59.520
okay any other

02:22:59.520 --> 02:23:04.090
comments changes I guess since we're making changes to the

02:23:04.090 --> 02:23:05.280
minutes we need a

02:23:05.280 --> 02:23:09.600
motion to approve those as corrected move approval as

02:23:09.600 --> 02:23:11.719
corrected second and a

02:23:11.719 --> 02:23:17.559
second any discussion yes how will you denote an abstention

02:23:17.559 --> 02:23:19.760
she sits behind you

02:23:19.760 --> 02:23:27.790
do a verbal thing how will she know who abstained future if

02:23:27.790 --> 02:23:30.440
we're gonna say that

02:23:30.440 --> 02:23:33.040
we're gonna record abstentions which is fine with me I don

02:23:33.040 --> 02:23:33.739
't care I'm just

02:23:33.739 --> 02:23:36.920
saying that if you don't have a verb some way to any abst

02:23:36.920 --> 02:23:38.000
ention you know if

02:23:38.000 --> 02:23:41.600
you don't have a way to do that she's not gonna know who

02:23:41.600 --> 02:23:43.520
how to yeah I think

02:23:43.520 --> 02:23:49.229
it's I think it's a requirement or if it's Robert's rule of

02:23:49.229 --> 02:23:49.739
order if he's

02:23:49.739 --> 02:23:53.000
abstaining it needs to be record you need to note yourself

02:23:53.000 --> 02:23:53.479
you need to

02:23:53.479 --> 02:23:58.389
declare that yeah it's just like a recusal sure okay okay

02:23:58.389 --> 02:24:02.159
okay that's a

02:24:02.159 --> 02:24:09.190
good idea okay any other discussion all in favor of the

02:24:09.190 --> 02:24:11.760
minutes as as changed

02:24:11.760 --> 02:24:22.040
say aye aye any opposed okay thank you okay item C is to

02:24:22.040 --> 02:24:23.440
receive report hold

02:24:23.440 --> 02:24:27.079
discussion and provide staff with direction concerning the

02:24:27.079 --> 02:24:27.840
approval of

02:24:27.840 --> 02:24:31.020
contract for the supply of water treatment chemicals for

02:24:31.020 --> 02:24:31.760
the city didn't

02:24:31.760 --> 02:24:36.620
water production and water reclamation departments in the

02:24:36.620 --> 02:24:38.719
amount not to excuse

02:24:38.719 --> 02:24:42.739
me for each item in the four-year not to exceed amount of

02:24:42.739 --> 02:24:44.239
seven million twenty

02:24:44.239 --> 02:24:49.950
six thousand one hundred dollars good morning my name is

02:24:49.950 --> 02:24:50.680
Tim Fisher I'm

02:24:50.680 --> 02:24:55.250
director of water utilities we use water treatment

02:24:55.250 --> 02:24:59.079
chemicals at both the water

02:24:59.079 --> 02:25:03.190
treatment plants and then also in the water reclamation

02:25:03.190 --> 02:25:04.600
plant though these are

02:25:04.600 --> 02:25:09.610
routine budget items annual chemical budgets and the actual

02:25:09.610 --> 02:25:10.959
purchases vary

02:25:10.959 --> 02:25:13.889
from year to year there's three variables that kind of

02:25:13.889 --> 02:25:14.559
affect that

02:25:14.559 --> 02:25:18.309
treated water volumes vary because of seasonality and

02:25:18.309 --> 02:25:19.600
weather patterns

02:25:19.600 --> 02:25:23.190
chemical dosages can also change because water quality

02:25:23.190 --> 02:25:25.280
changes and so the biggest

02:25:25.280 --> 02:25:28.879
impact that we have on treatment chemicals are the coagul

02:25:28.879 --> 02:25:29.920
ants that we use

02:25:29.920 --> 02:25:33.250
so when the turbidity is high due to runoff we'd have

02:25:33.250 --> 02:25:34.440
higher doses some of

02:25:34.440 --> 02:25:38.270
the other chemicals are less variable as far as our doses

02:25:38.270 --> 02:25:39.479
and then we do see

02:25:39.479 --> 02:25:45.239
price fluctuations with chemicals we didn't see them post

02:25:45.239 --> 02:25:47.000
Katrina and read

02:25:47.000 --> 02:25:52.069
reach some highs but then they stabilized and came back

02:25:52.069 --> 02:25:53.579
down we

02:25:53.579 --> 02:25:58.670
basically did production and reclamation division chemicals

02:25:58.670 --> 02:26:01.879
was one package water

02:26:01.879 --> 02:26:05.350
production represents about 70% of the total purchases of

02:26:05.350 --> 02:26:06.920
the water treatment

02:26:06.920 --> 02:26:10.459
process is a little bit more intensive that way and then

02:26:10.459 --> 02:26:11.159
the treatment

02:26:11.159 --> 02:26:15.360
chemicals have to be NSF 60 certified to comply with state

02:26:15.360 --> 02:26:17.200
and federal so as an

02:26:17.200 --> 02:26:21.850
additive to your drinking water they have to be NSF

02:26:21.850 --> 02:26:26.159
certified we do this is a

02:26:26.159 --> 02:26:30.569
good competitively bid process qualified low bidders are

02:26:30.569 --> 02:26:32.200
awarded the contract

02:26:32.200 --> 02:26:36.860
we've been doing multiple year contracts where each year we

02:26:36.860 --> 02:26:37.920
use the same bed

02:26:37.920 --> 02:26:41.899
there's a modest cost inflation embedded in that bid

02:26:41.899 --> 02:26:44.360
process this for references

02:26:44.360 --> 02:26:51.350
we bid back in 2012 and 2015 and so this is a 2017 bid and

02:26:51.350 --> 02:26:53.280
then they're both both

02:26:53.280 --> 02:26:56.719
all these purchases are done through purchase orders and

02:26:56.719 --> 02:26:57.719
they're funded

02:26:57.719 --> 02:27:05.750
through the annual budgets we have a exhibit one in your

