WEBVTT 00:00:00.000 --> 00:00:07.040 now it is okay it is nine o'clock and we do have a quorum so a call to order the 00:00:07.040 --> 00:00:13.280 Monday March 14th 2022 City of Denton Public Utilities Board the first item is 00:00:13.280 --> 00:00:17.000 presentations from members of the public is there anyone from the public that 00:00:17.000 --> 00:00:24.440 wishes to speak I see none okay we'll move on into the consent agenda does any 00:00:24.440 --> 00:00:31.680 board member wish to pull an item from A through C I see none do we have a motion 00:00:31.680 --> 00:00:37.880 to approve the consent agenda move approved very moved Barbara seconded all 00:00:37.880 --> 00:00:44.300 in favor say aye aye opposed carries next item consider the approval of the 00:00:44.300 --> 00:00:51.640 February 28th 2022 minutes were there any changes or corrections to the minutes 00:00:54.440 --> 00:01:00.360 seeing none do we have a motion to approve the February 22 thank you and a 00:01:00.360 --> 00:01:08.400 second Larry's second all in favor say aye aye opposed all right item B consider 00:01:08.400 --> 00:01:12.560 recommending the adoption of ordinance with the City of Denton for Archer 00:01:12.560 --> 00:01:29.280 Western Construction LLC and the amount of 13 million five oh nine to 21 sure 00:01:43.440 --> 00:01:49.560 good morning my name is David Brown I am construction project manager for the 00:01:49.560 --> 00:01:54.680 City of Denton utilities today I'm here to can bring to you consideration of a 00:01:54.680 --> 00:02:00.320 project over at the Pecan Creek water reclamation plant this is called the 00:02:00.320 --> 00:02:05.960 salts handling project phase 1a and it is covering the effluent filters the 00:02:05.960 --> 00:02:13.680 aeration diffusers and the digester improvements we want to talk about today 00:02:13.680 --> 00:02:19.040 is basically the plant and what's out there today the current flows we'll talk 00:02:19.040 --> 00:02:23.600 about what tcq has as far as their recommendations and their requirements 00:02:23.600 --> 00:02:28.960 and then we'll go into what the phase 1a is and the selection process for a 00:02:28.960 --> 00:02:42.000 contractor let's look at the planet the plant is a is almost 60 years old so a 00:02:42.000 --> 00:02:47.240 lot of the key components there are at that age there's separate facilities 00:02:47.240 --> 00:02:53.920 there but it's all one big facility and and those extra things are getting old 00:02:53.920 --> 00:02:58.960 those facilities are getting old so there's a multitude of things we want to 00:02:58.960 --> 00:03:03.400 do and replace like the sand filters which are currently you sand media and 00:03:03.400 --> 00:03:09.000 then of course the diffusers that are in this project and the anaerobic digester 00:03:09.000 --> 00:03:15.000 lid so with this we're going to update it for the future with this starting of 00:03:15.000 --> 00:03:18.720 this phase so if we look at the plant just what's going on there right now 00:03:18.720 --> 00:03:25.200 it's a 21 mgd plant what's permitted through tcq and a peak factor of 46 mgd 00:03:25.200 --> 00:03:29.640 so that's the peak that's the most that it can take permitted wise our flows 00:03:29.640 --> 00:03:35.000 right now at 71 percent about 12 13 million gallons per day mr. Brown quick 00:03:35.000 --> 00:03:40.120 question yes mgd is a million gallons yes sir that's many gallons per day thank 00:03:40.120 --> 00:03:47.720 you yes sir you bet so the tcq talks about it's a 75 90 rule so it's 75 00:03:47.720 --> 00:03:53.000 percent we are required to start design on improvements at the plant so we can 00:03:53.000 --> 00:03:58.920 improve that capacity those permitted flows and at 90 percent we're need to be 00:03:58.920 --> 00:04:02.600 in construction for those so right now we're at 71 percent we're trying we're 00:04:02.600 --> 00:04:07.400 getting ahead of the curve one thing we're going to do is let's see here I'm 00:04:07.400 --> 00:04:11.120 gonna click that one thing we're going to do is a sand filter rehabilitation 00:04:11.120 --> 00:04:16.680 it's going to be replaced with what we call diamond cloth filters sit a new 00:04:16.680 --> 00:04:22.840 