02:27:05.750 --> 02:27:06.920
backup that is a

02:27:06.920 --> 02:27:12.020
summary we actually did 15 chemicals and had 19 vendors and

02:27:12.020 --> 02:27:13.079
that was pretty big

02:27:13.079 --> 02:27:16.579
big bid spread so exhibit one kind of shows the low bidder

02:27:16.579 --> 02:27:18.280
in every case the

02:27:18.280 --> 02:27:21.200
only exception of that was potassium permanganate which did

02:27:21.200 --> 02:27:21.719
not meet our

02:27:21.719 --> 02:27:29.969
specification so anyway staff recommends approval of the

02:27:29.969 --> 02:27:31.399
bid and I'll have any

02:27:31.399 --> 02:27:36.799
questions I'll try to answer can you go back to the prior

02:27:36.799 --> 02:27:37.840
just the one just

02:27:37.840 --> 02:27:43.600
before well now it was a purchase chemical purchase by year

02:27:43.600 --> 02:27:44.600
pardon there

02:27:44.600 --> 02:27:48.889
was one that said chemical purchase by year I think there

02:27:48.889 --> 02:27:49.760
was a graph in there

02:27:49.760 --> 02:27:55.139
I just saw oh there there you go come to cost that's that's

02:27:55.139 --> 02:27:56.399
just a history for

02:27:56.399 --> 02:28:00.879
production of what I just sent each year I just wanted to

02:28:00.879 --> 02:28:01.959
see that as a

02:28:01.959 --> 02:28:07.319
comparison and it just shows the variability that we have

02:28:07.319 --> 02:28:08.360
and then also

02:28:08.360 --> 02:28:13.340
you know the primary coagulant of which iron is one of the

02:28:13.340 --> 02:28:15.120
major ones that has

02:28:15.120 --> 02:28:19.500
probably the bigger dosage fluctuation year to year and the

02:28:19.500 --> 02:28:20.920
caustic is the one

02:28:20.920 --> 02:28:24.120
where we see probably a much bigger price fluctuation

02:28:24.120 --> 02:28:26.120
historically cost of

02:28:26.120 --> 02:28:37.440
cost it fluctuates quite a bit no we just issue purchase

02:28:37.440 --> 02:28:39.360
orders typically

02:28:39.360 --> 02:28:44.479
annually and then at the beginning of the fiscal year will

02:28:44.479 --> 02:28:45.879
reissue those

02:28:45.879 --> 02:28:49.729
through purchase orders and then we also monitor what the

02:28:49.729 --> 02:28:51.360
market is with other

02:28:51.360 --> 02:28:54.540
water treatment plants in the area in the Metroplex as far

02:28:54.540 --> 02:28:55.479
as what they use

02:28:55.479 --> 02:28:58.450
and if we see that it's advantageous then we'll go out to b

02:28:58.450 --> 02:29:00.319
ids again and it's

02:29:00.319 --> 02:29:03.979
really locking in the unit cost pardon it's really locking

02:29:03.979 --> 02:29:05.040
in the unit's cost

02:29:05.040 --> 02:29:09.479
per chemical what we're gonna pay per unit for the chemical

02:29:09.479 --> 02:29:10.559
versus overall

02:29:10.559 --> 02:29:13.889
yeah yeah we're not we're just making it because you don't

02:29:13.889 --> 02:29:14.399
know how much you're

02:29:14.399 --> 02:29:16.860
gonna need yeah we're gonna make an estimate on the

02:29:16.860 --> 02:29:18.159
purchase orders and if

02:29:18.159 --> 02:29:21.959
at the end of the fiscal year we don't spend it we don't

02:29:21.959 --> 02:29:23.360
buy it if we have to

02:29:23.360 --> 02:29:27.270
increase that amount we have the flexibility under this

02:29:27.270 --> 02:29:28.600
approval process

02:29:28.600 --> 02:29:36.239
to do that we're just curious because that if we spent

02:29:36.239 --> 02:29:38.120
roughly 750 is it

02:29:38.120 --> 02:29:41.049
seven hundred fifty thousand dollars in chemical costs for

02:29:41.049 --> 02:29:44.959
2017 in a four-year

02:29:44.959 --> 02:29:48.559
not to exceed of seven million okay this is just the water

02:29:48.559 --> 02:29:50.280
production piece of

02:29:50.280 --> 02:29:54.319
it so it doesn't reflect the purchases from reclamation

02:29:54.319 --> 02:29:56.680
okay also this one is

02:29:56.680 --> 02:30:02.450
only water correct correct the other thing is is the

02:30:02.450 --> 02:30:03.559
calculation of

02:30:03.559 --> 02:30:06.600
authorization over the four-year period was based on a

02:30:06.600 --> 02:30:08.120
preliminary estimate this

02:30:08.120 --> 02:30:11.469
for the bid purposes and so it probably exceeds what we

02:30:11.469 --> 02:30:14.879
will actually spend are

02:30:14.879 --> 02:30:19.680
you seeing any price increases are they fairly stable from

02:30:19.680 --> 02:30:21.360
what they have been

02:30:25.040 --> 02:30:30.360
I know this is very good I just want to know if we're

02:30:30.360 --> 02:30:31.280
spending more we're

02:30:31.280 --> 02:30:36.200
spending less on chemicals going forward assets well that

02:30:36.200 --> 02:30:38.200
this would potentially

02:30:38.200 --> 02:30:43.139
suggest that we're gonna be spending slightly more but the

02:30:43.139 --> 02:30:44.879
this is a long

02:30:44.879 --> 02:30:49.040
term history of a grouping of them ferric is one of the

02:30:49.040 --> 02:30:50.360
bigger players

02:30:50.360 --> 02:30:54.719
again you can see caustic with the big price fluctuations

02:30:54.719 --> 02:30:56.079
bike that we have

02:30:56.079 --> 02:31:00.430
so it's settling down it's up slightly this is another

02:31:00.430 --> 02:31:03.399
grouping of chemicals

02:31:03.399 --> 02:31:09.489
the cost of ammonia is actually down a little bit this year

02:31:09.489 --> 02:31:10.520
we don't use much

02:31:10.520 --> 02:31:15.379
of that so that kind of goes back to this stack bar chart

02:31:15.379 --> 02:31:16.700
of all the

02:31:16.700 --> 02:31:25.520
different components okay okay any other questions I have a

02:31:25.520 --> 02:31:28.479
motion for item C

02:31:28.479 --> 02:31:33.590
recommend approval motion to approve approval of item C's

02:31:33.590 --> 02:31:35.079
or second second

02:31:35.079 --> 02:31:44.489
second discussion all in favor say aye aye any opposed same

02:31:44.489 --> 02:31:45.760
sign hearing none

02:31:45.760 --> 02:31:49.840
item a or excuse me item C passes thank you thank you

02:31:49.840 --> 02:31:53.399
thanks Tim item D is to

02:31:53.399 --> 02:31:56.090
receive report holder discussion and provide staff with

02:31:56.090 --> 02:31:57.079
direction concerning

02:31:57.079 --> 02:32:00.600
the approval of a public works contract for directional

02:32:00.600 --> 02:32:02.559
boring services for DME

02:32:02.559 --> 02:32:10.180
and other utility departments with CNC directional boring

02:32:10.180 --> 02:32:11.479
LLC I'm assuming

02:32:11.479 --> 02:32:14.860
this a three-year or five-year it is actually a five-year

02:32:14.860 --> 02:32:16.200
five-year here in

02:32:16.200 --> 02:32:19.409
the word yeah wording of it it says three-year and then in

02:32:19.409 --> 02:32:20.319
the numerical it

02:32:20.319 --> 02:32:23.620
says five five okay it is actually a five-year so a five-

02:32:23.620 --> 02:32:24.639
year not to exceed

02:32:24.639 --> 02:32:28.209
amount of three million dollars that is correct I'm Rowdy

02:32:28.209 --> 02:32:29.360
Patterson I'm

02:32:29.360 --> 02:32:32.829
superintendent of distribution for didn't municipal

02:32:32.829 --> 02:32:34.200
electric didn't

02:32:34.200 --> 02:32:37.500
municipal electric isn't the only ones that use this boring

02:32:37.500 --> 02:32:39.000
contract base water

02:32:39.000 --> 02:32:41.920
and water department also use it but we are the biggest

02:32:41.920 --> 02:32:43.159
user so we're the ones

02:32:43.159 --> 02:32:48.930
making the presentation a little bit of background the city

02:32:48.930 --> 02:32:49.719
has utilized

02:32:49.719 --> 02:32:53.870
contractors for the installation of underground since 2000

02:32:53.870 --> 02:32:55.120
with the rapid

02:32:55.120 --> 02:33:00.030
growth that we were seeing at the time and the city's

02:33:00.030 --> 02:33:01.799
desire to install

02:33:01.799 --> 02:33:07.649
underground utilities we went to a contract for these

02:33:07.649 --> 02:33:09.879
services we use them

02:33:09.879 --> 02:33:12.840
to install underground facilities and all new subdivisions

02:33:12.840 --> 02:33:14.079
no we no longer

02:33:14.079 --> 02:33:18.739
have any overhead subdivisions that come in that are brand

02:33:18.739 --> 02:33:20.479
new we also put it in

02:33:20.479 --> 02:33:26.250
locations that are feasible we did a major underground

02:33:26.250 --> 02:33:27.479
reconstruction in on

02:33:27.479 --> 02:33:30.700
the Hickory Street project we're doing some around UNT

02:33:30.700 --> 02:33:32.079
right now helping with

02:33:32.079 --> 02:33:37.840
that RFP 6516 includes the labor equipment tools

02:33:37.840 --> 02:33:39.079
supervision and as well

02:33:39.079 --> 02:33:42.049
as all administrative and insurance costs incurred by the

02:33:42.049 --> 02:33:42.719
contractor

02:33:42.719 --> 02:33:47.799
necessary to complete all these installations they're also

02:33:47.799 --> 02:33:48.479
they also are

02:33:48.479 --> 02:33:52.079
are supervised by city staff and I brought one of the guys

02:33:52.079 --> 02:33:53.040
with me Craig

02:33:53.040 --> 02:33:58.219
Stastny he is our contractor coordinator over this contract

02:33:58.219 --> 02:33:59.159
and the one we'll be

02:33:59.159 --> 02:34:06.280
talking about next. Request for proposals were sent to 464

02:34:06.280 --> 02:34:07.520
prospective suppliers

02:34:07.520 --> 02:34:11.879
of this item in addition specifications were placed on

02:34:11.879 --> 02:34:12.959
materials management

02:34:12.959 --> 02:34:18.889
website suppliers could download the advertised we also

02:34:18.889 --> 02:34:19.639
advertised in the

02:34:19.639 --> 02:34:23.700
newspaper we only received three proposals which is pretty

02:34:23.700 --> 02:34:24.639
common for us

02:34:24.639 --> 02:34:29.059
I mean this is about what we get every time we go out for

02:34:29.059 --> 02:34:31.159
bid for this they

02:34:31.159 --> 02:34:36.100
were we we evaluated the proposals based on advertised

02:34:36.100 --> 02:34:38.360
criteria including price

02:34:38.360 --> 02:34:41.729
project schedule compliance with specifications and

02:34:41.729 --> 02:34:42.639
indicators of

02:34:42.639 --> 02:34:46.879
probable performance best and final offer was made by all

02:34:46.879 --> 02:34:49.399
three that proposed

02:34:49.399 --> 02:34:55.600
put in proposals and CNC directional boring was ranked the

02:34:55.600 --> 02:34:56.239
highest in

02:34:56.239 --> 02:34:59.709
determined to be the best back value for the city and y'all