technology so with that improvement we'll be able to with there's four basins 00:04:22.840 --> 00:04:28.760 out there right now with sand filters with when we've improved this we'll be 00:04:28.760 --> 00:04:33.560 able to go to a capacity of 46 mgd with one of the filters out and that's per 00:04:33.560 --> 00:04:42.640 tcq so 23 mgd per basin with that we gain through the use of these diamond 00:04:42.640 --> 00:04:46.960 cloth filters with that we have like I said a capacity increase and also 00:04:46.960 --> 00:04:51.220 automatic cleaning and we're just preparing for a next phase these are 00:04:51.220 --> 00:04:54.620 things that we're going to do to be prepared for the future improvements as 00:04:54.620 --> 00:05:00.120 well so they'll coincide also we're going to change out the aeration diffusers 00:05:00.120 --> 00:05:05.480 right now they are 20 plus years old these go in aeration basins feed 00:05:05.480 --> 00:05:10.520 oxygen to the process one of the things the new diffusers they resist fouling 00:05:10.520 --> 00:05:15.140 they're made out of a membrane of rubber latex type material instead of the old 00:05:15.140 --> 00:05:21.800 ceramic so we have a longer lifespan of these membranes and also the O&M 00:05:21.800 --> 00:05:29.400 operation maintenance costs are greatly reduced also with this phase 1a we're 00:05:29.400 --> 00:05:36.880 going to replace aerum anaerobic digester lid so the both of the anaerobic 00:05:36.880 --> 00:05:44.200 digesters will be cleaned and with that a new gas lid will be built on site and 00:05:44.200 --> 00:05:50.120 installed with this lid we'll be able to capture the gas from the anaerobic 00:05:50.120 --> 00:05:55.720 digester and we're going to put it into the gas line and eventually hook up to 00:05:55.720 --> 00:06:04.200 a landfill project for Atmos gas so it would be reclaimed gas we went to 00:06:04.200 --> 00:06:10.760 competitive seal proposal and two actually two only two construction 00:06:10.760 --> 00:06:16.760 firms a bid on it and we selected Archer Western 13 million dollars five hundred 00:06:16.760 --> 00:06:22.000 nine two two one three hundred ninety five days of construction so we would 00:06:22.000 --> 00:06:26.320 like to recommend the entry contract with for the effluent filter aeration 00:06:26.320 --> 00:06:31.640 diffuser digesting improvements for the pecan Creek water reclamation plant with 00:06:31.640 --> 00:06:37.800 the Archer Western construction LLC now if there any questions be glad to answer 00:06:37.800 --> 00:06:42.360 also have a couple of gentlemen here a lot of technical expertise we'll start 00:06:42.360 --> 00:06:46.240 off here with mr. back thanks for that presentation just a quick question how 00:06:46.240 --> 00:06:51.680 much gas that's getting regenerated that you're gonna pipe over the atmosphere are 00:06:51.680 --> 00:06:55.520 we looking at what is it what kind of rate do you know exactly what you're 00:06:55.520 --> 00:07:03.240 capturing right now this is a rusty Willard he is a superintendent of a 00:07:03.240 --> 00:07:15.760 wastewater treatment okay a rusty go ahead you're flaring that off okay so 00:07:15.760 --> 00:07:22.640 now you'll be actually capturing it okay so it's the same amount but we're 00:07:22.640 --> 00:07:31.080 capturing now gotcha okay thank you I don't know if it's rusty and I had a 00:07:31.080 --> 00:07:35.720 question about the selection on the bids yes sir so you said you only had two 00:07:35.720 --> 00:07:39.760 bidders yes sir so what was your selection criteria the criteria was 00:07:39.760 --> 00:07:45.240 based on a lot of it had to first 30% personnel 30% I'll have to get you the 00:07:45.240 --> 00:07:49.280 numbers but I'll just give us a high level of the high level was that Archer 00:07:49.280 --> 00:07:54.160 Western was there already over there on site they're doing currently doing our 00:07:54.160 --> 00:07:59.640 detention facility and our pump station pecan Creek pump station there we've 00:07:59.640 --> 00:08:04.000 worked with them that that exact management those guys over there and 00:08:04.000 --> 00:08:07.960 we've had nothing but good good rapport with those guys and they have lots of 00:08:07.960 --> 00:08:13.800 experience in doing slant sand filters and plant work so they're mainly a group 00:08:13.800 --> 00:08:19.360 that does a lot of plant work okay so basically you've got a good working 00:08:19.360 --> 00:08:22.800 relationship with yes sir so what was the rest of the criteria you were kind 00:08:22.800 --> 00:08:27.560 of going criteria was on pricing they came in under bid on the main okay bid 00:08:27.560 --> 00:08:34.280 and then also on the so they were within 25,000 on the the alternate so 00:08:34.280 --> 00:08:38.720 Laurie Hill on the purchasing manager and it's an exhibit to list all the 00:08:38.720 --> 00:08:43.600 criteria and how they scored them but we had the key personnel was 20% quality 00:08:43.600 --> 00:08:47.840 reputation and ability to complete similar projects in on schedule and 00:08:47.840 --> 00:08:52.800 within budget was 30% detailed schedule and written plan was 15 their safety 00:08:52.800 --> 00:08:58.680 record was 5 and then the price was 30 okay I mean 25,000 on 13 million that's 00:08:58.680 --> 00:09:07.380 a push thank you we excuse me we usually get to see that because it's kind of 00:09:07.380 --> 00:09:14.040 hard to grasp I mean the confidence is sure is not questionable but we usually 00:09:14.040 --> 00:09:28.920 get to just look at it yeah it was okay I like my mistake that's okay any other 00:09:28.920 --> 00:09:33.840 questions I can help with are we gonna have any supply chain issues that you're 00:09:33.840 --> 00:09:40.240 aware of I can't guarantee that but they are we've had some questions come in on 00:09:40.240 --> 00:09:45.000 the pre-bid you know with questions like hey we need to jump on this and get some 00:09:45.000 --> 00:09:50.320 lead time so I think they're and I know that he has put in the lead time on 00:09:50.320 --> 00:09:54.240 there to get some equipment all right I know that's a problem it is just about 00:09:54.240 --> 00:09:57.720 everything we're doing a lot of things even was projects that are going on 00:09:57.720 --> 00:10:04.560 right now and can this postpone the next plant needing to be built can some of 00:10:04.560 --> 00:10:11.680 this we are that's one of we will have another project of course this is a this 00:10:11.680 --> 00:10:16.600 is a phased approach it's actually a solids handling and this is phase 1a of 00:10:16.600 --> 00:10:22.240 it the next phase of that will be coming up shortly will be a first first more 00:10:22.240 --> 00:10:26.640 solids handling for belt presses etc then there is going to be another project 00:10:26.640 --> 00:10:31.320 coming up with a head works in the plant which will help with expansion as well 00:10:31.320 --> 00:10:37.160 but this this is starts us off and will coincide with a technology coming forward 00:10:37.160 --> 00:10:46.640 okay thank you other questions go ahead so you're looking at this phase 1a it's 00:10:46.640 --> 00:10:51.800 13 and a half million dollars so what's your projection for the total refit of 00:10:51.800 --> 00:10:58.280 the plant over phase 1 a B and I presume phase 2 I mean just ballpark give it 00:10:58.280 --> 00:11:03.440 total first the total solids handling this is solids hanging project is around 00:11:03.440 --> 00:11:08.880 54 million dollars okay this is about a third of it down yes sir 00:11:08.880 --> 00:11:19.280 yeah I'm sorry that's also a small capacity upgrade for the plant yes we're 00:11:19.280 --> 00:11:24.600 currently working on a wastewater master plan and we'll be getting that to y'all 00:11:24.600 --> 00:11:29.040 the group soon and then also there's another project that will be coming on 00:11:29.040 --> 00:11:34.600 this is is to start off our capacity upgrades and certainly you're aware that 00:11:34.600 --> 00:11:39.440 this is going to be heading that way with all the growth so this is started 00:11:39.440 --> 00:11:45.840 off couldn't plan ahead we appreciate it thank you all right do we have a motion 00:11:45.840 --> 00:11:52.920 to approve item B motion so moved okay Lee moved Larry second all in favor say 00:11:52.920 --> 00:11:59.680 I think I motion carries thank you management reports 00:11:59.680 --> 00:12:06.780 madam chair and members of pub so a couple items on management report the 00:12:06.780 --> 00:12:11.060 first one is on the future agenda items so the things that we've listed on here 00:12:11.060 --> 00:12:14.440 is just to make you aware that we have budget presentations coming to you 00:12:14.440 --> 00:12:18.360 generally speaking we'll have a couple of those we'll go through the budget for 00:12:18.360 --> 00:12:22.400 each of the utilities the operating budget and the CIP budget as well and 00:12:22.400 --> 00:12:25.720 hopefully affords you the opportunity to have some good discussion on that and 00:12:25.720 --> 00:12:30.520 then around the 11th of July then we'll be asking you to to give a 00:12:30.520 --> 00:12:34.500 recommendation to the council on on those budgets and also any rate 00:12:34.500 --> 00:12:39.040 ordinances that may be applicable as as you may be aware we are required by 00:12:39.040 --> 00:12:44.640 state law to furnish the the the adopter the city manager proposed budget to the 00:12:44.640 --> 00:12:49.360 council by July 31st and so so that's kind of the time frame but our hope is 00:12:49.360 --> 00:12:53.200 that we'll have all the information to you well in advance that you can review 00:12:53.200 --> 00:12:56.400 it and we can go through those presentations it'll be a water 00:12:56.400 --> 00:13:01.360 wastewater solid waste electric and also customer service which is primarily 00:13:01.360 --> 00:13:05.960 funded by the utilities so that's what's kind of on your agenda over the next 00:13:05.960 --> 00:13:11.640 you know couple of couple of months and then on future agenda items we still 00:13:11.640 --> 00:13:16.640 have these two items we're still kind of actively working on those I can tell you 00:13:16.640 --> 00:13:20.000 that on the DME side we've kind of run into a little bit of hiccups here and 00:13:20.000 --> 00:13:23.060 trying to make sure that we get that information but but we are working on it 00:13:23.060 --> 00:13:26.740 hope to get that to you I've been also the sustainability committee before too 00:13:26.740 --> 00:13:30.800 long so with that happy to answer any questions that you may have on any of 00:13:30.800 --> 00:13:38.840 that any questions okay then concluding items does any board member wish to have 00:13:38.840 --> 00:13:45.400 something added to an agenda or have any public comments to be made looks like no 00:13:45.400 --> 00:13:49.400 all right then we're on to the work session receive a report hold a 00:13:49.400 --> 00:13:54.080 discussion and give staff direction regarding the audit project 0 to 5 energy 00:13:54.080 --> 00:14:00.560 portfolio management renewable energy offset goals and if we start going 00:14:00.560 --> 00:14:04.560 getting into an area where it's a competitive discussion we will go into 00:14:04.560 --> 00:14:12.800 closed session well after after after talking with the city attorney we we 00:14:12.800 --> 00:14:16.200 don't have the language in there but we oh we did to go into closed session but 00:14:16.200 --> 00:14:19.720 we don't think that we will so we'll we'll try to stay away from that but if 00:14:19.720 --> 00:14:22.700 but if something does come up we can always follow up through a legal status 00:14:22.700 --> 00:14:27.960 report for you but medicine Rorschach the city auditor is is on zoom she was 00:14:27.960 --> 00:14:30.840 unable to be here with us this morning but she'll be going through that 00:14:30.840 --> 00:14:35.080 presentation and Terry Nolte and myself are here to you know go into any 00:14:35.080 --> 00:14:40.540 questions that you may have that medicine is not able to respond to yes 00:14:40.540 --> 00:14:46.640 hello can y'all all hear me yes okay great awesome I'm sorry I couldn't be 00:14:46.640 --> 00:14:51.680 there I wish I could but it was unfortunate so as Tony said I'm 00:14:51.680 --> 00:14:55.560 Madison Rorschach the city auditor I'm gonna present our findings so let me 00:14:55.560 --> 00:15:04.240 just share my screen that way you all can see the presentation all right let's 00:15:04.240 --> 00:15:09.920 green I'm having a little bit of trouble hearing this presentation Madison he 00:15:09.920 --> 00:15:16.040 where he's having a little hard time hearing