02:34:59.709 --> 02:35:00.879
have an exhibit that

02:35:00.879 --> 02:35:06.639
shows all of that. Here are some active projects that this

02:35:06.639 --> 02:35:07.639
contract will be used

02:35:07.639 --> 02:35:14.360
on as you can see UNT where we do a lot of work with UNT

02:35:14.360 --> 02:35:15.120
that's one of the major

02:35:15.120 --> 02:35:21.290
projects there's several 1515 out towards Airport Road we

02:35:21.290 --> 02:35:22.000
're looking at

02:35:22.000 --> 02:35:25.719
taking some stuff underground across the highway there just

02:35:25.719 --> 02:35:26.920
numerous projects and

02:35:26.920 --> 02:35:31.670
we also this product this contract will be in conjunction

02:35:31.670 --> 02:35:32.360
with all of our

02:35:32.360 --> 02:35:36.129
maintenance boards that we do to replace direct buried

02:35:36.129 --> 02:35:37.399
cable we no longer

02:35:37.399 --> 02:35:44.069
utilize direct buried cable in in in our underground system

02:35:44.069 --> 02:35:45.920
some of y'all are new

02:35:45.920 --> 02:35:49.209
to the public utilities board so I just wanted to kind of

02:35:49.209 --> 02:35:50.159
go over what is

02:35:50.159 --> 02:35:55.959
directional drilling it's commonly it's horizontal

02:35:55.959 --> 02:35:57.559
directional drilling or HDD

02:35:57.559 --> 02:36:00.260
and it's a stirruble trenchless method of installing

02:36:00.260 --> 02:36:01.879
underground pipe condor

02:36:01.879 --> 02:36:05.479
or cables in a shallow arc a longer prescribed bore path by

02:36:05.479 --> 02:36:06.399
using a surface

02:36:06.399 --> 02:36:09.139
launch drilling rig with minimal impact on the surrounding

02:36:09.139 --> 02:36:10.600
area that's one of

02:36:10.600 --> 02:36:13.909
the main reasons we use directional drilling is because it

02:36:13.909 --> 02:36:14.719
going under a

02:36:14.719 --> 02:36:18.739
roadway we don't have to open cut 380 Carroll Boulevard

02:36:18.739 --> 02:36:20.360
something like that it

02:36:20.360 --> 02:36:23.909
helps a lot or if you have a lot of landscaping you don't

02:36:23.909 --> 02:36:25.420
have to repair the

02:36:25.420 --> 02:36:29.340
landscaping when you dig through there you can actually go

02:36:29.340 --> 02:36:32.319
under the pipe that

02:36:32.319 --> 02:36:35.250
we use can be PVC polyethylene that just talks about the

02:36:35.250 --> 02:36:36.360
different types of

02:36:36.360 --> 02:36:41.110
pipe the one misconception is that directional drilling is

02:36:41.110 --> 02:36:41.760
easier if you

02:36:41.760 --> 02:36:46.440
the softer the soil is and that's that's incorrect it's

02:36:46.440 --> 02:36:47.600
actually easier to drill

02:36:47.600 --> 02:36:52.469
in rock or a harder type of material because as you as you

02:36:52.469 --> 02:36:54.319
're drilling you

02:36:54.319 --> 02:36:58.219
have the the outer wall stays intact where with sand or

02:36:58.219 --> 02:36:59.680
anything like that

02:36:59.680 --> 02:37:02.860
that outer wall will fall down and it creates a vacuum and

02:37:02.860 --> 02:37:03.799
it keeps you from

02:37:03.799 --> 02:37:08.610
being able to pull your pull your product back this is just

02:37:08.610 --> 02:37:09.319
a little

02:37:09.319 --> 02:37:12.700
picture of what you know how directional drilling looks you

02:37:12.700 --> 02:37:13.639
can actually steer

02:37:13.639 --> 02:37:16.559
this I mean you can actually it has a pitch and it has a

02:37:16.559 --> 02:37:17.600
curve and it has a

02:37:17.600 --> 02:37:21.180
turn so you can actually steer it along the path now you

02:37:21.180 --> 02:37:23.479
can't make a big sharp

02:37:23.479 --> 02:37:27.950
turn like that but you can make a wide sweeping arc the

02:37:27.950 --> 02:37:29.540
head on the on the

02:37:29.540 --> 02:37:33.159
drilling rigs that are used here in Denton by us they have

02:37:33.159 --> 02:37:34.239
a paddle on that

02:37:34.239 --> 02:37:36.510
can help you to steer it that's that's how they steer it

02:37:36.510 --> 02:37:37.440
they actually just

02:37:37.440 --> 02:37:40.909
push it and and don't turn it and it guides it in a

02:37:40.909 --> 02:37:43.319
direction that's just a

02:37:43.319 --> 02:37:47.979
picture of what one typically looks like going in the

02:37:47.979 --> 02:37:49.360
ground that's the other

02:37:49.360 --> 02:37:53.680
thing for it you don't have a lot of open trench you have a

02:37:53.680 --> 02:37:55.200
receiving pit and

02:37:55.200 --> 02:38:00.940
a starting pit that's all you have recommendation is the

02:38:00.940 --> 02:38:01.479
award of a

02:38:01.479 --> 02:38:05.120
contract to CNC directional drilling in the five-year not

02:38:05.120 --> 02:38:06.360
to exceed amount of

02:38:06.360 --> 02:38:08.950
three million dollars which is based on previous spend

02:38:08.950 --> 02:38:10.040
history over the last

02:38:10.040 --> 02:38:13.020
contract period this contractor was the lowest cost respond

02:38:13.020 --> 02:38:13.920
ent who also had the

02:38:13.920 --> 02:38:22.040
highest evaluated score any questions were they the last

02:38:22.040 --> 02:38:23.959
contract winner no

02:38:23.959 --> 02:38:27.979
they were not GTI was our last contract winner and they

02:38:27.979 --> 02:38:29.840
they were a little bit

02:38:29.840 --> 02:38:33.120
higher they were a little bit higher I think no actually