okay can you hear me better now 00:15:17.160 --> 00:15:26.680 okay was that yes or no sorry that's a yes okay great all right so this this 00:15:26.680 --> 00:15:30.840 report details our findings from the second phase of this project phase one 00:15:30.840 --> 00:15:35.280 one which we presented to you earlier covered energy portfolio transaction 00:15:35.280 --> 00:15:42.600 administration and so this one covers renewable energy offset goal so it as I 00:15:42.600 --> 00:15:46.040 said we've generally evaluated compliance cities renewable energy offset 00:15:46.040 --> 00:15:52.320 goal so historically city has issued have adopted a series of plans to achieve 00:15:52.320 --> 00:15:58.360 that have been aimed at achieving a 100% renewable energy goal of achieving a 00:15:58.360 --> 00:16:03.200 hundred percent renewable energy for all DME ratepayers achievement of which is 00:16:03.200 --> 00:16:07.760 primarily the responsibility of DMEs energy management organization through 00:16:07.760 --> 00:16:13.960 the management of the city's energy portfolio since the most recent plan the 00:16:13.960 --> 00:16:17.320 Denton renewable resource plan was adopted the city has increased its 00:16:17.320 --> 00:16:23.520 renewable energy production by almost 30% and so as part of this review we 00:16:23.520 --> 00:16:28.800 evaluated how the room renewable energy goal energy goal is progress is 00:16:28.800 --> 00:16:34.480 calculated monitored and reported so to begin we found that in general there's 00:16:34.480 --> 00:16:40.720 no formal definition in a city policy or internal DME procedure for how renewable 00:16:40.720 --> 00:16:44.080 energy off for how the renewable energy offset goal progress should be 00:16:44.080 --> 00:16:49.280 calculated in addition DME has not established any standard operating 00:16:49.280 --> 00:16:53.120 procedures outlining how the renewable energy offset goal should be monitored or 00:16:53.120 --> 00:16:58.200 reported and so we recommended that they should define how the renewable energy 00:16:58.200 --> 00:17:01.280 offset goal is calculated because it will help promote transparency and 00:17:01.280 --> 00:17:06.120 simplify the monitoring and reporting process for DME staff in addition we 00:17:06.120 --> 00:17:09.520 found that the Denton renewable resource plan should be updated to reflect 00:17:09.520 --> 00:17:15.880 expected load increases and regulatory changes that for the future and then 00:17:15.880 --> 00:17:20.920 finally we found that in the general electric industry renewable energy 00:17:20.920 --> 00:17:24.760 certificates are generally used to account for and make renewable energy 00:17:24.760 --> 00:17:30.440 power claims according to industry best practices institutions or companies 00:17:30.440 --> 00:17:35.440 should retire recs or which means to formally remove them from the market in 00:17:35.440 --> 00:17:39.080 order to ensure their renewable power usage claims are being properly 00:17:39.080 --> 00:17:44.280 supported that being said the city of Denton is not required to retire recs as 00:17:44.280 --> 00:17:48.760 part of the state's state of Texas's recs program and as a utility has 00:17:48.760 --> 00:17:52.640 different reasons for making renewable power usage claims than a company would 00:17:52.640 --> 00:17:57.960 for example and so for that reason we're recommending that the city evaluate the 00:17:57.960 --> 00:18:03.480 costs and benefits of retiring recs specifically retirement of recs would 00:18:03.480 --> 00:18:07.720 likely simplify the reporting process and increase transparency as annual 00:18:07.720 --> 00:18:16.760 retirements would be publicly reported by ERCOT okay and maybe this isn't time 00:18:16.760 --> 00:18:24.600 to ask but I don't understand retiring recs can you elaborate on that just a 00:18:24.600 --> 00:18:29.560 little bit because my understanding is once we purchased them they're in motion 00:18:29.560 --> 00:18:39.560 and to retire them did we did we not fully use them or yeah so the rec 00:18:39.560 --> 00:18:44.640 program is essentially accounting system that the state of Texas's 00:18:44.640 --> 00:18:54.120 uses to require most energy providers to support renewable energy production so 00:18:54.120 --> 00:19:01.320 most people in on in most market participants in ERCOT's market are 00:19:01.320 --> 00:19:06.560 required to purchase and retire which is basically to tell ERCOT hey we purchase 00:19:06.560 --> 00:19:12.040 these and we were saying we're using them and nobody else can use them so when 00:19:12.040 --> 00:19:15.240 you retire a rec it takes it out of circulation so that it can't be 00:19:15.240 --> 00:19:19.040 purchased by anybody else and they can't make a claim that that's it's been used 00:19:19.040 --> 00:19:26.400 by them but it's still a functional item that can be used by the person who 00:19:26.400 --> 00:19:33.400 purchased it it's so it's kind of Tony or Terry step in please if you would like 00:19:33.400 --> 00:19:38.320 to but it's it's kind of like a receipt that just says okay I'm sorry it's like 00:19:38.320 --> 00:19:42.320 it's like math to me I always had a hard time with that good morning at Terry 00:19:42.320 --> 00:19:49.920 and all thesis at DME so the rec program was established as part of the the 00:19:49.920 --> 00:19:55.400 competitive retail market in Texas we don't participate in the competitive 00:19:55.400 --> 00:20:01.040 retail market work what's called a non opt-in entity so we don't participate 00:20:01.040 --> 00:20:07.920 in competitive retail but in competitive retail markets they are required to have 00:20:07.920 --> 00:20:12.000 a certain percentage of the energy that they supply to their customers to be 00:20:12.000 --> 00:20:21.520 renewable and so the rec program is the mechanism that ERCOT uses to certify 00:20:21.520 --> 00:20:28.480 compliance with that renewable percentage so when a rec is awarded to a 00:20:28.480 --> 00:20:33.600 renewable resource for each megawatt of generation from that resource it's 00:20:33.600 --> 00:20:42.120 deposited into an account for that resource in our case they're they're 00:20:42.120 --> 00:20:49.600 into the generators resource account and then transferred to us as we take power 00:20:49.600 --> 00:20:56.920 off the resource and actually happens quarterly those are awarded by ERCOT 00:20:56.920 --> 00:21:05.600 based upon the actual generation of the renewable resource so the rec once it's 00:21:05.600 --> 00:21:12.520 in the once it's issued has a three-year life and for those competitive retailers 00:21:12.520 --> 00:21:17.360 because they have a compliance requirement every year they must retire 00:21:17.360 --> 00:21:23.520 them in the year or after the year that they serve the load that they served 00:21:23.520 --> 00:21:27.840 because we don't participate in that competitive retail market there is no 00:21:27.840 --> 00:21:35.160 such requirement for us to retire the rec so we have traditionally just let 00:21:35.160 --> 00:21:40.820 them expire at the end of three years rather than to make the actual 00:21:40.820 --> 00:21:45.080 retirement request so if they're retired does that mean we can't count them in as 00:21:45.080 --> 00:21:52.160 part of our energy offset we do count them as part of our energy or offset we 00:21:52.160 --> 00:21:56.880 just internally track them to make sure that in the year they were generated 00:21:56.880 --> 00:22:01.960 they're counted against the energy that we actually consumed in that year okay 00:22:01.960 --> 00:22:08.120 and mr. Beck what I'll what I'll what I'll say is too so in in this rewriter 00:22:08.120 --> 00:22:12.560 or this update to the dental renewable resource plan we do plan to make that a 00:22:12.560 --> 00:22:18.760 topic of discussion and so I want to be clear that DME has not sold any of the 00:22:18.760 --> 00:22:23.520 wrecks that it owns as part of our PPAs right we retain them and we hold them 00:22:23.520 --> 00:22:28.920 until they expire we do not actually go in and physically retire them in this 00:22:28.920 --> 00:22:32.200 account right and so I wanted to make sure that that you're clear about that 00:22:32.200 --> 00:22:38.440 what I will tell you is that there is a monetary value to those wrecks right as 00:22:38.440 --> 00:22:43.360 Terry has mentioned we are not required by Urquhart to retire them so in the 00:22:43.360 --> 00:22:47.120 