02:38:33.120 --> 02:38:34.680
they were about 19%

02:38:34.680 --> 02:38:37.860
higher that's why if it would have been close we probably

02:38:37.860 --> 02:38:38.600
would have liked to

02:38:38.600 --> 02:38:41.290
have stayed with somebody that we were familiar with but it

02:38:41.290 --> 02:38:42.159
wasn't even close

02:38:42.159 --> 02:38:48.200
so we couldn't I couldn't justify considering them okay

02:38:48.200 --> 02:38:51.840
questions no is

02:38:51.840 --> 02:38:56.139
there a recommendation or approval motion to approve their

02:38:56.139 --> 02:38:56.879
second second

02:38:56.879 --> 02:39:04.920
and a second discussion I do want to ask one thing how you

02:39:04.920 --> 02:39:06.280
evaluated bringing

02:39:06.280 --> 02:39:12.969
that service in-house instead of contracting that out we

02:39:12.969 --> 02:39:16.920
actually did

02:39:16.920 --> 02:39:22.569
that about 25 years ago and it wasn't a pretty sight it was

02:39:22.569 --> 02:39:23.399
it was fairly new at

02:39:23.399 --> 02:39:26.569
the time it's something that you have to continually do it

02:39:26.569 --> 02:39:27.280
's kind of like being

02:39:27.280 --> 02:39:29.530
a lineman you have to continually work on the lines you

02:39:29.530 --> 02:39:30.879
have to continually do

02:39:30.879 --> 02:39:34.520
that job and we don't actually do enough of it to keep

02:39:34.520 --> 02:39:36.559
somebody busy in doing it

02:39:36.559 --> 02:39:40.479
that much so you kind of lose you know you you lose that

02:39:40.479 --> 02:39:43.340
edge we after we

02:39:43.340 --> 02:39:46.319
bought we did actually buy a big machine we brought it in

02:39:46.319 --> 02:39:48.079
we utilized it after we

02:39:48.079 --> 02:39:52.610
lost several fifteen thousand dollar boar heads we decided

02:39:52.610 --> 02:39:53.479
that probably

02:39:53.479 --> 02:39:56.409
wasn't the best idea so we that's when we decided to

02:39:56.409 --> 02:39:57.760
contract it out but I

02:39:57.760 --> 02:40:00.729
guess at some point though like 25 years ago we probably

02:40:00.729 --> 02:40:01.360
weren't putting that

02:40:01.360 --> 02:40:06.549
much we were actually doing about as much as we're doing

02:40:06.549 --> 02:40:07.440
now just for the

02:40:07.440 --> 02:40:10.200
simple fact that we were just starting to put some of the

02:40:10.200 --> 02:40:11.319
South Ridge and that

02:40:11.319 --> 02:40:16.500
top stuff okay and underground okay thank you to go back

02:40:16.500 --> 02:40:19.719
okay other comments

02:40:20.239 --> 02:40:26.000
then all in favor of the motion say aye aye any opposed

02:40:26.000 --> 02:40:28.600
okay motion passes item

02:40:28.600 --> 02:40:33.600
number E which is a receive report whole discussion provide

02:40:33.600 --> 02:40:34.719
staff with direction

02:40:34.719 --> 02:40:39.469
concerning the approval of RP number 65 18 and recommend

02:40:39.469 --> 02:40:41.040
award of a contract for

02:40:41.040 --> 02:40:47.350
the purchase of underground electric installation services

02:40:47.350 --> 02:40:49.760
for DME to FX 5

02:40:49.760 --> 02:40:53.819
construction and excavation in a contract that amount not

02:40:53.819 --> 02:40:54.959
to exceed six

02:40:54.959 --> 02:40:58.209
million dollars this would be a three-year contract is that

02:40:58.209 --> 02:40:58.639
correct that's

02:40:58.639 --> 02:41:06.090
correct again the background is the same for this because

02:41:06.090 --> 02:41:06.579
it is the

02:41:06.579 --> 02:41:09.120
underground the only difference is you know when we were

02:41:09.120 --> 02:41:10.200
talking about the the

02:41:10.200 --> 02:41:14.079
boring versus open trench there's certain times that boring

02:41:14.079 --> 02:41:15.440
is not it's

02:41:15.440 --> 02:41:18.629
it's it won't work for us and I'll show you some pictures

02:41:18.629 --> 02:41:20.280
here in a minute that

02:41:20.280 --> 02:41:23.459
will go along with that the wording is pretty much all the

02:41:23.459 --> 02:41:26.040
same this but this

02:41:26.040 --> 02:41:30.459
is our fp 65 18 it includes the same type of labor tools

02:41:30.459 --> 02:41:31.600
equipment and

02:41:31.600 --> 02:41:35.549
everything to be supplied and also Craig is also our

02:41:35.549 --> 02:41:39.079
contract coordinator on that

02:41:39.319 --> 02:41:43.450
request were sent out to 325 prospective suppliers on this

02:41:43.450 --> 02:41:44.239
one and we only

02:41:44.239 --> 02:41:48.610
received three again so it's that's kind of I mean we've

02:41:48.610 --> 02:41:49.959
got and they're not the

02:41:49.959 --> 02:41:53.489
same three there are three different ones so it's kind of I

02:41:53.489 --> 02:41:54.879
don't understand

02:41:54.879 --> 02:41:59.799
that are we just a three strike town or what is it we

02:41:59.799 --> 02:42:02.000
received best and final

02:42:02.000 --> 02:42:06.110
offers we clarified some line item pricing there was some

02:42:06.110 --> 02:42:07.159
there was some

02:42:07.159 --> 02:42:10.809
large discrepancies between two two separate bidders and we

02:42:10.809 --> 02:42:11.760
wanted to make

02:42:11.760 --> 02:42:16.100
sure that like I tell everybody we can get the best price

02:42:16.100 --> 02:42:17.280
in here but if

02:42:17.280 --> 02:42:20.520
somebody's low balling us on a price and they can't make

02:42:20.520 --> 02:42:21.920
money we're not going

02:42:21.920 --> 02:42:23.700
to need one of us is going to win in the end because they

02:42:23.700 --> 02:42:24.399
're not going to be able

02:42:24.399 --> 02:42:27.620
to fulfill their contract so we had to go back in and kind

02:42:27.620 --> 02:42:28.680
of meet with those

02:42:28.680 --> 02:42:33.040
people and talk about that FX five ended up being the high

02:42:33.040 --> 02:42:34.100
strength and the

02:42:34.100 --> 02:42:41.409
lowest price again just as CNC was only only first one here

02:42:41.409 --> 02:42:42.520
's just a little

02:42:42.520 --> 02:42:45.760
picture of the Winko distribution center whenever we

02:42:45.760 --> 02:42:47.399
installed all this and this

02:42:47.399 --> 02:42:50.440
kind of tells you why we couldn't use a directional

02:42:50.440 --> 02:42:52.040
drilling you can see this

02:42:52.040 --> 02:42:55.989
is taken from from the air but you can see the ditch and

02:42:55.989 --> 02:42:57.280
the piping in there

02:42:57.280 --> 02:43:00.569
well that that little diagram shows you how many six inch

02:43:00.569 --> 02:43:01.799
conduits we installed

02:43:01.799 --> 02:43:05.690
there to get that in in a directional drilling it's almost

02:43:05.690 --> 02:43:07.120
impossible because

02:43:07.120 --> 02:43:11.459
of how much dirt you have to displace here's another

02:43:11.459 --> 02:43:13.319
picture of Winko where we

02:43:13.319 --> 02:43:18.440
covered this mainline duck with concrete here's a pull box

02:43:18.440 --> 02:43:19.840
out at the new loves

02:43:19.840 --> 02:43:25.200
going in off of 35 and 77 with some conduit coming out of

02:43:25.200 --> 02:43:26.719
it another picture

02:43:26.719 --> 02:43:28.700
where they're back filling and you can see the pipe

02:43:28.700 --> 02:43:29.459
sticking up in the

02:43:29.459 --> 02:43:32.639
foreground that's where we're going to set a piece of

02:43:32.639 --> 02:43:34.559
switch gear here are

02:43:34.559 --> 02:43:37.989
forecasted projects for the URD as you can see there's

02:43:37.989 --> 02:43:41.280
quite a few UNT projects

02:43:41.280 --> 02:43:44.959
substation feeders coming out of Jim Crystal and Locus

02:43:44.959 --> 02:43:46.879
several tie feeders

02:43:46.879 --> 02:43:52.920
and then some apartments Buc-Ease is included and then the

02:43:52.920 --> 02:43:54.079
most of these are

02:43:54.079 --> 02:43:59.040
subdivisions that that we have forecasted in the future

02:44:00.440 --> 02:44:04.200
our recommendation is to ward the contract FX-5

02:44:04.200 --> 02:44:06.360
construction in the

02:44:06.360 --> 02:44:09.280
three-year not to exceed amount of six million dollars

02:44:09.280 --> 02:44:10.559
which is based again on

02:44:10.559 --> 02:44:18.590
previous spend history and they were the best value that we

02:44:18.590 --> 02:44:21.040
had any questions

02:44:21.040 --> 02:44:25.159
questions I don't really have a question on the contract

02:44:25.159 --> 02:44:26.600
but how what is our

02:44:26.600 --> 02:44:31.049
percentage of underground now we have 57% of our our

02:44:31.049 --> 02:44:32.680
distribution lines are

02:44:32.680 --> 02:44:38.790
underground we have 800 miles of total distribution and we

02:44:38.790 --> 02:44:40.000
have about four

02:44:40.000 --> 02:44:47.620
hundred and fifty nine miles of that 459 of that is

02:44:47.620 --> 02:44:49.479
actually underground okay

02:44:49.479 --> 02:44:58.319
very good other questions is there a recommendation motion

02:44:58.319 --> 02:45:00.159
second of a

02:45:00.159 --> 02:45:06.319
motion to approve item II in a second further discussion

02:45:06.319 --> 02:45:08.360
all in favor say aye

02:45:08.360 --> 02:45:13.090
any opposed same sign thank you thank y'all thank you guys

02:45:13.090 --> 02:45:13.680
for sticking around

02:45:13.680 --> 02:45:22.129
to realize you're gonna be yeah that's what I said thank

02:45:22.129 --> 02:45:26.879
you okay next is item

02:45:26.879 --> 02:45:32.069
F which is ACM update just a few items for you today we

02:45:32.069 --> 02:45:32.959
have a couple of

02:45:32.959 --> 02:45:35.889
articles that we're providing to you item one is a

02:45:35.889 --> 02:45:37.440
wastewater article that

02:45:37.440 --> 02:45:39.610
we had on our asset management system we were featured in

02:45:39.610 --> 02:45:40.319
that particular

02:45:40.319 --> 02:45:42.780
magazine and just wanted to bring that to your attention we

02:45:42.780 --> 02:45:43.360
also had a

02:45:43.360 --> 02:45:48.100
request from member Armantor for the utility dive article

02:45:48.100 --> 02:45:48.719
so we've included

02:45:48.719 --> 02:45:51.639
that in your backup for your review and I wanted to point

02:45:51.639 --> 02:45:53.280
out that we've began

02:45:53.280 --> 02:45:55.780
to include the future agenda items list for those of you

02:45:55.780 --> 02:45:56.840
who are familiar with

02:45:56.840 --> 02:45:59.879
the council agenda we have future items list that we also

02:45:59.879 --> 02:46:01.159
publish for the council

02:46:01.159 --> 02:46:03.190
of just kind of what we think is the tentative schedule for

02:46:03.190 --> 02:46:03.840
some different

02:46:03.840 --> 02:46:06.440
topics coming forward those items tend to move around