event that we wanted to monetize them we could but you could be in a situation 00:22:47.120 --> 00:22:50.920 potentially where we've counted them towards our hundred percent goal and 00:22:50.920 --> 00:22:56.280 then we sell them to company X or entity X and then they also count them so 00:22:56.280 --> 00:23:00.200 there's a potential for double counting of those wrecks right and so that's part 00:23:00.200 --> 00:23:03.740 of the consideration is that you know there's a there's a monetary value to 00:23:03.740 --> 00:23:08.200 them that could potentially be beneficial to to our ratepayers and but 00:23:08.200 --> 00:23:13.120 once you retire them that you no longer have that opportunity so that's what 00:23:13.120 --> 00:23:16.320 we're saying is we're gonna bring that up bring that back for discussion and 00:23:16.320 --> 00:23:20.880 get direction and certainly if it's the policy makers decision for us to retire 00:23:20.880 --> 00:23:24.400 them and no longer do what we've been doing then we will certainly do that just 00:23:24.400 --> 00:23:29.720 understand that now you've taken potentially one more tool budgetary tool 00:23:29.720 --> 00:23:37.480 out of that toolbox for us the policy maker being being the PB and City 00:23:37.480 --> 00:23:50.200 Council ultimately I am presuming that an REC or REC is a renewable energy credit 00:23:50.200 --> 00:23:55.040 correct okay and that renewable energy credit is issued by Urquhart yes sir 00:23:55.040 --> 00:24:03.820 okay thank you yep okay go ahead Madison okay and I just want to say we're we 00:24:03.820 --> 00:24:07.120 brought this up as part of our audit report because in the industry most 00:24:07.120 --> 00:24:10.880 people are required to retire RECs in order to count them towards their 00:24:10.880 --> 00:24:15.960 renewable energy goal offset goal but that's not true for the city so I just 00:24:15.960 --> 00:24:19.840 wanted to make that clear but we also found the same costs and benefits that 00:24:19.840 --> 00:24:24.640 Tony just outlined and so that's why it's not our recommend it is not our 00:24:24.640 --> 00:24:29.340 recommendation at the city retire RECs only that we evaluate the cost and 00:24:29.340 --> 00:24:33.880 benefits because there are some transparency benefits and simplify 00:24:33.880 --> 00:24:38.400 potential simplification of the reporting process if we do retire RECs 00:24:38.400 --> 00:24:48.360 I'll share my thank you for that clarification all right okay so just 00:24:48.360 --> 00:24:52.080 moving on to the next slide due to kind of this lack of clarity in the policy 00:24:52.080 --> 00:24:57.160 about how the renewable energy offset goal progress is calculated we 00:24:57.160 --> 00:25:01.360 calculated it in three different ways and compared it to D&E's total load as 00:25:01.360 --> 00:25:07.760 shown in the figure on the slide so the direct generation line which you can see 00:25:07.760 --> 00:25:13.720 my mouse is this red line down here the bottom line it was based on all of the 00:25:13.720 --> 00:25:18.880 megawatt hours that the city paid its renewable PPA generators so that line 00:25:18.880 --> 00:25:24.520 captures only energy delivered to the grid are really purchased by us from 00:25:24.520 --> 00:25:29.240 pure renewable energy providers the second line the all RECs line which is 00:25:29.240 --> 00:25:35.320 this kind of gray line that is right here if you can see it was calculated 00:25:35.320 --> 00:25:39.560 based on the total number of RECs in the city's ERCOT REC account so that line 00:25:39.560 --> 00:25:44.000 captures all of the RECs transferred to the city from his PPA generators 00:25:44.000 --> 00:25:48.560 including RECs that the city did not actually receive physical energy from 00:25:48.560 --> 00:25:56.440 and then finally the D&E's calculation line which is this yellow line that's 00:25:56.440 --> 00:26:00.640 kind of you can see those follows the blue line which is the load and is a 00:26:00.640 --> 00:26:09.000 little bit above at the end is how D&E calculates its renewable energy offset 00:26:09.000 --> 00:26:14.440 is there a question yes there's another question Madison go ahead Lee so I'm 00:26:14.440 --> 00:26:19.560 assuming