02:46:06.440 --> 02:46:07.639
sometimes from for

02:46:07.639 --> 02:46:10.860
different reasons but what we wanted to try to provide you

02:46:10.860 --> 02:46:11.879
with some type of a

02:46:11.879 --> 02:46:14.920
schedule of what we think items are going to be over the

02:46:14.920 --> 02:46:15.840
next few months

02:46:15.840 --> 02:46:18.100
obviously there will have to be some changes to that but we

02:46:18.100 --> 02:46:18.680
thought that

02:46:18.680 --> 02:46:22.180
would be helpful for you as you look at your your work here

02:46:22.180 --> 02:46:23.280
on the board and

02:46:23.280 --> 02:46:26.319
then finally we had the new business matrix some of the

02:46:26.319 --> 02:46:27.399
items that have been

02:46:27.399 --> 02:46:31.379
requested we've provided a couple of memos in that section

02:46:31.379 --> 02:46:32.840
with just some

02:46:32.840 --> 02:46:35.299
answers to some requests for information that you've had

02:46:35.299 --> 02:46:36.280
over the last few weeks

02:46:36.280 --> 02:46:38.959
and we'll continue to provide that information as as we get

02:46:38.959 --> 02:46:39.680
those from the

02:46:39.680 --> 02:46:43.629
board so that's all I have for you today unless there's any

02:46:43.629 --> 02:46:44.000
questions

02:46:44.000 --> 02:46:50.090
question question I assume this is a typo on the new

02:46:50.090 --> 02:46:52.319
business action items

02:46:52.319 --> 02:46:56.680
list on number 11 says we'll provide informal staff report

02:46:56.680 --> 02:46:57.280
to be be on

02:46:57.280 --> 02:47:01.479
October 17th and that means November 7th so that mean

02:47:01.479 --> 02:47:04.840
November 7 yes yes you're

02:47:04.840 --> 02:47:08.280
correct I believe that is a type of October 17th but just

02:47:08.280 --> 02:47:09.000
wanted to yes I

02:47:09.000 --> 02:47:13.899
don't believe we've provided that yet okay thank you thank

02:47:13.899 --> 02:47:16.360
you okay you know

02:47:16.360 --> 02:47:22.180
the questions about the ACM report oh I'll just say just a

02:47:22.180 --> 02:47:22.840
comment I just want

02:47:22.840 --> 02:47:25.760
to say congratulations to Denton Wastewater on that article

02:47:25.760 --> 02:47:26.120
that was

02:47:26.120 --> 02:47:29.879
really interesting and I encourage people to read that also

02:47:29.879 --> 02:47:31.120
great stuff that

02:47:31.120 --> 02:47:34.600
they're doing over there and yeah thanks

02:47:34.600 --> 02:47:46.370
yes we'll recognize PS he's in the back there okay conclud

02:47:46.370 --> 02:47:48.040
ing items if there's

02:47:48.040 --> 02:47:55.280
any anything to add comments public recognition for going

02:47:55.280 --> 02:47:56.319
forward future

02:47:56.319 --> 02:48:00.700
agenda items we'd like to see on there on the agenda now's

02:48:00.700 --> 02:48:02.680
the time to bring

02:48:02.680 --> 02:48:09.159
those up I had several um number one I would like us to

02:48:09.159 --> 02:48:11.680
have a discussion on

02:48:11.680 --> 02:48:15.159
the possibility of holding our meetings in the evening

02:48:15.159 --> 02:48:16.120
thank you I was gonna say

02:48:16.120 --> 02:48:25.680
that oh yeah we can't decide but we'll put it yeah I think

02:48:25.680 --> 02:48:26.440
the benefits of

02:48:26.440 --> 02:48:32.479
that are obvious to the public and future members of pub my

02:48:32.479 --> 02:48:33.440
second thing

02:48:33.440 --> 02:48:36.620
and these are in no particular order but I'm reading off a

02:48:36.620 --> 02:48:39.719
list that I made I was

02:48:39.719 --> 02:48:48.079
wondering if staff if Todd if you or Brian could ask our DM

02:48:48.079 --> 02:48:50.280
E lineman if they

02:48:50.280 --> 02:48:54.440
if there's any interest in helping out in Puerto Rico like

02:48:54.440 --> 02:48:55.600
they did with

02:48:55.600 --> 02:49:00.120
Houston area many parts of Texas affected by the hurricane

02:49:00.120 --> 02:49:02.840
and in Florida

02:49:02.840 --> 02:49:06.959
doesn't that typically that request comes from Puerto Rico

02:49:06.959 --> 02:49:08.280
that's that's

02:49:08.280 --> 02:49:10.549
typically how it's done we've gotten requests from

02:49:10.549 --> 02:49:12.079
different agencies I think

02:49:12.079 --> 02:49:14.049
there's probably some logistical issues of getting

02:49:14.049 --> 02:49:14.920
equipment there but we can

02:49:14.920 --> 02:49:21.799
certainly yeah we couldn't bring our line truck and kind of

02:49:21.799 --> 02:49:23.639
and a kind of

02:49:23.639 --> 02:49:26.360
question packed into there was I was also curious if there

02:49:26.360 --> 02:49:27.000
had been any

02:49:27.000 --> 02:49:30.180
requests but but even if there hadn't I was wondering if

02:49:30.180 --> 02:49:30.920
there was and

02:49:30.920 --> 02:49:34.520
specifically an interest among the linemen just you know

02:49:34.520 --> 02:49:35.719
just hearing them

02:49:35.719 --> 02:49:39.010
talk about the work they did it obviously was it was such

02:49:39.010 --> 02:49:39.879
hard work but

02:49:39.879 --> 02:49:45.590
it was so really gratifying for them to be able to do that

02:49:45.590 --> 02:49:48.040
and as one of the

02:49:48.040 --> 02:49:52.370
presenters said at the council meeting last week that you

02:49:52.370 --> 02:49:53.600
know when we get

02:49:53.600 --> 02:49:57.079
someone else's back it also means that they have our back

02:49:57.079 --> 02:49:58.440
and I know that

02:49:58.440 --> 02:50:00.899
people are all over Denton are concerned you know many

02:50:00.899 --> 02:50:02.159
people here have have ties

02:50:02.159 --> 02:50:09.229
to Puerto Rico or the area so anyway and then the other my

02:50:09.229 --> 02:50:13.920
other two issues that

02:50:13.920 --> 02:50:18.299
I would like to see discussed in future both about billing

02:50:18.299 --> 02:50:19.319
one I was approached

02:50:19.319 --> 02:50:25.360
by a rate payer about it DME billing issue that I hadn't

02:50:25.360 --> 02:50:27.440
been aware of and

02:50:27.440 --> 02:50:33.260
she she told me that that she would prefer in terms of her

02:50:33.260 --> 02:50:35.159
payment schedule

02:50:35.159 --> 02:50:38.340
when she gets paid for work versus when her husband paid

02:50:38.340 --> 02:50:39.440
gets work she would

02:50:39.440 --> 02:50:43.649
prefer to get get billed at a certain date but when she

02:50:43.649 --> 02:50:45.079
asked DME can you

02:50:45.079 --> 02:50:49.600
switch my billing date she was told and I didn't have time

02:50:49.600 --> 02:50:51.079
to guess for proof of

02:50:51.079 --> 02:50:57.559
this this was literally in the grocery store but just just

02:50:57.559 --> 02:50:59.719
yesterday but or the

02:50:59.719 --> 02:51:03.670
day before yesterday but she was told that if you want to

02:51:03.670 --> 02:51:04.319
switch your your

02:51:04.319 --> 02:51:07.799
billing date you'll have to switch your neighborhood that

02:51:07.799 --> 02:51:09.120
your neighborhood gets

02:51:09.120 --> 02:51:14.889
built in this date so I know how you know how our customer

02:51:14.889 --> 02:51:16.559
service is so eager as

02:51:16.559 --> 02:51:20.590
we saw from the presentation to be flexible I was wondering

02:51:20.590 --> 02:51:21.440
if this is

02:51:21.440 --> 02:51:25.479
indeed the policy or if there was some misunderstanding and

02:51:25.479 --> 02:51:27.159
and if it is indeed

02:51:27.159 --> 02:51:30.399
the policy if there could be a change where we could have

02:51:30.399 --> 02:51:31.620
customizable billing

02:51:31.620 --> 02:51:35.219
due dates so anyway sorry that was so long but but that but

02:51:35.219 --> 02:51:36.000
that was the issue

02:51:36.000 --> 02:51:39.870
and I'm just assuming that it doesn't affect this just this

02:51:39.870 --> 02:51:41.120
one person that it

02:51:41.120 --> 02:51:48.739
affects more and then the final issues is about about

02:51:48.739 --> 02:51:51.559
wastewater billing and this

02:51:51.559 --> 02:51:54.549
is something else that I was not aware of until a rate

02:51:54.549 --> 02:51:56.319
payer approached me about

02:51:56.319 --> 02:52:00.120
it apparently because there there's a 30-day

02:52:00.120 --> 02:52:08.239
grace period whereby you know if you don't pay your bill by

02:52:08.239 --> 02:52:09.399
a certain amount

02:52:09.399 --> 02:52:15.239
you get some sort of extra charge and this rate payer had a

02:52:15.239 --> 02:52:16.920
question that I

02:52:16.920 --> 02:52:21.600
thought was a good one and I want want to pose that if we

02:52:21.600 --> 02:52:22.840
could see if there

02:52:22.840 --> 02:52:27.739
could be a rule put in place whereby wastewater bills would

02:52:27.739 --> 02:52:29.200
would not exceed

02:52:29.200 --> 02:52:34.379
water usage so in other words because he missed the 30-day

02:52:34.379 --> 02:52:35.639
grace period because I

02:52:35.639 --> 02:52:37.709
think he was out of the country or something like that this

02:52:37.709 --> 02:52:38.280
had happened

02:52:38.280 --> 02:52:41.530
to him in the past it happened recently you know he ended

02:52:41.530 --> 02:52:42.760
up having to pay for

02:52:42.760 --> 02:52:50.030
water that he didn't use so I was just want just having a

02:52:50.030 --> 02:52:51.440
some sort of work

02:52:51.440 --> 02:52:57.600
session on how those how wastewater bills are determined

02:52:57.600 --> 02:52:58.959
and what the

02:52:58.959 --> 02:53:02.209
rationale was behind the grace period and how it could end

02:53:02.209 --> 02:53:03.399
up a situation like

02:53:03.399 --> 02:53:05.840
that

02:53:09.840 --> 02:53:15.280
yep it's during the yeah yes do you want it yeah

02:53:17.280 --> 02:53:22.989
oh yeah that's true that's true nevermind yes if I could

02:53:22.989 --> 02:53:23.760
clarify there

02:53:24.799 --> 02:53:27.729
there rules there were several questions that this board

02:53:27.729 --> 02:53:28.680
had about some of the

02:53:28.680 --> 02:53:31.139
credit and collections processes we also had a similar

02:53:31.139 --> 02:53:32.040
discussion with the

02:53:32.040 --> 02:53:33.770
council there were some questions that they had some of

02:53:33.770 --> 02:53:34.479
those were about the

02:53:34.479 --> 02:53:36.959
schedules I'll look at these questions that you've offered

02:53:36.959 --> 02:53:37.760
here and try to bring

02:53:37.760 --> 02:53:39.909
all that back and we can have the discussion at one time

02:53:39.909 --> 02:53:41.040
excellent excellent

02:53:41.040 --> 02:53:49.200
thank you so much okay all right anything else sir motion

02:53:49.200 --> 02:53:50.399
to adjourn so

02:53:50.399 --> 02:53:55.200
moved second second and a second all in favor say aye aye

02:53:55.200 --> 02:53:57.120
any opposed same sign

02:53:57.120 --> 02:53:59.680
thank you