from this graph that this is where D&E is using the RECs is in these 00:26:19.560 --> 00:26:25.240 calculations and this is pretty much your only utilization of them well so so 00:26:25.240 --> 00:26:30.160 the the REC is is in essence the evidence of the renewable energy that 00:26:30.160 --> 00:26:34.960 was producing what we state is that you know for every one megawatt of renewable 00:26:34.960 --> 00:26:39.640 energy we get one REC right I think what what's important in this graph to 00:26:39.640 --> 00:26:43.400 understand is that that red line the actual generation the difference between 00:26:43.400 --> 00:26:48.480 the actual generation and the RECs and this was likely before before you came 00:26:48.480 --> 00:26:53.400 on but back in 2019 we had a discussion with the council that we have 30 00:26:53.400 --> 00:27:00.020 megawatts in a in a PPA where we where it's not tied to energy that we've 00:27:00.020 --> 00:27:05.360 contracted for right and so so we asked the council to allow us to count that 00:27:05.360 --> 00:27:10.120 towards our energy towards our renewable energy goal and in essence that 00:27:10.120 --> 00:27:14.160 difference between the generation and the REC is those 30 megawatts about 300 00:27:14.160 --> 00:27:21.440 megawatt hours right Terry a year that that we're counting currently because of 00:27:21.440 --> 00:27:25.240 that contract and in essence what we told the council is we can go out there 00:27:25.240 --> 00:27:30.080 and we can contract for it for direct energy but we've already paid for these 00:27:30.080 --> 00:27:34.560 30 megawatts of RECs right so that's about a two million dollar if I recall 00:27:34.560 --> 00:27:38.520 of additional cost that we would be incurring for rate payers as the 00:27:38.520 --> 00:27:42.760 council was good with us counting that towards our goal understanding that that 00:27:42.760 --> 00:27:48.760 contract is going to expire probably in 2023 and 2023 and so we're already 00:27:48.760 --> 00:27:54.760 actively looking to replace that with actual energy that's tied to RECs all 00:27:54.760 --> 00:28:00.040 right thank you yes sir go ahead 00:28:14.640 --> 00:28:24.000 Madison you may be on mute sorry about that as Tony mentioned some of the the 00:28:24.000 --> 00:28:28.880 yellow line accounts for PPA generators differently their generation so some of 00:28:28.880 --> 00:28:32.700 them are measuring direct generation from the red line and then some of them 00:28:32.700 --> 00:28:38.080 are measuring are measured using RECs from the city's account because some of 00:28:38.080 --> 00:28:41.080 them don't actually have generation direct generation associated with those 00:28:41.080 --> 00:28:48.360 RECs and so actually based on our assessment of DME's calculation it 00:28:48.360 --> 00:28:52.520 ensures that megawatt hours of electricity are not double counted and 00:28:52.520 --> 00:28:56.360 it is likely the most accurate method given this the structure of the city's 00:28:56.360 --> 00:29:00.960 current PPA agreements that Tony mentioned and then and including some 00:29:00.960 --> 00:29:04.240 potential data discrepancies that we noticed noted in our previous 00:29:04.240 --> 00:29:10.360 presentation to you all and so using DME's calculation practice to measure 00:29:10.360 --> 00:29:14.440 renewable offset the city's offset offset a hundred and one percent of their of 00:29:14.440 --> 00:29:21.140 its total load during calendar year 2021 so in summary we issued a total of four 00:29:21.140 --> 00:29:25.560 recommendations to DME all of which were concurred and based on their responses 00:29:25.560 --> 00:29:29.440 we believe the identified risk will be appropriately addressed and we're 00:29:29.440 --> 00:29:34.160 planning to conduct a follow-up review in 18 to 36 months in conjunction with 00:29:34.160 --> 00:29:37.120 the first phase of this audit project so we'll have one follow-up report at the 00:29:37.120 --> 00:29:48.600 end of this and that is the end of my presentation other questions all right 00:29:48.600 --> 00:29:56.160 thank you all right thank you so much well that is it do we have a motion to 00:29:56.160 --> 00:30:03.920 adjourn 931 oh very good thank you